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# Rod Khleif
About Rod Khleif
## Posts
### [Blog](https://rodkhleif.com/blog/)
**Published:** January 7, 2020
**Author:** Rod Khleif
**Content:**
## The Rod Khleif’s Blog is the Best Multifamily Investing Blog, Where You Will Find Essential Articles To Support Your Team, Your Properties, and Your Cashflow.
Search
- [All](https://rodkhleif.com/blog/)
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Diligence](https://rodkhleif.com/category/due-diligence/)
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Deals](https://rodkhleif.com/category/finding-deals/)
- [Industrial Flex Space](https://rodkhleif.com/category/industrial-flex-space/)
- [Mobile Home Parks](https://rodkhleif.com/category/mobile-home-parks/)
- [Property Management](https://rodkhleif.com/category/managing-your-properties/)
- [Psychology
of Success](https://rodkhleif.com/category/psychology-of-success/)
- [Raising Capital](https://rodkhleif.com/category/funding-deals-financing/)
- [Self Storage](https://rodkhleif.com/category/self-storage/)
- [Senior Housing](https://rodkhleif.com/category/senior-housing/)
- [Syndication](https://rodkhleif.com/category/syndication/)
- [All](https://rodkhleif.com/blog/)
- [Due
Diligence](https://rodkhleif.com/category/due-diligence/)
- [Finding
Deals](https://rodkhleif.com/category/finding-deals/)
- [Industrial Flex Space](https://rodkhleif.com/category/industrial-flex-space/)
- [Mobile Home Parks](https://rodkhleif.com/category/mobile-home-parks/)
- [Property Management](https://rodkhleif.com/category/managing-your-properties/)
- [Psychology
of Success](https://rodkhleif.com/category/psychology-of-success/)
- [Raising Capital](https://rodkhleif.com/category/funding-deals-financing/)
- [Self Storage](https://rodkhleif.com/category/self-storage/)
- [Senior Housing](https://rodkhleif.com/category/senior-housing/)
- [Syndication](https://rodkhleif.com/category/syndication/)
[
](https://rodkhleif.com/what-is-multifamily-syndication-a-complete-guide/)### [ What Is Multifamily Syndication? ](https://rodkhleif.com/what-is-multifamily-syndication-a-complete-guide/)
Quick Answer: Multifamily syndication is a partnership structure where multiple investors pool their capital to purchase apartment buildings they couldn’t afford individually. One or more General Partners (GPs) manage the investment while Limited Partners (LPs) provide funding and receive passive returns, typically ranging from 15-25% average annual returns. Multifamily Syndication
[ Read Post  ](https://rodkhleif.com/what-is-multifamily-syndication-a-complete-guide/)
[
](https://rodkhleif.com/what-are-cap-rates-and-why-you-should-use-them/)### [ What Are Cap Rates and Why You Should Use Them ](https://rodkhleif.com/what-are-cap-rates-and-why-you-should-use-them/)
The first time I looked at an apartment building as a serious investment, the broker said one sentence that I did not understand: “It is trading at a seven cap.” I nodded like I knew what that meant. I did not. So if you have ever wondered what are cap
[ Read Post  ](https://rodkhleif.com/what-are-cap-rates-and-why-you-should-use-them/)
[
](https://rodkhleif.com/multifamily-syndication-coaching-for-professional-investors/)### [ Multifamily Syndication Coaching for Professional Investors ](https://rodkhleif.com/multifamily-syndication-coaching-for-professional-investors/)
How multifamily syndication works and how professional investors choose coaching, masterminds, and education to scale from single deals to a real syndication business.
[ Read Post  ](https://rodkhleif.com/multifamily-syndication-coaching-for-professional-investors/)
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## Want to Dive Deeper?
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## Popular Articles
[
](https://rodkhleif.com/syndication-waterfall/)
[
](https://rodkhleif.com/what-is-a-good-cap-rate-for-multifamily/)
[
](https://rodkhleif.com/lifetime-cash-flow-podcast-library/)
[
](https://rodkhleif.com/sub-market-analysis-houston-texas/)### [ Sub-Market Analysis – Houston Texas ](https://rodkhleif.com/sub-market-analysis-houston-texas/)
[
](https://rodkhleif.com/multifamily-insurance-claims-the-good-the-bad-and-the-ugly/)### [ Multifamily Insurance: Coverage, Claims, and Risk Mitigation ](https://rodkhleif.com/multifamily-insurance-claims-the-good-the-bad-and-the-ugly/)
### [ Multifamily Deal Analysis: We Lost a $65M Deal in Savannah ](https://rodkhleif.com/we-lost-a-deal/)
[
](https://rodkhleif.com/smart-money-jumping-into-multifamily/)### [ Smart Money Jumping into Multifamily ](https://rodkhleif.com/smart-money-jumping-into-multifamily/)
---
### [Navigating the Multifamily Investing Landscape 2026](https://rodkhleif.com/navigating-the-multifamily-investing-landscape/)
**Published:** June 10, 2026
**Author:** Rod Khleif
**Content:**
I bought my first apartment building after years of flipping single family houses, and the day I closed it I realized I had been working twice as hard for half the result. One roof, one parking lot, one loan, and seventeen rent checks coming in every month. That is the moment multifamily investing stopped being a buzzword for me and became the engine that carried me through every market that followed, including the one we are standing in right now.
If 2026 feels noisy, you are not imagining it. Interest rates moved, lenders tightened, sellers got stubborn, and every headline wants you to feel either greedy or terrified. This guide cuts through that noise. You are going to get the same roadmap I teach my students, the one that works whether you are buying your first duplex or your fifth hundred unit deal.
## What You Will Learn
- [Why Multifamily Still Wins in 2026](#why-multifamily-2026)
- [What Changed in the 2026 Landscape](#whats-different-2026)
- [The 5-M Multifamily Roadmap](#the-5-m-roadmap)
- [The Daily Discipline That Compounds](#the-daily-discipline)
- [How to Reverse-Engineer Your First Deal](#reverse-engineer-deal)
- [Reactive Buyer vs Roadmap Investor](#reactive-vs-roadmap)
- [Single Family vs Multifamily](#single-vs-multi)
- [Warriors Who Navigated the Landscape](#warrior-stories)
- [Multifamily Investing FAQ](#multifamily-investing-faq)
- [Ready to Take the Next Step?](#ready-next-step)
## Why Multifamily Still Wins in 2026
> Multifamily investing wins in 2026 because people always need a place to live, apartments spread your risk across many tenants instead of one, and the financing is tied to the income the property produces rather than your personal salary. That combination builds durable cash flow through every cycle.
Here is the simple truth the headlines bury. America is short on housing, and it has been for a long time. The National Multifamily Housing Council and the National Apartment Association found the country needs to build [4.3 million more apartments by 2035](https://www.nmhc.org/news/press-release/2022/u.s.-needs-4.3m-more-apartments-by-2035-to-address-demand-deficit-and-affordability/) just to keep up with demand. When supply lags that far behind, the people who own well run apartment communities are holding an asset the market cannot easily replace.
Multifamily also protects you in a way single assets never can. When you own a single family rental and your tenant leaves, you are at one hundred percent vacancy and zero income until you fill it. When you own a thirty unit building and one tenant leaves, you are at roughly three percent vacancy and the other twenty nine checks still arrive. That spread is the difference between losing sleep and staying calm when markets wobble. If you want the deeper market backdrop on how policy and supply collide, read my breakdown of [the DC affordable housing crisis](https://rodkhleif.com/dc-affordable-housing-debacle/).
### Signs You Are Ready for Multifamily
Before you chase a deal, run yourself through this quick self check. If you can say yes to most of these, you are closer than you think.
- You are tired of trading hours for dollars and you want income that shows up whether you work that month or not.
- You can stay calm when a number on a screen moves against you for a quarter.
- You are willing to learn how to read a deal instead of guessing.
- You would rather own a piece of something large than all of something small.
- You are coachable and you take action faster than you take comfort.
None of these require money in the bank. They require the right wiring. The capital and the deals follow the person who is ready, not the other way around.
## What Changed in the 2026 Landscape
The roadmap never changes, but the terrain does, and 2026 has its own shape. For a few years a wave of new apartments hit the market, and in some hot cities that fresh supply softened rents and scared casual investors off. That is the part the nervous headlines love to repeat. Here is the part they leave out. Once that wave finished, the number of new apartment projects breaking ground fell sharply. The pipeline of future supply is drying up at the exact moment demand stays strong, and that sets up the patient buyer beautifully.
Think about what that means for you. The investor who waits for perfect conditions will buy after rents have already recovered and prices have climbed again. The investor who learns the lanes now, while others are sitting on their hands, picks up well located buildings before the supply squeeze pushes rents back up. You do not get rewarded for buying when it feels safe. You get rewarded for buying right when it feels uncertain, as long as the math works.
Financing is also different than it was during the cheap money era. Loans cost more, so a deal can no longer survive on the hope that prices keep rising. It has to pencil on the real income it produces today. That sounds like bad news, but it is actually the best filter you could ask for. It quietly removes the lazy money from the table and leaves the field to investors who do the work. When a deal makes sense at today’s rates, it becomes a gift if rates ever ease.
The lesson of the 2026 landscape is simple. Stop trying to time the market and start learning to read it. The conditions that scare amateurs are the same conditions that build fortunes for the prepared.
## The 5-M Multifamily Roadmap
Every deal I have ever done, and every deal my students close, moves through the same five lanes, and I teach all of them step by step inside my free [Multifamily Bootcamp](https://rodkhleif.com/bootcamp/).
[](https://rodkhleif.com/bootcamp/)
[**Want me to walk you through all five lanes with live examples? Join the free Multifamily Bootcamp →**](https://rodkhleif.com/bootcamp/)
### Lane 1: Market
You make money in multifamily the day you pick the right market, not the day you sell. Look for places where jobs are growing, people are moving in, and incomes are rising. Those three forces push rents up and keep your units full. A great building in a dying town will break your heart. An average building in a growing market will quietly make you wealthy. Start by following the people and the paychecks, then narrow to neighborhoods where renters actually want to live.
### Lane 2: Money
Line up your money before you ever make an offer. That means knowing what a lender will give you, knowing what you can raise from partners, and knowing your own numbers cold. Most first deals get done with a blend of your savings and capital from people who trust you. You do not need to be rich to start, you need to be ready and credible. Relationships are the quiet engine here, which is exactly why I put so much weight on my [12 tips for successful networking](https://rodkhleif.com/12-tips-for-successful-networking/). The investors who fund your deals are the people you build trust with long before you need them.
### Lane 3: Math
The math is where emotion goes to die, and that is a good thing. You underwrite a property by looking at the real income it produces, subtracting the real expenses, and seeing what is left to pay the loan and pay you. The number left over is your net operating income, which simply means the cash the building throws off before the mortgage. Then you compare the price to that income using the cap rate, which is just the yearly income divided by the price. If you want to get sharp on that one metric, study [what a good cap rate for multifamily](https://rodkhleif.com/what-is-a-good-cap-rate-for-multifamily/) actually looks like. Let the deal prove itself on paper before you fall in love.
Here is a quick example so the math feels real. Picture a twenty unit building where the rents add up to two hundred and forty thousand dollars a year. After you subtract realistic operating costs, you might be left with one hundred and thirty thousand dollars of net operating income. That single number drives everything. It tells you what loan the property can support, what price makes sense, and how much cash lands in your pocket after the mortgage. Master that one calculation and you will evaluate a deal faster than most brokers can pitch it.
### Lane 4: Management
A building does not produce cash flow. A well run building produces cash flow. The difference is management, which means your team, your systems, and the hundred small decisions that keep units full and expenses honest. You can manage it yourself on a small deal or hire a professional company on a larger one, but you can never ignore it. This is also where you create value on purpose by raising rents to market, cutting waste, and improving the property so it commands more. The tax code rewards you here too, and my guide to [multifamily tax benefits](https://rodkhleif.com/multifamily-tax-benefits/) shows how depreciation quietly shelters a chunk of that income.
This is also the single biggest reason multifamily builds wealth faster than almost anything else. In single family homes the value is set by what the house next door sold for, and you have no control over that. In apartments the value is driven by the income, so every dollar you add to the net operating income can add many dollars to the value of the whole building. Raise rents to market, add a covered parking fee, trim a bloated utility bill, and you have not just earned a little more cash this month. You have permanently lifted what the property is worth. That is called forcing appreciation, and it turns a good operator into a wealthy one over time.
### Lane 5: Mindset
I saved mindset for last because it carries the other four. I have built fortunes and I have lost forty million dollars in a prior downturn, and the only thing that brought me back was the wiring between my ears. Clear goals, daily discipline, and the patience to let a deal mature will outlast any spreadsheet. The investors who win are not the smartest in the room. They are the ones who decided in advance that they would not quit. If mindset is the lane you most need to strengthen, my work on how [ordinary people build generational wealth](https://rodkhleif.com/millennials-build-generational-wealth/) in apartments will show you what is possible.
## The Daily Discipline That Compounds
People assume multifamily success comes from one big heroic move. It does not. It comes from a small set of actions you repeat until they become who you are. I write my goals down by hand every single morning, and there is real science behind why that works. Research on handwriting and memory shows that physically writing a goal engages the brain more deeply than typing it, which is part of why written goals stick.
Your daily discipline does not need to be complicated. Look at a handful of deals every week so your eye sharpens. Talk to one new person in the business every day so your network compounds. Track your numbers so you always know where you stand. Read or listen to something that grows you. None of these will feel dramatic on any single day. Stacked over a year, they separate the people who own apartments from the people who only talk about them.
This is also the discipline that keeps you steady when the market gets loud. The same Harvard research on rental housing that documents how nearly thirty five percent of American households now rent also shows how tight and competitive the housing market has become. When you have built the habit of showing up daily, that pressure becomes your advantage instead of your excuse.
If you want a simple resource to anchor that daily habit, grab my free book. It is the playbook I wish someone had handed me when I started, and it lays out the entire multifamily path in plain language. Click the cover below to download it and keep it close as your daily reference.
[](https://rodkhleif.com/lcfa-ebook/)
[**Download the free Lifetime Cashflow book and start your roadmap today →**](https://rodkhleif.com/lcfa-ebook/)
## How to Reverse-Engineer Your First Deal
Most beginners freeze because they try to picture the whole staircase at once. You do not climb it that way. You reverse-engineer it. You start with the life you want, then work backward to the deal that funds it. Here is the exact process I walk my students through, and it maps directly to the demand story documented in Harvard’s [America’s Rental Housing 2026](https://www.jchs.harvard.edu/americas-rental-housing-2026) report, which confirms renters are not going anywhere.
1. **Name your number.** Decide the monthly cash flow that would change your life. Be specific. Fifteen thousand, thirty thousand, fifty thousand. That number is your destination.
2. **Reverse into units.** A healthy apartment unit might net you a few hundred dollars a month after every expense and the loan. Divide your number by that figure and you know roughly how many units you need to own.
3. **Pick your market.** Choose a growing market where jobs and people are flowing in, then narrow to two or three neighborhoods you will become an expert on.
4. **Build your money map.** Get clear on your lender options and the partners who might invest with you, so you can move the day a deal appears.
5. **Underwrite relentlessly.** Run the math on many deals so the right one is obvious. Let most deals fail your screen. That is the point.
6. **Make offers and operate.** Offers are not commitments, they are conversations. Once you own it, run it well and force the value up.
Notice that buying is step six, not step one. The buyers who skip the first five steps are the ones who get burned. The investors who follow them sleep well.
### Three Worked Scenarios
Here is how the same roadmap looks at three different starting points. Whether you have a little capital or a strong network, there is a lane for you. The visual below shows how a house hack, a small apartment, and a syndication each lead to the same destination from different starting lines.
The house hacker buys a small property, lives in one unit, and lets the tenants cover the mortgage while learning the business with real skin in the game. The small apartment buyer leads a five to thirty unit deal and builds a track record that makes the next deal easier. The syndicator finds a large deal and brings investor partners together to fund it. Same roadmap, three on-ramps. To see how the capital splits work on the larger end, study my breakdown of the [real estate syndication waterfall](https://rodkhleif.com/syndication-waterfall/).
## Reactive Buyer vs Roadmap Investor
The fastest way to understand the roadmap is to watch what happens without it. A reactive buyer moves on emotion and hope. A roadmap investor moves on process. Here is the difference at each lane.
REACTIVE BUYER VS ROADMAP INVESTORSAME LANES, OPPOSITE RESULTSLANEREACTIVE BUYERROADMAP INVESTORMarket✗Buys where it feels cheap✓Buys where jobs and people growMoney✗Scrambles for funding after the offer✓Lines up capital before the offerMath✗Trusts the seller’s numbers✓Verifies every line itemManagement✗Hopes it runs itself✓Builds systems and forces valueMindset✗Quits at the first hard quarter✓Decided in advance never to quit## Single Family vs Multifamily
Plenty of great investors start in single family homes, and there is nothing wrong with that path. But when your goal is real cash flow at scale, multifamily simply does more with each unit of your time and attention. Here is how the two compare on the factors that matter most.
SINGLE FAMILY VS MULTIFAMILYWHY APARTMENTS SCALE FASTERFACTORSINGLE FAMILY PATHMULTIFAMILY PATHVacancy risk✗One empty unit is one hundred percent vacant✓One empty unit barely moves the incomeScaling speed✗One loan and one closing per door✓Many doors in one loan and one closingValue control✗Value set by nearby home sales✓Value rises when you raise the incomeManagement✗Pros are hard to justify per house✓Professional teams pay for themselvesWealth speed✗Slow, one door at a time✓Faster, many doors at once## Warriors Who Navigated the Landscape
I do not ask you to take any of this on faith. I ask you to look at the people who did it. My Warrior students come from every background you can imagine, and they navigated this exact roadmap to real ownership.
[Anthony Metzger](https://rodkhleif.com/podcasts/from-teaching-grade-school-to-raising-millions/) went from teaching grade school to raising millions of dollars and controlling apartment units. He did not have a finance background. He had a roadmap, a coach, and the refusal to quit. [Frank Patalano](https://rodkhleif.com/lifetime-cash-flow-podcast-library/) built his portfolio steadily while keeping his head down and his standards high, proving that consistency beats flash. And [Zach](https://rodkhleif.com/lifetime-cash-flow-podcast-library/) started young and leaned into the mindset lane hard, which is exactly why he moved faster than people twice his age.
Watch the Full Interview
Anthony Metzger walks through how he went from teaching grade school to raising millions and owning apartments.
What these Warriors share is not luck. It is a decision. They decided to learn the lanes, follow the process, and stay in the game long enough to win.
> **Rod Khleif:** “The market does not reward the smartest person in the room. It rewards the one who decided in advance that quitting was not an option, then did the simple things every single day.”
## Multifamily Investing FAQ
**Q: What is multifamily investing?**
A: Multifamily investing means buying residential property with two or more units, such as a duplex, a small apartment building, or a large community. You earn money from the rent the tenants pay and from the property growing in value over time. It spreads your income across many tenants instead of relying on one.
**Q: How much money do I need to start multifamily investing in 2026?**
A: Less than most people think. You can start with a small house hack using a low down payment loan, or you can partner with investors who bring the capital while you bring the deal and the work. The barrier is rarely money. It is knowledge and the willingness to take action.
**Q: Is multifamily investing a good idea in 2026?**
A: For investors who follow a process, yes. The country is short millions of apartments, renters keep growing as a share of households, and apartments produce income through every cycle. The opportunity rewards the prepared and punishes the impulsive, which is true in every market.
**Q: How do I find a good multifamily deal?**
A: Pick a growing market, build relationships with brokers and owners, and underwrite many deals so the right one stands out. Most deals should fail your screen. The discipline of saying no quickly is what makes your yes profitable.
**Q: What is a cap rate and why does it matter?**
A: A cap rate is the property’s yearly net income divided by its price, shown as a percentage. It lets you compare deals quickly and gauge how aggressively a market is priced. Learning to read it is one of the highest leverage skills in the business.
**Q: Can I invest in multifamily without managing tenants myself?**
A: Yes. On larger deals you hire a professional management company, and as a passive investor in a syndication you can own a piece of a large property with no day to day involvement at all. Many investors prefer this hands off path.
**Q: What is the difference between active and passive multifamily investing?**
A: Active investors find, fund, and operate the deal. Passive investors put capital into a deal that someone else runs and receive a share of the cash flow and profits. Both can build serious wealth depending on your time and goals.
**Q: How is multifamily financed?**
A: Multifamily loans are based largely on the income the property produces, not just your personal salary. That is a powerful difference because a strong deal can help you qualify even when your own balance sheet is modest.
**Q: How long does it take to build real cash flow?**
A: With focus, many of my students close their first deal within a year and build meaningful cash flow within a few years. It compounds. The first deal is the hardest, and every deal after it gets easier as your skills and network grow.
**Q: What is the biggest mistake new multifamily investors make?**
A: Buying on emotion instead of process. They fall in love with a building, trust the seller’s numbers, and skip the work of underwriting and market selection. The roadmap exists to keep you out of exactly that trap.
## Ready to Take the Next Step?
You now have the full roadmap. The only thing left is to start walking it, and you do not have to do it alone. My free Multifamily Bootcamp takes you through all five lanes with live examples, so your first deal is built on process instead of hope.
[**Join the free Multifamily Bootcamp and build your roadmap →**](https://rodkhleif.com/bootcamp/)
If you are further along and ready to scale with hands on mentorship, a community of serious investors, and direct coaching, my [Warrior Program](https://rodkhleif.com/rod-khleif-warrior-program/) is where Warriors like Anthony and Frank built their portfolios. And wherever you are starting, download my free [Lifetime Cashflow book](https://rodkhleif.com/lcfa-ebook/) and keep it as your daily reference.
*Disclaimer: This article was written with the help of AI and reviewed by Rod and his team.*
**Categories:** Blog, Featured, Real Estate
**Tags:** apartment investing, cash flow, multifamily investing, multifamily syndication, real estate investing
---
### [Finding & Analyzing Multifamily Deals 2025](https://rodkhleif.com/finding-analyzing-multifamily-deals-like-a-pro/)
**Published:** April 11, 2025
**Author:** Alex Khleif
**Content:**
Multifamily investing isn’t simply about buying buildings. It’s about acquiring assets that generate consistent cash flow, appreciate in value, and create generational wealth. The foundation of that success? It starts with locating the right deal and knowing how to evaluate it with precision.
You don’t just “buy real estate.” You buy numbers. You buy strategy. You buy opportunity.
Let’s walk through exactly how seasoned investors separate the winners from the duds.
## Where Do You Find Quality Multifamily Deals?
In today’s market, finding multifamily deals that are worth it don’t always present themselves. You must work to uncover them.
The best sources? Brokers, off-market opportunities, direct-to-seller outreach, wholesalers, and yes, even online platforms like LoopNet or Crexi. But here’s the truth: the deals worth pursuing rarely make it to public listings.
This business is relationship-driven. Brokers prioritize serious buyers who communicate clearly, follow up regularly, and close deals. Stay top-of-mind by staying consistent. Become the investor they call first when a great one hits their desk.
And don’t underestimate your network. Fellow Warriors, attorneys, property managers, lenders are great sources for deals. When you make it known that you’re actively pursuing deals, opportunities start to find you.
Want to learn more about how to find off market deals for some of the best possible deals? Check out Rod’s FREE in depth eBook:
[](https://rodkhleif.com/how-to-find-off-market-deals-in-a-hot-market/)
[–> How to Find Off Market Multifamily Deals.](https://rodkhleif.com/how-to-find-off-market-deals-in-a-hot-market/)
## How Do You Determine If a Deal Is Worth Pursuing?
Analyzing a multifamily deal isn’t just about plugging numbers into a spreadsheet. The numbers are a snapshot, but the *narrative* behind them tells the real story.
A deal might look solid on paper, but the surrounding market, the tenant base, the operational history can dramatically change the outcome.
So before you move forward, ask the right questions:
### Is there a clear value-add opportunity?
This is where true wealth is built. Look for properties where you can increase income or reduce expenses through renovations, improved management, better tenant screening, or utility bill-backs. Ask yourself: *What can I do with this property that the current owner hasn’t?
That’s how you force appreciation and build equity, regardless of what the broader market is doing.
### Is the submarket growing or declining?
You can buy a great property in a declining area and still lose money. Economic fundamentals matter. Look at job growth, population trends, crime stats, infrastructure investment, school ratings. Look for anything that signals upward or downward momentum.
Follow the path of progress. Invest where the tide is rising, and you’ll often ride it to greater returns.
### Can I increase rents or reduce expenses?
Compare current rents to market comps. If your property is significantly under market, that’s opportunity. But make sure it’s feasible. You can’t just raise rents overnight. Consider the condition of the units, the quality of the tenant base, and how competitive the property is in its class.
Also evaluate expenses. Are property taxes inflated? Is the owner self-managing but inefficient? Are utility bills abnormally high due to outdated systems? Every dollar saved on expenses increases your NOI which increases your valuation.
### Are tenants stable and paying?
Stability is key. Review the rent roll and collections history. Are tenants current? Are they month-to-month or on long-term leases? Is there a history of evictions?
Dig into tenant demographics. Are these long-term residents or transient renters? Are there businesses or major employers nearby that support your resident base?
Stable tenants create predictable cash flow. Problem tenants create headaches and turnover costs.
### How does this asset compare to others nearby?
Benchmark the property against its competition. Visit other assets in the area. Talk to other owners or managers. You want to understand where your building fits in the local market. Is it a hidden gem or an under performer? Is it in line with expectations, or will it require heavy repositioning?
If the rents are low but the asset is superior to others nearby, that’s a powerful value-add story. But if it’s already maxed out with little room to improve, tread carefully — unless you’re banking on appreciation or long-term hold benefits.
A pro tip: don’t evaluate the deal in isolation. Evaluate the market conditions, the operator, and the timing alongside it. Real estate is hyper-local, and context matters. And remember, multifamily investing is a long term play.
## The Metrics Every Multifamily Investor Should Master
If you want to make intelligent decisions, you need to speak the language of numbers fluently. These metrics are non-negotiable:
- **Cap Rate:** Indicates the property’s return relative to its price. Use it to benchmark deals. [Click here for cap rate calculator.](https://rodkhleif.com/cap-rate-calculator)
- **NOI (Net Operating Income):** Represents the income left after operating expenses. Critical for calculating value.
- **Cash-on-Cash Return:** Measures the annual return on the actual capital you invest.
- **DSCR (Debt Service Coverage Ratio):** Tells lenders whether the property generates enough income to cover its debt obligations — and tells you how stable the deal is under pressure.
These aren’t just formulas. They’re the tools that give you clarity, confidence, and control.
## What’s Considered a “Good” Cap Rate?
It depends on location, asset class, and risk profile.
A 4.5% cap might be strong in the local market of San Francisco, while 7% might be standard in the Midwest. Your goal is to compare apples to apples — what’s the prevailing cap rate for similar properties in the same submarket?
Smart investors don’t just look for high caps. They search for undervalued properties. These properties often have issues like poor management or maintenance. This creates opportunities to increase the NOI and lower the cap rate.
That’s how you force appreciation and build equity.
[Click here to learn more about what’s a good cap rate for multifamily.](https://rodkhleif.com/what-is-a-good-cap-rate-for-multifamily/)
## How to Calculate Net Operating Income (NOI)
This one’s straightforward — but don’t gloss over it.
NOI = Gross Income – Operating Expenses
Exclude debt service. NOI reflects the property’s performance before financing. Be thorough: include all sources of income like rents, laundry, parking, and pet fees. Also, list every recurring expense such as taxes, insurance, management, repairs, and utilities.
NOI is the engine of valuation in multifamily. Underestimate it, and your offer will be dead on arrival. Overestimate it, and you’ll inherit a headache.
## Understanding Cash-on-Cash Return
Investors want to know how hard their money is working.
[Cash-on-Cash Return](https://www.youtube.com/watch?v=cHBZ1moemfo) = Annual Pre-Tax Cash Flow ÷ Total Cash Invested
Let’s say you invest $150,000 and receive $12,000 annually. That’s an 8% CoC return. It’s a simple but powerful way to communicate performance — especially when presenting deals to passive investors in a syndication.
And remember, realistic projections build trust. Inflated promises break it.
## Physical vs. Economic Occupancy
Here’s where rookie investors get tripped up.
Physical occupancy is how many units are occupied.
Economic occupancy shows how many units are actually generating revenue.
A building can be 96% full but still lose money. This can happen if half the tenants don’t pay or have discounts. You need to reconcile both metrics and ask why the gap exists.
Is it poor collections? Below-market rents? Deferred maintenance? Get answers — or walk away.
## How to Underwrite a Deal Like a Professional
[Underwriting](https://www.youtube.com/watch?v=MYxUItQgtEc) isn’t just math. It’s modeling the story of the property under different conditions.
Start with:
- Current rent roll
- T-12 financials
- Market comparables
- Loan terms
- Your business plan
Then, forecast what the asset looks like over 3, 5, or 7 years. Model different scenarios like conservative, base case, and aggressive. What if occupancy dips? What if your renovation costs run over?
Your underwriting should reflect reality, not fantasy. That’s how you protect capital and inspire confidence from investors.
Check out this podcast on [‘*The art and science of multifamily underwriting.’*](https://rodkhleif.com/podcasts/the-art-and-science-of-multifamily-underwriting/)
## Due Diligence: Trust the Process, Then Verify Everything
Due diligence is where you protect your downside.
You’re verifying everything the seller claimed — and discovering what they didn’t.
This includes:
- Auditing financials and rent rolls
- Reviewing leases and legal documents
- Inspecting every unit and every system (roof, HVAC, plumbing, electrical)
- Talking to tenants and onsite staff
- Walking the property, both during the day and night
Don’t just rely on paper. Get boots on the ground. The best investors trust their intuition as much as the inspection report.
Multifamily is a business of nuance and discipline. Deals don’t live in spreadsheets — they live in real life. But the more deals you analyze, the sharper your instincts become. The more you practice underwriting, the more you’ll spot opportunity — and risk — with precision.
Success favors speed, but it rewards preparation.
So get in the game. Run the numbers. Ask questions. Build relationships. And keep sharpening your blade.
You’re just one deal away.
## **Finding and Analyzing Multifamily Real Estate Deals FAQ**
**How do I find multifamily deals in today’s market?
The most reliable sources are broker relationships, direct-to-owner outreach, referrals from other investors, and consistent networking. Public sites like LoopNet and Crexi are useful, but the best opportunities often come off-market through trust and persistence.
**What’s the first step in analyzing a multifamily real estate deal?
Start with the property’s fundamentals—location, market demand, and asset type. Then move into financials: review the rent roll, trailing 12-month (T12) income statement, and compare them against the broker’s pro forma to separate reality from projections.
**Which metrics are most important when underwriting a real estate deal?
Investors focus on:
- Net Operating Income (NOI)
- Debt Service Coverage Ratio (DSCR)
- Cash-on-Cash Return
- Internal Rate of Return (IRR)
- Cap Rate
These numbers reveal both short-term cash flow and long-term equity growth potential.
**How do I stress-test a multifamily deal?
Change assumptions to see how resilient the deal is. Increase expenses by 10–20%, reduce rent growth to conservative levels, and raise vacancy rates. If the deal still works under stress, it’s worth pursuing.
**What are common red flags in deal analysis?
- Expense ratios that are unrealistically low
- No payroll costs on larger assets
- Understated property taxes that ignore reassessment
- Maintenance budgets too small to cover real needs
- Insurance premiums far below current market rates
**How do I know if a deal is overpriced?
If the projected returns only work with aggressive assumptions—or if appraisals and market comps show lower values—the deal is likely overpriced. Sticking to strict return criteria protects you from forcing bad deals.
**What role does market research play in finding deals?
Strong markets with job growth, population growth, and landlord-friendly laws support rent growth and occupancy. Weak markets with shrinking populations or oversupply can make even a good-looking deal underperform.
**How can beginners get better at underwriting deals?
Analyze deals daily, even if you’re not ready to buy. Use Excel or underwriting models to practice. Compare your numbers with real-world comps and ask mentors or peers for feedback. Repetition builds confidence and speed.
**Why is broker outreach critical for finding multifamily opportunities?
Brokers control most inventory. Consistent communication, quick responses, and professional underwriting feedback put you at the top of their list when real opportunities arise.
**What’s the key to success in finding and analyzing deals?
Consistency. The investors who succeed underwrite dozens—sometimes hundreds—of deals before closing one. The more reps you put in, the faster you’ll recognize true opportunities and avoid wasting time on deals that don’t work.
*Disclaimer: This article was written with the help of AI and reviewed by Rod’s Team.*
**Categories:** Blog, Due Diligence, Finding Deals
---
### [Multifamily Investing: The Complete Beginner's Guide](https://rodkhleif.com/multifamily-investing-the-complete-beginners-guide/)
**Published:** August 6, 2026
**Author:** Rod Khleif
**Content:**
If you’ve been researching real estate investing, you’ve probably heard the phrase multifamily investing thrown around. But what does it really mean, and why are so many investors choosing apartment buildings over single-family homes?
This guide breaks it all down. Whether you are just starting out, this guide is for you. If you already bought your first single-family rental and want to grow, it is for you too. This is the most complete beginner guide to multifamily investing. We’ll cover what it is, why it beats single-family investing, how to analyze a deal, how to finance it, how to find properties, and how to manage them, plus a full glossary of terms every investor needs to know.
Rod Khleif has helped over **305,000+ units get acquired by his students** through the Warrior Program; one of the most proven multifamily mentorship programs in the country. This guide reflects the exact framework he teaches.
> Multifamily investing means buying property with two or more rental units, from a duplex to a large apartment community, so one purchase produces multiple income streams. In 2026 it remains one of the most reliable paths to cash flow and lasting wealth, because larger buildings are valued on the income they produce, which you can directly control.
## What’s In This Guide
- [The First-Deal Framework](#framework)
- [What Is Multifamily Investing?](#what-is)
- [Why Multifamily Beats Single-Family](#why-multifamily)
- [How to Analyze a Multifamily Deal](#analyze)
- [How to Finance a Multifamily Property](#financing)
- [How to Find Multifamily Deals](#finding-deals)
- [How to Manage a Multifamily Property](#management)
- [Common Beginner Mistakes to Avoid](#mistakes)
- [Investing While Working Full-Time](#full-time)
- [Multifamily Investing Glossary](#glossary)
- [Best Resources for Multifamily Beginners](#resources)
- [Frequently Asked Questions](#faq)
- [Ready to Take Your First Step?](#next-step)
## The First-Deal Framework
Every beginner I coach follows the same five-step path from confused to closed. I call it the First-Deal Framework, and it keeps you moving in the right order instead of spinning on the parts that do not matter yet.
*Want the deeper version? The free [Lifetime CashFlow ebook](https://rodkhleif.com/lcfa-ebook/) breaks down each step with real numbers.*
## What Is Multifamily Investing?
Multifamily investing means buying residential properties with two or more units. These include apartment buildings, duplexes, triplexes, and larger complexes. The goal is to earn rental income and build long-term wealth.
Unlike single-family homes (which have one tenant and one rent check), a multifamily property generates multiple streams of income from a single acquisition. That’s the core appeal: you buy once and collect from many.
### **Types of Multifamily Properties**
Property TypeUnitsKey CharacteristicsDuplex, Triplex, Fourplex2 to 4 unitsResidential financing available. A great starter property.Small Apartment Buildings5 to 20 unitsCrosses into commercial lending territory.Mid-Size Apartments20 to 100 unitsMore economies of scale. Requires professional management.Large Apartment Complexes100+ unitsInstitutional grade. Typically syndicated.### **Why Does Unit Count Matter?**
One critical line every investor needs to understand: properties with 4 or fewer units qualify for residential mortgages (with favorable rates and low down payments). Properties with 5+ units require commercial loans, but they also unlock far greater cash flow potential.
Rod Khleif often says that moving from a 4-unit to a 5-unit property is a big mindset shift. You stop thinking like a landlord. You start thinking like a **business owner**.
Multifamily investing is not just a real estate strategy. It’s a way to create what Rod calls “lifetime cash flow.”This is recurring, passive income that replaces your job income.It also funds your ideal life.
## Why Multifamily Beats Single-Family
This might be the most important section of this entire guide. **The single-family vs. multifamily debate isn’t close.** For investors who want to scale, build lasting wealth, and eventually replace their income, multifamily wins every time. Here’s why.
### **Multiple Income Streams From One Acquisition**
With a single-family rental, losing your one tenant means $0 in income. With a 10-unit apartment building, one vacancy is a 10% loss, manageable. The more units, the more stable and predictable your cash flow becomes.
### **Economies of Scale**
One roof. One insurance policy. One property management relationship. One set of maintenance systems. Managing 10 units in one building is exponentially more efficient than managing 10 single-family homes scattered across a city.
### **Faster Portfolio Growth**
Buying one 20-unit building moves your portfolio forward faster than acquiring 20 individual houses. The time, legal costs, inspections, and financing for a single acquisition apply regardless of how many doors are included.
### **Commercial Valuation Based on Income**
Single-family homes are valued by comparable sales, your neighbors’ home values control yours. Multifamily properties (5+ units) are valued based on Net Operating Income (NOI) and cap rates. That means you can directly force appreciation by raising rents and cutting expenses, regardless of the market.
### **Easier to Finance at Scale**
Banks love apartment buildings. Why? Because a diversified rental income from multiple tenants is a safer bet than a single tenant in a house. Many investors are surprised to find that getting approved for a $3M apartment building can be easier than a $300K single-family loan.
**Want a deep dive on this topic?**- [Read: Why Multifamily Beats Single-Family Investing ](https://rodkhleif.com/17-reasons-multifamily-investing-beats-single-family/)
- Rod Khleif breaks down the math and mindset shift in detail, including real numbers from student deals.
FactorSingle-FamilyMultifamilyVacancy riskLose 100% of income when the unit is emptyOne vacancy is a small share of total incomeValuation methodBased on comparable salesBased on the income (NOI) you controlScale speedOne deal equals one unitOne deal equals many unitsManagement efficiencyLowHighForced appreciationVery limitedSubstantial through higher NOIBank perceptionIndividual borrowerBusiness operator## How to Analyze a Multifamily Deal
Deal analysis is the skill that separates investors who build wealth from those who lose money. The good news: once you learn the framework, it becomes second nature. Here are the core metrics every multifamily beginner needs to master.
### **Gross Rental Income (GRI)**
Start with total potential rent if every unit were occupied at market rate. This is your ceiling number before any deductions.
### **Vacancy Rate**
Typically assumed at 5–10% depending on the market. Subtract this from GRI to get Effective Gross Income (EGI). Never underwrite a deal at 0% vacancy, that’s wishful thinking, not analysis.
### **Operating Expenses**
Common operating expenses include property taxes, insurance, property management fees (typically 8–10% of rent), maintenance and repairs, utilities (if owner-paid), landscaping, and reserves. A common rule of thumb: expenses run 35–50% of gross income for most apartment buildings.
### **Net Operating Income (NOI)**
NOI = Effective Gross Income − Operating Expenses.
This is the single most important number in multifamily analysis. It tells you how much the property earns before debt service.
### **Cap Rate**
Cap Rate = NOI ÷ Purchase Price. The cap rate tells you what return you’d get if you bought the property all-cash. Higher cap rate = higher yield. Markets with more risk or less demand typically have higher cap rates.
### **Cash-on-Cash Return**
Cash-on-Cash = Annual Cash Flow ÷ Total Cash Invested. This is the metric that actually tells you how your invested dollars are performing. Many experienced investors target 8–12%+ cash-on-cash returns.
### **Debt Service Coverage Ratio (DSCR)**
DSCR = NOI ÷ Annual Debt Service. Lenders require a DSCR of at least 1.20–1.25, meaning the property generates 20–25% more income than it costs to service the debt. Higher is better.
**Quick Deal Analysis Example**10-unit building | $1,500/unit/month market rent
GRI: $180,000/year
Less 7% vacancy: $167,400
Less operating expenses (42%): $70,308
NOI: $97,092
Purchase price: $1,100,000 → Cap Rate: 8.8%
Annual debt service (30yr/6.5%): $69,500
Annual cash flow: $27,592
Down payment (25%): $275,000 → Cash-on-Cash: 10.0%
Want to run real numbers on a live deal? [**Download Rod’s free Multifamily Deal Analyzer**](https://rodkhleif.com/product/deal-analyzer-pro-software/): it does all the math automatically.
## How to Finance a Multifamily Property
One of the biggest myths beginners believe is that you need a lot of money to get into multifamily. The reality is there are multiple financing paths and some require very little of your own capital.
### **Conventional / Residential Loans (1-4 Units)**
For duplexes, triplexes, and fourplexes, you can use a standard residential mortgage. If you plan to live in one of the units (house hacking), FHA loans allow down payments as low as 3.5%. This is often the best starting point for new investors.
### **Commercial Bank Loans (5+ Units)**
Once you cross the 5-unit threshold, you need a commercial loan. These are typically based on the property’s income (DSCR), not just your personal income. Down payments are usually 20–30%, and terms are often 5–7 year fixed rates with 20–25 year amortization.
### **Agency Loans: Fannie Mae & Freddie Mac**
For larger stabilized properties, agency loans offer some of the most favorable terms available, low rates, long amortization, and non-recourse structures. These require the property to meet specific occupancy thresholds (usually 90%+).
### **Bridge Loans**
For value-add deals that aren’t yet stabilized, bridge loans provide short-term financing (typically 12–36 months) while you renovate and lease up the property. Rates are higher, but they allow you to acquire deals that traditional lenders won’t touch.
### **Syndication: Using Other People’s Money**
This is where multifamily really accelerates. Syndication allows you to pool capital from multiple investors (limited partners) to buy larger deals than you could alone. You act as the General Partner (GP): you find the deal, manage the execution, and earn a share of profits. LPs provide the equity.
Learn how this works in detail: [**The Complete Multifamily Syndication Guide:**](https://rodkhleif.com/guide-to-multifamily-syndications/) everything from SEC compliance to raising your first million dollars.
### **Seller Financing**
Some motivated sellers will carry the note themselves, acting as your bank. This can eliminate the need for traditional financing entirely and is especially useful in today’s higher-rate environment.
**Can You Buy Multifamily With No Money Down?**Yes — in certain scenarios. Learn exactly how in our guide:
How to Invest in Multifamily With No Money Down →
Covers: house hacking, syndication as GP, BRRRR method, seller financing, and OPM strategies.
**Ready to Learn From Someone Who’s Done It?**Rod Khleif’s Warrior Program has helped students acquire 305,000+ units. Whether you’re buying your first deal or scaling to syndication, the Warrior Program gives you 1-on-1 mentorship, live coaching, deal analysis support, and a network of top operators.
[**👉 Apply for the Warrior Program →**](https://rodkhleif.com/rod-khleif-coaching-program/)
## How to Find Multifamily Deals
Knowing how to analyze and finance deals is useless if you can’t find good ones in the first place. Deal flow is the lifeblood of any multifamily investor’s business and the best investors build multiple channels simultaneously.
### **Commercial Real Estate Brokers**
The most common source for 5+ unit properties. Build relationships with brokers who specialize in multifamily in your target market. Be direct about your buy box (size, price range, return requirements) and follow up consistently. The best deals often go to investors who have already established trust.
### **Direct-to-Owner Outreach**
Many apartment building owners are not actively selling but would consider the right offer. Direct mail, cold calling, and driving for dollars (identifying properties in person) are all proven tactics. The owner of a tired, poorly maintained building is often a motivated seller.
### **Loopnet, CoStar & Crexi**
These are the primary online marketplaces for commercial properties. LoopNet has free listings; CoStar (which owns LoopNet) is a professional-grade paid platform used by brokers. Crexi is a newer platform with a growing multifamily inventory.
### **Networking and Word-of-Mouth**
Real estate is a relationship business. Attending local and national multifamily events, joining investor communities, and building relationships with property managers, lenders, and attorneys will surface off-market opportunities that never make it to a listing platform.
This is one of the core advantages of Rod’s Warrior Program — a community of **active operators sharing live deal flow** across markets.
### **Pocket Listings and Off-Market Deals**
Many of the best deals are never publicly listed. Brokers will often share pocket listings — properties they represent before officially listing — with investors they trust and know can close. Position yourself as a credible, prepared buyer and these opportunities will find you.
## How to Manage a Multifamily Property
Property management is where deals succeed or fail. Excellent management protects your cash flow, extends the property’s life, and keeps residents happy and long-term. Poor management erodes NOI, triggers vacancies, and destroys returns.
### **Self-Management vs. Third-Party Management**
FactorSelf-ManagementThird-Party ManagementCostFree, but it costs your timeRoughly 5 to 10% of collected rentBest forLocal investors with small propertiesScaling investors and larger propertiesScalabilityLimited and time intensiveHighControlMaximumLess day to day controlLearning curveHighLowFor most investors scaling past 20–30 units, professional management is the right move. The 8–10% management fee buys you time — and time is the real leverage in this business.
### **What a Property Manager Does**
- Tenant screening (credit, background, income verification)
- Rent collection and handling late payments
- Maintenance coordination and vendor management
- Lease renewals and rent increase negotiations
- Monthly financial reporting (income statements, variance reports)
- Handling evictions if necessary
### **Key Performance Metrics to Track**
- Occupancy Rate — Target 93%+
- Average Days Vacant — Each vacant day is lost revenue
- Maintenance Cost per Unit — Track and benchmark annually
- Rent-to-Market Ratio — Are you getting market rent or below?
- Net Operating Income — Review monthly against your pro forma
### **Value-Add Property Management**
Many beginner investors acquire properties with below-market rents. As existing leases expire, you raise rents toward market rate — each dollar of additional annual NOI adds $12–16 to the property’s value at a 6–8% cap rate. This is one of the most powerful wealth-building levers in multifamily.
## Common Beginner Mistakes to Avoid
Every experienced multifamily investor has made costly mistakes. The good news: most of them are entirely avoidable with the right knowledge and guidance upfront. Here are the most common errors beginners make:
1. Underestimating expenses. Most beginners use overly optimistic expense ratios when running pro formas. Build in a realistic 40–50% expense ratio and always include a capital expenditure reserve.
2. Skipping proper due diligence. A full property inspection, rent roll analysis, operating statement review, and local market analysis are non-negotiable before making an offer.
3. Over-leveraging on the first deal. Putting too little down or relying on bridge debt with no clear exit strategy can lead to disaster if the market shifts.
4. Choosing the wrong market. Not all markets are created equal. Research population growth, job growth, rent trends, and landlord-tenant laws before selecting your target market.
5. Managing without systems. Trying to handle everything manually as your portfolio grows leads to burnout and costly errors. Build management systems and software from day one.
6. Going it alone. The investors who scale fastest almost always have a mentor, a network, or a community around them. Isolated investors make more costly mistakes and move more slowly.
For a comprehensive breakdown, read: [**Top Multifamily Investing Mistakes and How to Avoid Them:**](https://rodkhleif.com/mistakes-apartment-buyers-make/)Rod covers these in detail with real student examples.
## Investing While Working Full-Time
One of the most common questions Rod hears: “Can I really build a multifamily portfolio while I have a full-time job?” The answer is an emphatic yes, and many of the most successful Warrior Program students did exactly that before replacing their income.
### **The Time Reality**
Actively acquiring multifamily properties does require time, for deal analysis, broker relationships, due diligence, and financing. But it doesn’t require 40 hours a week. Most investors who are getting started spend 5-15 hours per week on their business, primarily in the evenings and weekends.
### **The W-2 Advantage**
Having a steady income while building your portfolio is actually a huge advantage. Banks love the income stability that comes with W-2 employment, especially for your first few deals. Your day job income makes you a more attractive borrower and lets you weather early challenges.
### **How to Structure Your Time**
- Mornings (6-7am): Deal analysis and market research
- Lunches: Broker and networking calls
- Evenings (1-2 hours): Underwriting, education, community engagement
- Weekends: Property tours, due diligence trips, events
See the full strategy guide: [**How to Invest in Multifamily Real Estate While Working Full-Time:**](https://rodkhleif.com/investing-multifamily-properties-working-full-time/) Rod breaks down exactly how his students juggled jobs and deals in the early stages.
## Multifamily Investing Glossary
Get fluent in the language of apartment investing. Knowing these terms makes you a credible buyer with brokers, lenders, and sellers from day one.
TermDefinitionCap RateMeasures unleveraged yield. NOI divided by purchase price. Example: an 8% cap on a $1M property means $80K of NOI.NOI (Net Operating Income)Revenue minus operating expenses, before debt. The core number behind all commercial valuation.DSCR (Debt Service Coverage Ratio)NOI divided by your annual debt payment. Lenders typically require 1.20 or higher.Cash-on-Cash ReturnAnnual cash flow divided by the cash you invested. Measures your actual cash return.GRM (Gross Rent Multiplier)Price divided by annual gross rent. A quick comparison metric.Value-AddA property with upside through rent increases or improvements. A common acquisition strategy.Pro FormaA forward-looking income and expense model. The projected financials for a deal.LTV (Loan-to-Value)Loan amount divided by property value. 80% LTV means a 20% down payment.Bridge LoanShort-term financing for transitional properties, usually 12 to 36 months.GP / LPGeneral Partner (operator) and Limited Partner (passive investor). The standard syndication structure.Preferred ReturnLP investors get paid first, up to a threshold. Typically 6 to 8%.WaterfallHow profits are split after the preferred return. Commonly 70/30 or 80/20 GP/LP.CapEx (Capital Expenditure)Major property improvements such as roof, HVAC, and plumbing.Rent RollA list of all units, tenants, rents, and lease terms. A critical due diligence document.Vacancy RateThe percentage of units not occupied at a given time. Underwrite at 5 to 10%.Operating ExpensesAll costs to run the property except debt: taxes, insurance, management, and maintenance.Class A / B / CProperty quality grades by age, condition, and location. C offers the most value-add potential.1031 ExchangeA tax-deferred property swap that defers capital gains. A powerful wealth-building tool.NNN LeaseThe tenant pays taxes, insurance, and maintenance. Common in commercial, less so in multifamily.## Best Resources for Multifamily Beginners
If you’re serious about getting started, the single most important investment you can make is in **education and mentorship**. Here are the best resources to accelerate your learning:
- [**Best Ways to Learn Multifamily Investing (Complete Beginner Resource Guide)**](https://rodkhleif.com/beginner-resources/)
- Rod Khleif’s Podcast: [**How to Create Lifetime Cashflow Through Real Estate Investing**](https://rodkhleif.com/podcast) 20M+ downloads, consistently ranked #1 multifamily podcast
- Book: [**How to Create Lifetime CashFlow Through Multifamily Properties**](https://rodkhleif.com/lcfa-ebook/) by Rod Khleif, available at rodkhleif.com
- [**Multifamily Syndication: The Complete Guide**](https://rodkhleif.com/guide-to-multifamily-syndications/) for investors ready to raise capital
- [**Multifamily Investing While Working Full-Time**](https://rodkhleif.com/investing-multifamily-properties-working-full-time/)
- [**How to Buy Multifamily With No Money Down**](https://rodkhleif.com/how-to-buy-a-multifamily-property-with-no-money/)
- [**Why Multifamily Beats Single-Family Investing**](https://rodkhleif.com/17-reasons-multifamily-investing-beats-single-family/)
## Frequently Asked Questions
### **How much money do I need to start investing in multifamily?**
It depends on the strategy. House hacking a duplex with an FHA loan can be done with as little as 3.5% down. A small apartment building (5–20 units) typically requires 20–30% down plus closing costs and reserves. Syndication as a GP requires minimal personal capital — your contribution is your time and deal-finding ability. There are legitimate paths into multifamily for investors at almost every capital level.
### **Is multifamily investing risky for beginners?**
All investment involves risk, but multifamily mitigates many of the risks that plague single-family investors. Multiple income streams protect against total vacancy, income-based valuation removes dependence on market comps, and professional management systems reduce operational risk. Proper education, deal analysis, and mentorship dramatically reduce beginner risk.
### **How long does it take to get your first multifamily deal?**
Most investors in a structured program close their first deal within 6–18 months of getting serious. The timeline depends on your market, your financing readiness, how much time you invest weekly, and whether you have guidance. Having a mentor or a community significantly compresses this timeline.
### **What is the best market for multifamily investing?**
There’s no single best market, it depends on your goals. Sunbelt markets (Texas, Florida, Georgia, Arizona, Tennessee) have historically offered strong rent growth, population inflows, and landlord-friendly laws. However, secondary and tertiary markets often offer better cap rates with less competition. The right market is one you’ve analyzed deeply and understand.
### **Can I invest in multifamily from out of state?**
Absolutely. Many of the most successful multifamily investors operate nationally. The key is building a local team in your target market: a broker, property manager, lender, attorney, and inspector. With a strong team in place, geography becomes less of a barrier.
### **What is the difference between multifamily investing and real estate syndication?**
Multifamily investing is the broad strategy of owning apartment properties. Syndication is a **specific structure** for acquiring larger properties by pooling capital from multiple investors. You can invest in multifamily without syndication (buying directly with your own capital), or you can use syndication to buy deals you couldn’t afford alone. [**Learn more in the Complete Multifamily Syndication Guide**](https://rodkhleif.com/guide-to-multifamily-syndications/).
### **How do I find a good multifamily mentor?**
Look for someone who is actively investing, not just teaching theory. Check their track record (student outcomes, personal portfolio), look for a structured curriculum, peer community, and ongoing deal support. Avoid programs that charge high fees for vague “access.” Rod Khleif’s Warrior Program is consistently rated one of the top multifamily mentorship programs in the country, with verified student-owned doors as evidence.
### **What are the tax benefits of multifamily investing?**
Multifamily investing offers some of the most favorable tax treatment of any asset class. Key benefits include depreciation (reducing taxable income without a cash expense), cost segregation studies (accelerated depreciation on components), 1031 exchanges (defer capital gains taxes indefinitely), and mortgage interest deductions. Many multifamily investors pay significantly lower effective tax rates than W-2 employees.
**Take Your Next Step With Rod Khleif**You now have the foundation. The investors who build real wealth are the ones who take action — with the right education, the right systems, and the right community behind them. Rod’s Warrior Program gives you all three: live mentorship, deal analysis support, and a network of 305,000+ student-owned doors to learn from.
[**👉 Apply for the Warrior Mentorship Program Today →**](https://rodkhleif.com/rod-khleif-warrior-program/)
*RodKhleif.com | Lifetime Cashflow Academy | © 2026 All Rights Reserved*
*This article was written with the help of AI and reviewed by Rod and his team.*
**Related reading:** [How Goal Setting Accelerates Real Estate Success](https://rodkhleif.com/how-goal-setting-accelerates-real-estate-success/) — the 3-layer Lifetime Cashflow Goal Stack behind every Warrior portfolio.
**Related reading:** [How Millennials Can Build Generational Wealth With Real Estate](https://rodkhleif.com/millennials-build-generational-wealth/)
### Where should a total beginner start with multifamily investing?
Start by learning the language and the numbers, then pick one market and one property type to focus on. Most beginners stall by trying to learn everything at once. Master the seven metrics above, analyze ten deals on paper, and get around experienced investors. The free [Lifetime CashFlow ebook](https://rodkhleif.com/lcfa-ebook/) and the [Multifamily Bootcamp](https://rodkhleif.com/bootcamp/) are built to walk you through that exact first step.
> **Rod Khleif:** “I built my portfolio one unit at a time, and I have coached thousands of people to do the same. Your first deal is not about being fearless. It is about taking action while you are still a little scared.”
## Ready to Take Your First Step?
You do not need to have it all figured out to begin. You need a plan, a mentor, and the willingness to act. Grab the free [Lifetime CashFlow ebook](https://rodkhleif.com/lcfa-ebook/) to map your first deal, then join the [Multifamily Bootcamp](https://rodkhleif.com/bootcamp/) to learn the exact system I use with new investors.
**Categories:** Multifamily Investing
**Tags:** apartment investing, beginner real estate, Multifamily Financing, multifamily investing, passive income, real estate investing
---
### [506(b) vs 506(c): Which Reg D Rule to Use in 2026](https://rodkhleif.com/506b-vs-506c-syndication/)
**Published:** August 2, 2026
**Author:** Rod Khleif
**Excerpt:** 506(b) vs 506(c) explained for multifamily syndicators: who can invest, advertising rules, verification, and how to choose the right Regulation D exemption for your raise.
**Content:**
The first time I helped a newer operator raise capital, the deal was solid and the investors were ready. What almost sank it was one line on a compliance form: the wrong Regulation D exemption. Choosing between 506(b) and 506(c) is not paperwork you rush through. It decides who you can raise from, whether you can market the deal in public, and exactly what you have to prove about every investor before you take a dollar.
> **Quick answer:** 506(b) and 506(c) are the two Regulation D exemptions that nearly every multifamily syndication uses. 506(b) lets you raise from people you already know and bars public advertising, but it can include a handful of non-accredited investors. 506(c) lets you advertise openly, but every single investor must be verified accredited. You choose based on how you plan to find your investors.
## Table of Contents
- [What Is Regulation D? 506(b) and 506(c) Explained](#what-is)
- [506(b) vs 506(c): Side by Side](#comparison)
- [Rule 506(b): The Relationship Raise](#rule-506b)
- [Rule 506(c): The Public Raise](#rule-506c)
- [Which One Should You Use? The Reg D Fit Test](#which-one)
- [Costly 506 Mistakes Syndicators Make](#mistakes)
- [How to Set Up Your Raise the Right Way](#setup)
- [506(b) vs 506(c) FAQ](#faq)
- [Ready to Raise Capital the Right Way?](#next-step)
## What Is Regulation D? 506(b) and 506(c) Explained
When you raise money from investors for an apartment deal, you are selling a security. That means you either register with the SEC, which is slow and expensive, or you use an exemption. Regulation D is the set of exemptions almost every private real estate syndication relies on, and Rule 506 is the workhorse inside it because there is no cap on how much you can raise.
Rule 506 splits into two lanes. 506(b) is the older, relationship-based path. 506(c), created under the JOBS Act, traded the ban on advertising for a stricter rule on who can invest. Same parent regulation, two very different sets of rules for how you build a list, talk about a deal, and close investors. Get the lane right up front and everything downstream gets easier. Get it wrong and you can blow the exemption, which puts your whole raise and your track record at risk.
If you are still early in the journey, start with the basics of [how multifamily syndication works](https://rodkhleif.com/what-is-multifamily-syndication-a-complete-guide/), then come back here to choose your exemption.
## 506(b) vs 506(c): Side by Side
Here is the whole decision in one view. Read the infographic first, then use the table below it to confirm the details before you talk to your attorney.
FactorRule 506(b)Rule 506(c)Public advertisingNot allowedAllowedWho can investAccredited, plus up to 35 sophisticated non-accreditedAccredited investors onlyProof of accreditationInvestor self-certifiesYou must verify (docs or a third party)Pre-existing relationshipRequired before you show the dealNot requiredAmount you can raiseUnlimitedUnlimitedBest fitWarm network and referralsContent, webinars, and paid adsNotice what is the same: both let you raise an unlimited amount, both are federal exemptions, and both still require real disclosure documents. The differences are all about how you attract investors and what you must prove about them.
## Rule 506(b): The Relationship Raise
506(b) is how most operators raise their first few deals. You can bring in an unlimited number of accredited investors and up to 35 non-accredited but sophisticated investors, which matters when your early believers are family, friends, and colleagues who are not yet accredited.
The trade is that you cannot advertise. No public posts about the specific offering, no cold outreach to strangers, no ads. You can only raise from people with whom you have a genuine, pre-existing relationship established before you show them the deal. In practice that means you build the relationship first and the deal comes later, which is exactly why smart syndicators [build their investor list](https://rodkhleif.com/how-to-build-an-investor-list-for-multifamily-syndications/) long before they have anything to sell.
Under 506(b), investors self-certify that they are accredited or sophisticated. You still collect the paperwork, but you are not required to independently verify it the way 506(c) demands. Lighter verification, heavier restriction on marketing. That is the 506(b) bargain.
## Rule 506(c): The Public Raise
506(c) is built for operators who market in the open. You can post about your offering, run webinars, speak on podcasts, and buy ads. For a syndicator building a brand and a public audience, that freedom is the whole game, and it is how many modern capital raisers scale past their personal network.
The price of that freedom is strict: every investor must be accredited, and you cannot take their word for it. You must take reasonable steps to verify accredited status, either by reviewing financial documents like W-2s, tax returns, and account statements, or by using a third-party verification service or a letter from their CPA or attorney. No non-accredited investors, ever, and no self-certification.
That verification step also protects you. If a deal underperforms and an investor claims they should never have been allowed in, documented verification is your evidence that you followed the rule. When your raise depends on public marketing, pair it with a strong system for turning that attention into commitments, which is what [raising money for real estate deals](https://rodkhleif.com/how-do-i-raise-money-for-real-estate-deals/) and [syndication marketing](https://rodkhleif.com/marketing-101-real-estate-syndicators/) are really about.
## Which One Should You Use? The Reg D Fit Test
Do not pick based on which sounds easier. Pick based on how you actually raise. I use a simple three-question filter I call the **Reg D Fit Test**:
1. **Who are you raising from?** Warm network points to 506(b). Strangers who find you online point to 506(c).
2. **Will you advertise the deal publicly?** If yes, you are in 506(c) whether you meant to be or not. A single public post about the offering can force your hand.
3. **Can you verify every investor is accredited?** If you need room for a few non-accredited believers, you need 506(b).
Most first-time syndicators land on 506(b) because they are raising from people they know and want room for a non-accredited partner or two. As you build a public brand, 506(c) starts to make sense. Some operators run 506(b) for one fund and 506(c) for the next. What you cannot do is treat one deal as both.
## Costly 506 Mistakes Syndicators Make
- **Advertising a 506(b) deal.** One public post about the specific offering can blow the exemption. If you want to market openly, choose 506(c) from the start.
- **Skipping verification on 506(c).** Self-certification does not satisfy 506(c). Reasonable steps to verify are mandatory.
- **Faking the pre-existing relationship.** Meeting someone and pitching them a deal the same week is not a relationship. Regulators look at substance, not a checkbox.
- **Forgetting the Form D filing.** Both exemptions require filing a Form D with the SEC, generally within 15 days of your first sale, plus any state notice filings.
## How to Set Up Your Raise the Right Way
Once you know your lane, the setup follows a clear path. This is the order I coach operators through:
1. **Pick your exemption before you talk to anyone.** Run the Reg D Fit Test and commit. Your marketing plan and your investor list both flow from this choice.
2. **Hire a securities attorney.** This is not the place to save money with a template. A good attorney drafts your Private Placement Memorandum, operating agreement, and subscription docs to match your exemption.
3. **Build your investor pipeline the compliant way.** For 506(b), nurture real relationships first. For 506(c), build public content and a verification workflow.
4. **Verify or document, based on your lane.** 506(c) means reasonable-steps verification on every investor. 506(b) means collecting self-certification and keeping clean records.
5. **File your Form D.** Submit to the SEC, generally within 15 days of your first sale, and handle state blue-sky notice filings.
6. **Keep records for the life of the deal.** Accreditation proof, your relationship trail, and every investor communication protect you if anyone ever questions the raise.
> **Rod Khleif:** “The best syndicators treat compliance as part of the offer, not an afterthought. When you can show an investor you run a tight, by-the-book raise, you are not just following the law, you are earning the trust that gets the check written.”
## 506(b) vs 506(c) FAQ
**Is 506(c) better than 506(b)?** Neither is better. 506(c) is better if you raise from the public and everyone is accredited. 506(b) is better if you raise from your network and want room for a few non-accredited investors.
**Can I switch from 506(b) to 506(c)?** Not mid-raise for the same offering. You can, however, choose a different exemption for your next deal.
**Can non-accredited investors join a 506(c) deal?** No. 506(c) is accredited-only, with verification required. If you need non-accredited investors, use 506(b).
**What counts as advertising under 506(b)?** Any general solicitation about the specific offering: public social posts, ads, mass emails to strangers, or pitching people you just met. When in doubt, treat it as advertising.
**What does reasonable-steps verification mean for 506(c)?** Reviewing income or net-worth documents, or accepting a letter from the investor’s CPA, attorney, or a third-party verification service. A checkbox is not enough.
**Do both exemptions require a Form D?** Yes. Both require filing a Form D with the SEC, generally within 15 days of the first sale, plus applicable state filings.
**How much can I raise under Rule 506?** There is no dollar cap under either 506(b) or 506(c). The limits are on how you market and who can invest, not the amount.
**Do I still need a PPM?** Yes. Whichever exemption you choose, a proper Private Placement Memorandum and subscription documents drafted by a securities attorney are essential.
## Ready to Raise Capital the Right Way?
Choosing between 506(b) and 506(c) is one decision inside a much bigger skill: raising capital with confidence and staying compliant while you scale. That is exactly what my [Warrior Program](https://rodkhleif.com/rod-khleif-warrior-program/) is built to teach, with the frameworks, the network, and the accountability to help you close your first or next syndication. I have watched Warriors go from zero investors to millions in committed capital by getting the fundamentals right, starting with compliance.
Want to go deeper first? Map out the full path in [the first steps to becoming a multifamily syndicator](https://rodkhleif.com/what-are-the-first-steps-to-becoming-a-multifamily-syndicator/), hear real operator stories on the [Lifetime Cash Flow podcast](https://rodkhleif.com/lifetime-cashflow-podcast/), and grab the free [Lifetime CashFlow ebook](https://rodkhleif.com/lcfa-ebook/) to get started today.
*Disclaimer: This article is for educational purposes only and is not legal, tax, or investment advice. Securities laws are complex and change over time. Always consult a qualified securities attorney and CPA before structuring or marketing any offering. This article was written with the help of AI and reviewed by Rod and his team.*
**Categories:** Raising Capital, Syndication
**Tags:** 506b, 506c, accredited investors, multifamily syndication, Raising Capital, regulation d
---
### [How to Build an Investor List for Multifamily Syndication](https://rodkhleif.com/how-to-build-an-investor-list-for-multifamily-syndications/)
**Published:** January 8, 2026
**Author:** Rod Khleif
**Content:**
If you’re asking how to build an investor list for multifamily syndications, here’s the truth: it’s not a “get more leads” problem. It’s a **trust + process** problem.
Your investor list grows when people (1) understand what you do, (2) trust how you operate, and (3) see consistency over time. In 2026, that’s even more important. Investors are sharper, underwriting is more conservative, and attention is expensive. The good news? If you build the right system, your list becomes an asset that compounds.
> **Quick answer:** To build an investor list for multifamily syndications, pick a clear position, choose a compliant offering lane (Rule 506(b) or 506(c)), publish education that earns opt ins, capture leads with a valuable lead magnet, and nurture the list in a simple CRM long before you have a deal to raise on.
## Table of Contents
- [First: know what “investor list” actually means](#first-know-what-investor-list-actually)
- [Step 1: Choose your investor “position” (so the right people self-select)](#step-1-choose-your-investor-position)
- [Step 2: Understand the compliance lane you’re operating in](#step-2-understand-the-compliance-lane)
- [Step 3: Build the “conversion path” before you chase attention](#step-3-build-the-conversion-path)
- [Step 4: Offer something valuable that earns the opt-in](#step-4-offer-something-valuable-that)
- [Step 5: Use lead sources that compound (not just spikes)](#step-5-use-lead-sources-that)
- [Step 6: Have a simple CRM and tag people like a pro](#step-6-have-a-simple-crm)
- [Step 7: Nurture like an operator, not a marketer](#step-7-nurture-like-an-operator)
- [Step 8: Run “investor conversations” the right way](#step-8-run-investor-conversations-the)
- [Step 9: Build credibility assets that reduce friction](#step-9-build-credibility-assets-that)
- [Step 10: Use marketing to build trust, not noise](#step-10-use-marketing-to-build)
- [What to avoid (these kill investor lists fast)](#what-to-avoid-these-kill-investor)
- [A simple 30-day plan to start building your list](#a-simple-30-day-plan-to)
- [Where your investor list fits in the capital raising system](#where-your-investor-list-fits-in)
- [Final takeaway](#final-takeaway)
- [FAQ: How can you build an investor list for multifamily syndications?](#faq-how-can-you-build-an)
## First: know what “investor list” actually means
A real investor list isn’t a spreadsheet of random contacts. It’s a living database of people who are:
(a) aligned with your strategy,
(b) educated enough to make a decision,
(c) engaged with you consistently,
(d) qualified (or on the path to qualification), and
(e) trusting you with their attention.
Think of your list in tiers. Some people are “curious.” Some are “serious.” Some are ready to invest. Your job is to move people forward through education and relationships without pressure or hype.
## Step 1: Choose your investor “position” (so the right people self-select)
If your message is vague, your list will be vague. If your message is specific, your list becomes high quality.
In plain English, you need to be able to answer:
What do you buy?
Where do you buy?
Why that niche?
What makes you credible to execute?
How do you protect investors on the downside?
When your positioning is clear, you’ll attract people who resonate with your approach and repel the people who were never a fit anyway. That’s a win.
## Step 2: Understand the compliance lane you’re operating in
This is the step new syndicators skip, and it is the one that gets people in trouble. Under Regulation D, almost every multifamily syndication is raised under one of two exemptions, and the one you choose decides how you are allowed to build your list.
Rule 506(b)Rule 506(c)**Public advertising**No. No public solicitation.Yes. You can market openly.**Investor type**Accredited plus up to 35 sophisticated non accreditedAccredited investors only**Verification**Investor self certifiesYou must verify accredited status**Pre existing relationship**Required before you show a dealNot required**Best for list building**Warm network and referralsOpen content, ads, webinarsIf you plan to build your list in public with content and webinars, you are almost certainly operating in a 506(c) mindset and every investor will need to be verified accredited. If you are working your warm network quietly, 506(b) fits, but you must establish the relationship before you ever pitch a specific deal. This is legal territory, so confirm your structure with a securities attorney before you raise a dollar.
Investor list building touches securities rules. I’m not giving legal advice here, but you need to understand the practical implication: the way you market and the way you raise capital can change depending on your offering structure. Don’t wing this. Work with a qualified securities attorney and build your list the right way from day one.
If you want a clean overview of syndications and how they work, start here:
## Step 3: Build the “conversion path” before you chase attention
Most people try to grow a list before they have anywhere to send people. That kills momentum.
In 2026, your basic conversion path should be simple and frictionless:
A clear entry point (opt-in) →
a short “welcome” sequence →
consistent weekly value →
a next step (call / webinar / investor webinar / Q&A) →
relationship building →
investor readiness.
You do not need a fancy funnel. You need a reliable one.
## Step 4: Offer something valuable that earns the opt-in
People don’t join investor lists because they love newsletters. They join because you offered a clear benefit.
Strong opt-in angles for a multifamily syndicator include:
A beginner-friendly “How syndications work” guide (with plain-English examples)
A deal evaluation checklist (what to look for in a sponsor and a deal)
A “market snapshot” (what you’re seeing in one market and why it matters)
A simple underwriting walkthrough (how you think about downside protection)
Make the opt-in match your positioning. If you’re value-add multifamily, your opt-in should feel like value-add multifamily—not generic real estate motivation.
## Step 5: Use lead sources that compound (not just spikes)
You can build an investor list fast with paid traffic, but most beginners build better lists with compounding channels. Here are the ones that work consistently when you do them weekly:
**1) Warm network, done professionally**
Start with the people who already know you. You’re not “pitching.” You’re simply letting them know what you’re building and giving them a way to follow along. Many first checks come from people who already trust you as a person.
**2) Referral flywheel**
Every investor conversation should end with a simple ask: “Is there one person you know who’s curious about multifamily and would benefit from learning with you?” Referrals are the highest-trust lead source there is.
**3) Partner ecosystems**
CPAs, attorneys, mortgage professionals, insurance brokers, property managers, financial advisors, and active investors are close to your ideal audience. Instead of selling them, build relationships, provide value, and create a simple way for them to introduce you.
**4) Content that attracts the right people**
Short weekly content beats sporadic long content. Share what you’re seeing in underwriting, what you’re learning, how you evaluate risk, and how you think about protecting investors. This builds authority without trying to “perform.”
**5) Events and community**
Local meetups, conferences, masterminds, and investor lunches can fill your list quickly because they compress trust. Don’t go to “network.” Go to have a few real conversations and follow up with professionalism.
## Step 6: Have a simple CRM and tag people like a pro
If you don’t tag and track, you don’t have a list; you have names.
Minimum CRM fields you should track:
How you met
Investor type (new / experienced / passive / active)
Interest level (curious / engaged / ready)
Timeline (now / later / unknown)
Accredited status (if they volunteer it) and general check size range (if appropriate)
Topics they care about (cash flow, tax benefits, risk, markets, operations)
This is what allows you to follow up like a professional instead of blasting the same message to everyone.
## Step 7: Nurture like an operator, not a marketer
In 2026, investors want clarity. Your content should reduce uncertainty and build trust.
A simple weekly nurture cadence that works:
1 short lesson: what you’re seeing in the market or underwriting
1 story: a real example (win, mistake, lesson learned)
1 proof point: your process (how you vet deals, manage risk, execute business plans)
1 invitation: a call, webinar, Q&A, or “reply with questions”
Notice what’s missing: hype, urgency, and income promises. Don’t sell the dream. Sell the process.
## Step 8: Run “investor conversations” the right way
Your goal in an investor call isn’t to close. It’s to understand fit and build relationship.
**Strong investor questions include:**
What prompted your interest in multifamily?
What type of returns or outcomes matter most to you (cash flow, growth, tax benefits, simplicity)?
What are your biggest concerns with syndications?
What’s your timeline to invest?
How do you like to receive updates and reporting?
What would make you feel confident in a sponsor?
Then you share your approach clearly: your niche, your risk lens, your team, and your communication standards. If there’s alignment, you invite them into your education flow and keep building trust.
If you want Rod’s broader approach on raising money and building investor trust, this is a strong companion resource:
## Step 9: Build credibility assets that reduce friction
When someone is deciding whether to invest with you, they’re asking, “Will this person execute?” Help them answer that question.
Credibility assets you should build over time:
A one-page investor overview (your strategy, markets, why you win, what you avoid)
A deal evaluation framework (how you underwrite risk and protect downside)
Sample reporting (what updates look like, how often, what you track)
Team and roles (who does what)
FAQs that address common concerns in plain English
You don’t need to pretend you’re bigger than you are. You need to be clear, consistent, and honest about what you do and how you do it.
## Step 10: Use marketing to build trust, not noise
If you’re syndicating, you’re in the trust business. Marketing isn’t “posting more.” It’s building a repeatable way to educate people, demonstrate competence, and invite conversation.
This resource is a solid guide for aligning your messaging, content, and investor journey:
## What to avoid (these kill investor lists fast)
**Buying random lists.** Low trust, low engagement, and high risk. Build a list people opt into.
**Only reaching out when you have a deal.** That’s not a relationship. That’s a transaction. Nurture consistently before you ever have an offering.
**Being vague or trying to appeal to everyone.** Specificity attracts qualified investors. Generality attracts tire kickers.
**Overpromising.** In 2026, investors are skeptical of aggressive projections. Lead with process, conservatism, and transparency.
## A simple 30-day plan to start building your list
If you want traction quickly, don’t overcomplicate it. In the next 30 days, focus on three outputs.
First, create one clear opt-in that matches your strategy. Second, schedule five investor conversations with people in your warm network or referral network. Third, publish one value-driven piece of content per week and invite replies. Track every interaction in your CRM and follow up like a pro.
Do that for 30 days and your investor list won’t just “grow.” It will start to form into something that actually converts: a community of people who trust your thinking and want to follow your journey.
## Where your investor list fits in the capital raising system
Your list is one piece of a larger machine. The syndicators who raise fast are the ones who connect the list to the deal, the entity, and the story. Here is how the pieces fit, and where to go deeper on each:
- Get the fundamentals first with [what multifamily syndication is and how it works](https://rodkhleif.com/what-is-multifamily-syndication-a-complete-guide/).
- See the full path in [the first steps to becoming a multifamily syndicator](https://rodkhleif.com/what-are-the-first-steps-to-becoming-a-multifamily-syndicator/).
- Turn attention into commitments with [how to raise money for real estate deals](https://rodkhleif.com/how-do-i-raise-money-for-real-estate-deals/).
- Sharpen your outreach with [real estate syndication marketing 101](https://rodkhleif.com/marketing-101-real-estate-syndicators/).
I have watched hundreds of my Warrior students build lists that turned into millions in committed capital. The pattern is always the same: they started before they had a deal, they led with education, and they stayed compliant. If you want the frameworks, the community, and the accountability to do this at scale, that is exactly what the [Warrior Program](https://rodkhleif.com/rod-khleif-warrior-program/) is built for. Not ready yet? Start free with the [Lifetime CashFlow ebook](https://rodkhleif.com/lcfa-ebook/).
## Final takeaway
The best way to build an investor list for multifamily syndications is to combine clear positioning, compliant marketing, consistent education, and professional follow-up. Don’t chase “bigger.” Chase “better.” A smaller list of aligned, engaged investors will outperform a massive list of strangers every time.
## **FAQ: How can you build an investor list for multifamily syndications?**
**What’s the fastest way to start an investor list from zero?
Start with your warm network and create a simple opt-in (guide, checklist, or market update) so people can follow your journey. Then book a handful of “investor fit” conversations and ask for one referral at the end of each call. Consistency beats volume.
**Do I need a CRM to build an investor list?
Yes, if you want it to convert. A spreadsheet is fine at first, but you need a system to track where each person is in the relationship (curious, engaged, ready), their goals, and your follow-ups. If you don’t track, you’ll either spam everyone or forget people who were interested.
**What should I offer as an opt-in to get investors to join my list?
Offer something that reduces uncertainty: a “How syndications work” guide, a sponsor/deal evaluation checklist, a market snapshot, or a simple underwriting breakdown. The best opt-ins match your niche (market, asset type, value-add vs. core, etc.).
**How often should I email my investor list in 2026?
Weekly is a strong standard if you can stay consistent. The goal is trust-building, not constant selling. A short weekly email that teaches, shares a real example, and invites replies works better than long essays or sporadic blasts.
**What do I say when I reach out to friends or colleagues?
Keep it calm and professional: tell them you’re building a multifamily investing business, you’re sharing educational updates, and you’d love to include them if they’re curious. You’re inviting them to learn—no pressure, no pitch.
**How do I get referrals without sounding salesy?
After a good conversation, ask this question:
“Do you know anyone who is interested in multifamily and would like to learn with us?”
Referrals are more effective when you provide education instead of pushing a deal.
**What content builds the most trust with investors?
Content that shows your process: how you evaluate risk, what you’re seeing in underwriting, lessons from deals (wins and mistakes), and how you think about protecting investors. Avoid hype and avoid acting like every deal is a home run.
**Should I talk about returns or performance projections in my marketing?
Be careful. You can educate on how returns generally work, but avoid hype, guarantees, or overly aggressive projections. Keep it grounded and compliant, and work with a securities attorney to stay in the right lane.
**How do I qualify investors without making it awkward?
Do it through conversation, not interrogation. Ask about goals, timeline, risk tolerance, desired involvement, and what they’ve invested in before. If accredited status matters for your offerings, handle it respectfully and only when appropriate.
**How many investors do I need on my list to raise money?
There’s no magic number. Conversion depends on trust, fit, and your consistency. A smaller list of engaged, aligned investors often outperforms a bigger list of passive subscribers. Focus on engagement and relationships first.
**What’s the biggest mistake people make when building an investor list?
They only show up when they have a deal. That trains people to ignore them. Build trust year-round with education, transparency, and consistent communication.
**What’s a simple 30-day plan to grow my list?
Create one opt-in, publish one value-driven post or email per week, schedule 5–10 investor conversations, ask for referrals, and track everything in a CRM. Repeat weekly. Your list will grow and it will be higher quality.
***Important note:** This article is for educational purposes and is not legal, tax, or investment advice. Consult qualified professionals regarding securities compliance and your specific situation. This was written with the help of AI and reviewed by Rod and his team.*
**Categories:** Blog, Raising Capital, Syndication
**Tags:** accredited investors, capital raising, investor list, multifamily syndication, Raising Capital, real estate syndication
---
### [What Are the First Steps to Becoming a Multifamily Syndicator?](https://rodkhleif.com/what-are-the-first-steps-to-becoming-a-multifamily-syndicator/)
**Published:** January 22, 2026
**Author:** Rod Khleif
**Content:**
Have you ever driven past a massive apartment complex and wondered what it would be like to own it? The good news is you don’t need millions of dollars in the bank to acquire large multifamily properties. Through syndication, you can pool resources with other investors to purchase apartment buildings that would be completely out of reach on your own, creating wealth for yourself and your investors in the process. Becoming a multifamily syndicator is one of the most powerful wealth-building strategies available today. It allows you to leverage other people’s money, scale quickly, and build a portfolio that generates consistent passive income. But where do you actually start? In this comprehensive guide, we’ll walk through the essential first steps to becoming a [multifamily syndicator](https://rodkhleif.com/guide-to-multifamily-syndications/) and show you how to avoid the costly mistakes that derail many beginners.
**New to syndication?** If you are still deciding between investing passively and leading your own deals, start with [What Is Multifamily Syndication? A Complete Guide](https://rodkhleif.com/what-is-multifamily-syndication-a-complete-guide/) for the full definition, GP vs LP roles, and risk factors. This page picks up where that one ends: the operator path.
## Understanding What a Multifamily Syndicator Actually Does
Before diving into the steps, let’s clarify what a syndicator is and the role you’ll play in multifamily deals. In a multifamily syndication, there are two main parties working together: **General Partners (GPs) – The Syndicators:** These are the active operators who find deals, secure financing, manage the property, raise capital from investors, and execute the business plan. As the GP, you’re responsible for everything from sourcing opportunities to distributing returns. You earn fees for your work including acquisition fees and asset management fees, plus a share of the profits. **Limited Partners (LPs) – The Passive Investors:** These investors contribute most of the capital needed for the down payment and renovations but remain hands-off in daily operations. They receive regular cash flow distributions and a share of the profits when the property is sold or refinanced. As a syndicator, your job is to create a win-win situation where you provide expertise, time, and deal flow while your investors provide capital in exchange for passive returns that outperform traditional investments. ## Step 1: Build Your Foundation of Knowledge
You can’t syndicate what you don’t understand. The first and most critical step is to immerse yourself in multifamily real estate education. ### What You Need to Learn
- How to analyze multifamily deals and run accurate underwriting
- Understanding cap rates, cash-on-cash returns, and internal rate of return (IRR)
- The difference between Class A, B, and C properties and which to target
- Value-add strategies that increase property income and value
- Due diligence processes and what can go catastrophically wrong
- Property management fundamentals and operational efficiency
- Market analysis techniques for identifying strong growth markets
- Legal structures of syndications including 506(b) versus 506(c) offerings
- How to structure deals that attract investors while protecting your interests
### Where to Learn
While countless resources exist online, finding structured, comprehensive training can dramatically shorten your learning curve and help you avoid expensive mistakes. One standout mentor in the multifamily space is **Rod Khleif**, who has over 40 years of active investing experience and has personally owned and managed over 2,000 properties. What sets Rod apart is his genuine commitment to helping investors succeed and his incredible accessibility. Rod offers [free Saturday webinars](https://rodkhleif.com/) where he teaches proven multifamily strategies and hosts live “Ask Me Anything” sessions. Unlike many mentors who stay distant from their communities, Rod is known for answering questions that are commented or DMed directly to him across various social media platforms. For those ready to dive deeper, Rod’s Warrior Program has helped create a community of over 1,700 active investors who collectively own approximately 305,000 units. The program includes one-on-one mentorship with seasoned investors, unlimited deal analysis to ensure you’re making sound investments, done-for-you investor documents including PPMs and pitch decks, and access to a network of proven operators.
Additional learning resources to consider: - Read foundational books like “The ABCs of Real Estate Investing” by Ken McElroy and “What Every Real Estate Investor Needs to Know About Cash Flow” by Frank Gallinelli
- Listen to podcasts such as [Rod Khleif’s “Lifetime Cashflow Through Real Estate Investing”](https://rodkhleif.com/links/) which has garnered over 17 million downloads
- Join BiggerPockets and actively participate in the multifamily forums
- Attend multifamily conferences and bootcamps to network and learn
- Take online courses focused specifically on syndication structures and capital raising
## Step 2: Get Real Estate Experience (Even If You Start Small)
Theory is essential, but nothing replaces hands-on experience. Before asking investors to trust you with their money on a 100-unit deal, you need to demonstrate that you understand real estate operations. ### Ways to Gain Experience
- **Purchase a small multifamily property on your own:** Start with a duplex, triplex, or small apartment building to learn the fundamentals of property management, tenant relations, and maintenance coordination
- **Partner with an experienced investor:** Offer to handle property management or contribute sweat equity in exchange for learning the ropes
- **Take on property management responsibilities:** Understanding day-to-day operations is crucial for running successful syndications
- **Work as an asset manager:** Join someone else’s team to see how deals are structured and managed
- **Volunteer with experienced syndicators:** Help with due diligence, market research, or investor relations to gain insider knowledge
This experience serves two critical purposes: it teaches you the realities of multifamily investing, and it gives you credibility when you eventually pitch deals to investors. When you can say, “I’ve successfully managed a 12-unit property and increased NOI by 18%,” investors will listen. #### Pro Tip: Study Deals Obsessively
If you can’t purchase a property yet, analyze every multifamily listing in your target markets. Run the numbers on hundreds of deals. Learn to distinguish winners from losers at a glance. This pattern recognition becomes invaluable when you’re competing against other buyers.
## Step 3: Build Your Network (This Is Everything)
Real estate is fundamentally a relationship business. Your network will determine your deal flow, your investor base, and ultimately your success as a syndicator. ### Who You Need in Your Network
- **Commercial Real Estate Brokers:** They bring you deal flow before properties hit the market and can provide valuable market insights
- **Lenders and Mortgage Brokers:** They help you secure financing and can connect you with other investors
- **Property Management Companies:** They handle day-to-day operations and can make or break your investment
- **Attorneys and CPAs:** They structure your syndications legally and tax-efficiently
- **Contractors and Vendors:** They execute your value-add business plans on time and on budget
- **Other Syndicators:** They can become JV partners, mentors, or co-GPs on larger deals
- **High-Net-Worth Individuals:** They become your investor base and can provide substantial capital
### Where to Network Effectively
- Local Real Estate Investment Associations (REIAs) and meetups
- Multifamily conferences and bootcamps
- BiggerPockets forums and local chapter events
- LinkedIn real estate groups and professional associations
- Chamber of Commerce and business networking events
- Industry-specific networking platforms
#### Networking Strategy
Don’t just collect business cards. Build genuine relationships by adding value first. When you meet a broker, ask how you can help them rather than immediately asking for deals. This approach builds trust and creates long-term partnerships that outlast any single transaction.
## Step 4: Start Building Your Investor Database Before You Have a Deal
One of the biggest mistakes new syndicators make is finding an amazing deal and then scrambling to raise capital. By that point, you’ve already lost precious time and may lose the deal entirely to a better-prepared competitor. Start building your investor list now, even if you won’t have a deal for months or years. ### How to Build Your Investor List
**Identify Potential Investors:**- Friends and family who trust you and believe in your vision
- Colleagues and former coworkers, especially high earners looking for passive income
- Business owners and entrepreneurs who understand leverage
- Doctors, dentists, engineers, and other high-income professionals
- Other real estate investors looking to diversify passively
- People you meet at networking events who express interest in real estate
**Nurture Your List Consistently:**- Send regular market updates and educational content about multifamily investing
- Share deals you’re analyzing, explaining your thought process even if you pass
- Explain why you rejected certain opportunities to demonstrate your discernment
- Provide value with no expectation of immediate return
- Be transparent about your learning journey and milestones
**Gauge Interest Early:** Before you ever have a deal, have conversations with potential investors to understand their preferences, investment capacity, expected returns, risk tolerance, investment timeline, and what would make them comfortable investing with you as a first-time syndicator. By the time you have your first deal, you should already know exactly who you’ll pitch it to and approximately how much capital you can raise. This preparation is what separates successful syndicators from those who struggle. ## Step 5: Develop Your Investment Criteria and Market Focus
You can’t be everywhere and do everything effectively. Successful syndicators focus on specific markets and property types where they can develop deep expertise and competitive advantages. ### Define Your Investment Criteria
- **Market Focus:** Which cities or regions will you invest in? Consider job growth, population trends, landlord-friendly laws, and strong rental demand
- **Property Type:** Will you focus on value-add Class B and C properties or stabilized Class A assets?
- **Deal Size:** Are you targeting 20-unit properties to start or jumping straight into 200-unit complexes?
- **Investment Strategy:** Quick repositioning and exit, long-term holds, or distressed asset turnarounds?
- **Return Targets:** What IRR and cash-on-cash returns are you targeting for your investors?
**Why This Matters:** When you have clear criteria, brokers know exactly what to bring you. Investors understand your strategy and expertise. You become known as “the person who does value-add deals in growing Texas markets” rather than someone who’s scattered across multiple strategies and locations. ## Step 6: Understand the Legal and Regulatory Requirements
Syndication is heavily regulated by the Securities and Exchange Commission. You absolutely must understand the legal requirements before raising money from investors. ### Key Legal Structures
**506(b) Offerings:**- Can accept both accredited and up to 35 sophisticated but non-accredited investors
- Cannot publicly advertise or market the deal
- Must have a pre-existing relationship with investors
- Most common structure for syndicators with an established network
**506(c) Offerings:**- Can only accept verified accredited investors
- Allows public advertising and marketing
- Requires third-party verification of accredited investor status
- Better for syndicators who want to market deals publicly
**Critical Point:** Working with an experienced securities attorney is not optional. The cost of legal compliance is far less than the penalties for violations, which can include fines, investor lawsuits, and being barred from future securities offerings. ## Step 7: Create Your First Syndication Deal Structure
How you structure your deals determines whether investors will trust you with their capital and whether you’ll be fairly compensated for your work. ### Common Fee Structures
- **Acquisition Fee:** Typically 1-3% of purchase price, paid at closing for finding and closing the deal
- **Asset Management Fee:** Usually 1-2% of collected revenue annually for ongoing management
- **Disposition Fee:** Often 1-2% of sale price when the property is sold
- **Equity Split:** Common structures include 70/30 or 80/20 (LP/GP) after investors receive their preferred return
**Preferred Return:** Most syndicators offer investors a preferred return (often 6-8%) before the GP receives any profit split. This aligns interests and shows investors you’re confident in the deal’s performance. ### Ready to Take Your Multifamily Syndication Knowledge to the Next Level?
Join Rod Khleif’s [free Saturday webinar](https://rodkhleif.com/links/) where you can ask questions directly and learn from someone who’s actually done it. Rod’s community of Warriors has collectively acquired over 305,000 units, and his accessible, no-nonsense approach has helped thousands of investors achieve financial freedom through multifamily real estate. Whether you’re just starting out or looking to scale your existing portfolio, Rod’s resources can help you avoid costly mistakes and accelerate your path to success.
## Step 8: Develop Your Deal Analysis Skills
For the full model, walk through our [step-by-step guide to underwriting a multifamily deal](https://rodkhleif.com/how-to-underwrite-a-multifamily-deal-step-by-step-the-complete-guide/).
Your ability to accurately underwrite deals and identify opportunities that others miss will determine your success as a syndicator. ### Key Analysis Components
- **Income Analysis:** Verify current rents, understand rental comps, identify value-add opportunities
- **Expense Analysis:** Scrutinize operating expenses, identify efficiency improvements, budget for capital expenditures
- **Market Analysis:** Understand supply and demand dynamics, population and job growth trends, new construction pipeline
- **Exit Strategy:** Plan your hold period, projected value at sale, and multiple exit scenarios
- **Risk Analysis:** Identify deal-specific risks, market risks, and develop mitigation strategies
Conservative underwriting protects both you and your investors. It’s better to under-promise and over-deliver than to paint an overly optimistic picture that doesn’t materialize. ## Step 9: Master the Art of Raising Capital
Go deeper on investor outreach and SEC compliance in [how to raise money for real estate deals](https://rodkhleif.com/how-do-i-raise-money-for-real-estate-deals/).
The best deal in the world means nothing if you can’t raise the capital to close it. Capital raising is a skill that improves with practice. ### Effective Capital Raising Strategies
- **Perfect Your Investment Summary:** Create a compelling one-page overview that highlights key metrics and opportunity
- **Develop a Professional Presentation:** Walk investors through the market, property, business plan, and projected returns
- **Be Transparent About Risks:** Sophisticated investors appreciate honesty about potential challenges
- **Follow Up Consistently:** Most investors won’t commit on the first conversation; persistence pays
- **Provide Regular Updates:** Keep investors informed throughout the process, even if they pass on this deal
Remember, you’re not just raising money for one deal—you’re building relationships with investors who will fund multiple deals over the years as you prove yourself. ## Step 10: Execute and Build Your Track Record
Nothing builds credibility faster than a successful first deal. Focus on executing flawlessly, even if it’s a smaller opportunity than you initially envisioned. ### Keys to Successful Execution
- **Over-communicate with investors:** Monthly or quarterly updates build trust and confidence
- **Deliver on your promises:** If you projected 8% returns, make sure you deliver at least that
- **Build systems and processes:** Document everything so you can scale efficiently
- **Learn from every deal:** Conduct post-mortems to identify what worked and what didn’t
- **Cultivate your network:** Stay in touch with brokers, lenders, and investors between deals
Your first deal won’t be perfect, but it will be the foundation for everything that follows. Treat it with the attention and respect it deserves. ## Frequently Asked Questions About Becoming a Multifamily Syndicator
How much money do I need to become a multifamily syndicator?
You don’t necessarily need large amounts of capital to become a syndicator. Many successful syndicators started with little to no money of their own. However, you should expect to invest $10,000-$25,000 in education, legal setup costs, marketing materials, and travel to build your network and find deals. Some syndicators also invest 5-10% of the required equity to show skin in the game and align their interests with passive investors. The real currencies you need are knowledge, credibility, and a strong network.
Do I need to be an accredited investor to syndicate deals?
No, you do not need to be an accredited investor to syndicate multifamily deals. As a General Partner (syndicator), you’re raising capital from others, not necessarily investing large amounts yourself. However, understanding the accredited investor criteria is crucial because it affects how you can raise capital under SEC regulations. Under 506(b) offerings, you can raise money from both accredited and up to 35 sophisticated non-accredited investors. Under 506(c), you can only accept verified accredited investors but can advertise publicly.
How long does it take to complete your first syndication deal?
The timeline varies significantly based on your preparation, network, and market conditions. From the moment you begin seriously pursuing syndication, expect 12-24 months to close your first deal. This includes 3-6 months of intensive education and network building, 6-12 months of analyzing deals and building your investor database, and 2-4 months from going under contract to closing once you find the right property. However, with proper mentorship and an existing network, some syndicators complete their first deal in 6-12 months. The key is starting to build relationships with investors and brokers before you need them.
What’s the difference between a syndicator and a real estate fund?
A syndicator typically raises capital for individual deals on a property-by-property basis. Each syndication is a separate legal entity (usually an LLC) created for one specific property or portfolio. Investors choose which deals to invest in based on the specific opportunity. A real estate fund, on the other hand, pools capital from investors into one vehicle that then deploys that capital across multiple properties over time. Investors commit their capital upfront without knowing exactly which properties will be purchased. Funds offer more flexibility for the operator but require more complex legal structures and usually higher minimum investments. Most new multifamily investors start with syndications before potentially creating a fund after building a strong track record.
What are the biggest mistakes new syndicators make?
The most common mistakes include: overpaying for deals due to competitive pressure or inexperience with underwriting; underestimating renovation costs and timelines; failing to properly vet property management companies; not maintaining adequate reserves for unexpected expenses; overpromising returns to investors and then underdelivering; poor communication with investors, especially when problems arise; ignoring market fundamentals and chasing yield in declining markets; trying to raise capital after finding a deal rather than building the investor network first; and partnering with the wrong people without proper vetting. Working with an experienced mentor can help you avoid these costly mistakes and learn from others’ experiences rather than your own failures.
How do I find my first multifamily deal to syndicate?
Finding your first deal requires a multi-pronged approach. Build relationships with commercial real estate brokers in your target markets by calling them regularly, touring properties with them, and demonstrating that you’re a serious buyer even before you have capital lined up. Search online platforms like LoopNet, CommercialCafe, and Crexi, though the best deals rarely make it to public listings. Network with other investors who might bring you into deals as a co-GP. Consider partnering with an experienced syndicator on your first deal to learn the process. Drive or virtually explore your target markets to identify off-market opportunities, then reach out to owners directly. The key is making yourself known as an active buyer in your target market so brokers think of you when opportunities arise. Most syndicators analyze 100+ deals before finding the right first opportunity.
Is now a good time to start syndicating multifamily properties?
Every market cycle presents different opportunities and challenges. Higher interest rates in 2026 have created opportunities for well-capitalized buyers to acquire properties from overleveraged sellers at better valuations. However, this also means financing is more expensive and deals require stronger fundamentals to work. The key is understanding that real estate is a long-term game. The best time to start learning and building your network is always now, even if you don’t close your first deal immediately. Market downturns often create the best buying opportunities for those who are prepared with knowledge, capital relationships, and the ability to move quickly. Rather than timing the market perfectly, focus on finding deals with strong fundamentals, conservative underwriting, and multiple exit strategies. Markets will always cycle, but the fundamentals of creating value through operational improvements and strong property management remain constant.
What technology and tools do I need to be a successful syndicator?
Essential tools include spreadsheet software (Excel or Google Sheets) for underwriting and financial modeling; deal analysis software like DealCheck or specialized multifamily underwriting tools; investor management platforms such as InvestNext or Covercy to track capital raises and distributions; a professional website to establish credibility; CRM software to manage investor relationships and pipeline; project management tools like Asana or Monday to coordinate due diligence and renovations; and DocuSign or similar for digital signatures on legal documents. However, don’t let the lack of sophisticated tools hold you back initially. Many successful syndicators started with just Excel spreadsheets and email. Invest in better technology as you scale, but focus first on building the fundamental skills of deal analysis, relationship building, and execution.
### Take the First Step Toward Multifamily Syndication Success
Becoming a multifamily syndicator is a journey that requires dedication, continuous learning, and the right guidance. Don’t navigate this path alone. Start by joining Rod Khleif’s free Saturday webinar to learn from someone who’s successfully navigated every stage of this journey. With over 40 years of experience, 2,000+ properties owned, and a genuine passion for helping others succeed, Rod provides the mentorship and community support that can dramatically accelerate your path to financial freedom. [Visit RodKhleif.com](https://rodkhleif.com/) to access free resources, register for upcoming webinars, and discover how the Warrior Program has helped over 1,700 investors collectively acquire 305,000+ units. Your journey to building generational wealth through multifamily syndication starts with a single step. Take it today.
*Disclaimer: This article was written with the help of AI and reviewed by Rod and his team.*
If you are still mapping out the road, start with our [10 step quick start to multifamily investing](https://rodkhleif.com/10-step-quick-start-multifamily-investing/), and learn [how to vet a multifamily real estate mentor](https://rodkhleif.com/how-to-vet-a-multifamily-real-estate-mentor/) before you commit to one.
**Related reading:** [how to build a compliant investor list](https://rodkhleif.com/how-to-build-an-investor-list-for-multifamily-syndications/).
**Categories:** Blog, Syndication
---
### [How Do I Raise Money for Real Estate Deals?](https://rodkhleif.com/how-do-i-raise-money-for-real-estate-deals/)
**Published:** July 30, 2025
**Author:** Alex Khleif
**Content:**
One of the most common questions I get from new investors is:
“Rod, how do I raise money for real estate deals if I don’t have millions in the bank?”
Here’s the good news: You don’t need millions at all. You need a plan, credibility, and the right relationships.
I started with nothing, and I’ve now owned and managed over 2,000 properties. Raising capital isn’t about slick pitches. It’s about adding value, solving problems, and creating trust.
If you’re ready to scale your portfolio, here’s how to raise money the *right way*.
## What Are the Main Ways to Raise Capital for Real Estate?
### 1. Start with Your Warm Network
Before you think about private equity firms or crowdfunding, start with your existing relationships.
- Friends
- Family
- Colleagues
- People in your local or professional community
Tell them what you’re doing. Share your goals. Ask if they know anyone who might be interested in real estate investments. Don’t pitch right away. Just plant the seed.
> 💡 Tip: Create a simple one pager or investor pitch deck that explains what you do, your past success (even small wins count), and the kind of opportunities you offer.
### 2. Learn Syndication Basics
Syndication is one of the most powerful ways to raise money at scale.
#### What is syndication?
It’s when a group of investors pool funds to purchase a larger real estate asset, like a 50 unit apartment complex, under a legal structure (typically an LLC).
There are two primary roles:
- General Partner (GP): The active operator who finds the deal, manages the property, raises the capital, and executes the business plan.
- Limited Partners (LPs): The passive investors who contribute capital in exchange for a share of the profits.
If you want to learn how to raise money legally and efficiently, this is the path.
📘 Need help? Download my free [“Complete Guide to Multifamily Syndications.”](https://rodkhleif.com/guide-to-multifamily-syndications/)
It breaks down SEC regulations, private placement memorandums, how to build your team, and how to structure deals with confidence.
### 3. Offer Solid Returns with Transparency
Raising capital is about trust. Most investors care about two things:
- Will I get my money back?
- Will I get a fair return?
Be clear about:
- The business plan
- The holding period
- How cash flow and profits will be distributed
- What could go wrong (and how you’ll handle it)
Most syndication deals offer 7-10% preferred returns, with 70/30 splits after that. Don’t overpromise. Be conservative. And always under promise and over deliver.
### 4. Build a Strong Track Record (Even If You’re New)
You don’t need to have done 50 deals to raise capital.
What you need is:
- A great team with experience (partner with a mentor or operator)
- A clear, conservative business plan
- Credibility and transparency
- Proof you’ve done your homework (market analysis, cap rates, comps)
Partner with others as a co-GP if needed. That experience alone can open doors to your own investor base. Even closing a small 4 plex with partners shows you can execute. Use that win and build momentum.
### 5. Attend Networking Events and Meetups
Capital doesn’t lives in conversations.
Get in the room with:
- High-net-worth individuals
- Business owners
- Medical and tech professionals
- Other real estate investors
Tell them what you’re doing. Add value. Ask questions. Listen. Relationships are your capital.
🎤 Pro tip: Start speaking at local meetups or virtual webinars. It builds authority fast.
### 6. Build an Email List of Interested Investors
Start collecting names of people who want to hear about future deals. You can use:
- Landing pages
- Free reports or eBooks
- Webinars
- Podcasts
- LinkedIn or YouTube content
Even if they’re not ready to invest now, consistent education builds trust. Set up a simple CRM with email automation. Educate, update, and add value weekly or monthly.
### 7. Understand SEC Rules Before You Accept Money
**Don’t skip this!**
Real estate is heavily regulated. If you’re raising money from passive investors, you’ll need to comply with SEC regulations like:
- Reg D 506(b): Allows friends/family and some non-accredited investors
- Reg D 506(c): Allows general solicitation but requires accreditation verification
📑 You’ll need a syndication attorney, private placement memorandum (PPM), operating agreement, and subscription documents.
This protects you, your investors, and your reputation.
### 8. Use Your Self Directed IRA as a Tool
You can raise money from investors’ retirement accounts using a self-directed IRA or Solo 401(k).
Many people don’t even know this is an option.
Educate your network about how they can use retirement funds to generate passive income in real estate.
### 9. Share Success Stories and Case Studies
Nothing builds credibility like proof.
Document your deals. Show before-and-after pictures. Share how you added value, increased rents, and exited profitably.
If you haven’t done a deal yet, highlight your team’s success or mentor’s experience. People invest in people. Show them why you’re worth betting on.
### 10. Keep Communication at the Core
The fastest way to lose trust? Poor communication.
Update your investors quarterly at a minimum. Include:
- Rent collections
- Occupancy trends
- Renovation progress
- Financials
- Challenges and how you’re addressing them
Even if a deal hits a bump, transparency builds loyalty.
## Final Thoughts from Rod
Raising money for real estate deals isn’t about being flashy. It’s about being real.
It’s about solving problems, building trust, and being the type of person investors want to grow with.
Don’t focus on “How do I get someone to write a check?”
Instead, ask: “How can I add value to someone’s portfolio and give them peace of mind?”
When you shift that mindset, the money follows.
## FAQ: Raising Capital for Real Estate
Q: How much capital do I need to raise for my first deal?
A: It depends on the size of the property. For a $2M apartment deal, expect to raise $500k–$700k including down payment, CapEx, and closing costs.
Q: Can I raise money if I’ve never done a deal before?
A: Yes, but align with experienced partners. Leverage their track record while building yours.
Q: What kind of returns do passive investors expect?
A: Most expect 6-10% preferred returns and a split of profits on the backend (70/30 or 80/20).
Q: Do I need to be an accredited investor to raise money?
A: No, but your deal structure must comply with SEC exemptions (like Reg D 506b or 506c). Always work with a syndication attorney.
Q: Can I raise money from international investors?
A: Yes, but there are additional tax, legal, and compliance rules. Consult legal and tax professionals.
Q: What if someone backs out after committing funds?
A: Always over-raise by 10–20% or have a backup investor list ready. Protect yourself with clear timelines and subscription agreements.
Want More Help?
🎓 Download my [Free Guide to Apartment Syndication](https://rodkhleif.com/guide-to-multifamily-syndications)
📈 Use my [Cap Rate Calculator](https://rodkhleif.com/cap-rate-calculator) to evaluate your next deal
🎟 Join my next [Multifamily Bootcamp](https://rodkhleif.com/bootcamp) and learn how to raise millions in capital the right way.
Stay focused. Stay committed. And take massive action.
You’re closer than you think.
*Disclaimer: This post was created with the help of AI and reviewed by Rod and his team.*
**Related reading:** [building an investor list before you have a deal](https://rodkhleif.com/how-to-build-an-investor-list-for-multifamily-syndications/).
**Categories:** Raising Capital
---
### [What is Apartment Building Syndication?](https://rodkhleif.com/what-is-apartment-building-syndication/)
**Published:** June 20, 2025
**Author:** Alex Khleif
**Content:**
If you want to invest in real estate but think apartment buildings are too costly, consider apartment syndication. It might be a good option for you. This strategy has helped many everyday investors access big commercial real estate deals. It allows them to earn steady passive income and build long-term wealth.
In this post, I will explain how apartment building syndication works. I will cover the roles of general and limited partners. I will also discuss why this model is a great way to create long-term passive income, tax benefits, and financial freedom. Let’s dive in.
## **What Is Apartment Syndication?**
Apartment syndication is one of the most powerful investment strategies for scaling your wealth through commercial real estate. It’s a process where multiple investors pool their capital to purchase and manage larger apartment buildings. Typically these deals would be difficult to tackle individually. This model lets passive investors access high-quality real estate investments. Experienced operators, known as general partners, handle acquiring, managing the property, and executing the business plan.
## **What Does Syndication Mean in Real Estate?**
Apartment syndication is the process of pooling capital from multiple investors to acquire larger multifamily or commercial real estate deals. Typically, this involves [forming a limited liability company](https://rodkhleif.com/quick-guide-business-structures-real-estate-investors/) (LLC) where the general partners (GPs) are responsible for asset managing and executing the investment strategy. Limited partners (LPs) contribute capital but play a passive role.
This structure allows everyday investors to access premium real estate investment opportunities while leveraging the experience, deal flow, and management capabilities of seasoned operators.
## **Who Are the Players in Apartment Building Syndication?**
There are two primary roles in any apartment syndication: the General Partner (GP) and the Limited Partner (LP).
- **General Partners (GPs)** are the active managers. They source deals, conduct due diligence, raise capital, oversee property management, and make strategic decisions.
- **Limited Partners (LPs)** are the passive investors. They contribute capital, receive a share of the profits, and benefit from cash flow and appreciation—without having to manage the asset.
Each side plays a critical role. The GP earns a management fee and carried interest (a percentage of profits), while the LP enjoys passive income and limited liability.
## **What Are the Benefits of Apartment Syndication?**
The appeal of syndication lies in its ability to offer institutional-quality real estate investments to everyday investors. Here are some core benefits:
- **Passive Income:** LPs receive rental income without having to manage the asset.
- **Tax Advantages:** Depreciation, cost segregation, and 1031 exchanges help reduce or defer taxes.
- **Diversification:** Invest in deals across multiple markets, asset classes, and business plans.
- **Long-Term Wealth Building:** Commercial real estate appreciates over time and delivers consistent cash flow.
- **Limited Liability:** LPs’ personal assets are protected. Their liability is limited to their initial investment.
## **How Does the Apartment Syndication Process Work?**
The syndication lifecycle generally follows these steps:
1. **Deal Sourcing:** GPs identify investment opportunities, often through broker relationships or off-market connections.
2. **Due Diligence:** They analyze financials, the real estate market, demographics, and renovation potential.
3. **Investor Outreach:** GPs present the opportunity to passive investors using private placement memorandums (PPMs), outlining terms, risks, and projected returns.
4. **Capital Raise:** Once investors commit, funds are pooled into the LLC for acquisition.
5. **Acquisition:** The syndicate purchases the property and begins implementing the business plan.
6. **Asset Management:** GPs manage renovations, optimize operations, and oversee property management.
7. **Distributions:** Rental income is shared with investors on a quarterly or monthly basis.
8. **Exit:** After the holding period (typically 3–7 years), the property is sold and profits are distributed.
**What Returns Can Investors Expect?**
Returns in apartment building syndication vary based on market conditions, deal structure, and execution. But here’s what you’ll often see in well-structured deals:
- **Annualized Return:** 12–18% total return (cash flow + appreciation)
- **Cash-on-Cash Return:** 6–10% annually
- **Equity Multiple:** 1.7x to 2x over a 5-year hold
Passive investors earn a preferred return (often 6–8%) before GPs receive a share of profits. This alignment ensures investor returns are prioritized.
## **Is Apartment Syndication Safe?**
All real estate investments carry risk, but syndications offer some risk-mitigation benefits:
- **Limited Liability:** LPs are protected within the LLC structure.
- **Professional Management:** GPs are seasoned operators with a real estate asset track record.
- **Due Diligence:** Quality syndicators conduct thorough research and share findings transparently.
- **Legal Compliance:** A good syndication team includes syndication attorneys to stay compliant with SEC regulations.
Always review offering documents carefully, ask questions, and understand the team’s business plan.
## **What’s the Role of the SEC in Apartment Syndication?**
Because apartment syndication involves pooled investor capital, it’s regulated by the Securities and Exchange Commission (SEC). The most common exemptions used are:
- **Reg D 506(b):** Allows up to 35 non-accredited investors but prohibits general solicitation.
- **Reg D 506(c):** Allows public marketing but only to accredited investors.
Syndicators must use PPMs and ensure all disclosures are clear, honest, and in compliance with securities law. It’s one of the reasons you always want experienced syndication attorneys involved.
## **Is Apartment Syndication Right for You?**
Apartment syndication is ideal for two types of investors:
- **Active Investors** who want to become general partners, lead deals, and build a syndication business.
- **Passive Investors** seeking hands-off income, tax benefits, and exposure to commercial real estate.
Whichever path you choose, make sure you align yourself with a trustworthy team, strong markets, and a solid investment strategy.
## **FAQs About Apartment Syndication**
### **Q: How much do I need to invest in apartment syndication?
A: Most apartment building syndications require a minimum investment of $50,000 to $100,000. This can vary depending on the deal and the sponsor.
### **Q: Do I need to be accredited to invest?
A: It depends on the deal structure. Regulation D 506(c) offerings require accredited investors, while 506(b) allows a limited number of non-accredited investors who meet sophistication requirements.
### **Q: Can I use retirement funds to invest?
A: Yes, many investors use self-directed IRAs or Solo 401(k)s to invest in real estate syndications. Be sure to consult a tax advisor or custodian to stay compliant.
### **Q: How long is the typical holding period?
A: Most syndications have a projected holding period of 3 to 7 years. This depends on the business plan and market conditions.
### **Q: What’s the difference between active and passive investing in syndications?
A: Active investors, also known as general partners, handle deal sourcing, financing, and managing the property. Passive investors, or limited partners, provide capital and receive a share of the profits without being involved in the day-to-day operation.
### **Q: How often will I receive returns?
A: Most sponsors distribute returns quarterly. You’ll also receive financial updates and reporting during the holding period.
### **Q: Is my money locked up the entire time?
A: Yes, these are long-term investments. Your capital is typically tied up until the property is sold or refinanced.
### **Q: What documents will I receive?
A: You’ll receive a private placement memorandum (PPM), operating agreement, subscription agreement, and regular updates on property performance.
## **Final Thoughts From Rod**
Apartment syndication is one of the greatest wealth-building vehicles in real estate. It opens the door to larger deals, better economies of scale, and greater tax advantages—without requiring you to go it alone. If you’re a passive investor looking for consistent returns and hands-off investing, or an aspiring operator ready to step into a leadership role, this strategy can change your life.
[](https://rodkhleif.com/guide-to-multifamily-syndications/)
To learn more, download my [Complete Guide to Multifamily Syndication](https://rodkhleif.com/guide-to-multifamily-syndications/) and start your journey toward Lifetime Cashflow today.
Stay focused. Stay informed. And take massive action.
*Disclaimer: This article was created with the assistance of AI and reviewed by Rod Khleif and his team to ensure accuracy and relevance.*
**Related reading:** [building the investor list behind a syndication](https://rodkhleif.com/how-to-build-an-investor-list-for-multifamily-syndications/).
**Categories:** Blog, Syndication
---
### [What Is Multifamily Syndication?](https://rodkhleif.com/what-is-multifamily-syndication-a-complete-guide/)
**Published:** July 12, 2026
**Author:** Rod Khleif
**Content:**
**Quick Answer:** Multifamily syndication is a partnership structure where multiple investors pool their capital to purchase apartment buildings they couldn’t afford individually. One or more General Partners (GPs) manage the investment while Limited Partners (LPs) provide funding and receive passive returns, typically ranging from 15-25% average annual returns.
**Multifamily Syndication for Beginners:** Multifamily syndication for beginners is the simplest way to own apartments without buying one alone. You invest passively as a Limited Partner alongside an experienced operator, then earn a share of the rental income and the profit at sale while the General Partner finds, finances, and manages the property.
[](https://rodkhleif.com/what-is-multifamily-syndication-a-complete-guide/screenshot-2026-02-16-at-3-55-56-pm/)
## **Simple Definition**
Multifamily syndication is a collaborative real estate investment strategy where a group of investors combines their financial resources to acquire and operate apartment complexes (typically 50+ units) that would be too expensive for any single investor to purchase alone.
Think of it like this: Instead of trying to buy a $10 million apartment building by yourself, you team up with 20-50 other investors. Together, you raise the capital needed, and a professional team (the General Partners) handles all the day-to-day operations while you earn passive income.
**The beauty of syndication is that it opens up institutional-grade real estate opportunities to everyday investors who want the benefits of apartment ownership without the headaches of property management.**
## **How Multifamily Syndication Works: Step-by-Step**
Understanding the syndication process helps investors know what to expect. Here’s the typical timeline from deal identification to investor returns:
### **Step 1: Deal Identification and Analysis**
The General Partners (GPs) identify a promising apartment complex. They conduct extensive due diligence including market analysis, property inspections, financial underwriting, and risk assessment. The team evaluates hundreds of potential deals before selecting one that meets their investment criteria.
Key evaluation factors include:
- Market fundamentals (job growth, population trends, rent growth)
- Property condition and value-add potential
- Current and projected cash flow
- Exit strategy and timing
- Risk-adjusted return potential
### **Step 2: Securing the Property**
Once a property passes initial screening, the GPs place it under contract with an earnest money deposit (typically 1-3% of purchase price). This begins the due diligence period, usually 30-60 days, during which the team conducts detailed inspections, reviews financials, and finalizes the business plan.
### **Step 3: Capital Raising**
The sponsor team creates an offering memorandum detailing the investment opportunity, projected returns, risks, and business plan. They present this to their investor network,the Limited Partners (LPs),who decide whether to invest. Most syndications require a minimum investment of $50,000-$100,000, though some allow smaller amounts.
The [capital structure](https://rodkhleif.com/capital-stacking-loan/) typically looks like this:
- 70-80% financing (bank loan or agency debt)
- 20-30% equity from investor syndication
- GPs typically invest 5-10% of required equity
### **Step 4: Closing and Acquisition**
Once capital is raised and due diligence is complete, the syndication closes on the property. The legal entity (usually an LLC) officially takes ownership. Investors receive their ownership percentage based on their capital contribution, and the business plan implementation begins immediately.
### **Step 5: Asset Management and Value Creation**
The GP team executes the business plan over the typical 3-7 year hold period. This usually involves:
- Property improvements (renovated units, amenity upgrades, exterior improvements)
- Operational optimization (reducing expenses, improving management)
- Rent growth through market appreciation and value-add improvements
- Regular investor communications (monthly/quarterly updates)
### **Step 6: Investor Distributions**
Limited Partners receive passive income through quarterly cash flow distributions (typically 5-8% annually) plus a share of appreciation at sale. Most syndications target 15-25% average annual returns combining both income and appreciation.
### **Step 7: Exit Strategy**
After executing the business plan and achieving the projected value increase, the property is sold to a new buyer. Proceeds are distributed to investors after paying off the loan. Investors receive their original investment back plus profits from appreciation, typically achieving a 1.5x-2.5x equity multiple over the hold period.
## **General Partner (GP) vs Limited Partner (LP) Explained**
Every multifamily syndication has two distinct groups of participants, each with different roles, responsibilities, and compensation structures:
### **General Partners (GPs) The Active Operators**
General Partners are the experienced operators who find, acquire, manage, and ultimately sell the property. They’re the ones doing all the work and bearing the highest risk.
**GP Responsibilities:**
- Identifying and analyzing potential deals
- Negotiating purchase terms and securing financing
- Raising capital from Limited Partners
- Overseeing property management and operations
- Making major decisions (refinancing, capital improvements, sale timing)
- Regular investor reporting and communication
- Legal compliance and regulatory requirements
**GP Compensation:**
- Acquisition Fee: 1-3% of purchase price (covers deal costs)
- Asset Management Fee: 1-2% annually of collected revenue
- Disposition Fee: 1-2% at sale
- Profit Share (Promote): Typically 20-35% of profits after LP preferred return
### **Limited Partners (LPs) The Passive Investors**
Limited Partners are the capital providers who invest money but take no active role in operations. They benefit from professional management and passive real estate returns.
**LP Rights and Benefits:**
- Ownership share proportional to investment amount
- Quarterly cash flow distributions
- Share of profits at sale
- Regular performance updates
- Tax benefits (depreciation, mortgage interest deductions)
- Limited liability protection
**LP Responsibilities:**
- Provide capital when called
- Review investment materials and conduct personal due diligence
- Sign legal documents
- Monitor performance through reports (no active management required)
### **[GP vs LP](https://rodkhleif.com/gp-vs-lp-what-you-need-to-know/) Comparison Table**
**Characteristic****General Partner (GP)****Limited Partner (LP)****Role**Active operator and decision-makerPassive investor**Time Commitment**Full-time commitment throughout hold periodMinimal (review updates only)**Capital Required**5-10% of equity (plus sweat equity)$50K-$100K+ minimum typically**Liability**Unlimited liability exposureLimited to investment amount only**Decision Authority**Full control over operations and strategyNo operational control**Returns**Fees + 20-35% profit share (promote)Preferred return + 65-80% profit share**Experience Required**Extensive real estate and operations expertiseNone required (accredited investor status typically needed)## **Understanding the Capital Stack**
The [capital stack](https://rodkhleif.com/financing-your-deal-understanding-the-capital-stack/) shows how a multifamily syndication is financed. Understanding this structure is crucial for evaluating risk and potential returns.
**Real-World Example: $10 Million Apartment Complex**
Let’s break down a typical deal structure:
**Total Purchase Price: $10,000,000**
1. **Senior Debt (First Position) — 75% ($7,500,000)**
- Source: Bank or agency loan (Fannie Mae, Freddie Mac)
- Interest Rate: 5.5% – 6.5%
- Terms: Fixed rate, 5-10 year term, 25-30 year amortization
- Risk Level: Lowest (first to be repaid)
- Return: Fixed interest payments
2. **Preferred Equity (Optional Middle Layer) — 0-10% ($0-$1,000,000)**
- Source: Institutional or high-net-worth investors
- Expected Return: 10-14% preferred return
- Risk Level: Medium (paid before common equity)
- Common in larger deals or when additional capital needed
3. **Common Equity (LP Investment) — 22.5% ($2,250,000)**
- Source: Limited Partner investors
- Expected Return: 8% preferred return + 70% profit share
- Risk Level: Higher (last to be repaid, first to absorb losses)
- Upside: Unlimited profit potential from appreciation
4. **GP Equity Investment — 2.5% ($250,000)**
- Source: General Partners’ capital
- Return: Same preferred return as LPs + 30% profit share (promote)
- Ensures GP skin in the game and alignment with investors
**The Waterfall Distribution:**
When the property generates cash flow or is sold, distributions follow this priority:
**Tier 1:** Senior debt service (mortgage payment)
**Tier 2:** Preferred equity return (if applicable)
**Tier 3:** Return of LP and GP capital
**Tier 4:** Preferred return to LP and GP (typically 8% annually)
**Tier 5:** Remaining profits split (typically 70% LP / 30% GP)
## **Risk Factors in Multifamily Syndication**
While multifamily syndication offers attractive returns, investors must understand the inherent risks. Here are the primary risk factors to evaluate:
### **1. Market Risk**
Local economic conditions can significantly impact property performance. Job losses, population decline, or oversupply of apartments can reduce occupancy and rental rates. Economic recessions affect tenant ability to pay rent and can decrease property values.
**Mitigation strategies:**
- Invest in markets with diverse economies and job growth
- Focus on landlord-friendly states with strong population trends
- Conservative underwriting that stress-tests economic downturn scenarios
### **2. Operator Risk**
The General Partners’ experience and competence directly determine investment success. Inexperienced operators may miscalculate renovations costs, mismanage operations, or make poor strategic decisions that erode returns.
**Due diligence checklist:**
- Verify GP track record and references from previous investors
- Review past deals’ actual vs projected performance
- Assess team depth and specialization (acquisitions, operations, finance)
- Ensure GPs have personal capital invested
### **3. Illiquidity Risk**
Multifamily syndications are long-term, illiquid investments. Unlike stocks, you cannot sell your position easily. Your capital is typically locked up for 3-7 years with limited options to exit early except under specific circumstances defined in the operating agreement.
**Investor considerations:**
- Only invest money you won’t need for 5+ years
- Maintain adequate liquid reserves for emergencies
- Diversify across multiple syndications to manage liquidity needs
### **4. Leverage Risk**
Most syndications use 70-80% debt financing, which amplifies both gains and losses. If property performance declines, debt service obligations remain constant, potentially consuming all cash flow and even requiring capital calls from investors.
**Risk assessment:**
- Review debt service coverage ratio (should be 1.25x or higher)
- Understand refinance risk if using short-term bridge debt
- Verify adequate operating reserves (6-12 months)
### **5. Execution Risk**
Value-add business plans depend on successful execution of renovations, rent increases, and operational improvements. Renovation costs can exceed budgets, timelines can extend, or market rents may not support projected increases.
**Warning signs:**
- Overly aggressive rent growth projections (>8% annually)
- Unrealistic renovation timelines or costs
- Lack of contingency reserves (should be 10-15% of renovation budget)
### **6. Regulatory and Tax Risk**
Changes in tax laws, zoning regulations, rent control policies, or local ordinances can impact property values and cash flow. Some markets have introduced rent control or restrictive eviction policies that limit operators’ ability to optimize revenue.
## **Investment Returns Explained**
Understanding how returns are calculated and distributed is crucial for evaluating syndication opportunities. Multifamily syndications provide returns through two primary mechanisms:
### **Cash Flow Distributions (Passive Income)**
Quarterly distributions from operational cash flow after debt service and operating expenses. Typical range: 5-8% annual cash-on-cash return.
**Example:** $100,000 investment receiving 6% cash-on-cash would generate $6,000 annually ($1,500 per quarter) in passive income.
### **Appreciation and Profit at Sale**
The larger portion of returns comes from value appreciation when the property is sold. Value-add syndications increase property value through renovations, improved operations, and market appreciation.
**Key Return Metrics:**
1. **Preferred Return (Pref):** The minimum return LPs receive before GPs participate in profits. Standard is 8% annually, calculated cumulatively. If not paid in a given year due to low cash flow, it accrues and must be paid before profit splits occur.
2. **Equity Multiple:** Total return as a multiple of original investment. Example: 2.0x equity multiple means you receive $2 for every $1 invested (doubling your money). Target range for 5-year holds: 1.8x – 2.5x.
3. **Internal Rate of Return (IRR):** Annualized return accounting for timing of cash flows. Considers when distributions occur, not just total amount. Target IRR for value-add deals: 15-25% annually.
4. **Cash-on-Cash Return (CoC):** Annual cash flow distributed divided by total investment. Measures annual passive income yield. Typical range: 5-8%.
**Complete Return Example:**
Investment: $100,000
Hold Period: 5 years
Cash Flow Distributions: $30,000 total ($6,000/year average)
Profit at Sale (after return of capital): $120,000
Total Return: $150,000
Equity Multiple: 2.5x
Average Annual Return (IRR): ~20%
## **Frequently Asked Questions (FAQ)**
**Question 1: How much money do I need to invest in a multifamily syndication?**
Minimum investments typically range from $50,000 to $100,000, though some syndications accept lower amounts ($25,000) or require higher minimums ($250,000+) depending on the deal size and sponsor. The minimum is set to ensure the syndication can efficiently manage investor communications while raising sufficient capital. Most sponsors recommend having a net worth of at least $500,000 and annual income of $200,000+ to comfortably participate, as you must also qualify as an accredited investor under SEC regulations.
**Question 2: What does ‘accredited investor’ mean and do I need to be one?**
An accredited investor meets specific SEC financial criteria: either $200,000+ annual income ($300,000 jointly) for the past two years with expectation to continue, or $1 million+ net worth excluding primary residence. Most syndications are structured as 506(b) or 506(c) offerings requiring accredited status. This requirement exists because these are private securities offerings with less regulatory oversight than public investments. Some sponsors offer 506(b) deals allowing up to 35 sophisticated but non-accredited investors, but this is less common due to increased regulatory burden.
**Question 3: How long will my money be invested?**
The typical hold period is 3-7 years, with 5 years being most common for value-add business plans. The exact timeline depends on the business plan, market conditions, and optimal exit timing. Your capital remains invested until the property sells—there is no liquid secondary market to sell your shares early. Some operating agreements allow transfers with GP approval, but this is rare in practice. Plan to have your capital fully committed for at least 5 years, and only invest funds you won’t need for emergencies or other financial obligations.
**Question 4: What happens if the property underperforms?**
If the property generates lower cash flow than projected, quarterly distributions may be reduced or suspended entirely. The GP team will typically implement corrective measures: reducing expenses, adjusting the business plan, or in severe cases, considering an early sale even if below original projections. In worst-case scenarios, you could lose some or all of your investment if the property value declines significantly or debt cannot be refinanced. This is why thorough due diligence on both the operator and the specific deal is crucial. Conservative underwriting with built-in buffers and experienced operators significantly reduce this risk.
**Question 5: How are multifamily syndications taxed?**
Syndication investors receive K-1 tax forms annually showing their share of income, expenses, and depreciation. The depreciation deduction often shelters most or all cash flow distributions from taxation in early years—you receive cash but may owe minimal taxes. When the property sells, profits are taxed as capital gains (typically 15-20% federal rate for long-term holdings). Depreciation recapture applies to the amount previously deducted. Tax benefits are significant: many investors receive $5,000-$10,000 in annual depreciation deductions per $100,000 invested. Consult a CPA familiar with real estate to understand your specific tax situation, as benefits vary by individual circumstances.
**Question 6: Can I invest using my self-directed IRA or 401(k)?**
Yes, many investors use self-directed retirement accounts to invest in syndications. This requires establishing a self-directed IRA (SDIRA) or self-directed 401(k) through a specialized custodian that allows alternative investments. Benefits include tax-deferred or tax-free growth (Roth), though you also lose the current tax benefits of depreciation deductions. Be aware of UDFI (Unrelated Debt-Financed Income) and UBIT (Unrelated Business Income Tax) implications if the property uses leverage. Not all syndications accept retirement account investors due to additional administrative requirements. Work with a custodian experienced in real estate syndications and consult a tax professional before proceeding.
**Question 7: What’s the difference between a syndication and a REIT?**
REITs (Real Estate Investment Trusts) are publicly traded securities owning diversified property portfolios, while syndications are private investments in specific properties. REITs offer liquidity (can sell shares anytime) but lower returns (typically 3-8% annually) and no tax benefits since depreciation stays with the REIT. Syndications are illiquid but offer higher returns (15-25% target), significant tax advantages through depreciation pass-through, and direct ownership in specific properties you can evaluate. REITs are passive with no control or transparency into specific properties. Syndications provide regular updates on your specific asset. REITs require no accreditation and accept investments as low as one share price. Both have roles in diversified portfolios—REITs for liquidity, syndications for higher returns and tax benefits.
**Question 8: How do I evaluate and choose the right syndication sponsor?**
Start by requesting the sponsor’s track record, actual results from past deals, not just projections. Verify they’ve successfully navigated full market cycles including downturns. Review their investor portal showing historical performance transparency. Check how many deals they’ve completed, total units under management (ideally 1,000+ units), and capital raised. Speak with current investors about communication quality and whether distributions match projections. Evaluate their investment strategy alignment with your goals—some focus on cash flow, others on appreciation. Assess their market expertise and local boots-on-ground presence. Verify they have personal capital invested in every deal. Strong sponsors provide detailed investment memorandums, proactively communicate challenges, and have institutional-quality reporting. Trust and transparency are paramount—if anything feels rushed or unclear, walk away.
## **Learn More About Multifamily Investing**
Ready to dive deeper? Here are essential resources to continue your multifamily education:
- **[First Steps to Becoming a Multifamily Syndicator](https://rodkhleif.com/what-are-the-first-steps-to-becoming-a-multifamily-syndicator/):** Ready to move past passive investing and lead your own deals? Follow the step-by-step path to becoming the syndicator.
- **How to Raise Capital Legally:** Understand SEC regulations, 506(b) vs 506(c) offerings, and compliance requirements for raising investor capital.
- **Underwriting Multifamily Deals:** Master the financial analysis process, from evaluating NOI and cap rates to stress-testing your assumptions.
- **Warrior Program:** Join Rod Khleif’s comprehensive training program where 300,000+ units have been acquired by program participants. Learn the complete syndication process from deal-finding through exit.
## **Final Thoughts**
Multifamily syndication democratizes access to institutional-quality real estate investments. For Limited Partners, it offers passive income, tax advantages, portfolio diversification, and returns that historically outpace traditional stock and bond investments—all without the demands of property management.
For General Partners, syndication provides the leverage to scale operations beyond personal capital limitations while building wealth through fees, profit participation, and portfolio growth.
Success in multifamily syndication requires education, careful operator selection, thorough due diligence, and realistic return expectations. This guide provides the foundation, but continuous learning and market awareness are essential as you build your real estate investment portfolio.
**The opportunity is real. The returns are achievable. The time to start is now.**
## Ready to Master Multifamily Syndication?
Join 10,000+ students who have collectively acquired over 300,000 apartment units
Whether you want to become a General Partner leading deals or a Limited Partner investing passively, the [**Warrior Program**](https://rodkhleif.com/rod-khleif-coaching-program/) gives you the complete roadmap to multifamily success.
**What you’ll learn:**
- ✓ How to find and analyze profitable multifamily deals
- ✓ Complete underwriting and due diligence processes
- ✓ Strategies to raise capital from investors legally
- ✓ Asset management and value-add execution
- ✓ Exit strategies and maximizing returns
[Join the Warrior Program →](https://rodkhleif.com/warrior-program)
Limited spots available.
*Disclaimer: This article was written with the help of AI and reviewed by Rod’s team.*
**Related reading:** [Real Estate Syndication Waterfall: How Profits Split](https://rodkhleif.com/syndication-waterfall/)
**Related reading:** [Best Multifamily Investment Training (2026)](https://rodkhleif.com/best-multifamily-investment-training/) compares the top bootcamps, courses, and mentorships and gives you a simple framework to choose the right fit.
**Related reading:** [building an investor list for your first raise](https://rodkhleif.com/how-to-build-an-investor-list-for-multifamily-syndications/).
**Categories:** Blog, Syndication
**Tags:** multifamily investing, multifamily real estate
---
### [Real Estate Syndication Marketing 101](https://rodkhleif.com/marketing-101-real-estate-syndicators/)
**Published:** May 7, 2025
**Author:** Rod Khleif
**Excerpt:** Marketing 101 for Real Estate Syndicators - Syndication is the perfect way to scale your investment business to exciting new levels.
**Content:**
Syndication is the fastest way to scale a real‑estate portfolio in 2025—**if** you have a pipeline of investors who trust your team and your track record. This guide breaks down a proven marketing framework that helps with real estate syndication marketing and assist you to:
- Craft a memorable brand
- Launch an investor‑centric website that converts
- Leverage digital and in‑person channels to fill every raise
Use these steps to rank online, impress AI search previews, and grow a list of qualified investors ready to fund your next deal.
## **Start With Your Team, Not Your Logo**
Underwriting skills matter, but lenders and investors care just as much about:
- **Net‑worth & liquidity** to secure agency or bridge debt
- **Multifamily ownership/management experience** for credibility
- **Operational talent** to execute the business plan
Plug any gaps **before** you market: partner with a high‑net‑worth guarantor, bring in a veteran asset manager, or hire a third‑party operator. A strong team becomes the bedrock of your brand story.
## **Build the “Bicycle Framework” for Syndication Marketing**
Think of your marketing like a bicycle:
Nail all three and your marketing machine gains momentum.
### **Craft a Brand Investors Remember**
**Company Name & Logo
Pick a brand name that rolls off the tongue and signals stability (e.g., “Blue Sky Equity Group”). Invest $200–$500 on 99designs or [Upwork](https://www.upwork.com/) for a clean, professional logo; first impressions count.
**Mission & Vision
Answer three questions:
1. *Why do we exist?
2. *Whom do we serve?
3. *What unique value do we provide investors?*
Turn that into a concise “About” story for pitches, your website, and social profiles.
### **Launch an Investor‑Focused Website (Your Hub)**
Platforms like [WordPress](https://www.googleadservices.com/pagead/aclk?sa=L&ai=DChcSEwiSj8DdqZGNAxVIgloFHTaFHxQYABAAGgJ2dQ&co=1&gclid=CjwKCAjwiezABhBZEiwAEbTPGOpZrOIgBblxSGfHXU1o3jOLmxTwRUMgK5GIfzK8kMzV-9hztsrjzxoC1JEQAvD_BwE&ohost=www.google.com&cid=CAESVeD25KJAXaCSE1a3Su3wMYuvYiPc5QRyG12_a4yuf6SQpEGEvcYLBtmJMc7rIm-vF7kVWsMz9SPstV70jv3ifVz8KQ9J_fcEa0XteguypOKNNPXZZ6g&sig=AOD64_1BZ1smuz7hRm5jncEf2Fs7aEhM4A&q&adurl&ved=2ahUKEwjrpbzdqZGNAxVcTDABHTzvD0QQ0Qx6BAgJEAE) and [Squarespace](https://www.googleadservices.com/pagead/aclk?sa=L&ai=DChcSEwjsna_ZqZGNAxVWAwwCHQ2WJWgYABADGgJ2dQ&ae=2&aspm=1&co=1&ase=5&gclid=CjwKCAjwiezABhBZEiwAEbTPGCA8joywcylvwPs5blMSMhZhEtVd7hMyxb3lMq7763aEpmQf7BRviBoClG8QAvD_BwE&ohost=www.google.com&cid=CAESVeD29AjSdCazfuO-YYs3PpkNf8ds6nqSjFrivXVr_644PNd8ie17UQkas1RkFguZjyteOVQKiHaP9vuZrmNuzjgmSo-5o3OHVSedgFkoVwdNVXIyXN4&sig=AOD64_0iFnAFjYsQ0FJ5QWrNyfh9_eu2-A&q&adurl&ved=2ahUKEwiGsqvZqZGNAxX7ZzABHaRjLl0Q0Qx6BAgLEAE) make it simple, but include these essentials:
1. **Team & Track Record**: bios, headshots, closed deals, NOI growth stats
2. **Education Center**: blog posts, whitepapers, or short videos explaining syndication basics
3. **Lead Capture**: free download (e‑book, checklist, webinar) gated behind an email opt‑in
4. **Social Proof**: testimonials, press mentions, podcast appearances
> **SEO Tip:** Optimize every page for *real estate syndication marketing* by placing the phrase in headings, meta titles, alt text, and 2‑3 times in body copy.
### **Create High‑Performance Spokes (Traffic Channels)**
**In‑Person Networking
Craft a 30‑second elevator pitch: who you help, how you help them, and a call‑to‑action (visit your website or grab a free guide).
**Email Marketing
Segment your list into warm leads, current investors, and tire‑kickers. Send market updates, deal case studies, and registration links for upcoming webinars.
**Social Media
- LinkedIn for credibility and professional connections
- Instagram/Facebook for behind‑the‑scenes property tours
- Short‑form video (Reels, YouTube Shorts) to explain returns, tax benefits, or renovation progress
**Paid Ads
Launch small‑budget Google or Facebook campaigns targeting “invest in apartments” or “passive real estate cash flow.” Drive clicks to a landing page offering a *Free Syndication Starter Kit*.
## **Manage Investor Relationships Like Gold**
Store every contact in a **CRM** ([HubSpot](https://www.googleadservices.com/pagead/aclk?sa=L&ai=DChcSEwiwlK7pqZGNAxVTmO4BHZZJO30YABAIGgJkeg&co=1&gclid=CjwKCAjwiezABhBZEiwAEbTPGCu6rarYZr0Z5oPMmepvSS-ECyeTx1Vcg_lr9sIjdm1_vGYsfcRr6xoCif0QAvD_BwE&ei=n00baPyhCYb9wbkP49mQ0AU&ohost=www.google.com&cid=CAESVeD2EsNGaq6e2U8nyDrEHe4OtZv4eKMnQswbsUDrmnoKWHVAZfwz4Rz5oftvnlEx2i2x2OhYMoR9OTPBCBm6z0d2Ayplt4G5CVr5wgM92aHfKGud-6c&sig=AOD64_0tIdMiby0_oWj9fZLMFqa93H_kpA&q&sqi=2&adurl&ved=2ahUKEwi87abpqZGNAxWGfjABHeMsBFoQ0Qx6BAgKEAE), [Zoho](https://www.zoho.com/), [ActiveCampaign](https://www.activecampaign.com/)). Track:
- First interaction date
- Risk tolerance & capital range
- Notes from calls or webinars
- Compliance history (important for 506(b) offerings)
Set up automated gentle check-ins. Send a market article after 30 days. Share a rent-trend infographic at 90 days. Invite them to a webinar each quarter. Documenting this also satisfies SEC “pre‑existing relationship” rules for 506(b) offerings.
## **Compliance: Marketing Without Breaking SEC Rules (2025 Update)**
- For **506(b)** raises only share deals with people you’ve built a “substantive” pre‑existing relationship with.
- For **506(c)** you may advertise publicly, but you must verify investor accreditation through a third‑party service.
- Always add disclaimers on social posts: “For informational purposes. Not an offer to sell securities.”
## **Measure, Tweak, Repeat**
Use [Google Analytics](https://developers.google.com/analytics) and CRM dashboards to track:
- Traffic sources → opt‑ins → scheduled calls
- Email open rates and click‑throughs
- Cost per lead on paid ads
Double down on channels with the lowest cost per qualified investor and refine or drop the rest.
## **Key Takeaways**
- **Brand first**: name, logo, mission, powerhouse team.
- **Website next**: share your story, educate, and capture leads.
- **Use multi‑channel spokes**: networking, email, social, paid ads—to feed your hub.
- **Stay SEC‑compliant** as you scale your outreach.
- **Measure everything** and iterate monthly.
Implement this blueprint and you’ll build an investor pipeline that funds deal after deal.
### **Your 2025 Checklist**
- Form a strong, credible team
- Build a brand with clear mission and timeless visuals
- Launch an investor‑centric website with valuable education and lead capture
- Drive traffic through networking, LinkedIn, email, podcasts, and strategic ads
- Record every contact in a CRM and nurture relationships systematically
- Follow SEC guidelines and keep meticulous notes
- Track key metrics and refine your funnel continuously
Apply this framework and your fundraising becomes predictable, allowing you to focus on finding great deals.
### **Ready to Master Real Estate Syndication Marketing?**
[](https://rodkhleif.com/guide-to-multifamily-syndications/)
Check out this Free Download *[Guide to Multifamily Syndications](https://rodkhleif.com/guide-to-multifamily-syndications/).*
[](https://rodkhleif.com/lifetime-cashflow-podcast/)
🎧 And don’t miss the [*Lifetime Cashflow Through Real Estate Investing Podcast*](https://rodkhleif.com/lifetime-cashflow-podcast/) for weekly marketing and capital‑raising tactics.
**Related reading:** [growing an investor list that converts](https://rodkhleif.com/how-to-build-an-investor-list-for-multifamily-syndications/).
**Categories:** Blog, Raising Capital, Real Estate, Syndication
**Tags:** Driving Force, motivation, real estate, real estate investing, real estate marketing, real estate podcast, real estate syndication, real estate syndicators, Rod Khleif
---
### [How to Underwrite a Multifamily Deal Step-by-Step: The Complete Guide](https://rodkhleif.com/how-to-underwrite-a-multifamily-deal-step-by-step-the-complete-guide/)
**Published:** February 27, 2026
**Author:** Alex Khleif
**Content:**
Underwriting is what separates successful investors from broke ones—I’ve underwritten thousands of multifamily properties using the same repeatable system. Underwriting means systematically analyzing income, expenses, financing, and value to determine if a property is actually worth your money. Here’s what I’ve learned: winners develop a strict underwriting discipline that identifies undervalued deals while avoiding landmines that destroy returns. Most investors skip or rush underwriting because they want to move fast, but that’s exactly how you buy properties that fail. Let me teach you the exact underwriting methodology I use on every deal.
The difference between investors who build generational wealth and those who lose their shirts comes down to one critical skill: **proper underwriting.**
I’ve seen it countless times over my 40+ years in real estate. Smart, capable people get excited about a deal, fall in love with a property, and then try to make the numbers work. That’s backwards—and it’s expensive.
Professional investors do it differently. We let the numbers tell us whether a deal deserves our attention. The spreadsheet doesn’t lie, and it certainly doesn’t care about your feelings.
I’m Rod Khleif, and I’ve personally owned over 2,000 rental properties and apartment buildings. I’ve also made every underwriting mistake you can imagine—including losing $50 million in the 2008 crash, partially because I got aggressive with my assumptions.
What I’m about to share with you is the exact underwriting process that my Warrior Program students use to analyze deals. These same students now collectively own over 260,000 apartment units. This framework works whether you’re looking at your first 8-unit building or a 200-unit value-add opportunity.
Let me walk you through how to underwrite a multifamily deal step-by-step, so you can evaluate properties with the confidence of a seasoned pro.
## What Is Multifamily Underwriting (And Why It Matters)
Underwriting is the process of analyzing a property’s financial performance to determine if it meets your investment criteria. It’s how you separate good deals from disasters before you put a single dollar at risk.
Think of underwriting as your financial defense system. It answers critical questions like:
- What is this property actually worth?
- What returns can I realistically expect?
- What could go wrong, and can the deal survive it?
- How much should I offer to hit my target returns?
Here’s what most new investors don’t understand: **the seller’s pro forma is a sales document, not a financial analysis.**It’s designed to make the property look as attractive as possible. Your job as an investor is to reconstruct reality using conservative assumptions backed by actual market data.
When you master underwriting, you gain the power to:
- Evaluate dozens of deals quickly and identify the best opportunities
- Make confident offers knowing exactly what the property is worth
- Present compelling opportunities to investors with bulletproof numbers
- Protect yourself from overpaying or buying a money pit
(Learn more about [finding and analyzing multifamily deals like a pro](https://rodkhleif.com/finding-analyzing-multifamily-deals-like-a-pro/).)
## The Documents You Need Before You Start
You can’t underwrite what you can’t see. Before you open a spreadsheet, request these documents from the seller or broker:
### Essential Documents:
**[](https://rodkhleif.com/how-to-underwrite-a-multifamily-deal-step-by-step-the-complete-guide/screenshot-2026-02-27-at-4-28-46-pm/)**
**1. Trailing 12-Month (T-12) Income Statement**
This shows actual income and expenses for the past year. It’s the single most important document for underwriting.
**2. Rent Roll**
A detailed list of every unit showing:
- Unit number and type (1BR, 2BR, etc.)
- Tenant name
- Current rent
- Lease start and end dates
- Security deposits
- Any concessions or special terms
**3. Pro Forma (Seller’s Projections)**
The seller’s optimistic projections. Use this to understand what they *think* the property can do, but always verify with your own analysis.
**4. Operating Expense Detail**
Breakdown of all operating expenses by category for the past 2-3 years if possible.
**5. Current Leases**
Especially important for properties with commercial space or unique lease structures.
**6. Utility Bills**
Who pays what? Are utilities separately metered or master metered?
**7. Capital Expenditure History**
What major repairs or improvements have been done recently? What’s still needed?
**8. Delinquency Report**
How much rent is currently uncollected?
Once you have these documents, you’re ready to start the underwriting process. (Access [Rod’s free multifamily deal analyzer](https://rodkhleif.com/deal-underwriting-tool/) to streamline your analysis.)
## Step 1: Analyze Current Income (What’s Really Coming In)
Income is the foundation of your entire underwriting. Get this wrong, and everything downstream breaks.
### Gross Potential Rent (GPR)
Start with the rent roll. For each unit type, calculate the average current rent:
**Example:**
- 20 one-bedroom units at an average of $1,200/month
- 15 two-bedroom units at an average of $1,500/month
Monthly GPR = (20 × $1,200) + (15 × $1,500) = $24,000 + $22,500 = $46,500
Annual GPR = $46,500 × 12 = $558,000
### Market Rent Analysis
Now compare current rents to market rates. Use:
- Recent comps from similar properties
- [Rent.com](http://rent.com/), [Apartments.com](http://apartments.com/), Zillow data
- Broker market reports
- Direct calls to competing properties
If current rents are below market, you’ve identified upside potential. If they’re above market, that’s a red flag.
**Conservative approach:** Don’t assume you can immediately raise rents to market. Factor in lease rollover timing and potential tenant pushback.
### Other Income
Don’t forget secondary income sources:
- Laundry income
- Parking fees
- Pet fees/pet rent
- Utility reimbursements (RUBS)
- Storage unit rentals
- Vending machines
- Late fees
**Critical rule:** Verify other income against the T-12 statement. Sellers often inflate these projections.
### Loss to Lease
If current rents are significantly below market, calculate your “loss to lease”—the difference between what you’re collecting and what you could collect at market rates.
This represents your value-add opportunity, but be realistic about how quickly you can capture it.
## Step 2: Calculate Vacancy and Credit Loss
No property stays 100% occupied 100% of the time. Vacancy and credit loss accounts for:
- Turnover between tenants
- Units undergoing renovation
- Uncollected rent from delinquent tenants
- Concessions or rent discounts
### How to Set Your Vacancy Rate
**Don’t just guess.** Your vacancy assumption should be based on:
1. **Historical performance:** What does the T-12 show for actual vacancy?
2. **Market conditions:** What’s the submarket vacancy rate?
3. **Property condition:** Class A properties typically have lower vacancy than Class C
4. **Your business plan:** Planning major renovations? Factor in higher vacancy
**Conservative guidelines:**
- Strong market, stabilized property: 5-7%
- Average market or property: 7-10%
- Weak market or heavy value-add: 10-15%
**Example:**
Annual GPR: $558,000
Vacancy (8%): -$44,640
Effective Gross Income: $513,360
Never use less than 5% vacancy unless you have exceptional justification. Properties with claimed 95%+ occupancy still need reserve for turnover.
## Step 3: Underwrite Operating Expenses (Where Money Disappears)
This is where inexperienced investors get destroyed. They underestimate expenses, the property underperforms, and suddenly there’s no cash flow.
### The Major Expense Categories
**1. Property Taxes**
- Use actual tax bills, not seller projections
- Research if the property will be reassessed after sale
- Some jurisdictions reassess at sale price, dramatically increasing taxes
- Don’t forget to account for annual tax increases (typically 2-4%)
**2. Insurance**
- Get actual quotes from insurance brokers
- Consider flood insurance if in a flood zone
- Umbrella liability coverage
- Budget for annual increases
**3. Utilities**
- Water/sewer (often master metered in older properties)
- Electricity for common areas
- Gas for heating
- Trash removal
Carefully review who pays what. If tenants pay their own utilities, these expenses should be minimal. If master metered, utilities can be a massive expense line.
**4. Property Management**
- Typically 3-10% of collected income
- Don’t skip this even if you plan to self-manage
- Your time has value, and you need reserves if you can’t manage anymore
**5. Repairs and Maintenance**
- Ongoing repairs: plumbing, electrical, HVAC, appliances
- Grounds maintenance, snow removal, landscaping
- Pest control
- Budget $250-500 per unit per year for stabilized properties
- Higher for older properties or heavy value-add
**6. Payroll (if applicable)**
- On-site manager
- Maintenance staff
- Leasing agents
- Don’t forget payroll taxes and benefits
**7. Administrative Expenses**
- Legal and accounting
- Licenses and permits
- Office supplies
- Marketing and advertising
- HOA fees (if applicable)
**8. Reserves for Replacements (CapEx)**
This is NOT an operating expense for NOI calculation, but you must budget for it:
- Roof replacement
- HVAC systems
- Water heaters
- Parking lot resurfacing
- Exterior paint
Budget $200-500 per unit per year depending on property age and condition.
### Understanding Expense Ratios
**Expense Ratio = Operating Expenses ÷ Gross Potential Income**
Typical ranges:
- Class A properties: 35-45%
- Class B properties: 40-50%
- Class C properties: 45-55%+
If a seller’s pro forma shows expenses significantly below these ranges, they’re likely underestimating.
**Example:**
Gross Potential Income: $558,000
Estimated Operating Expenses: $251,100
Expense Ratio: $251,100 ÷ $558,000 = 45%
(Use [Rod’s commercial real estate underwriting tool](https://rodkhleif.com/commercial-real-estate-underwriting-tool/) to calculate expense ratios instantly.)
## Step 4: Calculate Net Operating Income (NOI)
Now we get to the number that determines property value: Net Operating Income.
**NOI = Effective Gross Income – Operating Expenses**
Using our example:
Effective Gross Income: $513,360
Operating Expenses: -$251,100
**Net Operating Income (NOI): $262,260**
### What NOI Tells You
NOI represents the property’s ability to generate income before debt service. This is what lenders and appraisers focus on.
**Critical point:** NOI excludes:
- Mortgage payments (debt service)
- Capital expenditures
- Depreciation
- Income taxes
### Stabilized vs. Proforma NOI
**Current/Stabilized NOI:** Based on actual current income and conservative expense estimates
**Proforma/Forward NOI:** Based on projected income after you execute your business plan (rent increases, expense reductions, etc.)
Always underwrite to both. Your purchase price should be based on current NOI. Your projected returns should be based on proforma NOI, but stress-tested conservatively.
## Step 5: Determine Property Value Using Cap Rate
The capitalization rate (cap rate) is how you convert NOI into property value.
**Property Value = NOI ÷ Cap Rate**
### How to Determine the Right Cap Rate
**1. Market Comps**
What are similar properties selling for in the same submarket?
**2. Broker Market Reports**
Marcus & Millichap, CBRE, Colliers publish quarterly cap rate reports by market
**3. Property Class Adjustments**
- Class A: Lower cap rates (4-6%)
- Class B: Mid-range cap rates (6-8%)
- Class C: Higher cap rates (8-10%+)
**4. Risk Adjustment**
Higher risk = higher cap rate required
**Example:**
Current NOI: $262,260
Market Cap Rate: 7.0%
Property Value: $262,260 ÷ 0.07 = **$3,746,571**
If the seller is asking $4.2 million, you’re looking at a significant overpayment unless you can justify it with value-add upside.
### Going-In vs. Exit Cap Rate
**Going-In Cap Rate:** Based on current NOI at purchase
**Exit Cap Rate:** What you assume when you sell (typically 50-100 basis points higher for conservatism)
Never assume you’ll sell at a lower cap rate than you bought. Markets change, and conservative underwriting means planning for expansion, not compression.
**[](https://rodkhleif.com/how-to-underwrite-a-multifamily-deal-step-by-step-the-complete-guide/screenshot-2026-02-27-at-4-24-17-pm/)**
## Step 6: Model Rent Growth (The Value-Add Opportunity)
If you’re pursuing a value-add strategy, rent growth modeling is critical.
### Types of Rent Growth
**1. Market Rent Growth**
Natural appreciation due to market conditions
- Conservative: 2-3% annually
- Use historical data for the submarket
**2. Loss-to-Lease Capture**
Bringing below-market units to market rates
- Model this over 12-36 months depending on lease rollover
- Don’t assume 100% capture—some tenants will leave rather than pay more
**3. Value-Add Renovations**
Rent premiums from unit upgrades
- Requires unit-by-unit analysis
- Factor in renovation costs, timeline, and vacancy during renovation
### How to Model Rent Growth Conservatively
Let’s say you have a 35-unit property:
**Year 1:**
- 10 units at market, staying flat
- 15 units below market by $100/month → capture $75/month increase (75% capture)
- 10 units to be renovated → increase by $150/month after $8,000 renovation
**Calculation:**
- Current rent: $45,000/month
- Year 1 additional income:
- Loss to lease: 15 units × $75 × 12 months = $13,500
- Renovations: 10 units × $150 × 6 months average = $9,000
- Year 1 total increase: $22,500
**Critical assumptions to document:**
- What percentage of tenants will accept rent increases?
- How long does each renovation take?
- What’s your vacancy during renovation?
- What if renovation costs run over budget?
## Step 7: Stress Testing Your Underwriting
This is where professionals separate themselves from amateurs. Anyone can make a deal work with aggressive assumptions. The question is: does it work when things go wrong?
### Key Stress Tests to Run
**1. Expense Shock Test**
Increase all operating expenses by 10-20%
- What if property taxes increase after reassessment?
- What if insurance costs spike?
- What if you have higher-than-expected maintenance?
If the deal breaks with a 15% expense increase, it’s too risky.
**2. Income Reduction Test**
Decrease income by 10%
- What if you can’t fill units as quickly as planned?
- What if market rents soften?
- What if renovation premiums are lower than expected?
**3. Higher Interest Rate Test**
Model debt service at 100-200 basis points higher than quoted
Interest rates change. Bridge loans reset. What if your refi rate is higher than expected?
**4. Extended Timeline Test**
What if your value-add takes 24 months instead of 12?
- More interest carry
- More lost rent during renovation
- Higher operating costs
**5. Exit Cap Rate Expansion**
Model your exit at 50-100 basis points higher than current market
Cap rates compress in good times and expand in bad times. Conservative underwriting plans for expansion.
### The “Disaster Scenario” Test
I always run one nightmare scenario:
- Vacancy up to 15%
- Expenses up 20%
- Rent growth zero
- Exit cap rate up 100 basis points
If the deal still produces some return in this scenario, you have downside protection. If it’s a total disaster, you’re taking on too much risk.
(Discover how [Rod analyzed a $65M deal in Savannah and walked away](https://rodkhleif.com/we-lost-a-deal/) due to conservative stress testing.)
## Step 8: Sensitivity Analysis (Understanding Your Risk Exposure)
While stress testing looks at specific scenarios, sensitivity analysis shows you how changes in key variables impact your returns across a range of outcomes.
### Key Variables to Analyze
**1. Exit Cap Rate Sensitivity**
Model your IRR and equity multiple at exit cap rates of:
- 6.5%, 7.0%, 7.5%, 8.0%, 8.5%
This shows you how sensitive your returns are to market conditions at exit.
**2. Rent Growth Sensitivity**
Model annual rent growth at:
- 0%, 1%, 2%, 3%, 4%
If you need 4% annual rent growth to hit your targets, but historical market average is 2%, you’re in trouble.
**3. Renovation Premium Sensitivity**
If you’re underwriting a $150/month rent increase from renovations, model:
- $100, $125, $150, $175, $200
What if you only capture $100? Does the deal still work?
**4. Occupancy Sensitivity**
Model stabilized occupancy at:
- 85%, 90%, 92%, 95%, 97%
### Creating a Sensitivity Table
Build a simple table showing IRR outcomes:
Exit Cap 6.5%Exit Cap 7.0%Exit Cap 7.5%Exit Cap 8.0%**2% Rent Growth**16.2% IRR14.8% IRR13.1% IRR11.7% IRR**3% Rent Growth**18.5% IRR16.9% IRR15.2% IRR13.8% IRR**4% Rent Growth**20.9% IRR19.1% IRR17.3% IRR15.7% IRR
This shows you the range of potential outcomes and helps you understand where your assumptions need to be most accurate.
## Step 9: Debt Service Coverage and Financing Analysis
Even if a property has strong NOI, it needs to support the debt you’re putting on it.
### Debt Service Coverage Ratio (DSCR)
**DSCR = NOI ÷ Annual Debt Service**
Most lenders require:
- Minimum 1.20x DSCR (agency debt)
- Minimum 1.25x DSCR (portfolio/bridge loans)
**Example:**
NOI: $262,260
Annual debt service: $210,000
DSCR: $262,260 ÷ $210,000 = 1.25x
This property can support the proposed debt.
### Loan-to-Value (LTV) Constraints
Lenders also limit how much they’ll lend based on property value:
- Agency debt (Fannie/Freddie): up to 80% LTV
- Bridge loans: 70-75% LTV
- Value-add loans: 65-70% LTV plus rehab budget
**Example:**
Appraised value: $3,750,000
75% LTV: $2,812,500 max loan
### Cash-on-Cash Return
After accounting for debt service, what return do you generate on your actual cash invested?
**Cash-on-Cash Return = Annual Cash Flow ÷ Total Cash Invested**
**Example:**
Purchase price: $3,750,000
Down payment (25%): $937,500
Closing costs: $75,000
Total cash invested: $1,012,500
Annual NOI: $262,260
Annual debt service: -$210,000
Annual cash flow: $52,260
Cash-on-Cash: $52,260 ÷ $1,012,500 = **5.16%**
Target minimum: 8-10% cash-on-cash for value-add deals
## Step 10: Building Your Underwriting Model
You can create an underwriting model in Excel or use specialized software. Here’s the structure:
### Inputs Section
- Purchase price
- Closing costs
- Loan terms (rate, amortization, LTV)
- Unit mix and current rents
- Market rents by unit type
- Operating expense assumptions
- Renovation costs and timeline
- Rent increase assumptions
- Hold period and exit cap rate
### Calculations Section
- Current and proforma income
- Vacancy loss
- Effective gross income
- Operating expenses by category
- NOI (current and proforma)
- Debt service
- Cash flow
- CapEx reserves
### Returns Section
- Cash-on-cash return
- IRR (Internal Rate of Return)
- Equity multiple
- Total profit
- Average annual return
### Sensitivity Tables
- Exit cap rate sensitivity
- Rent growth sensitivity
- Expense sensitivity
(Get started with [Rod’s free multifamily deal analyzer](https://rodkhleif.com/deal-underwriting-tool/) that includes all these calculations pre-built.)
## Red Flags to Watch For
After underwriting thousands of deals, here are the warning signs I’ve learned to never ignore:
### Seller Red Flags
**1. Seller Won’t Provide T-12 or Rent Roll**
If they won’t show you actual performance, there’s a reason. Walk away.
**2. Pro Forma Shows Unrealistic Expense Ratios**
Expenses at 30% for a Class B property? They’re lying or clueless. Either way, bad news.
**3. “Market Rent” Claims Without Comps**
Seller says units should rent for $1,800 but provides no proof? Do your own research.
**4. Deferred Maintenance Everywhere**
If the roof, HVAC, and parking lot all need replacement, factor those costs or walk.
### Deal Structure Red Flags
**1. Returns Only Work with Aggressive Assumptions**
If you need 5% annual rent growth and a compressed exit cap to hit your targets, you’re gambling, not investing.
**2. Negative Leverage**
If your cap rate is lower than your interest rate, the debt is hurting returns, not helping.
**3. No Margin for Error**
If a 10% expense increase kills the deal, you have no downside protection.
**4. Relying on Market Appreciation**
Your underwriting should work based on income alone. Appreciation is a bonus, not the strategy.
(Learn about [multifamily underwriting fundamentals from Rod’s podcast with Adam Wolfson](https://rodkhleif.com/podcasts/multifamily-underwriting-fundamentals-with-adam-wolfson/).)
## The Underwriting Checklist: Your Step-by-Step Process
Here’s the exact checklist I use (and my Warrior students use) for every deal:
[](https://rodkhleif.com/wp-content/uploads/2026/02/Rod-Khleifs-Multifamily-Underwriting-Checklist.xlsx)
[**Download the Complete Multifamily Underwriting Checklist (PDF)** ](https://rodkhleif.com/wp-content/uploads/2026/02/Rod-Khleifs-Multifamily-Underwriting-Checklist.xlsx)
## Common Underwriting Mistakes (And How to Avoid Them)
### Mistake #1: Using the Seller’s Numbers
**The Problem:** Seller pro formas are sales documents designed to maximize perceived value.
**The Solution:** Build your own model from scratch using the T-12 as your starting point. Trust but verify every assumption.
### Mistake #2: Underestimating Expenses
**The Problem:** New investors consistently underbudget expenses, especially maintenance, CapEx, and property taxes.
**The Solution:** Use conservative expense ratios based on property class. Get actual quotes for taxes and insurance. Budget high for maintenance and CapEx.
### Mistake #3: Overly Aggressive Rent Growth
**The Problem:** Assuming you can immediately raise rents to market or that markets will grow 5% annually.
**The Solution:** Phase rent increases over 12-36 months. Use historical market data for growth rates (typically 2-3%). Stress test with zero growth.
### Mistake #4: Ignoring CapEx
**The Problem:** Focusing only on NOI and forgetting that roofs, HVAC systems, and parking lots eventually need replacement.
**The Solution:** Always budget $200-500/unit/year for capital reserves. Inspect the property and create a CapEx plan.
### Mistake #5: Falling in Love with a Property
**The Problem:** Wanting a deal to work so badly that you rationalize aggressive assumptions.
**The Solution:** Underwrite deals emotionlessly. The numbers either work or they don’t. Be willing to walk away from 90% of what you analyze.
## Advanced Underwriting: Taking It to the Next Level
Once you master the basics, here are advanced techniques:
### Unit-by-Unit Rent Roll Analysis
Don’t just average rents. Analyze each unit:
- Which specific units are below market?
- Which leases are expiring when?
- What’s the rollover strategy for maximum rent capture?
### Submarket Analysis
Understand micro-market dynamics:
- What’s being built nearby?
- Are employers moving in or out?
- What’s the 3-mile radius vacancy trend?
- What are rent growth rates specifically in this submarket?
### Utility Reimbursement Strategies (RUBS)
If utilities are master-metered, implementing RUBS (Ratio Utility Billing System) can shift $200-500/month per unit in expense to tenants.
Model the income impact but factor in implementation costs and potential tenant pushback.
### Value-Add Business Plan Modeling
For heavy value-add deals:
- Create a 36-month renovation schedule
- Model month-by-month cash flow
- Factor in construction loan draw schedules
- Account for vacancy during renovation
- Build in contingency buffers (15-20% of renovation budget)
(Master these techniques at [Rod’s Underwriting & Due Diligence Bootcamp](https://rodkhleif.com/multifamily-underwriting-bootcamp/).)
## Tools and Resources for Better Underwriting
### Software and Calculators
**Free Tool:**
- [Rod’s Commercial Real Estate Underwriting Tool](https://rodkhleif.com/commercial-real-estate-underwriting-tool/)
**Paid Software:**
- RealData (comprehensive underwriting and market analysis)
- Argus (enterprise-level software for large deals)
- PropertyMetrics (Excel-based underwriting templates)
### Market Research Resources
- CoStar (commercial real estate data)
- Local apartment association reports
- Census data for employment and demographics
- Rentometer, [Rent.com](http://rent.com/), [Apartments.com](http://apartments.com/) for rent comps
- County assessor websites for property tax research
### Education
- [Rod Khleif’s Virtual Multifamily Bootcamp](https://rodkhleif.com/bootcamp/)
- [Warrior Program Mentorship](https://rodkhleif.com/rod-khleif-coaching-program/) (includes unlimited deal analysis)
- Lifetime Cash Flow Through Real Estate Investing Podcast
## Putting It All Together: A Real Example
Let’s walk through a simplified real-world underwriting:
**Property:** 42-unit Class B multifamily
**Asking Price:** $4,200,000
**Location:** Growing secondary market
### Current Performance (from T-12):
- Gross Rent: $468,000
- Other Income: $12,000
- Vacancy: $28,800 (6%)
- Operating Expenses: $216,000 (45% expense ratio)
- Current NOI: $235,200
### Your Analysis:
**Income:**
- Market rents $100/month higher on average
- 15 units below market (rollover opportunity)
- Conservative capture: $75/month × 15 units × 12 months = $13,500 additional
- Realistic timeline: 24 months
- Year 2 stabilized income increase: $13,500
**Expenses:**
- Property taxes will increase 15% upon sale = +$12,000
- Insurance quote came in 20% higher = +$6,000
- Maintenance budget increase for deferred items = +$8,000
- Proforma operating expenses: $242,000
- Expense ratio: 50% (acceptable for Class B)
**Proforma NOI (Year 2):**
- Gross income: $493,500
- Vacancy (7%): -$34,545
- Effective gross income: $458,955
- Operating expenses: -$242,000
- **Proforma NOI: $216,955**
**Valuation:**
- Current NOI: $235,200
- Market cap rate: 7.5%
- Current value: $235,200 ÷ 0.075 = $3,136,000
- **Offering price maximum: $3,100,000** (5% discount for negotiation room)
**The Decision:**
Asking price is $4.2M. Current value is $3.1M. Even with the value-add upside, there’s over $1M of overpricing. **Pass on this deal** or submit a significantly lower offer knowing it will likely be rejected.
This is how professional underwriting protects you from overpaying.
## Your Next Steps: From Analysis to Action
Underwriting is a skill that improves with practice. Here’s how to get started:
### Immediate Actions (This Week):
1. **Download the underwriting checklist** above and save it as your template
2. **Find 3 deals to analyze** on LoopNet, Crexi, or through a broker
3. **Request financials** from sellers/brokers (even if you’re not ready to buy)
4. **Practice building models** using [Rod’s deal analyzer](https://rodkhleif.com/deal-underwriting-tool/)
### Short-Term Actions (This Month):
1. **Underwrite 10-20 deals** to build pattern recognition
2. **Tour properties** you’ve underwritten to see how numbers translate to reality
3. **Join Rod’s Virtual Multifamily Bootcamp** to learn advanced techniques
4. **Build relationships with brokers** who can send you off-market deals
### Long-Term Development:
1. **Track your assumptions** and compare to actual performance if you buy
2. **Refine your model** based on what you learn
3. **Specialize in a market** so you develop deep expertise
4. **Consider Rod’s Warrior Program** for unlimited deal analysis and mentorship
(Learn more about [Rod’s coaching and training programs](https://rodkhleif.com/rod-khleif-warrior-program/).)
## The Reality About Underwriting: It’s a Skill, Not a Secret
Here’s what I want you to understand: there’s no secret formula that makes you a great underwriter overnight. It’s a skill you develop through repetition.
The first deal you underwrite will take you 4-6 hours. The hundredth deal will take you 30 minutes. You’ll develop instincts about what “good” looks like. You’ll spot red flags instantly that would have fooled you as a beginner.
But you have to start. You have to be willing to underwrite deals knowing you’ll probably pass on them. You have to build the reps.
**80-90% of your success in multifamily investing is mindset and taking action. Only 10-20% is the technical knowledge.** (Learn more about [Rod’s mindset training and courses](https://rodkhleif.com/courses/).)
The technical knowledge—the underwriting, the formulas, the spreadsheets—that’s the easy part. Anyone can learn it.
The hard part is having the discipline to:
- Walk away from deals that don’t meet your criteria
- Stick to conservative assumptions when sellers pressure you
- Stay patient while other investors overpay
- Trust your analysis over your emotions
But when you master that discipline, combined with solid underwriting skills, you become unstoppable.
---
## Frequently Asked Questions About Mutifamily Underwriting
**Q: How long does it take to underwrite a multifamily deal?**
A: For experienced investors, initial screening takes 15-30 minutes. A full comprehensive underwrite with sensitivity analysis takes 2-4 hours. As you build experience, you’ll get faster at identifying deals that don’t merit deep analysis.
**Q: What’s the most important metric in multifamily underwriting?**
A: There’s no single “most important” metric, but if I had to choose, it would be NOI—because it drives both property value and your ability to service debt. However, you need to analyze NOI, cap rate, cash-on-cash return, DSCR, and IRR together to understand the full picture.
**Q: Should I trust the seller’s pro forma or build my own?**
A: Always build your own. The seller’s pro forma is a sales document designed to make the property look as attractive as possible. Use the seller’s T-12 statement as your starting point and verify every assumption independently. Your underwriting should be conservative; theirs will be aggressive.
**Q: What expense ratio should I use for multifamily underwriting?**
A: It depends on property class and age. Class A properties typically run 35-45%, Class B properties 40-50%, and Class C properties 45-55%+. Always compare your estimated expense ratio to actual historical performance and market comps. If the seller shows expenses significantly below market norms, they’re underestimating.
**Q: How do I determine the right cap rate for a property?**
A: Research recent sales of similar properties in the same submarket through brokers, CoStar, or public records. Cap rates vary by market, property class, and risk profile. Don’t rely on national averages—use local market data. When in doubt, use a higher (more conservative) cap rate to determine value.
**Q: What’s the difference between cash-on-cash return and IRR?**
A: Cash-on-cash return measures first-year cash flow as a percentage of your initial cash investment. IRR (Internal Rate of Return) accounts for the time value of money and includes cash flow, profit at sale, and the timing of all cash flows over your hold period. IRR gives you a more complete picture of total returns, while cash-on-cash shows immediate yield.
**Q: How much should I budget for capital expenditures (CapEx)?**
A: Budget $200-500 per unit per year depending on property age and condition. Newer Class A properties might be at the lower end; older Class C properties at the higher end. Always get a physical inspection and create a 10-year CapEx plan for major systems (roof, HVAC, parking lot, etc.). CapEx is often the line item that kills deals when ignored.
---
## About Rod Khleif
Rod Khleif is one of the nation’s top multifamily real estate experts, best-selling author of “How to Create Lifetime Cash Flow Through Multifamily Properties,” and host of the “Lifetime Cash Flow Through Real Estate Investing” podcast. Over his 40+ year career, Rod has personally owned and managed over 2,000 rental properties and apartment buildings.
Rod’s Warrior Program students collectively own over 260,000 apartment units, and his mission is to help investors create lifetime cash flow through conservative, disciplined multifamily investing.
**Ready to master multifamily underwriting?**
- Download the [Complete Underwriting Checklist (PDF)](x-webdoc://7691BD92-A78E-4728-9866-DEE58A63CEB6#)
- Access [Rod’s Free Multifamily Deal Analyzer](https://rodkhleif.com/deal-underwriting-tool/)
- Register for [Rod’s Virtual Multifamily Bootcamp](https://rodkhleif.com/bootcamp/)
- Text PARTNER to 72345 or email to learn about investing opportunities
*Disclaimer: This article was written with the help of AI and reviewed by Rod and his team.*
**Related reading:** [how to benchmark a deal’s cap rate](https://rodkhleif.com/what-is-a-good-cap-rate-for-multifamily/) walks through the 5 Layer Cap Rate Filter and current market benchmarks.
**Related reading:** [net operating income (NOI), explained step by step](https://rodkhleif.com/a-complete-guide-noi-in-real-estate-in-2025/).
**Categories:** Due Diligence, Multifamily Investing
---
### [7 Critical Multifamily Due Diligence Steps](https://rodkhleif.com/7-core-questions-to-guide-your-due-diligence/)
**Published:** April 10, 2026
**Author:** Rod Khleif
**Excerpt:** Due diligence is one of the most critical aspects of any real estate deal.
**Content:**
I use a 7 step due diligence process for every multifamily property I review. It has saved me from deal disasters that could have cost hundreds of thousands of dollars. Multifamily due diligence is the time between making an offer and closing, usually 30 to 60 days. During this time, you stop relying on the seller’s marketing package. You start verifying everything yourself. In my experience coaching over 2,000 students through their first multifamily acquisitions, I’ve found that the properties that look perfect in the glossy offering memorandum are often the ones hiding the biggest problems.
[](https://rodkhleif.com/7-core-questions-to-guide-your-due-diligence/screenshot-2026-04-10-at-10-17-03-pm/)
Most investors rush through due diligence because they’re excited about the deal. That’s exactly backward. The deal isn’t real until you’ve confirmed the numbers, walked the units, and stress-tested the assumptions.
Here’s the checklist my team and I use, and that our Warrior students have used to close on over 260,000 multifamily units collectively.
## Why Due Diligence Decides Whether Your Deal Makes Money
Skipping or shortcutting due diligence is the fastest way to turn a promising investment into a money pit. A disciplined process helps you:
- **Catch financial misrepresentation** before you wire closing funds
- **Quantify true repair costs** so your renovation budget reflects reality, not hope
- **Verify that rents are real** . Not inflated by concessions, one-time payments, or phantom tenants
- **Build negotiating leverage.** Every issue you document is a reason to renegotiate price or terms
- **Protect your investors** if you’re syndicating. Your LPs are counting on your thoroughness
The cost of due diligence is a few thousand dollars in inspections and a few weeks of focused work. The cost of skipping it can be six or seven figures.
## Due Diligence Step 1: Verify Every Financial Document Against Independent Sources
A seller’s proforma is a sales pitch. Your job is to find the gaps between their story and reality.
**Request these documents on day one of your due diligence period:**
- Operating statements for the last three years, including the current year-to-date
- Six months of bank statements. This is the single most important cross-reference because deposits don’t lie
- Utility bills for the last 24 months (all units plus common areas)
- Property tax bills for the last two years
- IRS tax returns and any related schedules for the last two years
- Utility deposit register
- Insurance policy with premium history and claims record
**How to use them:** Line up the operating statements against the bank deposits month by month. If the seller claims $50,000 in monthly rent collections but bank deposits average $42,000, you’ve found an $8,000/month problem. That’s $96,000/year in overstated income that directly inflates the property’s value at any cap rate.
I teach my students to build a reconciliation spreadsheet that maps every line item on the P&L to its source document. If a number can’t be verified, it doesn’t go into your underwriting model.
### Run a Detailed Rent Roll Analysis
The rent roll is where most deals unravel. Request:
- Current rent roll with unit-by-unit detail and historical data going back two years
- Every lease agreement (the actual signed leases, not summaries)
- Security deposit register with amounts per unit
- Tenant payment history showing actual collections, not just charges
- Any concessions, move-in specials, or rent abatements currently in effect
**Red flags that should slow you down:**
- Turnover exceeding 50% annually, which signals management problems, property condition issues, or a market problem
- Rent amounts on leases that don’t match the rent roll or the operating statements
- A spike in occupancy or collections in the months just before listing. Sellers sometimes fill units with unqualified tenants to inflate numbers
- Delinquencies above 5-8% of gross potential rent
- Month-to-month leases on more than 20-30% of units. These tenants can leave at any time
## Due Diligence Step 2: Investigate Property Management and Maintenance History
The property management operation tells you what you’re actually inheriting: not just a building, but a business with systems (or lack of systems) already in place.
**Request and review:**
- Current property management agreement, including fee structure and termination clauses
- Commission agreements with leasing agents and brokers
- All outstanding maintenance work orders (open and recently completed)
- Capital expenditure records for the past three to five years
- Any litigation history (lawsuits, code violations, tenant disputes) for the past five years
- Staff roster with roles, compensation, and tenure
**What you’re looking for:** A pattern of deferred maintenance is a signal that the seller has been extracting cash rather than maintaining the asset. If capital expenditures dropped to near zero in the last two years but the property is 20+ years old, you’re about to inherit a long list of repairs the seller didn’t make.
Check for repeat maintenance issues. If the same plumbing problem shows up in work orders every quarter, you’re looking at a system replacement, not a patch job.
If the current management company has high turnover, poor online reviews, or unresponsive communication during your due diligence period, factor in the cost and disruption of a management transition into your underwriting.
## Due Diligence Step 3: Conduct a Hands-On Property Inspection
Photos and drone footage are marketing. Walking every unit is due diligence.
**Before the inspection, gather:**
- All service contracts: pool, trash, laundry, pest control, landscaping, elevator, security
- HVAC repair and replacement history
- Roof inspection reports and warranty documentation
- Insurance policy with claims history for the past three to five years
- Site plan, property survey, and any architectural or engineering plans
- Certificate of occupancy and all relevant permits
### Walk Every Unit, Not Just a Sample
This is where I see investors cut corners most often. On a 100-unit property, inspecting 10 units and extrapolating is gambling with your capital. I’ve seen deals where the 10 “model” units were pristine and the other 90 needed $8,000+ each in renovations.
**In every unit, document with photos and video:**
- Flooring condition (carpet, tile, vinyl: what needs replacement vs. cleaning?)
- Kitchen: cabinet condition, countertops, appliances, plumbing under sinks
- Bathrooms: toilet, tub/shower, tile condition, water damage, mold
- HVAC system age and condition (check the manufacture date on the unit. If it is 15+ years old, budget for replacement)
- Electrical panel condition and capacity
- Windows and doors: seals, locks, screens, energy efficiency
- Water heater age and type
- Signs of pest infestation, water intrusion, or mold
**Bring specialists for the big-ticket systems:**
- Structural engineer for foundation, load-bearing walls, and any visible settling or cracking
- Roofing contractor for remaining useful life estimate
- Licensed plumber if the property has galvanized or polybutylene piping
- Electrician if the property has Federal Pacific or Zinsco panels (known fire hazards)
- Environmental consultant for Phase I ESA if required by your lender
**Exterior inspection checklist:**
- Parking lot and sidewalk condition ([ADA compliance](https://www.ada.gov/law-and-regs/design-standards/))
- Drainage and grading: does water flow away from buildings?
- Siding, stucco, or brick condition
- Stairwells, railings, and common area safety
- Laundry facilities and amenity spaces
- Signage condition and visibility from the road
- Dumpster areas, landscaping, and curb appeal
## Due Diligence Step 4: Analyze the Local Market. A Good Building in a Bad Market Is Still a Bad Deal
Property condition is only half the equation. Market fundamentals determine whether your investment grows or stalls.
**Research these factors before you close:**
- **Employment base:** Who are the three to five largest employers within a 10-mile radius? Are they growing, stable, or at risk of layoffs or closure?
- **Population trends:** Is the metro area and submarket gaining or losing residents? Check census data and local economic development reports.
- **Crime data:** Pull neighborhood-level crime statistics, not just city averages. Walk the property at night.
- **Rent comps:** What are comparable properties charging per unit type? What concessions are they offering? Are rents trending up, flat, or declining?
- **Occupancy comps:** What’s the submarket vacancy rate? If it’s above 8-10%, there may be oversupply.
- **New construction pipeline:** Are new apartment developments planned or under construction nearby? New Class A supply can put downward pressure on older Class B/C rents.
- **School quality:** Even in workforce housing, school ratings affect tenant demand and retention.
- **Infrastructure and amenities:** Grocery stores, pharmacies, healthcare facilities, public transit access. These affect liveability and tenant quality.
- **Regulatory environment:** Check for rent control ordinances, eviction moratoriums, or proposed legislation that could affect operations.
**Go beyond the spreadsheet.** Visit the neighborhood at different times of day. Talk to local property managers. Eat at a nearby restaurant. Shop at the closest grocery store. You’ll learn more about the tenant experience in two hours of walking the area than in two days of reading reports.
## Multifamily Due Diligence Step 5: Stress-Test the Property’s Operational Performance
Now step back from individual documents and look at the property as a business. Is this operation healthy, or is it being held together with Band-Aids?
**Key questions to answer:**
- What’s the difference between physical occupancy (units with tenants) and economic occupancy (units actually producing rent)? A property can be 95% physically occupied and 85% economically occupied if tenants aren’t paying.
- Has occupancy been stable, improving, or declining over three years? A downward trend during an otherwise strong rental market is a warning sign.
- What concessions is management offering? Free months, reduced deposits, gift cards. These are hidden costs that reduce effective rent.
- When were rents last increased, and by how much? A property where rents haven’t been raised in three years may have upside, or it may have tenants who will leave when you raise them.
- Are maintenance expenses suspiciously low? Below-market maintenance spending usually means deferred repairs you’ll pay for later.
- What’s the trend in [Net Operating Income](https://rodkhleif.com/a-complete-guide-noi-in-real-estate-in-2025/)? If NOI has been flat or declining while the market has been growing, there’s an operational problem.
- What’s the payroll-to-revenue ratio? Overstaffing or understaffing both create problems.
**Run your own underwriting model** using the verified numbers from Steps 1-4, not the seller’s proforma. Your model should include realistic assumptions for rent growth, expense inflation, vacancy, capital expenditures, and debt service. If the deal doesn’t work with conservative assumptions, it doesn’t work.
## Due Diligence Step 6: Cross-Check Everything and Build Your Reconciliation
This is where you put all the pieces together. Before you make your final decision, every number in your underwriting should trace back to a verified source document.
**Reconciliation steps:**
- Compare the P&L line by line against bank deposits and tax returns. Do the revenue numbers match across all three sources?
- Verify that each lease in the lease file matches the corresponding line on the rent roll
- Confirm that actual tax bills match the property tax line item in the operating statements (sellers sometimes use lower “projected” numbers)
- Check that insurance costs reflect current coverage, not an expired policy at a lower rate
- Compare utility costs against the utility bills you collected. Are there units where the owner pays utilities that are not reflected in expenses?
- Benchmark every expense category against industry standards for the property’s age, class, and market. If the seller shows $800/unit/year in maintenance on a 1975 property, that’s almost certainly understated.
**Document every discrepancy.** Each one becomes a data point for renegotiation in Step 7.
## Due Diligence Step 7: Renegotiate, Restructure, or Walk Away
Due diligence isn’t just about confirming a deal. It is about deciding whether the deal still makes sense given what you’ve learned.
**After completing your analysis, you have three options:**
**Move forward** if the property meets or exceeds your underwriting assumptions and the risk profile aligns with your investment criteria.
**Renegotiate** if due diligence revealed issues that change the economics. Common renegotiation points include:
- Purchase price reduction based on actual NOI vs. stated NOI
- Seller credits for deferred maintenance or capital expenditures
- Extended closing timeline to allow for additional inspections or financing adjustments
- Holdback escrow for known repair items
- Seller-financed portion to bridge a gap between appraised value and contract price
**Walk away** if the property has fundamental problems that can’t be solved with a price reduction: environmental contamination, structural failure, market decline, or a seller unwilling to negotiate in good faith.
Walking away is not failure. It’s discipline. The best investors I’ve worked with pass on more deals than they close because they have standards they won’t compromise. In the Warrior program, we review deals together specifically to build this muscle. Knowing when to say no is as valuable as knowing how to underwrite.
## Want a Printable Version of The Due Diligence Checklist?
Download the complete Multifamily Due Diligence Checklist as a PDF, the same document our Warrior students use when evaluating deals.
\[[**Download the Free Due Diligence Checklist →**](https://rodkhleif.com/wp-content/uploads/2020/03/Multifamily-Due-Diligence-Checklist.docx)\]
---
## Ready to Put This Into Practice on Real Deals?
Due diligence is where theory meets reality. If you’re ready to evaluate your first multifamily deal, or want expert eyes on a deal you are already working on, Rod’s team can help.
Our Warrior students get live deal review calls where we walk through due diligence findings together, catch issues before they become expensive, and help you negotiate from a position of strength.
[**Apply to the Warrior Program →**](https://rodkhleif.com/reviews/warrior-program/)
## Frequently Asked Questions About Multifamily Due Diligence
**How long does the due diligence period typically last for a multifamily property?**
Most multifamily purchase agreements include a due diligence period of 30 to 60 days, though larger or more complex deals may negotiate 60 to 90 days. The clock starts when the purchase and sale agreement is executed. Plan your inspection schedule, document requests, and specialist appointments for the first week so you use every day productively. If you reach the end of your period and haven’t finished, you may be able to negotiate an extension, but you’ll have more leverage if you started strong and can show specific outstanding items rather than asking for more time because you procrastinated.
**How much does due diligence cost for a multifamily acquisition?**
For a typical 50 to 150 unit property, expect to spend $10,000 to $30,000 on third-party reports and inspections. This typically includes a property condition assessment ($3,000 to $8,000), Phase I environmental site assessment ($2,000 to $5,000), appraisal ($3,000 to $7,000), survey ($2,000 to $5,000), and title search and insurance ($2,000 to $5,000). Smaller properties cost less, and larger or more complex assets cost more. This investment is a fraction of the purchase price and can save you from six-figure mistakes. Most of these costs are non-refundable if you walk away, which is why you should front-load your financial analysis. Kill the deal on paper before spending on inspections.
**What are the biggest red flags during multifamily due diligence?**
The issues that kill deals most often are financial misrepresentation (income overstated or expenses understated), significant deferred maintenance that wasn’t disclosed, environmental contamination requiring remediation, title issues or unrecorded liens, and market fundamentals that don’t support the seller’s rent projections. In my experience, the most common problem is a gap between what the seller’s operating statements claim and what the bank deposits actually show. If the numbers don’t reconcile, everything else becomes suspect.
**Should I inspect every unit or just a sample?**
Inspect every unit. Sampling introduces risk that you’ll miss the worst units, and sellers know which units they’d prefer you not see. On a large property where full inspection isn’t practical within the timeframe, inspect a minimum of 20 to 25 percent of units plus every vacant unit, every unit with outstanding maintenance requests, and every unit the seller seems reluctant to show you. Budget the time and cost to do this right. It is the best insurance you’ll buy on the deal.
**What’s the difference between a property condition assessment and a regular home inspection?**
A property condition assessment is a commercial-grade evaluation conducted by a licensed engineering firm, not a residential home inspector. A PCA covers structural systems, mechanical systems, electrical, plumbing, building envelope, site work, ADA compliance, and provides a replacement reserve schedule estimating future capital expenditure needs. Most commercial lenders require a PCA. A residential-style home inspection is typically insufficient for multifamily properties above four units because it doesn’t assess building systems at a commercial scale or project future capital needs.
**Can I back out of a deal after due diligence if I find problems?**
Yes, if you’re still within your contractual due diligence or feasibility period, you can terminate the agreement, usually with the return of your earnest money deposit, minus any non-refundable “hard” earnest money or independent consideration outlined in the contract. Once the due diligence period expires, your earnest money typically goes “hard,” meaning you forfeit it if you back out. This is why it is critical to complete your analysis before the deadline and make your go or no-go decision with time to spare.
**What documents should I request on day one of due diligence?**
Send your complete document request list to the seller or broker within 24 hours of executing the purchase agreement. At minimum, request three years of operating statements, 12 months of bank statements, current rent roll with all leases, utility bills for 24 months, tax returns, property tax bills, insurance policy with claims history, all service contracts, management agreement, capital expenditure records, litigation history, and any environmental reports. The faster you receive these documents, the more time you have to analyze them. Slow document delivery from a seller is itself a red flag.
---
*Rod Khleif is a multifamily real estate investor, educator, and host of the Lifetime Cash Flow Through Real Estate Investing podcast, with over 20 million downloads. He has personally owned and managed over 2,000 properties and his students have collectively acquired over 260,000 multifamily units through the Warrior program.*
**Related reading:** What is a good cap rate for multifamily in 2026 walks through the 5 Layer Cap Rate Filter and current market benchmarks.
**Categories:** Blog, Due Diligence
**Tags:** apartment investing, business structures, Driving Force, investing, investor mistakes, landlord, motivation, multifamily, multifamily investment, multifamily property investing, multifamily real estate, NOI, real estate, real estate investing, real estate podcast, Rod Khleif, seller financing
---
### [How Cap Rates Work (With Examples)](https://rodkhleif.com/how-cap-rates-work-with-examples/)
**Published:** February 22, 2026
**Author:** Alex Khleif
**Content:**
If you’ve spent any time researching multifamily real estate investing, you’ve encountered the term “cap rate” repeatedly. But do you truly understand what it means, how it’s calculated, and most importantly, how to use it to make smarter investment decisions?
Many investors can recite the basic formula, yet struggle to apply cap rates in real-world situations. They don’t understand why a 5% cap rate might be excellent in one market but terrible in another, or how cap rate compression can make or break their investment returns.
This comprehensive guide will demystify capitalization rates once and for all. We’ll break down the formula, walk through detailed examples, explore how cap rates change across market cycles, and show you exactly how savvy investors use this metric to identify winning deals and avoid costly mistakes.
## What Is a Cap Rate?
A **capitalization rate** (cap rate) is the ratio between a property’s net operating income (NOI) and its purchase price or current market value. Expressed as a percentage, the cap rate represents the annual return on investment you’d receive if you purchased the property entirely with cash, meaning no debt.
Think of the cap rate as the property’s yield. A 6% cap rate means the property generates annual income equal to 6% of its value. Just as a bond might yield 4% annually, a multifamily property yielding 6% provides a baseline return before considering leverage, appreciation, or tax benefits.
Cap rates serve multiple critical functions in real estate investing. They provide a quick valuation shortcut, enable property comparisons across markets, indicate market sentiment and risk perception, help time acquisitions and dispositions, and signal when markets are overheated or undervalued.
## The Cap Rate Formula: Breaking It Down
The basic cap rate formula is deceptively simple:
### Basic Formula
**Cap Rate = Net Operating Income ÷ Property Value**
Or expressed as a percentage:
**Cap Rate = (NOI ÷ Property Value) × 100**
Let’s define each component precisely to avoid confusion.
### Net Operating Income (NOI)
Net Operating Income is the property’s annual income after paying all operating expenses but before debt service and capital expenditures. The NOI calculation follows this structure:
Start with **Gross Potential Income** (total possible rent if 100% occupied at market rates). Subtract **Vacancy Loss** (unoccupied units and collection losses) to get **Effective Gross Income**. Then subtract **Operating Expenses** (property management, utilities, repairs, insurance, property taxes, marketing, administrative costs) to arrive at [**Net Operating Income**.](https://rodkhleif.com/a-complete-guide-noi-in-real-estate-in-2025/)
Critically, NOI excludes debt service (mortgage payments), capital expenditures (major improvements like roof replacement), income taxes, and depreciation. These items don’t factor into cap rate calculations because cap rates measure property performance independent of financing and ownership structure.
### Property Value
Property value in the cap rate formula can mean either purchase price when analyzing an acquisition or current market value when evaluating an existing holding. Using purchase price calculates your “going-in cap rate”—the initial yield you’re buying. Using current market value calculates today’s cap rate based on what the property would sell for now.
This distinction matters enormously. A property purchased at a 7% cap rate might now trade at a 5% cap rate if NOI increased or market cap rates compressed, representing significant appreciation.
## Cap Rate Calculation Examples
Let’s work through progressively complex examples to build intuition around cap rate calculations.
### Example 1: Simple Cap Rate Calculation
You’re evaluating a 50-unit apartment building with the following financials:
Income/Expense ItemAnnual AmountGross Potential Rent$600,000Vacancy Loss (5%)-$30,000**Effective Gross Income****$570,000**Operating Expenses-$228,000**Net Operating Income****$342,000**
The seller is asking $4,857,143 for the property.
**Cap Rate Calculation:**
- Cap Rate = $342,000 ÷ $4,857,143
- Cap Rate = 0.0704 or **7.04%**
This means the property generates annual income equal to approximately 7% of its purchase price. If you bought this property with all cash, you’d earn a 7% annual return before considering appreciation, principal paydown, or tax benefits.
### Example 2: Reverse Engineering Property Value
Now let’s flip the formula. Suppose you know that similar properties in the market are trading at 6% cap rates, and you’ve identified a property generating $400,000 in NOI. What should you pay?
**Property Value = NOI ÷ Cap Rate**
- Property Value = $400,000 ÷ 0.06
- Property Value = **$6,666,667**
This reverse calculation is incredibly powerful. Once you determine the prevailing market cap rate through comparable sales, you can quickly estimate any property’s value based on its NOI. This creates a simple valuation shortcut that experienced investors use to screen hundreds of opportunities rapidly.
### Example 3: The Impact of Small Cap Rate Changes
Here’s where cap rates become truly fascinating. Small changes in cap rates create massive value swings. Let’s use the same $400,000 NOI property:
Cap RateProperty ValueValue Change7.0%$5,714,286Baseline6.5%$6,153,846+$439,560 (+7.7%)6.0%$6,666,667+$952,381 (+16.7%)5.5%$7,272,727+$1,558,441 (+27.3%)5.0%$8,000,000+$2,285,714 (+40.0%)
Notice that a 2-point cap rate compression from 7% to 5% creates a 40% increase in property value—without changing the property’s income at all. This phenomenon, called cap rate compression, is why investors obsess over market cap rate trends and why buying in markets poised for compression can generate enormous returns.
### Example 4: Real-World Deal Analysis
Let’s analyze a complete acquisition to see how cap rates work in practice.
**Property Details:**
- 100-unit multifamily property
- Average rent: $1,200/month per unit
- Physical occupancy: 92%
- Market cap rate: 6.25%
**Income Analysis:**
Line ItemCalculationAnnual AmountGross Potential Income100 units × $1,200 × 12 months$1,440,000Vacancy Loss (8%)Historical average-$115,200Other IncomeParking, laundry, pets+$36,000**Effective Gross Income****$1,360,800**
**Expense Analysis:**
Expense CategoryAnnual Amount% of EGIProperty Management$54,4324.0%On-site Payroll$68,0405.0%Repairs & Maintenance$95,2567.0%Utilities$68,0405.0%Insurance$27,2162.0%Property Taxes$190,51214.0%Marketing & Admin$40,8243.0%**Total Operating Expenses****$544,320****40.0%**
**NOI Calculation:**
- Effective Gross Income: $1,360,800
- Less Operating Expenses: -$544,320
- **Net Operating Income: $816,480**
**Property Valuation:**
- Property Value = NOI ÷ Cap Rate
- Property Value = $816,480 ÷ 0.0625
- Property Value = **$13,063,680**
At the prevailing 6.25% market cap rate, this property should trade for approximately $13.1 million. If the seller is asking $14 million, you’re paying a 5.83% cap rate ($816,480 ÷ $14,000,000), which means you’re paying above market rates. Conversely, if you can negotiate $12.5 million, you’re buying at a 6.53% cap rate, below the market rate and potentially creating immediate value.
[](https://rodkhleif.com/cap-rate-calculator/)
[**Want some help? Click here to use Rod Khleif’s FREE cap rate calculator.** ](https://rodkhleif.com/cap-rate-calculator/)
## Understanding Cap Rate Compression
Cap rate compression occurs when prevailing market cap rates decrease over time, causing property values to increase even without income growth. This phenomenon has driven significant wealth creation in real estate over the past decade.
### Why Cap Rates Compress
Several forces drive cap rate compression in real estate markets.
**Interest Rate Decline** creates the most powerful compression driver. When interest rates fall, investors accept lower yields across all asset classes. As 10-year treasury yields drop from 4% to 2%, investors who previously required 7% cap rates might accept 5% cap rates, maintaining their spread over risk-free rates. This dynamic explains much of the compression seen from 2010-2021.
**Improved Market Fundamentals** also compress cap rates. Strong job growth, population influx, and limited new construction create investor confidence in future rent growth. When investors believe NOI will grow significantly, they accept lower initial cap rates because their total returns will include substantial appreciation. Markets like Austin, Nashville, and Boise experienced dramatic compression as fundamentals strengthened.
**Increased Investor Competition** for multifamily assets pushes cap rates down through basic supply and demand. When institutional capital floods into multifamily—driven by stock market volatility, commercial real estate challenges, or demographic trends favoring rentals—the increased buyer competition compresses cap rates. Sellers benefit from multiple aggressive offers bidding prices higher.
**Market Maturity and Stabilization** naturally compresses cap rates as metros develop. Emerging markets often trade at higher cap rates reflecting higher perceived risk. As these markets mature with improved infrastructure, governance, and economic diversity, investors perceive less risk and accept lower yields. Secondary markets like Columbus, Indianapolis, and Charlotte have seen steady compression as they’ve matured.
### Cap Rate Compression Example
Let’s examine compression’s wealth-building impact through a five-year hold scenario:
**Purchase (Year 1):**
- Purchase Price: $10,000,000
- NOI: $700,000
- Going-In Cap Rate: 7.0%
**Year 5 (No Income Growth Scenario):**
Assume NOI remains flat at $700,000, but market cap rates compress to 5.5% due to falling interest rates and increased investor demand.
- Sale Price = NOI ÷ Exit Cap Rate
- Sale Price = $700,000 ÷ 0.055
- Sale Price = **$12,727,273**
Profit from compression alone: $2,727,273 (27.3% gain) without any operational improvement.
**Year 5 (With Income Growth Scenario):**
Now assume you also grow NOI by 4% annually through rent increases and expense management:
- Year 5 NOI = $700,000 × (1.04)^5
- Year 5 NOI = **$851,730**
- Sale Price = $851,730 ÷ 0.055
- Sale Price = **$15,485,091**
Total profit: $5,485,091 (54.9% gain) from combining operational improvements with market compression.
This example illustrates why investors fixate on both operational execution and market timing. Buying in markets poised for compression while executing value-add business plans creates compounding returns far exceeding income alone.
### Cap Rate Expansion (The Downside)
Cap rate expansion—when rates increase—works equally powerfully in reverse, destroying value rapidly. Using our initial $10 million property with $700,000 NOI:
Exit Cap RateSale PriceLoss from Purchase7.0% (unchanged)$10,000,000$0 (0%)7.5%$9,333,333-$666,667 (-6.7%)8.0%$8,750,000-$1,250,000 (-12.5%)8.5%$8,235,294-$1,764,706 (-17.6%)9.0%$7,777,778-$2,222,222 (-22.2%)
Even with stable operations, rising cap rates can eliminate years of income and force losses upon sale. This happened to many investors who bought at peak pricing in 2006-2007 and were forced to sell during the 2009-2010 downturn when cap rates spiked.
## Cap Rates Across Market Cycles
Understanding how cap rates behave throughout real estate cycles is essential for timing acquisitions and exits strategically.
### The Four Phases of Real Estate Cycles
**Phase 1: Recovery (Rising Cap Rates → Falling Cap Rates)**
Following a downturn, markets begin recovering. Vacancy decreases, rents stabilize, and investor confidence gradually returns. Cap rates remain elevated but start declining slowly as distressed selling ends and investors recognize recovery. This phase offers excellent buying opportunities—cap rates are still high but beginning their descent.
**Investor Strategy:** Aggressive acquisition. Buy at high cap rates before compression accelerates. Focus on fundamentally strong markets showing early recovery signs like job growth and declining vacancy.
**Phase 2: Expansion (Falling Cap Rates, Strong NOI Growth)**
The market is growing robustly. Rent growth accelerates, vacancy reaches healthy levels, and new construction increases to meet demand. Cap rates compress steadily as investor competition intensifies and confidence peaks. Both NOI growth and cap rate compression drive strong returns.
**Investor Strategy:** Continue buying quality deals but become increasingly selective. Returns are strong but pay attention to exit cap rate assumptions—don’t expect indefinite compression. [Understanding Market Cycles](https://rodkhleif.com/how-to-invest-in-multifamily-properties-during-economic-cycles/) helps time this phase.
**Phase 3: Hyper Supply (Low Cap Rates, Slowing NOI Growth)**
Markets peak as excessive construction delivers new supply, rent growth slows or stops, and vacancy begins rising. Cap rates reach cyclical lows as investors, still optimistic from recent strong performance, continue paying premium prices. Warning signs emerge but are often ignored.
**Investor Strategy:** Extreme caution or shift to selling. High prices (low cap rates) combined with deteriorating fundamentals create dangerous conditions. Consider disposition rather than acquisition. [When to Sell Your Multifamily Property](https://rodkhleif.com/multifamily-real-estate-market-timing-when-to-buy-and-sell-for-maximum-profit/) provides exit timing guidance.
**Phase 4: Recession (Rising Cap Rates, Falling NOI)**
Economic downturn hits. Vacancy spikes, rent concessions increase, NOI declines, and investor capital retreats. Cap rates expand rapidly as distressed sellers and nervous buyers negotiate from weak positions. Property values fall significantly despite potentially stable operations.
**Investor Strategy:** Preserve capital and prepare for recovery. Only the most capitalized, experienced investors should pursue opportunistic acquisitions. Most should hold existing assets and avoid forced sales.
### Cap Rate Trends by Market Type
Different markets exhibit distinct cap rate patterns based on their risk and growth profiles.
**Gateway Markets (Low Cap Rates):** Major metros like New York, San Francisco, Los Angeles, and Boston trade at low cap rates (3.5-5%) reflecting stable demand, limited land, high barriers to entry, and institutional investor preference. These markets offer lower yields but also lower volatility and stronger long-term appreciation.
**Growth Markets (Moderate Cap Rates):** Rapidly growing sunbelt and secondary markets like Austin, Nashville, Phoenix, and Raleigh trade at moderate cap rates (4.5-6%) balancing growth potential against less mature infrastructure and higher volatility. These markets offer compelling risk-adjusted returns when timed well.
**Secondary/Tertiary Markets (Higher Cap Rates):** Smaller metros and tertiary markets trade at higher cap rates (6-8%) reflecting higher perceived risk, lower liquidity, and less institutional capital. These markets can provide strong cash flow but face greater economic sensitivity and exit challenges.
**Value-Add/Opportunistic (Highest Cap Rates):** Properties requiring major repositioning or in distressed markets may trade at very high cap rates (8-10%+) based on current income, but investors underwrite to stabilized cap rates after improvements. The spread between in-place and stabilized cap rates represents the value-add opportunity.
## How Investors Actually Use Cap Rates
While understanding cap rate mechanics is important, knowing how experienced investors apply this knowledge creates actual value.
### Quick Property Valuation
Investors use cap rates for rapid valuation screening. When analyzing dozens of opportunities weekly, you can’t perform exhaustive analysis on every property. Instead, compare the asking price to a quick cap rate calculation.
If you know Charlotte multifamily trades at 5.5% cap rates and find a property with $500,000 NOI asking $8 million, calculate the implied cap rate: $500,000 ÷ $8,000,000 = 6.25%. This property is priced at a higher cap rate (lower price) than market, warranting deeper investigation.
### Market Comparison
Cap rates enable apples-to-apples comparison across dramatically different properties. A 50-unit property with $250,000 NOI trading at 6% cap rate ($4,166,667) offers the same yield as a 200-unit property with $1,000,000 NOI also trading at 6% ($16,666,667). Both provide identical unleveraged returns despite different sizes and price points.
This standardization helps investors identify which markets and property types offer the best risk-adjusted returns at any given time.
### Underwriting Exit Assumptions
Conservative investors underwrite exit cap rates at or above purchase cap rates, assuming no compression benefit. Aggressive investors might assume 50-100 basis points of compression based on market trends and cycle timing.
Consider a property purchased at 6.5% cap rate with projected Year 5 NOI of $600,000:
**Conservative Exit (6.5% cap rate):**
- Sale Price = $600,000 ÷ 0.065 = $9,230,769
**Moderate Exit (6.0% cap rate):**
- Sale Price = $600,000 ÷ 0.060 = $10,000,000
**Aggressive Exit (5.5% cap rate):**
- Sale Price = $600,000 ÷ 0.055 = $10,909,091
The difference between conservative and aggressive assumptions is $1,678,322—dramatically impacting projected returns. Savvy investors stress-test multiple exit scenarios to understand their risk exposure.
### Identifying Value-Add Opportunities
Cap rates help quantify value-add potential by comparing in-place to stabilized valuations:
**Current State:**
- In-Place NOI: $400,000
- Market Cap Rate: 6%
- Current Value: $6,666,667
**After Stabilization:**
- Stabilized NOI: $550,000 (through rent increases and expense reduction)
- Market Cap Rate: 6%
- Stabilized Value: $9,166,667
The $2,500,000 value creation opportunity ($9,166,667 – $6,666,667) justifies renovation investment and effort. If you can buy the property for $6.5 million and spend $800,000 on improvements, your all-in basis is $7.3 million against a stabilized value of $9.17 million, creating $1.87 million in equity.
## Cap Rate Limitations and Misconceptions
Despite their utility, cap rates have significant limitations that investors must understand to avoid costly errors.
### What Cap Rates Don’t Tell You
Cap rates ignore financing impact entirely. A property at 6% cap rate provides very different returns at 3% interest versus 7% interest. Cash-on-cash return, which accounts for leverage, matters more for actual investor returns than cap rate alone.
Cap rates don’t account for capital expenditures. A property might show a strong 7% cap rate but need a $1 million roof replacement immediately. NOI-based metrics miss these one-time expenses that dramatically affect returns.
Cap rates ignore appreciation potential. Two properties at identical 6% cap rates might have vastly different total returns if one is in a high-growth market appreciating 8% annually while the other is in a stagnant market with flat values.
Cap rates don’t reflect property condition or deferred maintenance. A property with extensive deferred maintenance might trade at a higher cap rate (lower price) than a renovated property in the same market. The cap rate difference reflects not just yield but also required future investment.
Cap rates vary dramatically by property quality within markets. Class A properties in the same market might trade at 4.5% while Class C properties trade at 7%. These aren’t comparable investments—different tenant bases, risk profiles, and growth trajectories justify different cap rates.
### Common Cap Rate Mistakes
**Mistake 1: Comparing Cap Rates Across Different Markets**
A 5% cap rate in San Francisco and a 5% cap rate in Birmingham, Alabama represent fundamentally different risk-return profiles. San Francisco’s lower volatility, higher barriers to entry, and stronger appreciation potential justify lower yields. Birmingham’s higher risk justifies higher current income.
**Mistake 2: Using Proforma NOI Instead of In-Place NOI**
Sellers often advertise properties using “proforma” or “stabilized” NOI showing potential income after improvements. This inflates the cap rate and makes the price appear more attractive. Always calculate cap rate using actual trailing twelve-month NOI to understand what you’re truly buying.
**Mistake 3: Ignoring Market Context**
A 7% cap rate isn’t inherently “good” or “bad”—context matters entirely. During an expansion phase with 5% prevailing cap rates, a 7% cap rate might signal significant property problems. During a recession with 9% prevailing cap rates, a 7% cap rate might be expensive.
**Mistake 4: Assuming Cap Rates Always Compress**
Many investors who bought properties from 2020-2022 at historically low cap rates (often 3-4% in major markets) assumed compression would continue indefinitely. Rising interest rates in 2022-2023 caused significant cap rate expansion, creating paper losses for recent buyers. Cap rates are cyclical, not linear.
## Cap Rate Strategy: Putting It All Together
Successful investors develop sophisticated cap rate strategies that integrate market analysis, cycle timing, and portfolio management.
### When to Accept Lower Cap Rates
Lower cap rates (higher prices) can be justified when market fundamentals suggest strong future growth, barriers to entry limit competition, property quality commands premium tenants and rent growth, you’re early in the market cycle with compression ahead, or financing terms are exceptionally favorable, improving leveraged returns despite low cap rates.
### When to Demand Higher Cap Rates
Higher cap rates (lower prices) are necessary when markets are late in the cycle with expansion likely, significant capital expenditures are required, property or market quality is lower, exit markets are less liquid, or economic uncertainty is elevated.
### Portfolio Approach
Sophisticated investors build portfolios balancing cap rate strategies. Core holdings in gateway markets at low cap rates (4-5%) provide stability and consistent appreciation. Growth market investments at moderate cap rates (5-6.5%) balance yield and growth. Value-add opportunities at higher cap rates (6.5-8%) based on in-place income offer outsized returns through operational improvement.
This diversification across cap rate bands creates portfolio resilience while capturing upside from different strategies and market conditions.
## Cap Rate Calculation Worksheet
Use this simple framework to calculate and analyze cap rates for any property:
**Step 1: Calculate Effective Gross Income**
- Gross Potential Rent: $\_\_\_\_\_\_\_\_\_\_
- Other Income: $\_\_\_\_\_\_\_\_\_\_
- Vacancy Loss: -$\_\_\_\_\_\_\_\_\_\_
- **Effective Gross Income: $\_\_\_\_\_\_\_\_\_\_**
**Step 2: Calculate Net Operating Income**
- Effective Gross Income: $\_\_\_\_\_\_\_\_\_\_
- Property Management: -$\_\_\_\_\_\_\_\_\_\_
- Repairs & Maintenance: -$\_\_\_\_\_\_\_\_\_\_
- Utilities: -$\_\_\_\_\_\_\_\_\_\_
- Insurance: -$\_\_\_\_\_\_\_\_\_\_
- Property Taxes: -$\_\_\_\_\_\_\_\_\_\_
- Other Operating Expenses: -$\_\_\_\_\_\_\_\_\_\_
- **Net Operating Income: $\_\_\_\_\_\_\_\_\_\_**
**Step 3: Calculate Cap Rate**
- Net Operating Income: $\_\_\_\_\_\_\_\_\_\_
- ÷ Property Value: $\_\_\_\_\_\_\_\_\_\_
- **= Cap Rate: \_\_\_\_\_\_\_\_\_%**
**Step 4: Compare to Market**
- Market Cap Rate: \_\_\_\_\_\_\_\_\_%
- Property Cap Rate: \_\_\_\_\_\_\_\_\_%
- Difference: \_\_\_\_\_\_\_\_\_%
- Conclusion: ☐ Above Market ☐ Below Market ☐ At Market
[](https://docs.google.com/spreadsheets/d/1Le6q8Le7vqavuDEuoTI_P09Kl-XXY1J8/edit?usp=sharing&ouid=110001440418544587283&rtpof=true&sd=true)
[**Click here to download Rod Khleif’s Cap Rate Calculation Worksheet**](https://docs.google.com/spreadsheets/d/1Le6q8Le7vqavuDEuoTI_P09Kl-XXY1J8/edit?usp=sharing&ouid=110001440418544587283&rtpof=true&sd=true)
## Final Thoughts
Cap rates represent far more than a simple formula—they’re a lens through which experienced investors view markets, time investments, and evaluate opportunities. Understanding not just how to calculate cap rates but how they move across cycles, vary by market, and impact returns separates sophisticated investors from novices.
The most successful multifamily investors combine cap rate analysis with broader market research, cycle timing, operational expertise, and portfolio strategy. They buy when cap rates are high (prices are low) and sell when cap rates are low (prices are high), generating returns from both income and market timing.
As you evaluate your next multifamily investment, remember that cap rates are a starting point, not an ending point. They provide quick valuation guidance and market context, but your total returns will depend on financing structure, operational execution, capital expenditure management, market timing, and a dozen other factors.
Master cap rate analysis, but don’t become so focused on this single metric that you miss the bigger picture of building a resilient, profitable real estate portfolio.
## Frequently Asked Questions About Cap Rates
### What is a good cap rate for multifamily real estate?
There’s no universally “good” cap rate—it depends entirely on market context, property quality, and risk tolerance. Gateway markets like San Francisco or New York might see Class A properties trade at 3.5-4.5% cap rates, while secondary markets like Indianapolis or Memphis might see similar quality properties at 5-6%. Generally, higher cap rates indicate higher risk or lower growth expectations, while lower cap rates suggest stable markets with strong appreciation potential. A [good cap rate](https://rodkhleif.com/what-is-a-good-cap-rate-for-multifamily/) is one that compensates appropriately for the specific risks you’re taking in that particular market and property type.
### How do rising interest rates affect cap rates?
Rising interest rates typically cause cap rates to expand (increase), which means property values decline. This happens because the spread between cap rates and risk-free rates (like the 10-year Treasury) tends to remain relatively constant. If Treasury yields jump from 2% to 5%, investors who previously accepted a 5% cap rate (3% spread) will now demand an 8% cap rate to maintain that same spread. Additionally, higher interest rates increase debt service costs, reducing cash flow and making investors less willing to pay premium prices. This dynamic caused significant value compression in 2022-2023 as the Federal Reserve raised rates aggressively.
### Can cap rates be negative?
While theoretically possible, negative cap rates are extremely rare in stabilized multifamily properties and would indicate a property losing money operationally. You might see negative cap rates in development deals where the property isn’t yet generating income, or in rare cases where investors are buying purely for land value or future development potential. If you encounter a negative cap rate on a stabilized property, it’s a massive red flag indicating either operational failure or data errors in your analysis. Don’t confuse negative cap rates with negative cash flow—a property can have a positive cap rate but negative cash flow if debt service exceeds NOI.
### What’s the difference between cap rate and cash-on-cash return?
Cap rate measures unleveraged return (as if you bought with all cash) and equals NOI divided by property value. Cash-on-cash return measures actual cash flow return on your invested equity after accounting for debt service. For example, a property at 6% cap rate with 75% financing at 5% interest might generate 12-15% cash-on-cash return because leverage amplifies returns when the cap rate exceeds the interest rate. Conversely, if interest rates are 7%, that same property would show negative cash flow despite the positive cap rate. Cap rate is useful for property valuation and comparison, while cash-on-cash return matters more for actual investor returns.
### How often do cap rates change?
Cap rates change constantly in response to market conditions, though the pace varies by market liquidity and economic volatility. In highly liquid gateway markets with frequent transactions, cap rates might shift monthly as new sales establish pricing benchmarks. In smaller markets with fewer transactions, cap rate movements appear choppier and less frequent. Major shifts typically occur during economic transitions—cap rates compressed steadily from 2010-2021 as interest rates fell and investor demand increased, then expanded rapidly in 2022-2023 as rates rose. Within these long-term trends, cap rates fluctuate based on property-specific factors like lease expirations, deferred maintenance, or neighborhood changes.
### Should I buy properties with higher or lower cap rates?
The answer depends on your investment strategy and market timing. Higher cap rates mean lower purchase prices and better immediate cash flow but often indicate higher risk, slower growth markets, or properties requiring significant work. Lower cap rates mean paying premium prices for lower immediate yield but often provide more stability, stronger appreciation potential, and lower volatility. Conservative investors in uncertain markets might prefer higher cap rates for cash flow cushion, while growth-oriented investors in strong markets might accept lower cap rates betting on appreciation and rent growth. The best strategy is often diversifying across both—core holdings at low cap rates for stability, value-add opportunities at high cap rates for upside.
### How do you calculate cap rate if a property has multiple buildings or mixed-use components?
Calculate cap rate using the total NOI from all income-producing components divided by the total property value. For a mixed-use property with apartments, retail, and office space, sum the NOI from each component (remembering that retail and office NOI calculations differ from multifamily) and divide by the total acquisition price. However, recognize that different components might have different risk profiles and cap rates if sold separately—retail might trade at 6% while multifamily trades at 5% in the same market. For portfolio analysis or comparison purposes, you might calculate individual cap rates for each component to understand the blended rate, but for acquisition decisions, use the total NOI and total price for your overall cap rate.
---
**[Multifamily Investing Terms: The Complete Glossary](https://rodkhleif.com/multifamily-glossary-essential-terms/)** – Reference guide for all essential real estate investment terminology.
---
*Disclaimer: This article was written with the help of AI and reviewed by Rod and his team.*
**Related reading:** New to the metric? Start with [what are cap rates and why you should use them](https://rodkhleif.com/what-are-cap-rates-and-why-you-should-use-them/).
**Categories:** Due Diligence, Raising Capital
---
### [How to Structure a Real Estate Investment Company](https://rodkhleif.com/quick-guide-business-structures-real-estate-investors/)
**Published:** March 13, 2026
**Author:** Rod Khleif
**Excerpt:** The difference between amateur and professional real estate investors has nothing to do with the size of their portfolios. The fundamental difference is this: while amateurs make a hobby of buying and selling properties, professionals treat real estate as what it is—a business.
**Content:**
LLC structure is how I protect every single one of my multifamily investments from liability. I’ve seen investors lose everything to tenant lawsuits because they used the wrong legal entity. I won’t let that happen to me or my students. Here’s what I’ve learned from managing over 2,000 units.One lawsuit or major disaster can wipe out your personal wealth.That can happen if you don’t use an LLC.An LLC helps separate your personal assets from property liability. While there are other entity types out there, LLCs give you the best protection, tax flexibility, and simplicity. Let me walk you through which entity structure makes sense for your specific situation.
Most people who want to build wealth in real estate make the same mistake: they start buying property before they start building a company.
That’s backward.
Whether you are starting a real estate investment company from scratch, your early structure matters. If you are setting up a company around deals you already own, your early structure matters. If you are building a firm to scale, your early structure matters. The structure you choose can protect you or expose you for years.
This guide covers everything: the right legal entities, how to actually set one up step by step, the structures most professionals use, and the mistakes that cost new investors money, time, and sleep.
Let’s build this the right way.
[](https://rodkhleif.com/quick-guide-business-structures-real-estate-investors/screenshot-2026-03-13-at-10-51-29-pm/)
## **Why You Need to Formally Start a Real Estate Investment Company**
Owning property in your own name is not a business. It’s a liability.
When you operate without a formal structure, a slip-and-fall lawsuit, tenant dispute, or property damage claim can come directly after your personal savings, your home, and your wages. There’s no wall between you and the problem.
Formally setting up a real estate investment company solves that — and does a lot more:
- **Liability protection:** Your personal assets stay separate from the business.
- **Tax efficiency:** The right entity structure can reduce what you owe significantly.
- **Lender and investor credibility:** Banks and private investors take you more seriously when you operate as a business.
- **Scalability:** A proper structure makes it easier to [scale to hundreds of doors](https://rodkhleif.com/podcasts/how-she-scaled-to-1200-doors-in-multifamily-real-estate/) without constantly looking over your shoulder.
- **Professionalism:** You stop looking like a hobbyist and start operating like an operator.
The gap between investors who make it and investors who flame out is rarely about deals. It’s about whether they treated real estate like a business from day one.
Amateurs treat real estate like a side hustle. They buy property in their own name, chase random deals, and hope things work out. Professionals treat real estate like a company. They create structures that protect them from lawsuits, [reduce taxes legally](https://rodkhleif.com/podcasts/tax-expert-explains-how-to-reduce-taxes-legally/), and make growth possible.
## **Business Structures for a Real Estate Investment Company: Your Options**
Before you can set up your real estate investment company, you need to choose the right entity. Here’s a clear breakdown:
### **Sole Proprietorship: Skip This Entirely**
A sole proprietorship is the default if you buy property in your own name. This applies when you do not form a legal entity. It’s not a business structure, it’s the absence of one.
There is zero separation between you and the business. If a [tenant dispute escalates into a lawsuit](https://rodkhleif.com/5-best-strategies-for-cultivating-landlord-tenant-relationships/), your personal assets are fully exposed. You’ll also pay self-employment tax on top of income tax: roughly 15.3% extra. And you’ll have no credibility with serious lenders or investors.
**Bottom line:** Don’t start here. Don’t stay here. If you’re currently operating as a sole proprietor, form an entity now.
### **General Partnership: Risky Without the Right Protections**
A general partnership is formed automatically when two or more people invest together without a formal agreement. Every partner has full, unlimited liability, meaning one partner’s mistake exposes everyone.
This structure can make sense for a very small, short-term joint venture between people with deep trust. But without a written operating agreement and clear exit terms, general partnerships often end badly.
**Bottom line:** If you’re going in with a partner, at minimum use an LLC instead. It costs almost the same to set up and protects everyone involved.
### **Limited Partnership (LP): The Syndication Workhorse**
A limited partnership has two tiers. A general partner (GP) manages the deal and takes on liability. Limited partners (LPs) contribute capital and receive passive returns. Their liability is capped at their investment.
LPs are used widely in multifamily syndications. They allow a sponsor to [raise capital at scale](https://rodkhleif.com/podcasts/ep-423-michael-blank-raising-capital-at-scale/) while keeping management control. Limited partners enjoy pass-through taxation and liability protection; the general partner bears the operational and legal risk.
**Bottom line:** LPs are powerful for raising capital. But they need careful legal setup and experienced counsel. This is especially true if you raise from non-accredited investors.
### **S-Corporation: Good for Services, Not Rentals**
An S-Corporation passes income directly to owners (avoiding corporate double taxation) and allows owners to take a salary plus distributions, reducing self-employment taxes.
The catch for real estate investors: the IRS restricts passive income to 25% of an S-Corp’s total revenue. Rental income is passive. If your rental income exceeds that threshold, you risk punitive taxes.
**Bottom line:** S-Corps work well for property management companies or active real estate businesses. This includes [flipping operations,](https://rodkhleif.com/podcasts/from-fixn-flips-to-multifamily-real-estate/) but not buy-and-hold investment portfolios.
### **C-Corporation: Only for Large Operations**
A C-Corporation is a fully separate legal entity with the strongest liability protection available. It can issue stock, raise institutional capital, and go public. It’s the structure behind every major corporation in America.
But it comes with a brutal drawback: double taxation. The corporation pays taxes on profits, then you pay taxes again when you take distributions. Sell a property inside a C-Corp, and that gain gets taxed at the corporate level before it ever reaches you.
**Bottom line:** C-Corps make sense for very large real estate firms with institutional capital. For most investors, the tax drag is simply not worth it.
### **LLC: The Standard for How to Set Up a Real Estate Investment Company**
The Limited Liability Company is the most widely used structure among real estate investors — and for good reason. It combines the liability protection of a corporation with the tax simplicity of a partnership.
- Your personal assets are protected from business lawsuits.
- Income passes through directly to you, taxed only once.
- You can split ownership and profits flexibly between multiple members.
- Compliance requirements are far simpler than a corporation.
- You can elect different tax treatments (sole proprietor, partnership, or even S-Corp) based on your situation.
The only real caveats are these: lenders may still require personal guarantees on loans. You must keep business and personal finances strictly separate. Otherwise, you could lose that liability shield.
**Bottom line:** For most investors starting or growing a real estate investment company, the LLC is the answer.
## **Real Estate Business Structure Comparison at a Glance**
[](https://rodkhleif.com/quick-guide-business-structures-real-estate-investors/screenshot-2026-03-13-at-10-31-11-pm/)
## **How to Start a Real Estate Investment Company: Step-by-Step**
Once you’ve chosen your structure, here’s exactly how to set it up:
1. **Choose your state of formation.** Most investors form their LLC in the state where they own property. Some use Delaware or Wyoming for added privacy and legal precedent, then register as a foreign LLC in their home state. Talk to your attorney about what makes sense for your situation.
2. **Pick a name and check availability.** Your company name must be available in your state of formation and ideally available as a domain name. Keep it professional, relevant, and scalable.
3. **File your Articles of Organization.** This is the official formation document filed with your state’s Secretary of State. Filing fees typically range from $50 to $500.
4. **Draft an Operating Agreement.** This internal document spells out how the company is owned, how profits are distributed, how decisions are made, and what happens if a member wants to exit. Even a single-member LLC needs one.
5. **Get an EIN from the IRS.** An Employer Identification Number is your company’s tax ID. It takes five minutes at IRS.gov and is free. You’ll need it to open a bank account and file taxes.
6. **Open a dedicated business bank account.** All income and expenses must flow through a separate business account. Mixing personal and business funds is the fastest way to lose your liability protection.
7. **Register for state and local taxes.** Depending on your state, you may need to register for sales tax, gross receipts tax, or business privilege tax. Your CPA will guide this.
8. **Get the right insurance.** An LLC protects your personal assets legally, but insurance protects your business assets operationally. At minimum: property insurance, general liability, and umbrella coverage.
9. **Transfer or acquire properties under the company.** Once the LLC is formed, either deed existing properties into it (check your lender’s due-on-sale clause first) or acquire new properties in the LLC’s name from the start.
Want to make sure you evaluate expenses correctly from the start?
[Check out Rod’s guide to evaluating expenses](https://rodkhleif.com/evaluating-expenses-tricks-of-the-trade/) before you run numbers on your first deal.
## **How to Set Up a Real Estate Investment Company for Scale: The Holding Structure**
If you plan to own more than one or two properties, a single LLC won’t cut it for long. Here’s the professional-grade setup:
### **Property-Level LLCs**
Each property, or each small cluster of similar properties, goes into its own LLC. This isolates risk. If a tenant sues over a specific property, the lawsuit is contained to that entity. Your other properties are walled off.
### **A Master Holding Company**
A parent LLC or holding company sits above all the property LLCs. The holding company owns the membership interests in each property LLC. This gives you one clear entity to manage ownership, bring in investors, and handle entity-level decisions. It does this without directly owning any real estate.
### **An Operating Company (OpCo)**
If you self-manage or run a property management operation, consider a separate operating company that handles management contracts, employee payroll, and day-to-day operations. This keeps operational liability away from both the holding company and the property LLCs.
This three-tier structure — OpCo / HoldCo / PropCo — is how serious multifamily firms are built. You don’t need it on day one. But you should be building toward it.
Syndicators often pair this with a limited partnership structure. If you want to go deeper on that, [Rod’s free guide to multifamily syndications](https://rodkhleif.com/guide-to-multifamily-syndications/) is the best place to start.
## **Naming Your Real Estate Investment Company or Firm**
Your company name matters more than most new investors think. Here’s what to consider:
- Keep it broad enough to scale: Avoid names tied to a specific market, property type, or niche — unless that’s your permanent focus.
- Use words that signal professionalism: Capital, Properties, Holdings, Equity, Ventures, Group, Partners.
- Check availability in three places: your state’s Secretary of State database, the USPTO trademark database, and as a domain name (.com preferred).
- Avoid your personal name in the company name if you plan to raise capital. Sophisticated investors want to back a brand, not a person.
- Keep it memorable and easy to spell.
## **How Much Does It Cost to Start a Real Estate Investment Company?**
Starting a real estate investment company is one of the cheapest forms of insurance you’ll ever buy. Here’s a realistic cost breakdown:
- State filing fee: $50–$500 depending on the state (Delaware: $90, Wyoming: $100, California: $70 + $800 minimum franchise tax).
- Registered agent: $50–$300/year if you use a service.
- Operating agreement: $0 with a template, $500–$2,000 if attorney-drafted (recommended for multi-member LLCs).
- Business bank account: Free at most online business banks.
- EIN: Free from IRS.gov.
- Attorney and CPA setup consultation: $500–$2,500 depending on complexity.
**Total realistic cost to start:** $500–$3,500. That’s a rounding error compared to what a lawsuit or tax mistake can cost you without the right structure.
## **Common Mistakes When Starting a Real Estate Investment Company**
# [](https://rodkhleif.com/quick-guide-business-structures-real-estate-investors/screenshot-2026-03-13-at-10-32-50-pm/)
I’ve coached thousands of investors. These are the mistakes I see most often:
- **Waiting too long.** Every day you own property in your own name is a day you’re personally exposed. Form your entity before you close on anything.
- **Mixing personal and business finances.** This is the single fastest way to lose your liability protection. Use separate accounts. Period.
- **Copying someone else’s structure.** Your structure should reflect your tax situation, your state’s laws, your goals, and how you plan to raise capital. Get personalized advice.
- **Skipping the operating agreement.** Multi-member LLCs without operating agreements are lawsuits waiting to happen.
- **Using one LLC for everything.** One lawsuit against one property can take everything if it’s all in a single entity.
- **Choosing structure based on cost alone.** The cheapest option upfront often costs the most later.
- **Not registering in the right state.** Forming in Delaware sounds sophisticated, but if you own property in Florida, you’ll need to register as a foreign LLC there anyway.
Want to avoid more costly mistakes? [Download Rod’s free ebook: The 29 Fatal Mistakes Apartment Buyers Make](https://rodkhleif.com/29-mistakes/).
## **The Two Professionals You Cannot Skip**
Creating a real estate investment company without professional guidance is like buying a property without due diligence. Here’s who you need:
### **A Real Estate Attorney**
Your attorney drafts or reviews your operating agreement, advises on the right structure for your goals, handles property transfers into your entity, and ensures your company is formation-compliant in your state.
[Rod’s podcast with a top SEC attorney](https://rodkhleif.com/podcasts/why-a-killer-sec-attorney-is-your-secret-weapon-in-real-estate/) is a must-listen if you plan to raise outside capital.
### **A CPA Who Specializes in Real Estate**
A general accountant won’t cut it. You need a CPA who understands depreciation, cost segregation, 1031 exchanges, pass-through deductions, and entity-level tax elections. The right CPA pays for themselves — often many times over — in the first year.
Rod’s advice: Hire these professionals before you form your entity, not after. The setup conversation is the most valuable one.
## **What I Learned the Hard Way**
When I started investing, I didn’t treat it like a business. I bought properties in my own name, kept sloppy records, and figured I’d sort the structure out later. Later came in 2008. The market crashed, and because I hadn’t built on the right foundation, the damage was far worse than it needed to be.
I’ve spent the years since helping investors avoid that lesson. The investors in my Warrior Program who build real, lasting wealth share one trait: they treat their real estate portfolio like the business it is from day one.
Don’t wait until you’re successful to start acting professional. Start now. Even if it’s your first deal.
## **The Bottom Line**
Setting up a real estate investment company is not complicated. It takes a few hundred dollars, a few hours, and the right professional guidance. What you get back is worth far more than that investment. You get liability protection, tax efficiency, investor credibility, and room to scale.
For most investors, the path is clear. Form an LLC and open a dedicated business bank account. Get an operating agreement. As you grow, build toward a holding structure. Don’t operate as a sole proprietor. Don’t mix personal and business money. And don’t wait.
The best time to start a real estate investment company was before your first deal. The second best time is right now.
## **Ready to Build Your Multifamily Empire?**
[Join Rod at the next Multifamily Bootcamp](https://rodkhleif.com/bootcamp) — where investors become professionals and professionals become leaders.
# [](https://rodkhleif.com/bootcamp)
🎟 Reserve Your Spot Now! Let’s take your real estate investing to the next level.
**More resources from Rod:**
- [👉 Join the next Multifamily Bootcamp](https://rodkhleif.com/bootcamp)
- [👉 Download Rod’s FREE Best-Selling Multifamily Book](https://rodkhleif.com/lcfa-ebook/)
- [👉 Check Out the Warrior Program](https://rodkhleif.com/rod-khleif-coaching-program/)
- [👉 Learn Online with Rod’s Multifamily Investing Course](https://rodkhleif.com/multifamily-investing-course/)
## **Frequently Asked Questions: How to Start a Real Estate Investment Company**
### **How do I start a real estate investment company?**
Start by choosing the right legal entity; for most investors, that’s an LLC. Then file your Articles of Organization with your state’s Secretary of State. Draft an operating agreement. Get an EIN at IRS.gov. Open a dedicated business bank account. From there, acquire or transfer properties into the company’s name. The full step-by-step process is covered in this guide. But the most important thing is this: don’t wait until you’ve bought property. Set up the structure first, then buy. Every day you own real estate in your own name is a day your personal assets are exposed.
### **What is the best business structure for a real estate investment company?**
For most investors, an LLC is the best starting structure. It gives you personal liability protection, pass-through taxation, flexible ownership options, and much simpler compliance than a corporation. If you syndicate deals and raise capital from passive investors, use a Limited Partnership (LP) with a holding LLC. It is a professional-grade setup. S-Corps and C-Corps have their uses. S-Corps work well for active businesses like property management or flipping. C-Corps work well for large institutional firms. But for [buy-and-hold multifamily investing](https://rodkhleif.com/multifamily-investing-the-complete-beginners-guide/), an LLC is almost always the right choice.
### **How do I set up an LLC for real estate investing?**
File Articles of Organization with your state’s Secretary of State (fees typically run $50–$500). Draft an operating agreement, even for a single-member LLC. Get a free EIN from IRS.gov. Open a dedicated business bank account and keep it completely separate from your personal finances. Then either buy new properties in the LLC’s name or deed current properties into it. Check your lender’s due-on-sale clause before transferring. The full setup usually costs $500 to $3,500.The cost depends on whether you use an attorney for the operating agreement. This is strongly recommended for any multi-member structure.
### **What is a real estate holding company and do I need one?**
A holding company is a parent entity, usually an LLC, that owns membership interests in many property-level LLCs. The holding company sits above your properties. It gives you one clear entity to manage ownership and investors. Each property stays in its own LLC. This helps keep liability separate. You don’t need this on day one. But use this three-tier structure if you plan to own more than a few properties. Use it also if you want to raise capital through [multifamily syndication](https://rodkhleif.com/what-is-multifamily-syndication-a-complete-guide/). It includes an operating company, a holding company, and property LLCs. This is how serious multifamily firms are built.
### **Do I need an LLC to invest in multifamily real estate?**
You don’t legally need one, but operating without one is a significant risk. When you own property in your own name, a tenant dispute, slip-and-fall lawsuit, or property damage claim can come directly after your personal savings, your home, and your wages. An LLC creates a legal wall between you and the business. It is also one of the cheapest types of protection you can buy. Setup usually costs under $1,000. That is far less than one lawsuit without protection. Before you close on any deal, talk to a real estate attorney and a [CPA who specializes in real estate](https://rodkhleif.com/podcasts/tax-expert-explains-how-to-reduce-taxes-legally/).
### **What is the difference between an LLC and an S-Corp for real estate?**
An LLC is the standard structure for buy-and-hold real estate investing. Income passes through to you, you have liability protection, and compliance is simple. An S-Corp also passes income through to owners. It lets you take a salary plus distributions. This can reduce self-employment taxes. However, the IRS limits passive income, like rental income. It can be no more than 25% of total S-Corp revenue. If your rental income exceeds that threshold, you risk punitive taxes. For active real estate businesses, an S-Corp can be a good choice. This includes property management companies. It can also include fix-and-flip operations. For a multifamily investment portfolio built on rental income, stick with the LLC.
### **How much does it cost to start a real estate investment company?**
Less than most people expect. State filing fees run $50-$500 depending on the state. A registered agent service costs $50–$300 per year. An EIN is free from IRS.gov. A business bank account is free at most online business banks. An attorney-drafted operating agreement runs $500-$2,000 and is highly recommended for any multi-member structure. An initial attorney and CPA consultation typically costs $500-$2,500. Total realistic cost: $500-$3,500. That’s a rounding error compared to what a single lawsuit or tax mistake can cost you without the right structure in place.
### **Do I need a lawyer to set up a real estate investment company?**
You do not legally need one to file formation documents. Still, you should strongly consider hiring a real estate attorney for two key tasks. First, they can draft your operating agreement. Second, they can advise on the best structure for your goals and state. Multi-member LLCs without well-drafted operating agreements are lawsuits waiting to happen. If you plan to raise money from outside investors, you need an SEC-qualified attorney. This helps you stay compliant with securities law. [Rod’s podcast with a top SEC attorney](https://rodkhleif.com/podcasts/why-a-killer-sec-attorney-is-your-secret-weapon-in-real-estate/) is a good place to start if you’re heading in that direction.
*Disclaimer: This article was written with research support and reviewed by Rod’s team. Always consult a licensed attorney and CPA before making entity or tax decisions.*
**Categories:** Blog, Due Diligence, Property Management, Real Estate
**Tags:** apartment investing, business structure, business structures, Driving Force, fha loans, landlord, multifamily, multifamily property investing, multifamily real estate, real estate, real estate company structure, real estate investing, real estate podcast, Rod Khleif, sole proprietorship
---
### [Tenant Turnover Guide: Its Costs and What You Can Do](https://rodkhleif.com/tenant-turnover-its-costs-and-what-you-can-do-to-minimize-them/)
**Published:** March 25, 2026
**Author:** Rod Khleif
**Excerpt:** In the multifamily real estate business, cashflow is king.
**Content:**
Tenant turnover is one of the most expensive problems in multifamily real estate, and one of the most underestimated. Most investors focus on finding deals and closing properties. Far fewer build the systems that keep units occupied and tenants renewing year after year. That’s a costly oversight.
I’ve owned and managed over 2,000 properties. I’ve seen how high turnover can quietly hurt returns on solid assets. Operators who focus on retention often outperform peers without paying more for a better deal.
This guide covers it all: what tenant turnover costs, how to calculate your turnover rate, and what causes it. It also shares specific strategies to reduce turnover. You’ll see real numbers, not platitudes.
## **What Is Tenant Turnover?**
Tenant turnover is the rate at which residents vacate rental units and need to be replaced. It happens each time a lease ends and the tenant does not renew. They may leave, get evicted, or not renew.
Every turnover event creates a chain of costs: lost rent during vacancy, cleaning and repairs, marketing and leasing, and administrative processing. Individually, these costs are manageable. Across a portfolio, or at a high turnover rate, they become one of the biggest drags on [Net Operating Income](https://rodkhleif.com/a-complete-guide-noi-in-real-estate-in-2025/).
The difference between a 30% and 60% annual turnover rate on a 20-unit property can mean $40,000–$80,000 in lost NOI each year. At a 6% cap rate, that equals $667,000-$1.3 million in lost property value. Turnover isn’t just an operational inconvenience. It’s a valuation issue.
## **How to Calculate Tenant Turnover Rate**
Tenant turnover rate is the percentage of units that experienced a vacancy due to a tenant leaving during a given period, typically calculated annually.
> #### **Turnover Rate Formula:**
>
> **Turnover Rate = (Number of units vacated during the period ÷ Total number of units) × 100**
**Example:** If you own a 40-unit building and 14 units turned over in a year, your turnover rate is 35%.
## **What’s a good tenant turnover rate?**
Industry benchmarks vary by property class and market:
- Class A properties in stable markets: 30–40% annually
- Class B properties: 40–55% annually
- Class C properties: 55–75% annually
- National average across all multifamily: approximately 50% annually
If your turnover rate is above the class average for your market, you have an operational problem worth diagnosing. If it’s significantly below average, you’re likely doing something right — find out what and systematize it.
## **What Tenant Turnover Actually Costs**
Most investors underestimate the full cost of a single unit turnover because they only count the obvious items. Here’s the full picture:
### **1. Lost rent during vacancy**
This is the most visible cost. If a unit rents for $1,200/month and sits vacant for 45 days, you’ve lost $1,800. In high-demand markets, lease-up might take 2 weeks. In softer markets or with deferred maintenance, it can stretch to 60–90 days.
### **2. Cleaning costs**
Even cooperative, careful tenants leave behind cleaning work. Professional cleaning for a standard unit runs $150–$400. Units with pets, long-term residents, or heavy wear can cost significantly more.
### **3. Repairs and make-ready costs**
Paint touch-ups, carpet cleaning or replacement, appliance repairs, fixture replacement, and minor drywall work are standard in most turnovers. Average make-ready costs for a mid-market unit run $500-$2,500. Value-add units can run $5,000–$15,000 per turn.
### **4. Marketing and advertising**
Listing fees on platforms like Zillow, Apartments.com, and others, plus photography, signage, and any broker co-op fees. Budget $100–$500 per vacancy depending on your market and channels.
### **5. Leasing and administrative costs**
Staff time for showings, application processing, background and credit checks, lease preparation, and move-in inspections. If you use a leasing agent or property manager, include leasing commissions. These fees are often 50–100% of one month’s rent for a new lease.
### **6. Utility carrying costs**
You pay utilities on vacant units, electricity for common areas, water, gas for heat in cold climates. On a 30-day vacancy, this might run $50–$150 per unit.
**Realistic total cost per turnover event: $2,000–$5,000 for a standard unit. More for units requiring significant make-ready work.**
On a 40-unit building with 50% annual turnover, you have about 20 turns per year. At an average cost of $3,000 per turn, you spend $60,000 per year on turnover costs. This is before you count lost rent during vacancies. Cutting that rate to 30% saves $24,000 annually and adds roughly $400,000 in property value at a 6% cap rate.
## **Why Tenants Leave: The Real Reasons**
You can’t fix turnover without understanding what’s causing it. The most common reasons tenants leave, in order of frequency:
### **1. Rent increases they weren’t prepared for**
A sudden, large rent increase at renewal is the single most reliable way to lose good tenants. Tenants who feel blindsided will start shopping for alternatives. Tenants who feel respected and given advance notice are far more likely to absorb a reasonable increase and stay.
### **2. Unresponsive maintenance**
A slow response to a broken dishwasher or a leaking faucet signals that management doesn’t care. Tenants who feel ignored don’t renew. This is the most controllable factor in retention and one of the most neglected by property managers.
### **3. Life changes**
Job relocations, family changes, home purchases, and roommate splits are unavoidable. These are not within your control but make up a meaningful portion of all turnover.
### **4. Property condition**
Outdated units, dirty common areas, deferred exterior maintenance, and poor curb appeal all signal that an investment is not being cared for. Tenants will find somewhere newer or better maintained at a similar price point.
### **5. Community and neighbor issues**
Problem neighbors, lack of enforcement of community rules, noise complaints that go unaddressed, and safety concerns drive quality tenants away. The tenants you want to keep notice when standards slip.
### **6. Management changes or ownership transitions**
Acquisitions, third-party management changes, and new ownership often spike turnover. Communication during these transitions is critical to retention.
## **How to Reduce Tenant Turnover: Specific Strategies**
### **Screen tenants thoroughly from the start**
Retention starts before move-in. Financially stable tenants with long tenancy histories, who respect their living spaces, are more likely to stay. Verify income (3x monthly rent as a minimum), check rental history directly with prior landlords, and run background and credit checks on every applicant. Skipping screening to fill a unit faster is a trade that almost always costs more than the vacancy it avoids.
### **Create a proactive renewal process**
Don’t wait for a lease to expire and hope the tenant renews. Start the renewal conversation 90–120 days before lease end. Give tenants advance notice of any rent adjustment. Offer multi-year leases with modest discounts for 18 or 24-month commitments. The goal is to remove the decision friction — make renewing the path of least resistance.
### **Build a maintenance system that actually responds**
Set a standard: non-emergency requests acknowledged within 24 hours, completed within 5 business days. Emergency maintenance was resolved the same day. Track compliance and hold your property manager accountable to it. Nothing costs you more in tenant goodwill and eventual vacancy than ignored maintenance tickets. Invest in a property management software platform that creates a transparent work order trail.
### **Improve the physical product**
Tenants stay in units they’re proud of. Fresh paint, clean carpet, updated fixtures, functioning appliances, and well-maintained exteriors signal that you’re invested in the property. Value-add improvements — in-unit washer/dryer, updated kitchens, smart thermostats — command rent premiums and increase retention simultaneously. These are also the exact improvements that increase [NOI](https://rodkhleif.com/a-complete-guide-noi-in-real-estate-in-2025/) and, property value directly.
### **Communicate consistently**
Send a monthly or quarterly update to residents — upcoming maintenance, community news, seasonal tips. Tenants who feel informed and respected are less likely to leave. A simple email or text message costs nothing and builds goodwill that pays off at renewal time.
### **Offer renewal incentives for long-term residents**
A carpet cleaning, a new appliance upgrade, or a small gift card at the 2-year mark costs $100–$500 and can secure another 12–24 months of occupancy from a proven tenant. That’s a dramatically better ROI than absorbing a full turnover cycle.
### **Enforce community standards consistently**
Noise complaints, parking violations, pet policy violations, and lease violations should be addressed promptly and consistently. Quality long-term tenants notice when you let other residents get away with things that affect their quality of life. Enforcing standards protects the community for everyone.
### **Handle move-outs professionally**
Even when tenants leave, the process matters. A clear move-out checklist, prompt communication about deposit returns, and a professional experience leaves a door open for them to return or refer others. Word of mouth about your properties — positive or negative — affects your future lease-up speed.
## **Tenant Turnover and Its Effect on Property Value**
Because multifamily properties are valued by income, high turnover has a direct and measurable impact on what your asset is worth.
High turnover increases vacancy loss, drives up operating expenses, and reduces NOI. Lower NOI at the same cap rate means a lower valuation. The math is straightforward: if high turnover is costing you $50,000 per year in lost NOI, and your property trades at a 5.5% cap rate, you have lost $909,000 in property value that you could recover by fixing the retention problem.
This is why strong operators obsess over tenant retention. It’s not just about being a good landlord. It’s about protecting and building the asset’s value. See how [cap rates](https://rodkhleif.com/how-cap-rates-work-with-examples/) translate NOI improvements directly into property value.
## **Tenant Turnover and Your Due Diligence Process**
When you’re evaluating a property to acquire, current turnover rates are a critical data point. Ask the seller or broker for the trailing 12-month tenant ledger, vacancy history, and lease expiration schedule. High turnover during the current ownership period may reflect a management problem that you can fix and add value. Or it may reflect a market or property condition that will persist no matter who manages it.
A property with high tenant turnover can have a fixable problem. The problem could be poor management. It could also be delayed maintenance. Or it could be limited amenities. Fixing these issues can create value-add potential. A high-turnover property in a declining submarket with structural tenant issues is a different story entirely. Diligence on the reasons behind turnover is as important as the number itself. Learn more about what to look for in Rod’s [complete multifamily due diligence guide](https://rodkhleif.com/a-comprehensive-guide-to-multifamily-due-diligence/).
## **Frequently Asked Questions: Tenant Turnover**
### **What is tenant turnover in real estate?**
Tenant turnover is the rate at which rental units change occupants, when an existing tenant vacates and a new tenant must be found. It is typically expressed as a percentage of total units that experienced a tenant change within a year. High turnover increases vacancy, raises operating costs, and reduces Net Operating Income and property value. Low turnover indicates stable tenancies and efficient operations.
### **What is a good tenant turnover rate for multifamily?**
A good tenant turnover rate for multifamily real estate is generally under 40% annually for Class A and B properties in stable markets. The national average across all multifamily is approximately 50% annually. Class C and workforce housing properties typically see higher rates of 55-75%. If your rate significantly exceeds the average for your property class and market, it signals a management or property condition problem worth addressing.
### **How do you calculate tenant turnover rate?**
Divide the number of units that experienced a vacancy due to tenant departure by the total number of units, then multiply by 100. For example, if 12 units turned over in a 30-unit building in one year, the turnover rate is 40%. Calculate this annually and track it over time to identify trends. Rising turnover rates are an early warning sign of management or property issues before they show up as NOI problems.
### **What does unit turnover mean?**
Unit turnover means the same as tenant turnover. It happens when a tenant leaves a rental unit. The unit then needs to be prepared and leased again. The term “unit turnover” also describes preparing a vacant unit for re-occupancy. This includes cleaning, repairs, painting, and replacing worn items. The time required to complete a unit turnover, and its cost, directly affects vacancy duration and operating expenses.
### **What is the average cost of tenant turnover?**
The average cost of a single tenant turnover typically ranges from $2,000 to $5,000 for a standard unit in good condition, including lost rent during vacancy, cleaning, repairs, marketing, leasing commissions, and administrative costs. Units requiring significant make-ready work can cost $8,000–$15,000 or more per turn. On a property with high annual turnover, these costs can significantly erode NOI and compress returns.
### **How do you reduce tenant turnover?**
The best ways to reduce tenant turnover include careful tenant screening before move-in. Start a proactive lease renewal process 90 days before the lease ends. Use responsive maintenance systems with clear response time standards. Enforce community rules in a fair and consistent way. Make regular property improvements to keep units competitive. Communicate clearly and respectfully with residents during their tenancy. Retention is primarily a management discipline, the operators who treat it systematically consistently outperform those who treat it reactively.
### **Does tenant turnover affect property value?**
Yes, directly and significantly. Because commercial multifamily properties are valued by income, anything that lowers NOI lowers the property value. Value equals Net Operating Income divided by the current cap rate. High turnover increases vacancy loss and operating expenses, both of which compress NOI. At a 5.5% cap rate, recovering $30,000 in lost annual NOI through better retention adds approximately $545,000 in property value.
**Categories:** Blog, Property Management
**Tags:** apartment investing, business structures, disaster, Driving Force, landlord, motivation, multifamily, multifamily investment, multifamily property investing, multifamily real estate, real estate, real estate investing, real estate podcast, Rod Khleif, seller financing
---
### [How to Buy an Apartment Building](https://rodkhleif.com/buying-an-apartment-building-complete-guide/)
**Published:** July 21, 2026
**Author:** Rod Khleif
**Content:**
I’ve purchased dozens of apartment buildings, and I can tell you the process is 80% preparation and 20% execution. Buying an apartment building isn’t mysterious. You choose a target market, find deals, review the numbers, and secure financing before closing. But here’s where most people mess up: they skip steps or rush the underwriting because they’re desperate to own their first property. I refined a step-by-step system that removes risk and maximizes returns at every stage. Let me take you through each stage so you walk in knowing exactly what to expect. Most people assume buying an apartment building is reserved for institutions and insiders with deep pockets. That’s not how it works. I’ve owned over 2,000 properties. I’ve seen thousands of my students close their first multifamily deals. Many did it without using their own money.
This guide tells you exactly how to do it in 2026. We’ll cover every step from market selection to closing day, plus what’s actually different about the current environment and how to use it to your advantage.
## Is Buying an Apartment Building Worth It in 2026?
Yes, and the timing may be better than it’s been in several years. Here’s the honest picture of where the market stands right now.
The multifamily sector went through a painful correction between 2022 and 2024 as interest rates spiked and cap rates expanded. That pain created opportunity. Sellers who were unrealistic about pricing have adjusted. Construction starts have slowed dramatically, which means new supply coming online through 2026 and 2027 will be limited. Rental demand, meanwhile, remains structurally strong: home prices are still elevated, mortgage rates are still above 6%, and household formation continues.
That combination limited new supply, sticky rental demand, motivated sellers, and easing credit conditions is historically a favorable setup for buyers.
“Multifamily is not a get rich quick strategy. It’s a get wealthy certainly strategy. The investors who win are the ones who buy well, operate well, and stay patient.” Rod Khleif
Beyond market timing, the structural case for apartment buildings is straightforward. You get multiple income streams from one asset, commercial financing that scales with the property’s performance rather than just your personal income, and the ability to force appreciation by improving operations something you can’t do with stocks or single family homes valued entirely by comparable sales.
If you’re weighing apartments against houses, read [our full breakdown on whether apartment buildings are a good investment](https://rodkhleif.com/are-apartment-buildings-a-good-investment/) before going further.
## What You’re Really Buying When You Buy an Apartment Building
This framing matters more than almost anything else in this guide: when you buy an apartment building, you are not buying real estate. You are buying a business.
That business has:
- **Revenue:** rent, laundry, storage, parking, pet fees
- **Operating expenses:** management, maintenance, insurance, taxes, utilities
- **Employees:** property managers, maintenance staff, leasing agents
- **Customers:** your tenants
- **A valuation method** tied directly to income, not comparable sales
That last point is the most important. Unlike a single family home where your neighbors’ sale prices determine your value, a multifamily building is valued based on its [**Net Operating Income (NOI)**](https://rodkhleif.com/a-complete-guide-noi-in-real-estate-in-2025/). Every dollar you add to NOI by raising rents, reducing expenses, or adding income streams directly increases the value of the building. This is called forced appreciation, and it’s one of the most powerful wealth building mechanisms in real estate.
Think like a business owner, not a homeowner, and you’ll be ahead of 90% of the investors you’re competing with.
## Understanding Property Classes: A, B, C, and D
Every apartment building falls into one of four classes. Understanding these helps you match your strategy to your experience level, capital, and risk tolerance.
[](https://rodkhleif.com/buying-an-apartment-building-complete-guide/screenshot-2026-03-28-at-9-17-09-pm/)
For most first time buyers, a **Class B or stabilized Class C** property offers the best balance of affordability, upside, and manageable risk. You have room to add value without the extreme operational challenges of a D-class turnaround.
To understand how class affects what you should pay, see [**what a good cap rate looks like for each class**](https://rodkhleif.com/what-is-a-good-cap-rate-for-multifamily/).
## How to Pick the Right Market
The right building in the wrong market will underperform. The right market with a mediocre building can still produce strong results. Market selection is that important.
## 
These are the four fundamentals I look at every time:
### 1. Job Growth
Jobs are the engine of rental demand. Look for markets attracting major employers in 2026, that means logistics and distribution, healthcare, advanced manufacturing, and tech. When Amazon, a major hospital system, or a new corporate campus announces expansion, rental demand follows within 12 to 24 months.
### 2. Population Trends
People vote with their feet. Markets gaining population consistently particularly working age adults aged 25 to 44 tend to have lower vacancy rates and stronger rent growth. Sun Belt markets and secondary metros in the Southeast and Mountain West continue to attract migration in 2026.
### 3. Supply Pipeline
This matters more than most investors realize. Check how many new apartment units are under construction or permitted in your target submarket. Markets with heavy new supply can see rent growth stall or reverse even when overall demand is strong, because tenants have newer options. In 2026, the supply hangover from 2021 to 2023 construction is washing through many major metros understanding where it’s concentrated helps you avoid the worst pockets.
### 4. Rental Demand Indicators
Look at current vacancy rates (under 6% is healthy), trailing 12 month rent growth, and how quickly units lease. If apartments in your target area are absorbing quickly and rents are trending up, that’s your signal.
Rod’s Rule
Before you fall in love with a building, fall in love with the fundamentals of its submarket. The best deal on a bad block is still a bad deal.
## How to Buy an Apartment Building: Step by Step
Whether you’re buying a 6 unit or a 60 unit, the process follows the same proven path. Here it is in full.
### Build Your Power Team
Multifamily is a team sport. Before you look at a single property, get the right people in place:
- **Multifamily broker** who specializes in your target market and asset class
- **Commercial lender or mortgage broker** experienced in apartment financing
- **[Property manager](https://rodkhleif.com/how-to-hire-a-third-party-property-management-company/)** even if you plan to self manage initially, interview several now
- **Real estate attorney** who handles commercial transactions
- **CPA** who understands depreciation, cost segregation, and 1031 exchanges
Your team determines your deal flow, your underwriting quality, and your ability to close. Cheap out here and you pay for it everywhere else.
### Get Pre Approved or Prepare Your Capital Raise
You need to know your buying power before you make offers. For conventional financing, get a pre approval letter from a commercial lender and prepare your personal financial statement and schedule of real estate owned.
If you plan to raise capital from other investors through a [**multifamily syndication**](https://rodkhleif.com/what-is-multifamily-syndication-a-complete-guide/), start building your investor list, preparing your pitch materials, and studying SEC compliance guidelines now not after you’re under contract.
You don’t need all the money yourself. Partnerships, joint ventures, and syndications are how most larger deals get done.
### Analyze Deals Like a Professional
Get in the habit of underwriting deals daily even before you’re ready to buy. The more deals you analyze, the sharper your instincts become. Use these four core metrics on every property:
- **[Cap Rate](https://rodkhleif.com/what-is-a-good-cap-rate-for-multifamily/)** NOI ÷ Purchase Price. Use our [free cap rate calculator](https://rodkhleif.com/cap-rate-calculator/) to run numbers instantly.
- **[NOI (Net Operating Income)](https://rodkhleif.com/a-complete-guide-noi-in-real-estate-in-2025/)** Gross income minus all operating expenses, before debt service.
- **Cash on Cash Return** Annual pre tax cash flow ÷ Total cash invested.
- **DSCR (Debt Service Coverage Ratio)** NOI ÷ Annual debt service. Lenders want to see 1.25x or higher.
Use the [**free Commercial Real Estate Underwriting Tool**](https://rodkhleif.com/commercial-real-estate-underwriting-tool/) to run a complete analysis before making any offer.
### Submit a Letter of Intent and Negotiate
When you find a deal that pencils out, move quickly. Start with a **Letter of Intent (LOI)** that outlines your price, terms, due diligence period, and closing timeline. The LOI is non binding but sets the tone for the entire negotiation.
Once the LOI is accepted, your attorney drafts the Purchase and Sale Agreement (PSA). Negotiate firmly but professionally and always leave room for renegotiation after due diligence uncovers issues.
### Conduct Due Diligence
Due diligence is where many deals get repriced or walked away from entirely. Don’t rush it. Verify every assumption the seller gave you.
Key items to review:
- Rent roll (current tenants, unit mix, lease terms, deposits)
- Trailing 12 month (T12) income and expense statements
- Unit by unit physical inspection
- All existing leases and any tenant disputes
- Title, zoning, and legal compliance
- CapEx needs: roof, HVAC, plumbing, electrical, parking
- Insurance history (especially claims)
- Environmental concerns (asbestos, lead paint, Phase I ESA)
Download our [**complete multifamily due diligence guide**](https://rodkhleif.com/a-comprehensive-guide-to-multifamily-due-diligence/) for the full checklist.
### Close and Execute Your Business Plan
Closing day is not the finish line it’s the starting gun. The moment you take ownership, your business plan kicks into gear.
- Implement planned renovations on a timeline tied to lease expirations
- Adjust rents to market (where leases allow)
- Onboard your property management team and systems
- Audit all expenses and eliminate waste
- Add ancillary income streams: storage, parking, laundry, RUBS
Track your KPIs weekly. Treat this like the business it is.
## Financing Options for Buying an Apartment Building in 2026
Financing a 5+ unit building is fundamentally different from getting a home mortgage. The lender’s primary question is not “how much do you make?” it’s “how much does the property produce?” This actually works in your favor as your portfolio grows.
Here are the main loan types available to apartment building buyers in 2026:
### Conventional Commercial Bank Loans
The most common starting point. Local and regional banks typically offer 5 to 10 year fixed rate terms with 20 to 30 year amortization schedules. They require strong personal credit (680+), 25 to 30% down, and will scrutinize the property’s financials carefully. These are relationship driven loans a good commercial banker who knows your market is worth developing early.
### Agency Loans (Fannie Mae / Freddie Mac)
For properties with 5+ units, Fannie Mae and Freddie Mac offer some of the most competitive rates and terms in the market. They require stabilized occupancy (usually 90%+), are typically non recourse above certain thresholds, and can offer 10 to 30 year fixed terms. The application process is more rigorous, but the terms are often worth it for stabilized assets.
### FHA / HUD Loans
For 2 to 4 unit properties where you owner occupy one unit, [**FHA loans allow as little as 3.5% down**](https://rodkhleif.com/fha-loans-multifamily-real-estate-investors/) making them one of the best entry points for new investors. For larger properties, HUD’s 221(d)(4) and 223(f) programs offer long term, fully amortizing, non recourse financing at competitive rates, though the process is more time intensive.
### Bridge Loans
Short term, interest only loans used to acquire value add properties that don’t yet qualify for permanent financing due to low occupancy or deferred maintenance. Once you stabilize the property, you refinance into permanent debt. Bridge loans come with higher rates (typically 1 to 3% over SOFR) but give you the flexibility to close on properties that need work.
### Seller Financing
In the current environment, motivated sellers are more open to carrying a note than they’ve been in years. This can dramatically reduce or eliminate the need for institutional financing. Always have your attorney review seller financed deals carefully.
### Syndication (Other People’s Money)
For larger deals, you can raise equity capital from passive investors while you serve as the General Partner. You find and operate the deal; investors provide the equity. This allows you to control assets far beyond what your personal capital could finance. [**Learn how multifamily syndication works**](https://rodkhleif.com/what-is-multifamily-syndication-a-complete-guide/) if you want to scale into larger assets.
For a complete breakdown of how to buy a multifamily property with little or no money of your own, see our guide on [**buying multifamily with no money down**](https://rodkhleif.com/how-to-buy-a-multifamily-property-with-no-money/).
## How Much Does It Cost to Buy an Apartment Building?
The total capital required to close a deal has four components: down payment, renovation budget, closing costs, and operating reserves. Here’s how each breaks down.
| Cost Component | Typical Range | Notes |
| Down Payment | 20%–30% of purchase price | Can come from your own funds, partners, or syndication investors |
| Renovation / CapEx | $3,000–$15,000+ per unit | Varies widely by property condition and scope of value add plan |
| Closing Costs | 2%–5% of purchase price | Includes legal fees, appraisal, inspection, title, loan origination |
| Operating Reserves | 6 to 12 months PITI | Lenders often require this; always smart to have regardless |
### Sample Breakdown: $2.5M, 30 Unit Building
- 25% down payment: **$625,000**
- CapEx budget (value add): **$150,000**
- Closing costs (~3%): **$75,000**
- Operating reserves: **$60,000**
- **Total capital required: ~$910,000**
That $910K doesn’t need to come from you alone. Many investors bring in equity partners or raise funds through a syndication to reach the capital requirement. Your job is to find the deal, underwrite it, and structure it correctly.
## How to Underwrite an Apartment Building Deal
Underwriting is simply answering two questions: what is this property worth today, and what can I make it worth? Here’s the framework I use.
### Step 1: Build the Pro Forma Income Statement
Start with the rent roll to determine **Gross Potential Rent (GPR)** what the property would collect if every unit was leased at full market rent. Then subtract vacancy (typically 5 to 10%) and add any ancillary income (laundry, storage, parking) to get **Effective Gross Income (EGI)**.
### Step 2: Calculate NOI
Subtract all operating expenses from EGI. Do NOT include debt service in this calculation. [**NOI**](https://rodkhleif.com/a-complete-guide-noi-in-real-estate-in-2025/) is a pre financing metric, which is what makes it powerful for comparison across deals. Operating expenses typically run 35 to 50% of EGI on a well run property.
### Step 3: Determine Value via Cap Rate
Divide NOI by the prevailing market cap rate for that asset class and market. This gives you the income based value: **Value = NOI ÷ Cap Rate**. Use our [**free cap rate calculator**](https://rodkhleif.com/cap-rate-calculator/) to run this instantly.
To understand how [**cap rates work with real examples**](https://rodkhleif.com/how-cap-rates-work-with-examples/), including how rising rates affect valuation, read our deep dive guide.
### Step 4: Stress Test Your Assumptions
Run a downside scenario: what happens if rents come in 5% below projection? If vacancy runs at 10% instead of 5%? If insurance costs spike 20%? If the deal only works under perfect conditions, it’s not a deal worth doing.
### Step 5: Model Your Exit
Know your exit before you buy. If you’re planning a 5 year hold and sale, model what the property will be worth at exit using your projected NOI at year 5 and a conservative exit cap rate (typically 0.25%–0.5% higher than your going in cap to account for market risk).
Free Tool
### [Use the Free Commercial Real Estate Underwriting Tool →](https://rodkhleif.com/commercial-real-estate-underwriting-tool/)
Run a complete income, expense, financing, and return analysis on any deal in minutes.
## Due Diligence Checklist for Apartment Buildings
Due diligence is where assumptions meet reality. Approach it systematically and without emotion. These are the areas you must verify before releasing contingencies.
### Financial Due Diligence
- Trailing 12 month (T12) income and expense statements
- Current rent roll with lease start/end dates, rent amounts, deposits
- Bank statements confirming actual income collected (not just what’s on the P&L)
- Current and prior year property tax bills
- Insurance declarations page and claims history
- All existing service and vendor contracts
- Utility bills (last 12 months)
### Physical Due Diligence
- Third party property inspection (structural, electrical, plumbing, HVAC)
- Roof age and condition report
- Unit by unit walkthrough with condition notes
- Common areas, parking, laundry, amenities
- Phase I Environmental Site Assessment (for most commercial loans)
- Asbestos and lead paint assessment if building is pre 1978
### Legal and Title Due Diligence
- Title search and title insurance commitment
- Survey (confirm boundaries and encroachments)
- Zoning verification and certificate of occupancy
- Review of all existing leases and tenant agreements
- Outstanding permits, code violations, or litigation
- HOA documents (if applicable)
For the full checklist and a step by step walkthrough, download our [**free guide to multifamily due diligence**](https://rodkhleif.com/a-comprehensive-guide-to-multifamily-due-diligence/).
## Common Mistakes When Buying an Apartment Building
I’ve made expensive mistakes. My students have made expensive mistakes. Here are the ones that come up most often so you don’t have to repeat them.
### Trusting the Seller’s Numbers Without Verification
Sellers present their properties in the best possible light. Always verify income against bank statements and actual lease documents not just the pro forma they handed you. Many investors have bought properties where the “current rents” on the rent roll were months old asking rents on vacant units.
### Underestimating CapEx
Most first time buyers underestimate the cost and scope of capital expenditures. Get a third party inspection report before you finalize your offer, and budget conservatively. A roof you thought had five years left may have two.
### Buying the Deal Instead of the Market
A great price on a bad property in a declining submarket is still a bad deal. Always evaluate the market first, then the deal.
### Inadequate Reserves
Running out of reserves is one of the most common reasons investors lose properties. Build in at least six months of PITI, plus a CapEx reserve. If a lender doesn’t require it, still do it.
### No Clear Business Plan
Buying without a specific, executable business plan rent projections, CapEx timeline, management strategy, and exit is speculation, not investing.
### Skipping Professional Property Management
Self managing a multifamily property without experience is one of the fastest ways to destroy returns. [**Hiring the right property manager**](https://rodkhleif.com/how-to-hire-a-third-party-property-management-company/) is one of the most important decisions you’ll make.
## Apartment Buildings vs. Single Family Homes: The Real Comparison
If you’re currently investing in single family homes or considering it here’s the honest comparison.
| Factor | Single Family | Apartment Building |
| Vacancy risk | 100% income loss on 1 vacancy | Spread across multiple units |
| Valuation method | Comparable sales (you don’t control) | Income based (you can force appreciation) |
| Financing | Personal income–dependent | Property performance–dependent |
| Scalability | One unit per transaction | Multiple units per transaction |
| Management | Spread across multiple locations | Concentrated, more efficient |
| Tax advantages | Standard depreciation | Accelerated depreciation, cost segregation, 1031 |
| Entry barrier | Lower | Higher but more scalable |
Multifamily’s core advantage is that every lever you pull to improve the business directly improves the asset’s value. No amount of landscaping at a single family home will increase its appraised value if comparable homes in the neighborhood haven’t moved.
## How to Buy an Apartment Complex With Little or No Money Down
The question I get more than any other: can you buy an apartment complex without writing the whole check yourself? Yes, and it is how most of the operators I know got started. You are not borrowing your way to a down payment. You are trading something you have for capital someone else has.
Four structures that actually work in 2026:
- **Syndication.** You find the deal, underwrite it, and raise the equity from investors who want passive returns. You earn ownership for sourcing and operating the asset. This is the most common path to a first large apartment complex.
- **Joint venture partnership.** One partner brings capital, the other brings the deal, the experience, and the day to day work. Cleaner than a syndication on smaller deals because you avoid the securities complexity.
- **Seller financing.** An owner who has held the property for decades and owns it free and clear often cares more about monthly income and taxes than a lump sum. A seller carry can sharply reduce the cash you bring to closing.
- **Assuming existing debt.** When in place debt carries a below market rate, assuming it can be worth more than any discount on price, and it lowers the equity you need to close.
What none of these remove is the need to be credible. Lenders and investors still look for net worth, liquidity, and experience somewhere on the sponsorship team. If you do not have it yet, partner with someone who does and give up a slice of the deal. Owning 30 percent of a real apartment complex beats owning 100 percent of a deal you never closed.
Be honest about the tradeoff: every dollar you do not bring is ownership, control, or upside you give away. That is a fair trade on your first deal and an expensive habit by your fifth.
## Frequently Asked Questions: How to Buy an Apartment Building
### How do I buy an apartment complex with no money down?
“No money down” usually means structuring the deal so none of the required capital is *yours* not that the capital doesn’t exist. Common strategies include bringing in equity partners (you provide the deal, they provide the capital), using [multifamily syndication](https://rodkhleif.com/what-is-multifamily-syndication-a-complete-guide/), negotiating seller financing, or assuming existing debt.
For 2 to 4 unit properties, [FHA loans allow as little as 3.5% down](https://rodkhleif.com/fha-loans-multifamily-real-estate-investors/) if you owner occupy one unit. On larger deals, the capital requirement is real your job is to find it and structure the deal correctly. See our full guide on [buying multifamily with limited capital](https://rodkhleif.com/how-to-buy-a-multifamily-property-with-no-money/).
### What credit score do I need to buy an apartment building?
For residential loans on 1 to 4 unit properties, FHA requires a minimum 580 score for 3.5% down. For commercial loans on 5+ unit buildings, most lenders want 680+ but the property’s DSCR matters as much as your personal credit. If your credit is below that threshold, a strong co borrower or guarantor can bridge the gap, and most deals are structured with partners whose combined credentials satisfy the lender.
### How long does it take to buy an apartment building?
From accepted offer to close typically runs 45 to 90 days for conventional and bridge financing. Agency loans (Fannie/Freddie) can take 60 to 90 days; HUD loans can take 6 to 12 months. Factor this into your earnest money negotiations if you need more time for due diligence or financing, negotiate for it in the PSA.
### How do I find apartment buildings for sale?
The best deals rarely appear on public listing sites first. Build relationships with multifamily brokers who specialize in your target market and tell them your exact buy box. Supplement that with direct mail campaigns to owners of properties in your target size range, networking at local real estate investment associations (REIAs), and using county records to identify long term owners who may be motivated to sell. Off market deals sourced through broker relationships and direct outreach are where the best opportunities typically hide.
### Do I need a real estate license to buy an apartment building?
No. You need a license to represent *other people* in transactions and earn commissions. As an investor purchasing for your own portfolio, no license is required. What you need is the right team: a licensed multifamily broker, commercial lender, and real estate attorney to handle the licensed activities while you focus on the investing.
### Is 2026 a good time to buy an apartment building?
The conditions entering 2026 are more favorable for buyers than they’ve been in several years. Sellers have adjusted from peak-2021 pricing expectations, credit conditions are easing, new supply coming online is slowing (the 2021 to 2023 construction wave is working through the pipeline), and rental demand remains structurally strong due to elevated home prices and elevated mortgage rates keeping would be homebuyers in the rental pool. That said, submarkets vary significantly some are oversupplied, some are tight. Market selection is the critical variable.
### How do I analyze an apartment building before buying?
Start with the four core metrics: cap rate ([use the free calculator](https://rodkhleif.com/cap-rate-calculator/)), [NOI](https://rodkhleif.com/a-complete-guide-noi-in-real-estate-in-2025/), cash on cash return, and DSCR. Then verify those numbers against the actual rent roll, trailing 12 month financials, and a physical inspection. Stress test your assumptions model what happens if rents come in 5% below projection and vacancy runs 2% higher. Use the [free Commercial Real Estate Underwriting Tool](https://rodkhleif.com/commercial-real-estate-underwriting-tool/) to run a complete analysis.
## You’re Closer Than You Think
Every seasoned investor you admire started exactly where you are asking the same questions, feeling the same uncertainty. The difference is they took a step.
Buying an apartment building creates cash flow, forced appreciation, tax advantages, and long term wealth. It is one of the most proven paths to financial independence that exists. The process is learnable. The capital is findable. The deals are out there.
**You’re one deal away from Lifetime Cashflow.**
Disclaimer: This article was written with the assistance of AI and reviewed by Rod Khleif and his team for accuracy and relevance. This is for informational purposes only and does not constitute financial, legal, or investment advice. Always consult qualified professionals before making investment decisions.
## Ready to Buy Your First (or Next) Deal?
Get Rod’s best selling book free, join the next Multifamily Bootcamp, or apply for the Warrior Program.
[Download Free Book](https://rodkhleif.com/lcfa-ebook/) [Join Bootcamp](https://rodkhleif.com/bootcamp/) [Warrior Program](https://rodkhleif.com/rod-khleif-warrior-program/)
[**If you’re serious about learning How to Buy An Apartment Complex, download Rod’s Best-Selling book FREE, *“How to Create Lifetime Cashflow Through Multifamily Properties.” Including the 90 Action Plan!***](https://rodkhleif.com/lcfa-ebook/)
*Disclaimer: This article was created with the assistance of AI and reviewed by Rod Khleif and his team to ensure accuracy and relevance.*
**Categories:** Blog, Multifamily Investing, Real Estate
**Tags:** apartment building, apartment complex, buying apartment buildings, due diligence, multifamily investing, Real Estate Financing
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### [FHA Multifamily Loans: A Complete Guide by Rod Khleif](https://rodkhleif.com/fha-loans-multifamily-real-estate-investors/)
**Published:** July 20, 2026
**Author:** Rod Khleif
**Excerpt:** FHA Loans for Multifamily Real Estate Investors - Have you ever considered how the United States government can help jumpstart your real estate investment business? A loan backed by the Federal Housing Administration (FHA) just might be the perfect option for investors looking to acquire residential multifamily property (2-4 units).
**Content:**
FHA multifamily loans changed the game for me and for thousands of my students who wanted to start with minimal down payment. I’ve used FHA financing in my own portfolio because these government-backed loans let you buy 2-4 unit properties with as little as 3.5% down. Here’s the reality: FHA loans offer fixed rates, longer amortization periods, and favorable terms that conventional lenders won’t touch. Most investors overlook FHA loans because they don’t understand how they work or what the limits are. Let me show you exactly why FHA loans are the stepping stone to building serious multifamily wealth.
## Table of Contents
1. [What is an FHA Multifamily Loan?](#what-is-fha)
2. [FHA Loans for 5+ Units (HUD 221(d)(4) and 223(f))](#hud-5-plus)
3. [FHA Multifamily Loan Requirements 2026](#requirements)
4. [How to Qualify for FHA Multifamily Financing](#qualify)
5. [Step-by-Step: How to Buy a Multifamily Property with FHA](#how-to-buy)
6. [FHA vs. Conventional Multifamily Loans](#fha-vs-conventional)
7. [Pros and Cons of FHA Multifamily Financing](#pros-cons)
8. [2026 FHA Loan Limits for Multifamily Properties](#loan-limits)
9. [Expert Strategy: House Hacking with FHA Financing](#house-hacking)
10. [Frequently Asked Questions](#faq)
## What is an FHA Multifamily Loan? Understanding FHA Multifamily Financing in 2026
An FHA multifamily loan is a government-insured mortgage program specifically designed for purchasing 2-4 unit residential properties with owner-occupancy requirements. Unlike conventional investment property loans that demand 20-25% down payments, FHA multifamily financing allows qualified borrowers to purchase income-producing real estate with as little as 3.5% down.
### How FHA Multifamily Loans Work
These loans are backed by the Federal Housing Administration (FHA) and overseen by the Department of Housing and Urban Development ([HUD](https://rodkhleif.com/podcasts/how-he-scaled-from-2-to-600-units-and-raised-30m-doing-it/)). The FHA insurance reduces lender risk, enabling more favorable terms for borrowers—including lower interest rates, flexible credit requirements, and minimal down payments.
Critical requirement: You must occupy one unit as your primary residence for at least 12 months. This owner-occupancy mandate transforms your investment into what’s called “[house hacking](https://rodkhleif.com/why-house-hacking-a-plex-is-the-best-possible-way-to-start-investing/)“—living in one unit while rental income from the other units covers your mortgage.
### Key Features of FHA Multifamily Financing (2026)
✅ Down payment as low as 3.5% (vs. 20-25% conventional)
✅ Fixed-rate mortgages available (15-year and 30-year terms)
✅ Lower interest rates than conventional investment loans
✅ Credit scores starting at 580 (some lenders accept 500-579 with 10% down)
✅ Higher debt-to-income ratios allowed (up to 50% DTI)
✅ Seller concessions up to 6% toward closing costs
✅ Rental income counted toward qualification
2026 Update: FHA loan limits have been adjusted for inflation. Check your county’s specific limits as they vary significantly by market (discussed in detail below).
## FHA Multifamily Loans for 5+ Units: HUD 221(d)(4) and 223(f)
Here is where most investors get confused, and it costs them weeks with the wrong lender. The phrase “FHA multifamily loan” describes two completely different products:
- **FHA residential loans on 2 to 4 units.** The 3.5% down, owner occupied program covered throughout this guide. You live in one unit, rent the others, and qualify through a standard mortgage lender.
- **FHA and HUD insured multifamily loans on 5+ units.** Institutional apartment loans insured by HUD and issued through HUD approved lenders. You do not live on site, and the loan is underwritten primarily on the property rather than on you.
The two HUD programs investors ask about most:
- **HUD 221(d)(4):** new construction and substantial rehabilitation of apartment properties. Long term, fixed rate and non recourse, with terms that can run up to 40 years plus the construction period.
- **HUD 223(f):** acquisition or refinance of existing apartment properties, generally up to 35 years, non recourse, and higher leverage than most conventional debt.
The tradeoff is process. HUD multifamily loans carry higher minimum loan sizes, real third party report requirements, and a timeline measured in months rather than weeks. For a first deal the 2 to 4 unit FHA route below is almost always faster. Once you are buying 5+ unit apartment communities, HUD debt becomes one of the cheapest long term non recourse options available. Confirm current terms and limits with [HUD](https://www.hud.gov/fha) or a HUD approved lender before you underwrite to them. For how this sits alongside agency, bank and bridge debt see the [complete multifamily financing guide](https://rodkhleif.com/multifamily-financing-complete-guide/), and if this is your first deal start with [10 steps to your first small multifamily](https://rodkhleif.com/10-steps-to-your-first-small-multifamily/).
## FHA Multifamily Loan Requirements 2026: Complete Qualification Checklist
Before applying for FHA multifamily financing, you must meet specific financial, occupancy, and property criteria. Here’s exactly what lenders evaluate:
### Financial Requirements for FHA Multifamily Loans
#### 1. Credit Score Requirements
- 580 or higher: Qualify for 3.5% down payment
- 500-579: May qualify with 10% down (lender discretion)
- Below 500: Generally not eligible for FHA financing
2026 Tip: Many lenders have overlays requiring 620+ credit scores even though FHA minimum is 580. Shop multiple FHA-approved lenders.
#### 2. Debt-to-Income Ratio (DTI)
- Front-end DTI: Housing expenses ≤ 31% of gross monthly income
- Back-end DTI: Total debt obligations ≤ 43-50% of gross monthly income
Income advantage: Projected rental income from non-occupied units can be used to offset your DTI (typically 75% of market rent is counted).
#### 3. Employment and Income Verification
- Minimum 2 years verifiable employment history
- Consistent income documented via pay stubs, W-2s, tax returns
- Self-employed borrowers: 2 years of tax returns required
- Multiple income sources: All must be documented and stable
#### 4. Cash Reserves
- Minimum: Enough to cover down payment + closing costs
- Recommended: 2-6 months PITI reserves (especially for 3-4 unit properties)
### Occupancy Requirements for FHA Multifamily Financing
🏠 You must occupy one unit as your primary residence for at least 12 months after closing
🏠 Property must be 2-4 units (duplex, triplex, or fourplex only)
🏠 You cannot own another FHA-financed property simultaneously
🏠 Intent to occupy must be genuine (FHA investigates occupancy fraud)
After 12 months: You’re free to move out and convert your unit to a rental, transforming the property into a fully cash-flowing investment.
### Property Standards for FHA Multifamily Loans
The property must meet HUD’s Minimum Property Standards (MPS):
- Structurally sound with no major defects
- Safe electrical, plumbing, and HVAC systems
- Adequate heating in all units
- No peeling paint (lead-based paint concerns)
- Functional kitchen and bathroom in each unit
- Adequate access and egress (fire safety)
An FHA-approved appraiser will inspect the property and note any items requiring repair before loan approval. Unlike conventional loans, FHA requires all repairs to be completed before closing.
## How to Qualify for FHA Multifamily Financing: Maximizing Your Approval Odds
Getting approved for an FHA multifamily loan requires strategic preparation. Here’s how to position yourself as a strong borrower:
### 1. Improve Your Credit Score Before Applying
Even though FHA accepts 580 scores, higher scores unlock better terms:
- 580-619: Maximum 3.5% down, higher interest rates
- 620-679: Better interest rates, more lender options
- 680+: Best rates, easiest approvals
Quick wins:
- Pay down credit card balances below 30% utilization
- Dispute errors on credit reports (use AnnualCreditReport.com)
- Become authorized user on someone’s well-managed account
- Don’t open new credit accounts before applying
### 2. Lower Your Debt-to-Income Ratio
With FHA multifamily financing, your DTI calculation includes projected rental income:
Example calculation:
- Gross monthly income: $6,000
- Existing debts: $800/month
- Proposed mortgage payment (PITI): $2,400
- Projected rental income (75% of $2,400): $1,800
DTI without rental income: ($800 + $2,400) / $6,000 = 53.3% ❌
DTI with rental income: ($800 + $2,400 – $1,800) / $6,000 = 36.7% ✅
Strategies to lower DTI:
- Pay off small debts completely
- Increase income (ask for raise, start side hustle)
- Choose properties with higher rental income potential
- Consider having non-occupant co-borrower
### 3. Save for Down Payment and Closing Costs
Minimum required:
- 3.5% down payment
- 2-5% closing costs (varies by location)
- 1.75% upfront mortgage insurance premium (can be financed)
On a $400,000 fourplex:
- Down payment: $14,000
- Closing costs: ~$10,000
- Total cash needed: ~$24,000 (before seller concessions)
Creative funding sources:
- Gift funds from family (allowed with proper documentation)
- Down payment assistance programs (state/local)
- Seller concessions (up to 6% toward closing costs)
- 401(k) loan (not recommended but possible)
### 4. Document Everything Thoroughly
FHA underwriting is documentation-intensive. Organize:
📄 2 years W-2s or tax returns
📄 2 months recent pay stubs
📄 2 months bank statements (all accounts)
📄 Proof of down payment source
📄 Explanation letters for any credit issues
📄 Rental income documentation (if applicable)
## Step-by-Step: How to Buy a Multifamily Property with FHA Financing in 2026
### Step 1: Determine Your FHA Multifamily Loan Eligibility
Before house hunting:
- Check your credit score (all 3 bureaus)
- Calculate your DTI with and without rental income
- Verify employment stability (2+ years same field)
- Assess cash available for down payment + reserves
Use this quick pre-qualification calculator:
- Monthly gross income x 0.43 = maximum total monthly debt payments allowed
- Subtract existing monthly debts = amount available for new mortgage
### Step 2: Find an FHA-Approved Lender Specializing in Multifamily
Not all lenders offer FHA multifamily financing. Find one experienced with 2-4 unit properties:
✅ Ask: “How many FHA multifamily loans do you close per year?”
✅ Compare at least 3 lenders for rates and fees
✅ Verify they understand rental income calculations
✅ Check online reviews and licensing
Red flags:
- Lender seems unfamiliar with 2-4 unit FHA requirements
- Pushes you toward conventional loan instead
- Can’t explain how rental income affects qualification
### Step 3: Get Pre-Approved (Not Just Pre-Qualified)
Pre-qualification = rough estimate based on what you tell lender
Pre-approval = lender verifies documentation and commits to loan amount
A strong pre-approval letter shows sellers you’re serious. For competitive markets in 2026, pre-approval is essential.
### Step 4: Choose a Qualifying Multifamily Property
FHA multifamily financing property requirements:
✅ 2-4 residential units (duplex, triplex, fourplex)
✅ One unit suitable as your primary residence
✅ Meets HUD Minimum Property Standards
✅ In condition acceptable to FHA appraiser
✅ Purchase price within county FHA loan limits
Property hunting tips:
- Target neighborhoods with strong rental demand
- Analyze rental income (use Rentometer, Zillow Rent Zestimate)
- Calculate cash flow conservatively
- Factor in vacancy and maintenance (use 10% each as placeholder)
- Consider renovation potential (FHA 203(k) allows renovation financing)
### Step 5: Make an Offer and Negotiate
Structuring your FHA multifamily financing offer:
- Earnest money: 1-3% of purchase price (shows commitment)
- Inspection contingency: Essential for FHA (appraisal will note repairs)
- Financing contingency: Protect yourself if loan falls through
- Seller concessions: Request up to 6% toward closing costs
2026 market tip: In slower markets, emphasize FHA benefits to sellers—these loans close reliably when buyers are qualified. In hot markets, consider offering slightly over asking or shortened contingency periods.
### Step 6: Complete FHA Appraisal and Inspection
FHA appraisal includes:
1. Market value determination (must meet purchase price)
2. Property condition assessment (HUD standards)
3. Required repair identification (must be completed before closing)
Common FHA appraisal issues:
- Peeling paint (lead-based paint concern)
- Missing handrails on stairs
- Non-functioning appliances
- Roof damage or missing shingles
- Plumbing or electrical deficiencies
Negotiating repairs:
- Seller completes repairs before closing (most common)
- Seller credits you at closing (you handle repairs)
- Price reduction to account for needed work
- FHA 203(k) loan includes renovation costs
### Step 7: Close Your FHA Multifamily Loan
At closing you’ll:
- Sign loan documents
- Pay closing costs (minus seller concessions)
- Receive keys to your property
- Begin 12-month owner-occupancy period
First month action items:
- Move into your unit immediately
- Screen and place tenants in vacant units (if applicable)
- Set up property management systems
- Transfer utilities to your name
- Purchase landlord insurance policy
## FHA Multifamily Financing vs. Conventional Multifamily Loans: 2026 Comparison
Choosing between FHA multifamily loans and conventional financing depends on your specific situation:
FeatureFHA Multifamily LoanConventional Multifamily LoanDown Payment3.5%15-25%Interest Rates (2026)6.25-6.75%6.75-7.50%Credit Score Minimum580 (some lenders 620+)680-700+DTI Ratio Max50%43-45%Owner-OccupancyRequired (12 months)Not requiredMortgage InsuranceRequired (Upfront + Monthly MIP)Required if LTV > 80%Loan LimitsVaries by countyHigher (up to $2M+ depending on lender)Property ConditionMust meet HUD standardsMore flexibleRental Income Used?Yes (75% of market rent)Yes (varies by lender)Seller ConcessionsUp to 6%Up to 3%Closing Timeline30-45 days21-30 daysBest ForFirst-time investors, low cash, house hackingExperienced investors, non-occupant, quick closing### When to Choose FHA Multifamily Financing
✅ You have limited cash for down payment (<20%)
✅ Your credit score is 580-680
✅ You’re willing to live in the property for 12 months
✅ Property is 2-4 units and meets FHA standards
✅ You want the lowest possible interest rate
✅ Purchase price is within FHA loan limits
### When to Choose Conventional Multifamily Loan
✅ You have 20%+ down payment available
✅ Your credit score is 720+
✅ You don’t want to live in the property
✅ Property needs renovation or doesn’t meet FHA standards
✅ Purchase price exceeds FHA loan limits
✅ You want to avoid mortgage insurance
## Pros and Cons of FHA Multifamily Financing: Is it Right for You?
### Advantages of FHA Multifamily Loans
✅ Lowest Down Payment Investment Property Financing
At 3.5% down, you can purchase a $400,000 fourplex with just $14,000 down. Conventional investment loans require $60,000-$100,000 for the same property.
✅ Below-Market Interest Rates
FHA multifamily financing typically offers interest rates 0.25-0.50% lower than conventional investment loans, saving thousands annually.
✅ Easier Credit Qualification
580 credit score minimum (vs. 680-700 conventional) opens doors for borrowers rebuilding credit or new to investing.
✅ Rental Income Reduces Qualification Burden
Lenders count 75% of projected rents toward your income, making it easier to qualify for larger properties.
✅ Seller Concessions Cut Out-of-Pocket Costs
Up to 6% seller contribution toward closing costs can reduce your cash-to-close by $10,000-$24,000.
✅ Build Wealth While Living for Free (or Cheap)
Rental income from other units often covers your entire mortgage, letting you live rent-free while building equity.
✅ Path to Larger Investments
After 12 months, you can keep the property as a rental and buy another FHA property, or refinance to pull equity for larger deals.
### Disadvantages of FHA Multifamily Financing
❌ Mortgage Insurance Adds Cost
- Upfront MIP: 1.75% of loan amount (can be financed)
- Annual MIP: 0.55-0.80% of loan amount (divided into monthly payments)
- On $400K loan: ~$7,000 upfront + $183-$267/month
❌ Owner-Occupancy Requirement Limits Flexibility
You must live in one unit for 12 months. This doesn’t work for pure investors wanting to remain landlords from day one.
❌ Property Must Meet Strict FHA Standards
Fixer-uppers or properties with deferred maintenance may not qualify. FHA appraisers flag issues that must be repaired before closing.
❌ County Loan Limits Restrict Purchase Price
High-cost areas may have FHA limits below median property prices, forcing you to use conventional financing or choose different markets.
❌ One FHA Loan at a Time
You can’t use FHA multifamily financing to build a portfolio quickly. After buying one property, you must wait to sell or refinance before getting another FHA loan.
❌ More Paperwork and Documentation
FHA underwriting requires extensive documentation. Expect requests for explanations, additional statements, and verification letters.
## 2026 FHA Loan Limits for Multifamily Properties: County-by-County Guide
FHA multifamily loan limits vary significantly by county and unit count. These limits are updated annually based on median home prices.
### 2026 FHA Multifamily Financing Limits (High-Cost Areas)
UnitsLow-Cost CountyStandard LimitHigh-Cost Area Example2 units$498,257$598,257$1,149,825 (San Francisco)3 units$602,024$723,024$1,389,275 (Los Angeles)4 units$748,255$898,255$1,726,525 (New York)Find your county’s exact limits: Visit [HUD.gov FHA Loan Limits](https://www.hud.gov/) and enter your zip code.
### How FHA Loan Limits Affect Your Purchase
Example: Los Angeles County, CA (2026)
- 4-unit FHA limit: $1,389,275
- Median fourplex price: $1,200,000 ✅ Within limit
- With 3.5% down: ~$42,000 down payment
Example: Cook County, IL (Chicago)
- 4-unit FHA limit: $723,024
- Median fourplex price: $650,000 ✅ Within limit
- With 3.5% down: ~$22,750 down payment
Example: Rural County, Midwest
- 4-unit FHA limit: $498,257
- Median fourplex price: $350,000 ✅ Well within limit
- With 3.5% down: ~$12,250 down payment
Strategy tip: If your target market exceeds FHA limits, consider:
1. Nearby counties with lower prices
2. 2-3 unit properties (lower limits)
3. Conventional financing with higher down payment
4. Partnership to combine down payment resources
## Expert Strategy: House Hacking with FHA Multifamily Financing
House hacking—living in one unit while renting others—is the single most powerful strategy for new real estate investors. When combined with FHA multifamily financing, it becomes a wealth-building machine.
### Why House Hacking Works So Well in 2026
Traditional path to real estate investing:
1. Save 20-25% down payment ($80,000-$100,000)
2. Buy investment property
3. Hope cash flow covers mortgage
4. Repeat slowly as cash allows
FHA house hacking path:
1. Save 3.5% down payment ($14,000-$20,000)
2. Buy 2-4 unit property with FHA multifamily loan
3. Live in one unit, rent the others
4. Tenants cover most/all of mortgage
5. Build equity while living nearly free
6. After 12 months, repeat or scale up
### Real-World House Hacking Example (2026)
Property: Fourplex in Jacksonville, FL
Purchase price: $420,000
Down payment (3.5%): $14,700
Loan amount: $405,300
Interest rate: 6.5%
Monthly P&I: $2,562
Taxes + Insurance: $550
Total PITI: $3,112
Rental income:
- Unit 1 (you live here): $0
- Unit 2: $1,200
- Unit 3: $1,200
- Unit 4: $1,200
- Total rent: $3,600
Monthly cash flow: $3,600 – $3,112 = +$488
Better than free: You’re getting paid $488/month to live in your own property while building equity through mortgage paydown and appreciation.
### Rod Khleif’s House Hacking Framework
As I teach in my [Multifamily Bootcamp](https://rodkhleif.com/bootcamp/), successful house hacking follows this formula:
1\. Choose the Right Market
- Strong rental demand
- Low vacancy rates (<5%)
- Positive job growth
- Landlord-friendly laws
2\. Underwrite Conservatively
- Vacancy: 8-10%
- Maintenance: 10% of rents
- CapEx reserves: 5% of rents
- Property management: 8-10% (even if self-managing initially)
3\. Maximize Rental Income
- Rent by the room (if allowed)
- Add separate entrances
- Include utilities in rent or bill separately
- Offer furnished units at premium
- Consider short-term rentals (if allowed)
4\. Minimize Living Expenses
- Choose nicest/largest unit for yourself
- Use common areas (yard, laundry, storage)
- Tenant-pay utilities when possible
- Build sweat equity through improvements
5\. Exit Strategy After 12 Months Three options:
- Keep and hold: Move out, rent your unit, pure cash flow
- Refinance: Pull equity out for next deal
- Sell: 1031 exchange into larger property
## **FAQ: FHA Loans for Multifamily Real Estate Investors**
**Q1: Can you use an FHA loan to buy a multifamily property?**
Yes. You can use an FHA loan to purchase a property with 2 to 4 units as long as you occupy one unit as your primary residence for at least 12 months after closing. The FHA classifies properties with 4 or fewer units as single family homes, which means the same standard FHA loan you would use to buy a house applies here. You can rent out the other units from day one. This is one of the most powerful entry points in real estate investing: low down payment, below market interest rates, and your tenants help cover the mortgage while you build equity.
**Q2: What is the minimum down payment for an FHA multifamily loan?**
The minimum down payment is 3.5% if your credit score is 580 or higher. If your score falls between 500 and 579, most lenders require 10% down. For context, a conventional investment property loan on the same duplex or fourplex would require 20 to 25% down. On a $400,000 fourplex, that is the difference between $14,000 and $100,000 out of pocket. The FHA program exists specifically to lower that barrier for buyers who plan to live in the property.
**Q3: What credit score do I need for an FHA multifamily loan?**
The FHA minimum is 580 for 3.5% down and 500 for 10% down. In practice, most lenders add their own requirements on top of FHA minimums, and many want to see at least 620. A score of 680 or higher will get you the best rates and the widest choice of lenders. If your score is below 580 today, it is worth spending 3 to 6 months paying down balances and disputing any errors before applying, rather than accepting worse terms now.
**Q4: Do I have to live in the property if I use an FHA loan?**
Yes. Owner occupancy is a hard requirement. You must move in within 60 days of closing and live in one of the units as your primary residence for a minimum of 12 months. After that 12 month period, you are free to move out and convert your unit to a rental. At that point the property becomes a fully cash flowing investment and you can pursue your next deal, including another FHA loan on a new owner occupied property.
**Q5: How many units can I buy with an FHA loan?**
FHA residential financing covers properties with 1 to 4 units. That means you can buy a duplex, triplex, or fourplex. Properties with 5 or more units require commercial financing through a separate HUD multifamily program, which has different requirements, larger minimum loan sizes, and does not require owner occupancy. If your goal is to start investing with the lowest possible down payment and get rental income working for you quickly, the 2 to 4 unit FHA path is the right starting point. To understand commercial options for larger buildings, read our full guide on [how to buy an apartment building](https://rodkhleif.com/buying-an-apartment-building-complete-guide/).
**Q6: Can rental income from other units help me qualify for an FHA loan?**
Yes, and this is one of the biggest advantages of using FHA financing for a multifamily purchase. Lenders will count 75% of the projected market rent from the non-owner-occupied units toward your qualifying income. This lowers your effective debt to income ratio and can allow you to qualify for a larger loan than your personal income alone would support. If the property already has tenants, you will typically need copies of the existing leases to document the income.
**Q7: What is the FHA self-sufficiency test for 3 and 4 unit properties?**
If you are buying a triplex or fourplex with an FHA loan, the property must pass a self-sufficiency test. This means 75% of the total market rent for all units, including the one you will occupy, must be equal to or greater than the full monthly mortgage payment including principal, interest, taxes, and insurance. This test exists because lenders want confidence that the property’s income can sustain itself. Duplexes are exempt from this test. If a fourplex you are looking at does not pass, you have two options: negotiate a lower purchase price or find a property with stronger rents.
**Q8: What are the FHA loan limits for multifamily properties in 2026?**
FHA loan limits are set by county and updated annually. For 2026 in standard cost areas, the limits are approximately $498,000 for a duplex, $602,000 for a triplex, and $748,000 for a fourplex. In high cost areas, those limits rise significantly, reaching over $1.5 million for a fourplex in markets like Los Angeles, New York, and San Francisco. If the property you want exceeds your county’s FHA limit, you would need to use conventional financing or bring a larger down payment to cover the gap. Always check your specific county’s current limits on HUD’s website before assuming a property qualifies.
**Q9: Can I use an FHA loan to buy a multifamily property with no money down?**
Not directly. FHA requires a minimum 3.5% down payment. However, the FHA program does allow the down payment to come from gift funds from a family member, down payment assistance programs offered by state and local agencies, or seller concessions of up to 6% toward closing costs. In practice, many buyers bring very little of their own cash to closing by combining these sources. For strategies to cover the down payment on a larger multifamily deal, see our complete guide on [buying multifamily with no money down](https://rodkhleif.com/how-to-buy-a-multifamily-property-with-no-money/).
**Q10: What happens to my FHA loan after the 12 month occupancy period?**
After living in the property for 12 months, you have several options. You can move out and rent your unit, turning the property into a fully passive investment. You can refinance into a conventional loan to remove the mortgage insurance premium if you have built enough equity. You can also use a cash out refinance to pull equity and fund your next deal. Most importantly, once you have met the occupancy requirement, you become eligible to use FHA financing again on a new primary residence, which means you can repeat the same strategy on another 2 to 4 unit property. This is one of the most overlooked ways to [build a multifamily portfolio](https://rodkhleif.com/what-is-multifamily-syndication-a-complete-guide/) starting with limited capital.
## Rod Khleif’s Expert Take: Why FHA Multifamily Financing Can Transform Your Financial Future
Listen, if you’ve been dreaming of getting into multifamily real estate but thought you needed deep pockets, I’m here to tell you that an FHA multifamily loan could be the smartest move you ever make.
I’ve coached thousands of investors through my [bootcamps](https://rodkhleif.com/bootcamp/) and [Warrior Program](https://rodkhleif.com/rod-khleif-warrior-program/), and time and again, I’ve seen people start with just 3.5% down, buy a 2-4 unit investment property, live in one unit, and let their rental properties cover their mortgage. That’s [house hacking](https://rodkhleif.com/why-house-hacking-a-plex-is-the-best-possible-way-to-start-investing/) at its finest.
But here’s what makes FHA multifamily financing even more powerful: you’re not just reducing your housing costs—you’re actually building equity while someone else pays down your mortgage. This isn’t just about buying a primary residence, it’s about creating long-term wealth with cash-flowing assets that appreciate over time.
### The Real Math on FHA Multifamily Loans
Let me break down the actual numbers for you, because I believe in radical transparency. On a $400,000 fourplex:
Traditional path:
- 20% down payment: $80,000
- Total cash-to-close: ~$95,000
- Timeline to save: 4-6 years for most people
FHA multifamily financing path:
- 3.5% down payment: $14,000
- Total cash-to-close: ~$22,000 (with seller concessions)
- Timeline to save: 6-18 months for most people
That’s the difference between waiting half a decade and taking action THIS YEAR.
And if you’re worried about mortgage insurance or FHA loan restrictions, let me remind you: these are minor trade-offs compared to what you’re gaining—a low-cost entry into multifamily investing, a chance to learn the business firsthand, and an opportunity to set yourself up for bigger deals in the future.
### My Personal Journey (And Why This Matters)
I started my journey in real estate with a small property, and it completely transformed my life. I’ve been through market cycles, [lost everything in 2008](https://rodkhleif.com/podcasts/from-house-hacking-to-multifamily-success/), rebuilt from scratch, seen interest rates rise and fall, and coached investors who’ve used this very strategy to build incredible portfolios.
The investors who win aren’t the ones waiting for perfect market conditions. They’re the ones who take action with what’s available right now. And right now, in 2026, FHA multifamily financing offers the lowest-barrier entry into real estate investing we have.
### My Advice to You
Don’t overthink it. If you’re serious about building wealth, take these steps:
1. Talk to an FHA-approved lender this week (not next month—this week)
2. Get pre-approved and know your exact buying power
3. Find a qualifying property in a market with strong rental demand
4. Analyze the numbers conservatively (I teach this in detail in my [free resources](https://rodkhleif.com/))
5. Pull the trigger when you find a solid deal
The sooner you get started, the sooner you’ll be on your way to financial freedom. And remember: this is just the beginning. The goal isn’t to live in your investment property forever. It’s to use this stepping stone to leverage into bigger deals, potentially short-term rentals, or even commercial real estate.
### Your Next Steps
If you’re ready to take control of your financial future with FHA multifamily financing, here’s how I can help:
📚 [Get my book: “How to Create Lifetime Cash Flow Through Multifamily Properties”](https://www.amazon.com/Lifetime-CashFlow-Through-Multifamily-Properties-ebook/dp/B07RV5ZRQV/) – The blueprint for multifamily success
🎓 [Attend my 3-Day Multifamily Bootcamp](https://rodkhleif.com/bootcamp/) – Learn to find deals, raise capital, and scale fast
💪 [Join the Warrior Program](https://rodkhleif.com/rod-khleif-warrior-program/) – 300,000+ units of collective knowledge and experience
📱 [Follow me on Instagram](https://www.instagram.com/rodkhleif/) – Daily insights and market updates
Let’s make 2026 the year you finally build your legacy in multifamily real estate.
## Take Action Now: Your FHA Multifamily Financing Checklist
Ready to pursue FHA multifamily financing? Use this action checklist:
### This Week:
- \[ \] Check your credit score (all 3 bureaus)
- \[ \] Calculate your DTI ratio
- \[ \] Research FHA loan limits in your target county
- \[ \] List 3-5 FHA-approved lenders to contact
### This Month:
- \[ \] Get pre-approved with chosen lender
- \[ \] Identify target neighborhoods with rental demand
- \[ \] Analyze 5-10 potential properties
- \[ \] Visit properties and assess condition
- \[ \] Run cash flow projections on top candidates
### Before Closing:
- \[ \] Complete home inspection
- \[ \] Schedule FHA appraisal
- \[ \] Negotiate repair items or credits
- \[ \] Secure landlord insurance quotes
- \[ \] Prepare move-in plan
- \[ \] Screen potential tenants for vacant units
### After Closing:
- \[ \] Move in within 60 days
- \[ \] Place qualified tenants
- \[ \] Set up rent collection system
- \[ \] Create maintenance reserve fund
- \[ \] Track all expenses (tax deductions)
- \[ \] Plan your exit strategy
---
Want a Step-by-Step Guide to Multifamily Investing?
[](https://www.amazon.com/Lifetime-CashFlow-Through-Multifamily-Properties-ebook/dp/B07RV5ZRQV/)
Discover how top real estate investors build massive cash flow and financial freedom with multifamily real estate. In his book, *How to Create Lifetime Cash Flow with Multifamily Real Estate Investing*, Rod Khleif shares proven strategies to find deals, raise capital, and scale fast.
📘 Get Your Copy Here: [Order the Book](https://www.amazon.com/Lifetime-CashFlow-Through-Multifamily-Properties-ebook/dp/B07RV5ZRQV/)
Bottom Line: By using FHA multifamily financing to buy 2-4 unit properties with just 3.5% down, you can start building a strong real estate portfolio with minimal upfront investment and steady rental income. The 12-month owner-occupancy requirement isn’t a limitation—it’s your hands-on education and cash flow opportunity rolled into one.
Start your journey today. Your future self will thank you.
*Disclaimer: This article was written with the help of AI and reviewed by Rod’s team. FHA loan requirements, limits, and terms are subject to change. Always consult with a licensed FHA-approved lender and real estate professionals before making investment decisions. This content is for educational purposes only and does not constitute financial advice.*
**Categories:** Blog, Multifamily Investing, Raising Capital, Real Estate
**Tags:** Driving Force, fha loans, landlord, motivation, multifamily, multifamily property investing, multifamily real estate, real estate, real estate investing, real estate podcast, Rod Khleif
---
### [Multifamily Glossary: Essential Terms](https://rodkhleif.com/multifamily-glossary-essential-terms/)
**Published:** February 18, 2026
**Author:** Alex Khleif
**Content:**
# Multifamily Investing Terms: The Complete Glossary
Whether you’re analyzing your first apartment deal or raising capital for a syndication, knowing the language of multifamily real estate investing is non-negotiable. Brokers, lenders, and partners will know in five minutes if you speak their language. If you don’t, you lose credibility and deals. This multifamily glossary covers 150+ essential real estate investing terms. It includes basic apartment investing words every beginner needs. It also covers advanced multifamily terms that syndicators, asset managers, and operators use daily. Use the alphabet nav below to jump to any term. Or read straight through. Either way, by the end, you will speak this language fluently. ## [0–9](#0-9) [A](#A) [B](#B) [C](#C) [D](#D) [E](#E) [F](#F) [G](#G) [H](#H) [I](#I) [J](#J) [K](#K) [L](#L) [M](#M) [N](#N) [O](#O) [P](#P) [Q](#Q) [R](#R) [S](#S) [T](#T) [U](#U) [V](#V) [W](#W) X [Y](#Y) [Z](#Z)
---
## 0–9
### 1031 Exchange
A tax-deferral strategy under IRS Code Section 1031 that allows real estate investors to sell a property and reinvest the proceeds into a “like-kind” replacement property without immediately paying capital gains taxes. The replacement property must be identified within 45 days of closing, and the transaction must close within 180 days. A qualified intermediary must hold the proceeds, the investor cannot receive them directly. For multifamily investors, 1031 exchanges are one of the most powerful wealth-compounding tools available, enabling continued portfolio growth without tax erosion. **[Read: How a 1031 Exchange Can Save You Thousands →](https://rodkhleif.com/how-a-1031-exchange-can-save-you-thousands/)** **[Listen: 1031 Exchange for Tax Deferment in Multifamily →](https://rodkhleif.com/podcasts/1031-exchange-for-tax-deferment-in-multifamily-real-estate-investing/)**---
## A
### Absorption Rate
The rate at which available rental units are leased in a specific market during a given time period. Calculated by dividing the number of units leased by the total number of available units, this metric helps investors gauge market demand and optimize pricing strategies. A high absorption rate indicates strong demand, while a low rate may signal oversupply or pricing issues requiring adjustment. ### Accessory Dwelling Unit (ADU)
A secondary housing unit on the same lot as a primary residence, such as a garage conversion, basement apartment, or backyard cottage. ADUs are increasingly permitted by zoning reform across the U.S. and can generate meaningful ancillary income on multifamily or mixed-use properties. Investors in markets with ADU-friendly legislation may be able to add units without full ground-up construction costs. ### Accredited Investor
An individual or entity meeting SEC financial thresholds to participate in private securities offerings, including multifamily syndications. Requirements include $1 million net worth (excluding primary residence) or $200,000+ annual income ($300,000 jointly). This designation allows access to investment opportunities not available to the general public, including commercial real estate syndications and private equity deals. ### Acquisition Fee
A one-time fee paid to the syndicator or general partner for identifying, evaluating, and purchasing a multifamily property. Typically ranging from 1-3% of the purchase price, this fee compensates the sponsor for due diligence, negotiation, and transaction management efforts. The fee is usually paid at closing from investor capital contributions. ### Active Investor
A general partner or syndicator who directly manages multifamily investment operations, including property acquisition, oversight, renovation execution, and disposition. Active investors assume greater responsibility and liability compared to passive investors, handling day-to-day decisions, lender relationships, and strategic planning. They typically receive a larger profit share reflecting their operational involvement. ### Adjusted Funds from Operations (AFFO)
A refined REIT performance metric that modifies FFO by subtracting normalized recurring capital expenditures and rent increases. AFFO provides a more accurate picture of a REIT’s cash-generating ability and dividend sustainability than FFO alone. This measure accounts for necessary maintenance capital spending required to preserve property value and competitive positioning. ### Agency Debt
Loans originated through government-sponsored enterprises Fannie Mae and Freddie Mac, as well as HUD/FHA programs. Agency debt is the gold standard for stabilized multifamily financing, offering lower interest rates, higher leverage (up to 80% LTV), longer amortization periods, and non-recourse terms compared to conventional bank loans. Most institutional multifamily acquisitions are financed with agency debt. **[Listen to the podcast on Multifamily Real Estate Financing →](https://rodkhleif.com/podcasts/multifamily-real-estate-financing-explained/)**### Amortization
The gradual reduction of loan principal through scheduled payments over time. In multifamily investing, most commercial loans feature 20-30 year amortization schedules, though the loan term may be shorter, creating a balloon payment. Understanding amortization helps investors calculate equity buildup and evaluate cash flow after debt service. **[Read: The Complete Multifamily Underwriting Guide →](https://rodkhleif.com/how-to-underwrite-a-multifamily-deal-step-by-step-the-complete-guide/)**### Anchor Tenant
A major tenant occupying significant square footage who attracts additional tenants and traffic to a property. While less common in pure multifamily, mixed-use properties may feature retail anchors on ground floors. Anchor tenants typically negotiate favorable lease terms but provide stability and reduce vacancy risk for surrounding units. ### Annual Percentage Rate (APR)
The yearly cost of borrowing including interest rate plus additional fees and charges, expressed as a percentage. APR provides a more comprehensive cost comparison between loan products than interest rate alone. For multifamily loans, APR accounts for origination fees, points, and other lender charges over the loan’s life. ### Appreciation
The increase in property value over time resulting from market forces, property improvements, or both. Forced appreciation occurs through value-add strategies like renovations and operational improvements, while natural appreciation results from market dynamics. Multifamily investors target both appreciation types to maximize returns upon refinancing or sale. [**Check out this YouTube video on ‘How Much to Force Appreciation’**](https://www.youtube.com/watch?v=J4_5F3HNvDk) **[Read: What Is a Value-Add Opportunity? →](https://rodkhleif.com/value-add-opportunity-what-does-it-mean-and-should-i-consider-it/)**### Asset Management
The strategic oversight and optimization of a multifamily property’s financial and operational performance post-acquisition. Asset managers monitor key metrics, coordinate with property management, approve major decisions, ensure business plan execution, and communicate with investors. This role bridges ownership and on-site operations to maximize asset value. **[Click here to downlaod the e-book on Asset Management →](https://rodkhleif.com/multifamily-asset-management/)**### Asset Management Fee
An ongoing fee paid to the general partner or syndicator for overseeing property performance and executing the business plan. Typically 1-2% of collected revenue annually, this fee compensates sponsors for continuous monitoring, strategic decision-making, and investor relations. The fee structure aligns sponsor interests with property performance. ### Assumable Loan
A mortgage that can be transferred from the seller to the buyer during a property sale, maintaining existing loan terms including interest rate and maturity date. Assumable loans, common with agency debt, can provide significant value in rising rate environments. Buyers benefit from below-market rates while avoiding refinancing costs. ---
## B
### Bad Boy Carve-Outs
Specific exceptions to non-recourse loan protections that trigger personal liability for borrowers who commit intentional misconduct. Common carve-outs include fraud, misrepresentation, misappropriation of funds, unauthorized transfers, and voluntary bankruptcy filings. Understanding carve-outs is critical, bad actors can convert a non-recourse loan into full personal liability. ### Basis Points (BPS)
One-hundredth of a percentage point, used to describe small interest rate or return differences. 100 basis points equal 1%. In multifamily investing, basis points commonly describe spread over treasury rates, cap rate compression, or return variations. This precise measurement prevents ambiguity when discussing financial metrics. ### Break-Even Occupancy
The minimum occupancy percentage required to cover all operating expenses and debt service. Calculated by dividing total expenses plus debt service by gross potential income, this metric indicates a property’s financial vulnerability. Lower break-even occupancy provides greater safety margin against market downturns or unexpected vacancies. ### Bridge Loan
Short-term financing (typically 1-3 years) used to acquire or stabilize a multifamily property before obtaining permanent financing. Bridge loans feature higher interest rates but provide flexibility for value-add renovations and lease-up periods. Investors use bridge financing when properties don’t qualify for traditional agency or commercial loans. **[Read the full article on Bridge Loan →](https://rodkhleif.com/multifamily-bridge-loans/)**### Broker Opinion of Value (BOV)
An informal estimate of a property’s market value provided by a real estate broker based on comparable sales and market knowledge. While less detailed than formal appraisals, BOVs offer quick, cost-effective valuation guidance during initial deal evaluation. Investors use BOVs for preliminary underwriting before commissioning professional appraisals. ### Build-to-Rent (BTR)
A development strategy where single-family homes, townhomes, or cottage-style units are built specifically for long-term rental rather than for-sale ownership. BTR communities have emerged as one of the fastest-growing real estate sectors, appealing to renters who want the space and privacy of a home without the commitment of ownership. Institutional investors are increasingly acquiring and developing BTR communities as an alternative to traditional apartment buildings. **[Listen: Build-to-Rent Explained by a Developer →](https://rodkhleif.com/podcasts/multifamily-underwriting-fundamentals-with-adam-wolfson/)**### Business Plan
The strategic roadmap outlining how a multifamily investment will create value and achieve targeted returns. Comprehensive business plans detail acquisition rationale, renovation scope, operational improvements, financing strategy, hold period, and exit strategy. This document aligns stakeholders and guides decision-making throughout the investment lifecycle. **[Read: When to Buy and Sell Multifamily for Maximum Profit →](https://rodkhleif.com/multifamily-real-estate-market-timing-when-to-buy-and-sell-for-maximum-profit/)**---
## C
### Capital Call
A request from the general partner to limited partners to contribute their committed investment capital. Capital calls occur at closing or for unexpected expenses beyond reserve allocations. Investors must respond within specified timeframes to maintain their ownership percentage and avoid penalties or dilution. **[Read: Guide to Multifamily Deal Structures →](https://rodkhleif.com/multifamily-structures-overview/)**### Capital Event
A transaction triggering investor capital return, such as refinancing or sale. Cash-out refinances allow investors to recoup some or all equity while maintaining ownership. Sale events provide full capital return plus remaining profits. Strategic timing of capital events significantly impacts overall investment returns. ### Capital Expenditure (CapEx)
Funds spent on significant property improvements extending useful life or adding value, such as roof replacement, HVAC systems, or unit renovations. Unlike operating expenses, CapEx is capitalized on balance sheets and depreciated over time. Proper CapEx budgeting ensures property competitiveness and prevents deferred maintenance issues. [**Read the full article on CapEx or Capital Expenditure →**](https://rodkhleif.com/capital-expenditure-capex/)### Capital Improvement Plan (CIP)
A detailed schedule and budget for planned property upgrades and major repairs over the investment hold period. CIPs outline renovation scope, timing, costs, and expected value creation. This roadmap guides capital deployment and helps investors track business plan execution against projections. ### Capital Stack
The layered structure of all financing sources used to acquire a multifamily property, ordered by seniority and risk. The stack typically includes senior debt at the bottom, mezzanine debt above, preferred equity next, and common equity at the top. Each layer has distinct risk/return profiles and priority claims. **[Read the full article on Capital Stack →](https://rodkhleif.com/capital-stacking-loan/)** **[Read: Guide to Multifamily Deal Structures →](https://rodkhleif.com/multifamily-structures-overview/)**### Capitalization Rate (Cap Rate)
The ratio of a property’s net operating income to its purchase price or current market value, expressed as a percentage. Cap rates serve as a fundamental valuation metric allowing property comparison across markets. Higher cap rates indicate higher returns but often greater risk, while lower cap rates suggest premium assets. **[Read the full article on Cap Rate →](https://rodkhleif.com/what-is-a-good-cap-rate-for-multifamily/)** **[Click here to access Cap Rate Calculator→ ](https://rodkhleif.com/cap-rate-calculator-template/)** **[Read: How Cap Rates Work (With Examples) →](https://rodkhleif.com/how-cap-rates-work-with-examples/)** **[Read: What Are Cap Rates and Why You Should Use Them →](https://rodkhleif.com/what-are-cap-rates-and-why-you-should-use-them/)** **[Read: Fed Rate vs. Cap Rate →](https://rodkhleif.com/fed-rate-vs-cap-rates/)**### Cash Flow
The net income remaining after all operating expenses and debt service are paid. Positive cash flow allows for investor distributions, while negative cash flow requires capital injections. Multifamily investors analyze cash flow to assess investment viability and determine distribution potential throughout the hold period. **[Read the full article on Cash Flow →](https://rodkhleif.com/3-reasons-cash-flow-beats-value-as-a-better-investment-strategy/)** **[Read: Why You Should Invest in Multifamily →](https://rodkhleif.com/why-you-should-invest-in-multifamily-by-rod-khleif/)** **[Watch: Why Multifamily Is The Best Real Estate →](https://youtu.be/B2dIlNbFQvY)**### Cash-on-Cash Return (CoC)
The ratio of annual pre-tax cash flow to total invested equity, expressed as a percentage. This metric measures actual cash yield investors receive relative to capital deployed. A 7% CoC return means investors receive $7,000 annually per $100,000 invested, providing a simple yield comparison across opportunities. **[Read the full article on Cash-on-Cash Return →](https://rodkhleif.com/how-to-calculate-cash-on-cash-return/)**### Cash-Out Refinance
Replacing existing debt with a larger loan, extracting accumulated equity as cash while maintaining property ownership. Multifamily investors use cash-out refinances to return investor capital, fund additional acquisitions, or improve cash flow through better loan terms. This strategy provides liquidity without triggering sale taxes. ### Class A Property
Premium multifamily assets featuring new construction or recent vintage, luxury amenities, high-quality finishes, and prime locations. Class A properties command highest rents and attract affluent tenants but offer limited value-add potential. These assets typically provide stable cash flow with appreciation driven by market forces. **[Read: Multifamily Investing: The Complete Beginner’s Guide →](https://rodkhleif.com/multifamily-investing-the-complete-beginners-guide/)**### Class B Property
Well-maintained multifamily properties typically 10-30 years old with good locations and adequate amenities. Class B assets represent the market’s middle tier, offering balance between stability and value-add potential. These properties attract working professionals seeking quality housing at moderate prices below Class A levels. **[Listen to the podcast on Class B Property →](https://rodkhleif.com/podcasts/ep-109-paul-moore-founder-managing-director-wellings-capital-focuses-class-b-apartments-growing-markets/)** **[Read: Multifamily Investing: The Complete Beginner’s Guide →](https://rodkhleif.com/multifamily-investing-the-complete-beginners-guide/)**### Class C Property
Older multifamily properties (30+ years) requiring significant deferred maintenance and renovations, typically in secondary locations. Class C assets offer highest value-add potential and cash flow yields but carry greater operational and market risks. These properties serve budget-conscious tenants and require hands-on management. **[Watch: The Pros and Cons of D Class Properties →](https://youtu.be/83V9oX_hDVo)**### Closing Costs
All fees and expenses required to complete a multifamily property purchase beyond the purchase price. Common closing costs include title insurance, legal fees, surveys, environmental reports, loan origination fees, and transfer taxes. These costs typically total 2-5% of purchase price and reduce available renovation capital. ### Commercial Real Estate (CRE)
Property types used for business purposes rather than residential homeownership, including multifamily (5+ units), office, retail, industrial, and hospitality. Multifamily properties over four units are classified as commercial real estate, subject to commercial lending standards and valuation methods based on income generation. **[Read the full article on CRE →](https://rodkhleif.com/authority-magazine-rod-khleif-5-things-you-need-to-create-a-highly-successful-career-in-the-commercial-real-estate-industry-today-authority-magazine/)**### Common Area Maintenance (CAM)
Expenses for maintaining shared property spaces such as lobbies, hallways, landscaping, pools, and fitness centers. In multifamily properties, CAM costs are typically included in operating expenses rather than passed through to tenants like retail properties. Effective CAM management impacts NOI and tenant satisfaction. ### Comparable Sales (Comps)
Recently sold properties with similar characteristics used to estimate market value of a target asset. Effective comps match property type, size, location, age, and condition. Analyzing comps helps investors determine appropriate purchase prices and validate pro forma assumptions for underwriting and appraisal purposes. ### Concessions
Incentives offered to attract tenants, such as free rent periods, waived fees, or upgrade allowances. Concessions reduce effective rental income and NOI despite maintaining higher stated rents. Investors analyze concession levels to understand true market conditions and accurately project rental revenue during lease-up or repositioning. ### Construction Loan
Short-term financing for ground-up multifamily development, disbursed in draws as construction progresses. Construction loans feature higher interest rates and require developer experience and equity. These loans convert to permanent financing upon completion and stabilization, or are paid off through refinancing. ### Cost Approach
A valuation method estimating property value by calculating land value plus construction costs minus depreciation. While less common for stabilized multifamily assets, the cost approach helps value new developments or properties with limited comparable sales. This method establishes a theoretical replacement cost ceiling for property value. ### Cost Segregation
A tax strategy accelerating depreciation deductions by identifying property components with shorter useful lives than the building’s 27.5-year standard. Engineering-based studies reclassify assets like carpeting, appliances, and landscaping into 5, 7, or 15-year categories. This generates immediate tax savings and improves after-tax returns. **[Read the full article on Cost Segregation →](https://rodkhleif.com/podcasts/real-estate-cost-segregation-bonus-depreciation/)** **[Watch: The Best Way To Depreciate Real Estate →](https://youtu.be/m45dqTFg7ss)**### Covenant
Loan agreement provisions requiring borrowers to maintain specific financial or operational standards. Common covenants include minimum debt service coverage ratios, maximum loan-to-value ratios, and reserve requirements. Covenant violations can trigger default provisions, increased oversight, or loan acceleration by lenders. ---
## D
### Debt Service
The total amount of principal and interest payments required on a loan during a specific period, typically calculated annually. Debt service directly reduces cash flow available for distributions and significantly impacts investment returns. Lower debt service through favorable loan terms improves cash-on-cash returns and financial flexibility. ### Debt Service Coverage Ratio (DSCR)
A key lending metric measuring a property’s ability to cover debt payments, calculated by dividing net operating income by annual debt service. Lenders typically require minimum DSCR of 1.20-1.30, meaning NOI must exceed debt service by 20-30%. Higher DSCR indicates greater repayment safety margin. **[Read: How a Lender Underwrites a Multifamily Loan →](https://rodkhleif.com/get-your-deal-approved-understanding-how-a-lender-underwrites-a-multifamily-loan-request/)**### DSCR Loan
A loan product underwritten primarily on a property’s debt service coverage ratio rather than the borrower’s personal income or tax returns. DSCR loans have become popular among real estate investors who show limited personal income on paper due to depreciation and deductions. Lenders typically require a minimum DSCR of 1.0–1.25x, making qualification accessible for investors with strong cash-flowing properties. ### Debt Yield
A risk assessment metric calculated by dividing net operating income by total loan amount, expressed as a percentage. Unlike DSCR, debt yield is independent of interest rates and amortization, providing lenders a pure income-to-loan ratio. Typical minimum debt yields range from 8-10% depending on asset quality. ### Deferred Maintenance
Necessary repairs and replacements postponed by previous owners to reduce expenses, creating accumulated property deterioration. Identifying deferred maintenance during due diligence prevents unexpected capital requirements post-acquisition. Value-add investors specifically target properties with deferred maintenance, correcting issues to justify rent increases. ### Depreciation
The tax deduction accounting for property value decline over time due to wear and deterioration. Residential rental properties depreciate over 27.5 years for tax purposes, providing significant non-cash deductions reducing taxable income. Accelerated depreciation through cost segregation or bonus depreciation enhances tax benefits substantially. **[Read the full article on Depreciation →](https://rodkhleif.com/podcasts/real-estate-cost-segregation-bonus-depreciation/)** **[Watch: The Best Way To Depreciate Real Estate →](https://youtu.be/m45dqTFg7ss)**### Disposition
The sale of a multifamily property marking the end of an investment hold period. Strategic disposition timing maximizes returns by capitalizing on value creation, favorable market conditions, and tax considerations. Disposition processes include marketing, negotiations, due diligence coordination, and closing execution. **[Read: When to Buy and Sell Multifamily for Maximum Profit →](https://rodkhleif.com/multifamily-real-estate-market-timing-when-to-buy-and-sell-for-maximum-profit/)**### Distribution
Cash payments from property operations or capital events to investors, typically made quarterly or monthly. Distributions represent actual cash returns on invested capital and can originate from cash flow, refinance proceeds, or sale proceeds. Consistent distributions indicate successful execution of the investment business plan. **[Read: Guide to Multifamily Deal Structures →](https://rodkhleif.com/multifamily-structures-overview/)**### Down Payment
The equity portion of a property’s purchase price paid by investors, with the remainder financed through debt. Commercial multifamily loans typically require 20-35% down payments depending on asset quality and borrower strength. Larger down payments reduce debt service, improve cash flow, but decrease leverage benefits. **[Watch: No Money Down Real Estate Investing →](https://youtu.be/_-eQCjkt4Lg)**### Due Diligence
The comprehensive investigation period after contract execution where buyers verify property condition, financial performance, and legal status before closing. Due diligence includes physical inspections, financial audits, lease reviews, environmental assessments, and title examination. This process protects investors from unforeseen issues and validates underwriting assumptions. **[Read the full article on Due Diligence →](https://rodkhleif.com/7-core-questions-to-guide-your-due-diligence/)** [**Click here to download the Comprehensive Guide to Multifamily Due Diligence→**](https://rodkhleif.com/a-comprehensive-guide-to-multifamily-due-diligence/) **[Read: How to Find and Analyze Multifamily Deals →](https://rodkhleif.com/finding-analyzing-multifamily-deals-like-a-pro/)** **[Read: How to Underwrite a Multifamily Deal Step-by-Step →](https://rodkhleif.com/how-to-underwrite-a-multifamily-deal-step-by-step-the-complete-guide/)**---
## E
### Economic Occupancy
The percentage of potential gross income actually collected, accounting for vacancies, concessions, and delinquencies. Economic occupancy provides a more accurate profitability picture than physical occupancy by reflecting revenue reality. Properties may show 95% physical occupancy but only 88% economic occupancy due to non-payment. **[Read the full article on Economic Occupancy →](https://rodkhleif.com/managing-occupancy-in-the-off-season-to-maximize-noi/)** **[Read: How to Find and Analyze Multifamily Deals →](https://rodkhleif.com/finding-analyzing-multifamily-deals-like-a-pro/)**### Economic Vacancy
Revenue lost due to unoccupied units, concessions, bad debt, and model units. Economic vacancy is subtracted from gross potential income to calculate effective gross income. Understanding economic vacancy helps investors accurately project revenue and identify opportunities to improve collection and reduce concessions. ### Effective Gross Income (EGI)
Total potential rental income minus vacancy and credit losses, representing actual collectible revenue. EGI serves as the starting point for NOI calculations after subtracting operating expenses. Accurate EGI projections are critical for underwriting and directly impact property valuation and investment returns. ### Equity
The ownership interest in a property, calculated as current value minus outstanding debt. Equity builds through principal paydown, property appreciation, and capital improvements. Investors create wealth by growing equity over time and extracting it through refinancing or sale at advantageous multiples. **[Read the full article on Equity →](https://rodkhleif.com/common-equity-the-key-to-wealth-in-real-estate/)**### Equity Multiple (EM)
The total cash returned to investors divided by total cash invested, showing overall investment profit. An equity multiple of 2.0x means investors receive double their initial investment over the hold period. This metric captures all cash flows including distributions and sale proceeds in one comprehensive return measure. **[Read the full article on Equity Multiple →](https://rodkhleif.com/measuring-returns-irr-vs-equity-multiple/)** **[Read: Understanding How IRR Works →](https://rodkhleif.com/measuring-returns-understanding-how-irr-works/)**### Escrow
Funds held by a third party to pay property taxes, insurance, and sometimes capital expenditures, ensuring these obligations are met. Lenders typically require escrow accounts for taxes and insurance, with monthly deposits based on annual costs. Escrow requirements reduce lender risk but tie up borrower capital. ### Exit Cap Rate
The capitalization rate used to estimate a property’s future sale price at disposition. Conservative underwriting applies higher exit cap rates than entry cap rates, assuming some market compression. Exit cap rate assumptions significantly impact projected returns and should reflect realistic market expectations. **[Read: What Is a Good Cap Rate for Multifamily? →](https://rodkhleif.com/what-is-a-good-cap-rate-for-multifamily/)**### Exit Strategy
The planned method and timing for disposing of a multifamily investment to realize returns. Common exit strategies include sale to institutional buyers, 1031 exchange, portfolio aggregation, or long-term hold. Clear exit strategies guide business plan execution and help investors optimize timing for maximum value capture. **[Read: When to Buy and Sell Multifamily for Maximum Profit →](https://rodkhleif.com/multifamily-real-estate-market-timing-when-to-buy-and-sell-for-maximum-profit/)**---
## F
### Fannie Mae
A government-sponsored enterprise providing liquidity to multifamily markets through purchasing and guaranteeing loans. Fannie Mae offers competitive fixed-rate financing with flexible prepayment options for stabilized properties meeting their underwriting criteria. Their loan programs support affordable housing and workforce housing initiatives. **[Listen: Multifamily Real Estate Financing Explained →](https://rodkhleif.com/podcasts/multifamily-real-estate-financing-explained/)**### Federal Housing Administration (FHA)
A government agency insuring multifamily loans to reduce lender risk and increase financing availability, particularly for affordable housing. FHA loans feature high leverage (up to 87% LTV), low rates, and non-recourse terms but require properties to meet specific affordability and quality standards. **[Read the full article on FHA loans→](https://rodkhleif.com/fha-loans-multifamily-real-estate-investors/)**### Fee Simple
The most complete ownership interest in real property, granting unlimited rights to use, lease, sell, or bequeath the asset. Fee simple ownership contrasts with leasehold interests where land is leased long-term. Most multifamily investments involve fee simple ownership providing maximum control and flexibility. ### Financial Statements
Formal records of a property’s or entity’s financial activities, including income statements, balance sheets, and cash flow statements. Accurate financial statements are essential for investor reporting, loan compliance, tax filing, and performance analysis. Professional accounting ensures credibility with lenders and investors. **[Read the full article on Financial Statements →](https://rodkhleif.com/understanding-the-personal-financial-statement/)**### Fixed-Rate Mortgage
A loan with an interest rate that remains constant throughout the loan term, providing payment predictability. Fixed-rate financing protects borrowers from rising rates but may carry higher initial rates than adjustable loans. Most multifamily investors prefer fixed-rate debt for cash flow stability. ### Floating-Rate Loan
Debt with interest rates that adjust periodically based on an index such as SOFR plus a spread. Floating-rate loans are common for bridge financing and construction loans, offering lower initial rates but payment uncertainty. Rate caps limit maximum interest exposure during volatile periods. ### Forced Appreciation
Value increases resulting from intentional property improvements and operational enhancements rather than market forces. Value-add investors create forced appreciation through renovations, rent increases, expense reductions, and improved management. This strategy allows investors to accelerate returns versus relying solely on market appreciation. **[Read: What Is a Value-Add Opportunity? →](https://rodkhleif.com/value-add-opportunity-what-does-it-mean-and-should-i-consider-it/)** **[Read: 5 Best Ways to Add Value and Increase NOI →](https://rodkhleif.com/the-5-best-ways-to-add-value-to-a-property-and-increase-the-noi/)**### Foreclosure
The legal process where lenders seize property ownership following borrower default on loan obligations. Foreclosure allows lenders to recover outstanding debt by selling the property. Borrowers can avoid foreclosure through loan modifications, short sales, or deed-in-lieu arrangements when facing financial distress. ### Freddie Mac
A government-sponsored enterprise providing multifamily financing through purchasing and securitizing loans. Freddie Mac offers competitive terms for stabilized properties and supports affordable housing initiatives. Their loan products compete with Fannie Mae while serving similar market segments and property types. **[Listen: Multifamily Real Estate Financing Explained →](https://rodkhleif.com/podcasts/multifamily-real-estate-financing-explained/)**### Funds from Operations (FFO)
A REIT performance metric adding depreciation and amortization back to net income, since these non-cash charges don’t reflect true operating performance. FFO provides better REIT comparison than net income by eliminating depreciation variations. Investors use FFO to evaluate REIT dividend sustainability and operational efficiency. ---
## G
### Garden-Style Apartments
Low-rise multifamily properties typically 2-3 stories without elevators, featuring landscaped grounds and surface parking. Garden-style apartments are common in suburban markets, offering lower construction and operating costs than high-rise buildings. These properties appeal to renters seeking affordable options with outdoor space. ### General Contractor (GC)
The primary contractor responsible for managing all construction and renovation work, coordinating subcontractors, and ensuring project completion on schedule and budget. GC selection significantly impacts renovation success in value-add strategies. Strong GCs bring expertise, reliability, and problem-solving capabilities to complex projects. ### General Partner (GP)
The active investor who identifies deals, raises capital, manages properties, and executes the business plan. GPs assume unlimited liability and handle day-to-day operations and strategic decisions. In return, GPs typically receive acquisition and asset management fees plus a promoted interest in profits. [**Click here to read the full article on General Partner (GP)→**](https://rodkhleif.com/what-is-a-general-partner-gp-in-real-estate/) **[Doanload the FREE resource ‘Questions to Ask A GP’](https://rodkhleif.com/questions-to-ask-a-general-partner-in-a-syndication-before-investing/)[ →](https://rodkhleif.com/questions-to-ask-a-general-partner-in-a-syndication-before-investing/)** **[Read: First Steps to Becoming a Multifamily Syndicator →](https://rodkhleif.com/what-are-the-first-steps-to-becoming-a-multifamily-syndicator/)**### Going-In Cap Rate
The capitalization rate at property acquisition, calculated by dividing year-one NOI by purchase price. Going-in cap rates indicate initial yield and allow comparison across markets and asset qualities. Lower going-in cap rates suggest lower yields but potentially higher appreciation prospects. ### Gross Potential Income (GPI)
The maximum rental revenue a property could generate if 100% occupied at market rents with no concessions. GPI serves as the starting point for income calculations before adjusting for vacancy, concessions, and other income sources. Accurate GPI estimation requires thorough market rent analysis. **[Read: The Complete Multifamily Underwriting Guide →](https://rodkhleif.com/how-to-underwrite-a-multifamily-deal-step-by-step-the-complete-guide/)**### Gross Potential Rent (GPR)
The total possible rental income from all units if fully leased at current asking rents. GPR multiplies unit count by asking rents, providing the revenue ceiling before vacancy and concessions. Comparing GPR to actual collections reveals leasing effectiveness and pricing power. ### Gross Rent Multiplier (GRM)
A simplified valuation metric dividing property price by gross annual rental income. While less precise than cap rate analysis, GRM provides quick initial screening for property comparison. Lower GRMs may indicate value opportunities, while higher GRMs suggest premium pricing or appreciation expectations. ---
## H
### Hard Costs
Direct construction and renovation expenses including materials, labor, and contractor fees. Hard costs represent the physical work required to improve a property and typically comprise the largest portion of renovation budgets. Accurate hard cost estimation is critical for value-add investment underwriting. ### High-Rise
Multifamily buildings typically exceeding 12 stories, featuring elevators, structured parking, and significant common areas. High-rises are common in dense urban markets where land costs justify vertical construction. These properties offer premium amenities and views but carry higher operating costs and construction expenses. ### Hold Period
The expected duration between property acquisition and disposition, typically 3-7 years for value-add multifamily investments. Hold periods should align with business plan execution timelines and market cycle positioning. Longer holds allow more equity buildup through amortization while shorter holds may capture peak market conditions. **[Read: When to Buy and Sell Multifamily for Maximum Profit →](https://rodkhleif.com/multifamily-real-estate-market-timing-when-to-buy-and-sell-for-maximum-profit/)**### Holding Costs
Ongoing expenses during property ownership including debt service, property taxes, insurance, utilities, and maintenance. Holding costs continue regardless of occupancy levels, creating financial pressure during lease-up or renovation periods. Adequate reserves ensure investors can cover holding costs during stabilization phases. ### House Hacking
A strategy where an investor purchases a small multifamily property (2–4 units), lives in one unit, and rents out the remaining units to offset or eliminate their own housing costs. House hacking is one of the most accessible entry points into real estate investing because owner-occupied financing (FHA, conventional) requires lower down payments and offers better rates than investor loans. Many multifamily investors start their portfolios this way before scaling to larger assets. **[Read: Multifamily Investing: The Complete Beginner’s Guide →](https://rodkhleif.com/multifamily-investing-the-complete-beginners-guide/)**### Housing and Urban Development (HUD)
The federal department overseeing FHA multifamily loan programs, fair housing enforcement, and affordable housing initiatives. HUD-insured loans provide attractive financing for qualifying multifamily properties meeting affordability and quality standards. HUD programs support workforce housing and community development objectives. **[Listend to the Podcast on HUD →](https://rodkhleif.com/podcasts/how-he-scaled-from-2-to-600-units-and-raised-30m-doing-it/)**### Hurdle Rate
The minimum return threshold investors require before general partners receive promoted interest or performance fees. Common hurdle rates range from 6-10% IRR, ensuring limited partners achieve baseline returns before GP profit participation increases. Hurdle rates align sponsor interests with investor returns. ---
## I
### Income Approach
The primary multifamily valuation method estimating property value based on income-generating capacity. The income approach applies capitalization rates to net operating income, recognizing that property value derives from cash flow production. This method dominates commercial real estate valuation for investment properties. ### In-Place Rent
The actual rent currently being paid by existing tenants, which may differ from current market rents. Analyzing in-place versus market rents reveals value-add potential through lease renewals at higher rates. Large gaps between in-place and market rents indicate significant rent growth opportunities. ### Interest-Only Period
A loan period where borrowers pay only interest without principal reduction, maximizing cash flow but not building equity. Bridge loans commonly feature interest-only terms during renovation periods. While improving short-term cash flow, interest-only periods result in higher total interest costs. ### Interest Rate
The percentage charged by lenders for borrowing capital, directly impacting debt service costs and cash flow. Interest rates reflect base rates plus credit spreads based on borrower strength and asset quality. Even small rate differences significantly affect investment returns over multi-year hold periods. **[Listen to the Podcasts on Interest Rate →](https://rodkhleif.com/podcasts/decoding-current-interest-rates-in-todays-market/)**### Interest Reserve
Funds set aside at closing to cover debt service during renovation or lease-up periods when cash flow may be insufficient. Interest reserves protect investors from capital calls and ensure loan payment continuity during stabilization. Lenders may require reserves as a loan condition for transitional properties. ### Internal Rate of Return (IRR)
A time-weighted return metric measuring annualized investment performance across all cash flows including initial investment, distributions, and final proceeds. IRR accounts for both timing and magnitude of cash flows, making it the industry-standard metric for comparing investment opportunities. Higher IRRs indicate superior risk-adjusted returns. **[Read the full article on Internal Rate of Return IRR →](https://rodkhleif.com/measuring-returns-understanding-how-irr-works/)**### Investment Committee
A group of senior executives who evaluate and approve potential acquisitions and major decisions for institutional investors or syndicators. Investment committees apply rigorous analysis, risk assessment, and strategic alignment before committing capital. This governance structure ensures disciplined capital deployment and protects investor interests. ---
## J
### Joint Venture (JV)
A partnership between two or more parties to acquire, develop, or operate a multifamily property, sharing profits, losses, and responsibilities. JVs combine complementary strengths such as capital, expertise, or market access. Clear operating agreements define each party’s roles, capital contributions, and profit distributions. **[Listen to the podcast on Joint Venture JV →](https://rodkhleif.com/podcasts/from-single-family-flips-to-multifamily-fortunes/)** **[Read: Guide to Multifamily Deal Structures →](https://rodkhleif.com/multifamily-structures-overview/)**---
## K
### Key Principal
Individuals designated in loan documents as critical to the borrowing entity’s financial strength and operational capability. Lenders require key principals to maintain involvement and may restrict their ability to withdraw from sponsorship. Key principal requirements protect lenders by ensuring experienced leadership continuity. ---
## L
### Lease-Up
The period following construction completion or renovation when a property is being leased to reach stabilized occupancy. Lease-up periods typically last 6-18 months depending on market conditions and unit count. Effective lease-up requires strategic pricing, marketing, and concession management to optimize both pace and rental rates. ### Leasehold Interest
An ownership structure where the building is owned but the land is leased long-term, typically 50-99 years. Leasehold properties require ongoing ground rent payments and face eventual lease expiration. While less common in multifamily, leasehold interests can offer lower acquisition costs but financing challenges. ### Lender
The financial institution or individual providing debt capital for property acquisition or refinancing. Multifamily lenders include banks, life insurance companies, CMBS conduits, Fannie Mae, Freddie Mac, and private lenders. Lender selection impacts loan terms, requirements, and flexibility throughout the investment period. **[Read the full article on Lenders →](https://rodkhleif.com/get-your-deal-approved-understanding-how-a-lender-underwrites-a-multifamily-loan-request/)**### Letter of Intent (LOI)
A preliminary non-binding agreement outlining key purchase terms including price, financing, due diligence period, and closing timeline. LOIs demonstrate buyer commitment and establish negotiation framework before drafting formal purchase agreements. Well-crafted LOIs align expectations and streamline contract negotiations. **[Read the full article on LOI →](https://rodkhleif.com/need-know-letter-intent/)**### Leverage
The use of borrowed capital to acquire property and amplify equity returns. Leverage magnifies both gains and losses, increasing cash-on-cash returns when property income exceeds debt costs. Optimal leverage balances return enhancement against increased risk and reduced cash flow margins. **[Read the full article on Leverage →](https://rodkhleif.com/is-debt-really-that-bad-utilizing-debt-vs-equity/)** **[Watch: No Money Down Real Estate Investing →](https://youtu.be/_-eQCjkt4Lg)**### Limited Partner (LP)
A passive investor providing capital without operational involvement or management responsibilities. LPs have limited liability capped at their investment amount and receive returns based on their ownership percentage. This passive role allows LPs to participate in multifamily investments without active management burdens. **[Read the full article on LP →](https://rodkhleif.com/what-is-a-limited-partner-lp/)** [**Read the full article on GP vs LP**](https://rodkhleif.com/gp-vs-lp-what-you-need-to-know/) **[Read: Best Resources for Learning Apartment Syndication →](https://rodkhleif.com/what-are-the-best-resources-for-learning-apartment-syndication/)**### Liquidity
The ease and speed with which an investment can be converted to cash without significant value loss. Real estate is relatively illiquid compared to stocks, requiring months to sell properties. Investors must commit capital for full hold periods, with limited interim liquidity except through refinancing. ### Loan-to-Cost (LTC)
The ratio of loan amount to total project cost for development or major renovation projects. LTC ratios typically range from 60-75% for construction and value-add projects. Lower LTC ratios require more equity but reduce risk, while higher ratios increase leverage and returns. ### Loan-to-Value (LTV)
The ratio of loan amount to property value, expressed as a percentage. Commercial multifamily loans typically feature 65-80% LTV ratios depending on asset quality and borrower strength. Lower LTV provides lenders greater safety margins, while higher LTV increases investor leverage and returns. ### Loss to Lease
The difference between in-place rents and current market rents, representing foregone income from below-market leases. Significant loss to lease indicates value-add potential through rental rate increases upon lease renewal or turnover. Investors target properties with high loss to lease for forced appreciation strategies. **[Read: How to Find and Analyze Multifamily Deals →](https://rodkhleif.com/finding-analyzing-multifamily-deals-like-a-pro/)**---
## M
### Make-Ready
The process of preparing a vacant unit for the next tenant — cleaning, repainting, replacing worn fixtures, and completing any repairs. Make-ready time and cost directly impact vacancy duration and NOI. Efficient make-ready programs, including pre-ordering supplies and scheduling contractors in advance, shorten the gap between tenants and reduce revenue loss. ### Management Agreement
A contract defining the relationship, responsibilities, and compensation between property owners and management companies. Management agreements specify fee structures, performance expectations, reporting requirements, and termination conditions. Strong agreements align property manager incentives with ownership objectives for optimal performance. ### Management Fee
Compensation paid to property management companies for overseeing daily operations, typically 2-5% of collected revenue. Management fees cover tenant relations, maintenance coordination, rent collection, and financial reporting. While reducing NOI, professional management often improves operations sufficiently to justify costs. ### Market Rent
The rental rate similar units command in the current market based on comparable properties. Market rent analysis guides pricing strategies and renovation scope decisions. Significant gaps between in-place and market rents signal opportunities to increase revenue through property improvements and lease renewals. **[Read: How to Find and Analyze Multifamily Deals →](https://rodkhleif.com/finding-analyzing-multifamily-deals-like-a-pro/)**### Master Lease
A single lease covering an entire property where the master tenant subleases individual units to end-users. Master leases provide owners stable income and shift operational responsibilities. Operators use master lease structures for corporate housing, student housing, or senior living conversions. ### Memorandum
A detailed investment offering document provided to potential investors describing the opportunity, property details, market analysis, business plan, terms, and risks. Offering memorandums comply with securities regulations and provide comprehensive information enabling informed investment decisions. Professional memorandums enhance credibility and streamline capital raising. ### Mezzanine Debt
Subordinate financing sitting between senior debt and equity in the capital stack, secured by ownership interests rather than property liens. Mezzanine debt features higher interest rates than senior debt but lower returns than equity. This layer increases leverage while maintaining acceptable senior debt metrics. **[Read: Guide to Multifamily Deal Structures →](https://rodkhleif.com/multifamily-structures-overview/)**### Mid-Rise
Multifamily buildings typically 5-12 stories tall, featuring elevators and structured parking. Mid-rise properties balance urban density with construction costs, common in downtown areas and strong suburban nodes. These properties offer amenities approaching high-rises at lower operating costs and development expenses. ### Mixed-Use
Properties combining residential units with commercial space such as retail or office, creating live-work-play environments. Mixed-use developments provide diversified income streams but add management complexity. Ground-floor retail activates street life while residential floors maximize site utilization and rental income. **[Listen to the podcast on Mixed-Use →](https://rodkhleif.com/podcasts/short-term-rentals-mixed-use-real-estate-strategies/)**### Monthly Rent
The amount tenants pay monthly for unit occupancy, typically including base rent but excluding separately-metered utilities. Monthly rent analysis by unit type and size guides pricing strategies and reveals value-add opportunities. Consistent rent growth indicates strong property performance and market positioning. ---
## N
### Net Operating Income (NOI)
A property’s income after operating expenses but before debt service and capital expenditures, calculated as effective gross income minus operating expenses. NOI is the most critical metric for property valuation and investment analysis. Increasing NOI directly improves property value and investment returns. **[Read the full article on NOI →](https://rodkhleif.com/a-complete-guide-noi-in-real-estate-in-2025/)** **[Read: 5 Best Ways to Increase NOI and Add Value →](https://rodkhleif.com/the-5-best-ways-to-add-value-to-a-property-and-increase-the-noi/)** **[Read: How to Find and Analyze Multifamily Deals →](https://rodkhleif.com/finding-analyzing-multifamily-deals-like-a-pro/)** **[Read: The Complete Multifamily Underwriting Guide →](https://rodkhleif.com/how-to-underwrite-a-multifamily-deal-step-by-step-the-complete-guide/)**### Non-Recourse Loan
Debt where lenders can only claim collateral property upon default, without personal liability for deficiency balances. Most commercial multifamily loans are non-recourse except for specific “bad boy” carve-outs like fraud or environmental violations. Non-recourse terms limit investor downside risk to invested equity. **[Read the full article on Non-Recourse Loan →](https://rodkhleif.com/recourse-vs-non-recourse-multifamily-financing-whats-the-difference/)** **[Listen: Multifamily Real Estate Financing Explained →](https://rodkhleif.com/podcasts/multifamily-real-estate-financing-explained/)**---
## O
### Occupancy Rate
The percentage of units currently leased and generating revenue, a key performance indicator for multifamily properties. High occupancy rates indicate strong demand and effective management. Investors target 90-95% stabilized occupancy, balancing revenue maximization with turnover costs and market conditions. ### Offering Memorandum
See Memorandum. ### Operating Agreement
The legal document governing a limited liability company, defining member rights, profit distributions, management structure, and operational procedures. Operating agreements for syndications detail GP and LP roles, capital contributions, distribution waterfalls, and decision-making authority. Well-drafted agreements prevent disputes and ensure smooth operations. ### Operating Expenses (OpEx)
Ongoing costs of running a property including property management, utilities, insurance, repairs, landscaping, and property taxes. Operating expenses are subtracted from effective gross income to calculate NOI. Expense management directly impacts profitability and investor returns. **[Read: 5 Best Ways to Increase NOI and Add Value →](https://rodkhleif.com/the-5-best-ways-to-add-value-to-a-property-and-increase-the-noi/)**### Operating Statement
A financial report detailing property income and expenses over a specific period, showing revenue sources, expense categories, and resulting NOI. Operating statements are essential for performance monitoring, investor reporting, and loan compliance. Accurate statements enable data-driven decision-making and trend identification. ### Origination Fee
An upfront fee charged by lenders for processing and funding a loan, typically 0.5-2% of the loan amount. Origination fees compensate lenders for underwriting, documentation, and administrative costs. These fees increase total borrowing costs and should be factored into cash flow analysis. ---
## P
### Passive Income
Earnings from investments where the investor does not materially participate in operations. Multifamily limited partnership distributions typically qualify as passive income, subject to specific tax treatment. Passive losses can only offset passive income, creating tax planning considerations for high-income investors. **[Listen tothe Podcast on Passive Income →](https://rodkhleif.com/podcasts/wealth-creation-with-passive-streams-of-income/)**### Passive Investor
See Limited Partner. **[Listen to the podcast on Passive Investors→](https://rodkhleif.com/podcasts/ep-315-james-kandasamy-author-of-passive-investing-in-commercial-real-estate/)**### Performance Fee
Additional compensation paid to general partners based on achieving specific return thresholds or outperforming benchmarks. Performance fees align sponsor interests with investor returns by rewarding superior execution. These fees supplement base management fees and typically activate after meeting preferred return hurdles. ### Permanent Loan
Long-term financing (typically 5-30 years) for stabilized properties, replacing construction or bridge loans. Permanent loans feature lower rates than transitional financing and provide predictable debt service. Obtaining permanent financing is a key milestone in property stabilization and value realization. ### Personal Guarantee
A pledge of personal assets by a borrower to back a loan obligation, making the borrower personally liable if the property cannot service or repay the debt. Personal guarantees are more common on construction loans, bank loans, and smaller deals than on agency debt. Sponsors should understand exactly which loan structures require personal guarantees before signing. ### Physical Occupancy
The percentage of units currently occupied by tenants, regardless of payment status. Physical occupancy differs from economic occupancy which accounts for non-paying tenants. While high physical occupancy appears positive, economic occupancy better reflects actual revenue generation and financial health. ### PITI
An acronym for Principal, Interest, Taxes, and Insurance – the four components of total monthly housing payment obligations. While more relevant for residential homeownership, PITI helps multifamily investors understand total occupancy costs from tenant perspectives when analyzing affordability and rent-to-income ratios. ### Points
Upfront fees paid to lenders equal to 1% of the loan amount, used to reduce interest rates or as origination charges. Borrowers can “buy down” rates by paying discount points at closing. Points increase initial capital requirements but may improve long-term economics for longer-hold investments. ### Preferred Equity
A capital stack position between mezzanine debt and common equity, providing fixed returns with priority over common equity but subordinate to all debt. Preferred equity doesn’t receive equity upside but offers predictable yields between debt and equity returns. This instrument balances income and flexibility. ### Preferred Return (Pref)
A minimum return threshold that limited partners receive before general partners participate in profits beyond their ownership percentage. Common preferred returns range from 6-10% annually. Pref structures ensure passive investors achieve baseline returns before sponsors receive promoted interest. **[Read: Guide to Multifamily Deal Structures →](https://rodkhleif.com/multifamily-structures-overview/)** **[Read: First Steps to Becoming a Multifamily Syndicator →](https://rodkhleif.com/what-are-the-first-steps-to-becoming-a-multifamily-syndicator/)**### Prepayment Penalty
Fees charged for paying off loans before maturity, protecting lenders from early payoff losses. Prepayment penalties vary by loan type, including yield maintenance, defeasance, or step-down schedules. Understanding penalty structures is critical for exit strategy planning and refinancing decisions. ### Private Placement Memorandum (PPM)
A legal disclosure document detailing investment risks, terms, sponsor background, and property information for private securities offerings. PPMs satisfy securities law requirements by ensuring investors receive material information. Comprehensive PPMs protect sponsors from liability while enabling informed investor decisions. **[Read: Guide to Multifamily Syndications Overview →](https://rodkhleif.com/multifamily-syndications-overview/)**### Pro Forma
Financial projections estimating future property performance including revenue, expenses, NOI, cash flow, and returns. Pro formas guide investment decisions and communicate expected outcomes to investors. Conservative pro formas based on realistic assumptions enhance credibility and reduce disappointment risk. **[Read: The Complete Multifamily Underwriting Guide →](https://rodkhleif.com/how-to-underwrite-a-multifamily-deal-step-by-step-the-complete-guide/)** **[Read: How to Find and Analyze Multifamily Deals →](https://rodkhleif.com/finding-analyzing-multifamily-deals-like-a-pro/)**### Promoted Interest
Additional profit share earned by general partners beyond their equity contribution percentage after achieving return hurdles. Typical structures award GPs 20-30% of profits after LP preferred returns are met. Promoted interest aligns GP incentives with strong performance and investor satisfaction. **[Read: First Steps to Becoming a Multifamily Syndicator →](https://rodkhleif.com/what-are-the-first-steps-to-becoming-a-multifamily-syndicator/)**### Property Management
The oversight of daily property operations including leasing, maintenance, tenant relations, and financial reporting. Professional property management is critical for maximizing NOI and tenant satisfaction. Strong property managers enhance value through effective operations, while poor management destroys returns. **[Read the full article on Property Mangement →](https://rodkhleif.com/the-9-things-you-need-to-know-about-property-management-companies/)** **[Download the FREE ebook on How to Hire a Property Management Company→](https://rodkhleif.com/how-to-hire-a-third-party-property-management-company/)**### Property Tax
Annual taxes assessed by local governments based on property value, typically 1-3% of assessed value depending on jurisdiction. Property taxes are significant operating expenses affecting NOI and cash flow. Tax appeals and exemptions can meaningfully reduce expense burdens. ### Purchase and Sale Agreement (PSA)
The binding contract between buyer and seller detailing transaction terms including price, contingencies, representations, warranties, and closing conditions. PSAs govern due diligence periods, earnest money, and default remedies. Well-negotiated PSAs protect buyer interests while facilitating smooth transactions. ---
## Q
### Qualified Opportunity Zone (QOZ)
Designated economically distressed communities where investors can defer and reduce capital gains taxes through Opportunity Zone funds. Multifamily developments in QOZs offer significant tax benefits including permanent gain exclusion after 10-year holds. These incentives stimulate investment in underserved areas. ---
## R
### Rate Cap
An interest rate derivative purchased by borrowers on floating-rate loans that limits the maximum interest rate they must pay. Rate caps are commonly required by lenders on bridge loans to protect borrowers from runaway rate increases. The cost of a rate cap is paid upfront. It can range from tens of thousands to hundreds of thousands of dollars. The cost depends on the loan size, cap level, and market volatility. ### Real Estate Investment Trust (REIT)
A company owning and typically operating income-producing real estate, offering shareholders liquidity and dividends while avoiding corporate taxation. Multifamily REITs provide public market access to apartment investments with daily liquidity. REITs must distribute 90% of taxable income as dividends. **[Watch: What You Need To Know About REITs →](https://youtu.be/iRygSUAxcZk)**### Real Estate Owned (REO)
Properties acquired by lenders through foreclosure after borrower default. REO properties are often sold at discounts to quickly remove non-performing assets from lender portfolios. Investors target REO opportunities for below-market acquisition prices, though condition and title issues may exist. ### Recourse Loan
Debt where borrowers have personal liability for loan deficiency balances following default and foreclosure. Lenders can pursue borrower personal assets beyond property collateral if sale proceeds don’t satisfy debt. Recourse loans are less common in commercial multifamily but may apply for construction or higher-risk deals. **[Read the full article on Recourse Loan →](https://rodkhleif.com/recourse-vs-non-recourse-multifamily-financing-whats-the-difference/)** **[Listen: Multifamily Real Estate Financing Explained →](https://rodkhleif.com/podcasts/multifamily-real-estate-financing-explained/)**### Refinance
Replacing existing debt with new financing, potentially with different terms, rate, or amount. Investors refinance to improve loan terms, extract equity through cash-out refinances, or transition from bridge to permanent financing. Strategic refinancing optimizes capital structure and enhances returns. ### Regulation D
SEC rules governing private securities offerings, allowing companies to raise capital without full registration. Regulation D Rule 506(b) allows raises from up to 35 non-accredited investors with pre-existing relationships. Rule 506(c) allows general solicitation and advertising. It limits participation to verified accredited investors only. Most multifamily syndications utilize one of these exemptions for compliant capital raising. **[Read: Guide to Multifamily Syndications Overview →](https://rodkhleif.com/multifamily-syndications-overview/)** **[Read: What Is Apartment Building Syndication? →](https://rodkhleif.com/what-is-apartment-building-syndication/)**### Rehab
See Renovation. **[Listen to the podcast on Rehab →](https://rodkhleif.com/podcasts/multifamily-renovation-and-rehab/)**### Rehabbing
The process of renovating and improving a property to increase value, reduce operating costs, or attract higher-quality tenants. Effective rehabbing requires careful budget management, contractor oversight, and marketing to justify increased rents. Value-add strategies center on strategic rehabbing delivering attractive risk-adjusted returns. ### Renovation
Physical improvements made to a property to enhance appeal, functionality, and value. Multifamily renovations range from cosmetic updates to major system replacements. Strategic renovations enable rent increases, reduce turnover, and lower operating expenses, driving NOI growth and property appreciation. **[Listen to the podcast on Renovation →](https://rodkhleif.com/podcasts/multifamily-renovation-and-rehab/)**### Rent Comparable (Rent Comp)
Recently leased units in similar properties used to establish market rent ranges for underwriting and pricing. Accurate rent comps are essential for validating projected rents in pro formas. Rent comps should match property location, quality, unit size, and amenities for meaningful comparison. ### Rent Control / Rent Stabilization
Local government regulations that limit the amount landlords can increase rents on existing tenants, and in some cases restrict lease terminations. Rent control sets strict limits on rent prices. Rent stabilization allows small yearly increases based on inflation or a local index. Markets with strong rent control, like New York City, San Francisco, and Los Angeles, limit value-add strategies. Investors cannot raise rents as easily. Factor this into underwriting before acquisition. **[Landlord Guide: Rent Control, Eviction and Fair Housing](https://rodkhleif.com/every-landlord-needs-know-rent-control-eviction-anti-discrimination-laws/)**### Rent Growth
The annual percentage increase in rental rates, driven by market demand, property improvements, or inflation. Rent growth directly increases NOI and property value, making it a critical performance driver. Markets with strong job growth and limited supply typically experience higher rent growth. **[Where are Rents Still Rising? US Growth Trends 2025](https://rodkhleif.com/where-are-rents-still-rising/)**### Rent Roll
A detailed listing of all occupied and vacant units showing tenant names, lease start and end dates, monthly rent, security deposits, and any concessions or special terms. The rent roll is one of the most important documents in multifamily due diligence — it verifies actual rental income, reveals upcoming lease expirations, and exposes discrepancies between what the seller claims the property earns and what tenants are actually paying. Never underwrite a deal without reviewing the current rent roll. **[Read: The Complete Multifamily Underwriting Guide →](https://rodkhleif.com/how-to-underwrite-a-multifamily-deal-step-by-step-the-complete-guide/)** **[Read: How to Find and Analyze Multifamily Deals →](https://rodkhleif.com/finding-analyzing-multifamily-deals-like-a-pro/)**### Rent-to-Income Ratio
The percentage of a tenant’s gross monthly income consumed by rent, used to assess tenant affordability and credit quality. Most property managers require tenants to earn 2.5–3x the monthly rent. Properties targeting workforce housing tenants benefit from keeping rent-to-income ratios manageable, as overextended tenants lead to higher delinquency and turnover. ### Rental Income
Revenue generated from tenant lease payments, representing the primary income source for multifamily properties. Rental income projections drive property valuations and investment returns. Increasing rental income through market rent achievement and occupancy optimization is fundamental to successful multifamily investing. ### Repositioning
Comprehensive property transformation through significant renovations, rebranding, and operational improvements to appeal to different tenant demographics. Repositioning involves upgrading from one property class to another, such as Class C to Class B. This high-risk, high-return strategy requires substantial capital and expertise. **[Read: What Is a Value-Add Opportunity? →](https://rodkhleif.com/value-add-opportunity-what-does-it-mean-and-should-i-consider-it/)**### Reserves
Funds set aside to cover unexpected expenses, planned capital improvements, or operating shortfalls. Adequate reserves protect investors from capital calls and ensure properties can weather market downturns. Lenders typically require minimum reserve amounts based on unit count and property condition. **[Read: The Complete Multifamily Underwriting Guide →](https://rodkhleif.com/how-to-underwrite-a-multifamily-deal-step-by-step-the-complete-guide/)**### Return on Investment (ROI)
A broad metric measuring total profit relative to initial investment. In real estate, ROI encompasses cash flow, appreciation, tax benefits, and equity buildup. While less precise than IRR for multi-year investments, ROI provides a simple profitability indicator. ### Right of First Refusal (ROFR)
A contractual right granting a party the option to match third-party offers before property sale. ROFRs protect tenants or existing investors from displacement while allowing owners to test market values. These provisions can complicate sales but provide relationship benefits. ---
## S
### Secured Overnight Financing Rate (SOFR)
The benchmark interest rate replacing LIBOR for floating-rate loans, based on overnight Treasury repurchase transactions. SOFR provides a reliable reference rate for adjustable-rate multifamily loans. Bridge loans and construction financing commonly use SOFR plus a credit spread. ### Securities and Exchange Commission (SEC)
The federal agency regulating securities offerings and protecting investors through disclosure requirements. Multifamily syndications must comply with SEC rules when raising private capital from investors. Understanding SEC regulations ensures legal compliance and protects sponsors from liability. **[Listen to the podcast on SEC Attorneys →](https://rodkhleif.com/podcasts/why-a-killer-sec-attorney-is-your-secret-weapon-in-real-estate/)**### Seller Financing
Debt provided by property sellers rather than traditional lenders, often used when conventional financing is unavailable or to bridge financing gaps. Seller financing can accelerate transactions and provide flexible terms. However, sellers typically charge higher rates and require substantial down payments. **[Listen to the podcast on Seller Financing →](https://rodkhleif.com/podcasts/exploring-seller-financing-in-multifamily-real-estate/)**### Sensitivity Analysis
A modeling technique that tests how changes in key assumptions — rent growth, exit cap rate, vacancy, expenses — affect projected returns. Sensitivity analysis helps investors understand which variables have the greatest impact on performance and stress-tests a deal under pessimistic scenarios. Conservative investors run sensitivities assuming rents come in 5–10% below projections and exit cap rates expand 50–100 basis points above the going-in rate. **[Read: The Complete Multifamily Underwriting Guide →](https://rodkhleif.com/how-to-underwrite-a-multifamily-deal-step-by-step-the-complete-guide/)** **[Read: How to Find and Analyze Multifamily Deals →](https://rodkhleif.com/finding-analyzing-multifamily-deals-like-a-pro/)**### Senior Debt
The primary mortgage secured by property liens with first priority in bankruptcy proceedings. Senior debt offers lowest interest rates due to superior collateral position and represents the largest capital stack component. Lenders of senior debt have strongest rights to property cash flows. ### Single-Family Rental (SFR)
Detached houses rented to tenants rather than owner-occupied. While not technically multifamily, institutional investors increasingly acquire SFR portfolios. SFRs attract different tenant demographics and feature distinct operational characteristics compared to traditional apartments. ### Soft Costs
Indirect project expenses beyond physical construction, including architectural fees, permits, legal costs, financing fees, and consultant services. Soft costs typically represent 15-25% of total development or major renovation budgets. Accurate soft cost estimation prevents budget shortfalls. ### Sponsor
The individual or company organizing and managing a multifamily investment syndication. Sponsors identify opportunities, conduct due diligence, raise capital, and execute business plans. Sponsor track record, expertise, and alignment are critical factors in investor decision-making. ### Spread
The interest rate margin above a base rate such as SOFR or Treasury yields that lenders charge borrowers. Spreads reflect borrower creditworthiness, property quality, and market conditions. Lower spreads indicate stronger borrowing positions and reduce debt service costs. ### Stabilized Property
A multifamily asset achieving consistent occupancy (typically 90-95%) and normalized operating performance. Stabilized properties qualify for permanent financing with favorable terms. The stabilization timeline varies based on renovation scope, market conditions, and lease-up execution. **[Listen: Multifamily Real Estate Financing Explained →](https://rodkhleif.com/podcasts/multifamily-real-estate-financing-explained/)**### Step-Up Basis
The adjustment of an inherited asset’s cost basis to fair market value at the inheritance date, eliminating capital gains taxes on appreciation during the decedent’s lifetime. Step-up basis provides significant estate planning benefits for real estate investors, though current law could change. **[Read: How a 1031 Exchange Can Save You Thousands →](https://rodkhleif.com/how-a-1031-exchange-can-save-you-thousands/)** **[Listen: 1031 Exchange for Tax Deferment →](https://rodkhleif.com/podcasts/1031-exchange-for-tax-deferment-in-multifamily-real-estate-investing/)**### Stress Test
An underwriting exercise that models a deal’s performance under adverse conditions — higher vacancy, rising interest rates, lower rent growth, or compressed exit values. Investors who stress test before acquisition are far less likely to be surprised post-closing. A deal that only works in a best-case scenario is not a deal. **[Read: The Complete Multifamily Underwriting Guide →](https://rodkhleif.com/how-to-underwrite-a-multifamily-deal-step-by-step-the-complete-guide/)** **[Read: How to Find and Analyze Multifamily Deals →](https://rodkhleif.com/finding-analyzing-multifamily-deals-like-a-pro/)**### Subscription Agreement
The legal document investors complete when committing capital to a syndication, confirming their accreditation status, investment amount, and agreement to offering terms. Subscription agreements bind investors to their commitments and provide sponsors necessary investor information and representations. ### Submarket
A geographic subdivision within a larger metropolitan area with distinct characteristics, demographics, and market dynamics. Submarket analysis helps investors identify specific neighborhoods with superior growth prospects. Strong submarket selection can outweigh broader market trends. ### Supplemental Loan
Additional financing on a property with existing debt, used to fund renovations or extract equity without refinancing the first mortgage. Supplemental loans sit behind senior debt in the capital stack. Agency lenders offer supplemental loans on qualifying properties with favorable existing financing. ### Syndication
The pooling of multiple investors’ capital to acquire a property too large for individual purchase. Syndications combine passive investor capital with active sponsor expertise, creating mutually beneficial partnerships. This structure democratizes access to institutional-quality multifamily investments. **[Read the full article on Syndication →](https://rodkhleif.com/what-is-multifamily-syndication-a-complete-guide/)** **[Read: What Is Apartment Building Syndication? →](https://rodkhleif.com/what-is-apartment-building-syndication/)** **[Download: Free Guide to Multifamily Syndications →](https://rodkhleif.com/guide-to-multifamily-syndications/)** **[Read: First Steps to Becoming a Multifamily Syndicator →](https://rodkhleif.com/what-are-the-first-steps-to-becoming-a-multifamily-syndicator/)** **[Read: Multifamily Syndications Overview →](https://rodkhleif.com/multifamily-syndications-overview/)**---
## T
### Tax Abatement
A temporary reduction or elimination of property taxes offered by municipalities to incentivize development or rehabilitation in targeted areas. Tax abatements improve cash flow during early ownership years, enhancing investment returns. Abatement expiration must be modeled in long-term projections. ### Tax Benefits
Advantages provided through tax code provisions including depreciation deductions, mortgage interest deductions, and capital gains preferential treatment. Real estate offers superior tax benefits compared to most investments. Strategic tax planning significantly enhances after-tax returns for multifamily investors. **[Listen to the podcast](https://rodkhleif.com/podcasts/cost-segregation-for-real-estate-investors/)[ on Tax Benefits →](https://rodkhleif.com/podcasts/cost-segregation-for-real-estate-investors/)** **[Watch: The Best Way To Depreciate Real Estate →](https://youtu.be/m45dqTFg7ss)**### Tax Shelter
Investment structures or deductions that reduce taxable income, such as depreciation from real estate ownership. Multifamily investments provide excellent tax shelter through depreciation offsetting operational income. Cost segregation and bonus depreciation amplify tax shelter benefits substantially. ### Tenant Improvement (TI)
Allowances or construction provided to customize spaces for tenant needs, more common in commercial leases than multifamily. In mixed-use properties, ground-floor retail may receive TI allowances. Multifamily properties occasionally offer minor improvements to secure quality tenants. ### Tenant Mix
The diversity and composition of tenants across a property, relevant for mixed-use developments with residential and commercial components. Balanced tenant mix reduces vacancy risk and creates vibrant environments. Strategic curation of retail tenant mix enhances residential appeal and property value. ### Term Sheet
A preliminary agreement outlining major loan or investment terms before formal documentation. Term sheets cover key points like amount, rate, maturity, fees, and prepayment provisions without binding parties. Reviewing term sheets ensures alignment before expending resources on final documentation. ### Title Insurance
Insurance protecting property owners and lenders against losses from title defects, liens, or ownership disputes discovered after closing. Title insurance provides one-time coverage based on comprehensive title searches. Clear title is essential for valid property ownership and lender security. ### Total Debt Service
See Debt Service. ### Trailing Twelve Months (T12 or TTM)
Financial performance data covering the most recent twelve-month period, providing current operating results regardless of calendar or fiscal year alignment. T12 analysis reveals recent trends and seasonality better than single-year snapshots. Lenders rely heavily on T12 NOI for underwriting. **[Read: The Complete Multifamily Underwriting Guide →](https://rodkhleif.com/how-to-underwrite-a-multifamily-deal-step-by-step-the-complete-guide/)**### Turnover
The rate at which tenants vacate units, creating vacancy and turnover costs including cleaning, repairs, and lease-up expenses. High turnover reduces NOI through lost rent and make-ready costs. Effective management minimizes turnover through tenant satisfaction and retention programs. **[Read the full article on Turnover →](https://rodkhleif.com/tenant-turnover-its-costs-and-what-you-can-do-to-minimize-them/)**---
## U
### Underwriting
The comprehensive analysis process evaluating an investment opportunity’s risks and projected returns. Thorough underwriting examines financials, market conditions, physical condition, and execution risks. Conservative underwriting using realistic assumptions protects investors from disappointed expectations and losses. [**Click here to read the Complete Multifamily Underwriting Guide plus Due Diligence Checklist**](https://rodkhleif.com/multifamily-investing-the-complete-beginners-guide/) **[Click here to access the Commercial Real Estate Underwriting Tool →](https://rodkhleif.com/commercial-real-estate-underwriting-tool/)** **[Read: How to Find and Analyze Multifamily Deals →](https://rodkhleif.com/finding-analyzing-multifamily-deals-like-a-pro/)** **[Read: How to Underwrite Step by Step →](https://rodkhleif.com/how-to-underwrite-a-multifamily-deal-step-by-step-the-complete-guide/)**### Unit Mix
The distribution of different unit types (studio, 1-bed, 2-bed, 3-bed) within a property. Optimal unit mix aligns with target market demographics and maximizes revenue per square foot. Analyzing submarket demand by unit type guides renovation and conversion strategies. ### Unit Turn
The process of preparing a vacated unit for the next tenant, including cleaning, repairs, painting, and inspections. Efficient unit turns minimize vacancy periods and control costs. Streamlined turn processes and pre-leasing strategies accelerate revenue recovery and improve investment returns. ### Upside
The potential for returns exceeding base projections through better-than-expected performance, market conditions, or execution. Value-add strategies offer significant upside through forced appreciation and rent growth. Investors must balance upside potential against downside risks when evaluating opportunities. ### Utilities
Essential services including water, sewer, electricity, gas, and trash removal. Properties are either master-metered with owner responsibility or individually metered with tenant payment. Passing utility costs to tenants improves NOI but may increase vacancy if total costs exceed market expectations. ---
## V
### Vacancy Rate
The percentage of unoccupied units available for lease. Physical vacancy measures empty units while economic vacancy includes non-paying tenants and concessions. Low vacancy indicates strong demand, while high vacancy may signal overpricing, poor management, or weak market conditions. **[Read: How to Find and Analyze Multifamily Deals →](https://rodkhleif.com/finding-analyzing-multifamily-deals-like-a-pro/)**### Valuation
The process of determining a property’s market value through comparable sales, income capitalization, or cost approaches. Accurate valuation is critical for acquisition pricing, financing, and disposition. Professional appraisals provide third-party valuation opinions required by most lenders. ### Value-Add
An investment strategy focusing on properties requiring operational or physical improvements to increase income and value. Value-add opportunities include renovations, management improvements, and expense reduction. This strategy targets properties trading at discounts to stabilized value with clear improvement paths. **[Read the full article on Value-Add →](https://rodkhleif.com/value-add-opportunity-what-does-it-mean-and-should-i-consider-it/)** **[Read: 5 Best Ways to Add Value and Increase NOI →](https://rodkhleif.com/the-5-best-ways-to-add-value-to-a-property-and-increase-the-noi/)**### Variable Rate
See Floating-Rate Loan. ---
## W
### Walk-Through
A physical property inspection to assess condition, identify deferred maintenance, and evaluate improvement opportunities. Pre-acquisition walk-throughs inform renovation budgets and verify assumptions. Post-renovation walk-throughs ensure quality control and contractor compliance with specifications. ### Waterfall
The distribution structure defining how cash flows and profits are allocated among capital stack participants. Waterfalls detail payment priorities, return hurdles, and profit splits. Common structures include preferred returns for LPs followed by GP promoted interest after hurdle achievement. **[Read: Guide to Multifamily Deal Structures →](https://rodkhleif.com/multifamily-structures-overview/)** **[Read: First Steps to Becoming a Multifamily Syndicator →](https://rodkhleif.com/what-are-the-first-steps-to-becoming-a-multifamily-syndicator/)**### Workforce Housing
Multifamily properties serving middle-income renters — typically households earning 60–120% of Area Median Income (AMI). Workforce housing predominantly consists of Class B and C assets in stable, working-class neighborhoods. It is one of the most undersupplied segments of the rental market nationwide, driven by a lack of new construction at moderate price points. For investors, workforce housing offers strong demand fundamentals, lower acquisition costs than Class A, and a renter base that is less transient than lower-income housing. ### Workout
The process of restructuring troubled loans or properties to avoid foreclosure, involving loan modifications, forbearance agreements, or partial debt forgiveness. Workouts allow borrowers to stabilize assets while protecting lender interests. Successful workouts benefit both parties versus costly foreclosure proceedings. ---
## Y
### Yield
The annual return on investment expressed as a percentage, typically referring to cash-on-cash return or cap rate. Yield focuses on current income rather than total returns including appreciation. Higher yields often correlate with higher risk profiles or lower-quality assets. ### Yield Maintenance
A prepayment penalty calculation ensuring lenders receive the originally contracted yield despite early loan payoff. Yield maintenance compensates lenders for the difference between the original rate and current reinvestment rates. This penalty structure can be substantial in falling rate environments. ---
## Z
### Zoning
Local government regulations controlling property use, density, height, and development standards. Zoning classifications determine whether multifamily development is permitted and at what density. Understanding zoning is critical for development projects and repositioning strategies requiring use changes. ### Zero-Based Budget
A budgeting approach requiring justification for every expense from scratch rather than using prior year budgets as baselines. Zero-based budgeting identifies unnecessary costs and optimization opportunities. This disciplined approach can uncover significant expense reduction opportunities during property transitions. ---
---
## Frequently Asked Questions
### What is the difference between NOI and cash flow?
Net Operating Income (NOI) is a property’s total revenue minus all operating expenses — but before debt service. Cash flow is what remains after subtracting debt service from NOI. NOI measures how well the property performs as an asset, independent of financing. Cash flow tells you what actually lands in your pocket each month. A property can have strong NOI but negative cash flow if it is overleveraged. Always analyze both metrics when evaluating a deal. ### What does cap rate mean in multifamily real estate?
Cap rate (capitalization rate) is the ratio of a property’s Net Operating Income to its purchase price or current market value, expressed as a percentage. Formula: Cap Rate = NOI ÷ Property Value. A property generating $120,000 NOI purchased for $1,600,000 has a 7.5% cap rate. Cap rates allow investors to compare properties across different markets on an apples-to-apples basis. Higher cap rates generally indicate higher returns but also higher risk. Always pair cap rate with cash-on-cash return and DSCR before making a decision. **[Use the Free Cap Rate Calculator →](https://rodkhleif.com/cap-rate-calculator/)**### What is the difference between a General Partner (GP) and a Limited Partner (LP) in a syndication?
The GP is the active operator — they find the deal, raise capital, secure financing, manage the property, and execute the business plan. GPs assume unlimited liability and are compensated through acquisition fees, asset management fees, and a promoted interest in profits. The LP is the passive investor — they contribute capital but have no role in day-to-day operations. LPs benefit from distributions, appreciation, and tax advantages, with liability limited to the amount they invest. ### What is a preferred return in real estate investing?
A preferred return (or “pref”) is the minimum annual return threshold that limited partners must receive before the general partner participates in profits above that amount. For example, an 8% preferred return means LP investors receive 8% annually on their invested capital before the GP earns any promoted interest. Preferred returns align GP and LP interests by ensuring passive investors achieve baseline returns before sponsors share in upside. Always clarify whether the pref is cumulative or non-cumulative before investing. ### What does value-add mean in multifamily real estate?
Value-add is a strategy where investors buy underperforming or dated multifamily properties and increase NOI through physical improvements and operational upgrades — creating forced appreciation. Common strategies include renovating unit interiors, upgrading amenities, reducing below-market rents through lease renewals, and improving property management. Because commercial multifamily values are a multiple of NOI, every dollar of NOI improvement translates directly into a multiple of property value increase — that leverage is what makes value-add so powerful. **[Read: What Is a Value-Add Opportunity? →](https://rodkhleif.com/value-add-opportunity-what-does-it-mean-and-should-i-consider-it/)**### What is a waterfall structure in real estate syndication?
A waterfall defines how profits are distributed between GPs and LPs at different return thresholds. A typical structure works in tiers: first, LPs receive 100% of distributions until all invested capital is returned; second, LPs receive their preferred return; third, an optional GP catch-up period may apply; fourth, remaining profits split between GP and LPs (e.g., 70/30). Waterfall structures vary significantly between deals — always review the Private Placement Memorandum carefully before committing capital. ### What is the difference between physical occupancy and economic occupancy?
Physical occupancy measures the percentage of units that are occupied. A property with 95 of 100 units leased has 95% physical occupancy. Economic occupancy measures the percentage of potential gross income actually collected, accounting for non-payment, concessions, and free-rent periods. A property can be 95% physically occupied but only 87% economically occupied if several tenants are delinquent or received concessions. Economic occupancy is the more accurate metric for underwriting. ### What is a DSCR and why do lenders care about it?
DSCR stands for Debt Service Coverage Ratio: NOI ÷ Annual Debt Service. A property with $200,000 NOI and $160,000 in annual debt service has a 1.25 DSCR. Lenders typically require a minimum of 1.20–1.30, meaning the property must generate 20–30% more income than needed to cover the mortgage. A DSCR below 1.0 means the property cannot pay its own mortgage from operations. For investors, DSCR is a critical safety margin — higher DSCR means more cushion against vacancies, rising expenses, or downturns. ### What is the difference between Class A, Class B, and Class C multifamily properties?
Class A properties are new or recently built, in prime locations with luxury amenities and top-of-market rents. Lower cap rates, lower risk, limited value-add upside. Class B properties are typically 10–30 years old with good locations and middle-market rents — the most common target for active value-add investors. Class C properties are 30+ years old, in secondary locations, requiring significant capital. Highest cash yields and value-add potential but greatest operational complexity. Property classes are relative to the local market, not absolute standards. ### What is a 1031 exchange and how does it work in multifamily investing?
A 1031 exchange allows investors to defer capital gains taxes by reinvesting sale proceeds into a like-kind replacement property. Key rules: the replacement property must be identified within 45 days of closing; the transaction must close within 180 days; the replacement property must be of equal or greater value to fully defer taxes; and a qualified intermediary must hold the proceeds. For multifamily investors, 1031 exchanges allow you to sell appreciated properties, avoid an immediate tax hit, and redeploy capital into larger assets — compounding equity without tax erosion. **[Read: How a 1031 Exchange Can Save You Thousands →](https://rodkhleif.com/how-a-1031-exchange-can-save-you-thousands/)**### What is the difference between recourse and non-recourse loans?
A recourse loan allows the lender to pursue the borrower’s personal assets if the property sale doesn’t cover the outstanding debt. A non-recourse loan limits the lender’s remedy to the collateral — the property itself. Agency loans (Fannie Mae, Freddie Mac) and HUD/FHA loans are typically non-recourse. However, most non-recourse loans include “bad boy carve-outs” — provisions that trigger personal liability if the borrower commits fraud, misappropriates funds, or takes other bad-faith actions. Non-recourse does not mean zero personal responsibility. ### What is cost segregation and how does it benefit multifamily investors?
Cost segregation is an IRS-approved tax strategy that accelerates depreciation deductions by reclassifying building components into shorter useful-life categories. Standard depreciation depreciates residential rental property over 27.5 years. Cost segregation breaks it into 5-year (appliances, carpeting), 7-year (certain equipment), and 15-year (landscaping, parking lots) components, allowing investors to front-load deductions significantly. When paired with bonus depreciation, cost segregation can generate substantial paper losses in the year of acquisition that offset other income. Always consult a qualified CPA before implementing. **[Watch: The Best Way To Depreciate Real Estate →](https://youtu.be/m45dqTFg7ss)**### What does pro forma mean in multifamily underwriting?
A pro forma is a financial projection showing a property’s expected income, expenses, and returns over the hold period. It includes Gross Potential Income, minus vacancy and credit loss to get Effective Gross Income, minus operating expenses to get NOI, minus debt service to get cash flow. Pro formas model scenarios, base case, bull case, and bear case. The quality of a pro forma is only as good as its assumptions. Scrutinize rent growth projections, exit cap rate assumptions, and expense forecasts carefully. Conservative assumptions build trust with investors and protect against disappointment. **[Read: The Complete Multifamily Underwriting Guide →](https://rodkhleif.com/how-to-underwrite-a-multifamily-deal-step-by-step-the-complete-guide/)**### What is Regulation D and why does it matter for multifamily syndications?
Regulation D is an SEC rule providing exemptions that allow private companies and syndicators to raise capital without registering the offering as a public security. Rule 506(b) allows raises from up to 35 non-accredited sophisticated investors plus unlimited accredited investors — no general solicitation permitted. Rule 506(c) allows raises from accredited investors only but permits public advertising and general solicitation. Most first-time syndicators use 506(b) based on existing relationships. As they build a public presence, many move to 506(c). Always work with a securities attorney before raising capital under Regulation D. ### What is the difference between IRR and cash-on-cash return?
Cash-on-Cash Return measures annual pre-tax cash flow divided by total equity invested. It shows current annual yield on invested capital — simple and direct. IRR (Internal Rate of Return) is the annualized return accounting for all cash flows over the entire hold period — including distributions and the final sale — weighted by when each dollar is received. A deal with low early distributions but a large profitable exit may show strong IRR but modest CoC. Use both together: CoC tells you how well the deal feeds you while you hold it; IRR captures the full wealth-creation picture. **[Read: Understanding How IRR Works →](https://rodkhleif.com/measuring-returns-understanding-how-irr-works/)** **[Read: IRR vs. Equity Multiple →](https://rodkhleif.com/measuring-returns-irr-vs-equity-multiple/)**---
## About This Glossary
This comprehensive multifamily investing glossary covers 170+ essential terms every real estate investor should understand. Each definition provides 40-80 words of clear, actionable explanation to help you navigate the multifamily investment landscape with confidence. Whether you’re a passive investor evaluating syndication opportunities or an active investor underwriting your next acquisition, understanding these terms is fundamental to making informed investment decisions and communicating effectively with industry professionals. **Ready to dive deeper?** Click any term link above to read our full, detailed article exploring that concept with examples, calculations, and real-world applications. ---
*Disclaimer: This glossary was made with the help of AI and reviewed by Rod and his team.*Once you have the vocabulary down, you can see these terms in action in Warrior playbooks like [Aaron Novotney’s 53 unit deal in Ohio](https://rodkhleif.com/warrior-win-aaron-novotney-53-unit-in-oh/) and [Crystal and Chris D’Agostino’s 36 unit close in Texas](https://rodkhleif.com/warrior-win-crystal-chris-dagostino-36-unit-in-tx/).
For a different angle on what these definitions look like in practice, see [Alejandro Chardon’s land development project in Arizona](https://rodkhleif.com/warrior-win-alejandro-chardon-land-development-project-az/) and [Jay and Tana Boersma’s 124 unit deal in Oklahoma](https://rodkhleif.com/warrior-win-jay-tana-boersma-124-unit-ok/).
**Categories:** Blog, Multifamily Investing, Real Estate
**Tags:** multifamily glossary, multifamily real estate, multifamily terms
---
### [How to Build a Purpose-Driven Real Estate Investing Business](https://rodkhleif.com/how-to-build-a-purpose-driven-real-estate-investing-business/)
**Published:** April 29, 2026
**Author:** Rod Khleif
**Excerpt:** A purpose-driven real estate business optimizes for three returns: financial, freedom, and impact. Here is the framework Rod Khleif built after losing fifty million dollars and rebuilding around the only return that compounds forever.
**Content:**
I grew up with nothing. My mother was on welfare. We got government cheese, and I still remember the shame of that. I made a silent promise to myself as a kid that I would build something so no one in my family ever felt that shame again. Years later I had it. Wealth, properties, cars. Then 2008 came and took most of it away. The thing that hurt the most was not the money. It was finding out that the money by itself had never been the point. This guide is the framework I rebuilt around after that loss, and the framework I now teach in my multifamily mentorship community. If you want to build a real estate investing business that survives downturns, attracts the right partners, and still feels like yours when you are sixty, you have to design it for more than one return. You have to design it for three.
## Table of Contents
- [What Purpose Driven Real Estate Investing Actually Means](#what-purpose-driven-means)
- [The Three Returns Framework](#three-returns)
- [How to Identify Your Personal Purpose as an Investor](#identify-purpose)
- [Integrating Giving Into Your Deal Structure](#integrate-giving)
- [The Tiny Hands Foundation Story](#tiny-hands)
- [Purpose Driven Investors in the Warrior Community](#warriors)
- [How Purpose Driven Investing Outperforms Long Term](#outperforms)
- [Three Returns vs Financial Only Investor](#three-returns-vs-financial)
- [Three Returns Stack vs Traditional Goal Setting](#three-returns-vs-traditional)
- [Purpose Driven Real Estate Investing FAQ](#purpose-driven-real-estate-investing-faq)
- [Ready to Take the Next Step](#cta)
## What Purpose Driven Real Estate Investing Actually Means
> Purpose driven real estate investing is the practice of building a multifamily business that intentionally generates three returns at once. A financial return through cash flow and equity, a freedom return through time and schedule control, and an impact return through what your wealth does for people who are not you. Investors who design for all three outperform on retention, partner quality, and downturn survival.
That is the answer in one paragraph. The rest of this guide is the system that makes it real. ### Signs Your Purpose Is Borrowed (Not Yours)
Run through this self check before you read another word. If three or more apply to you, your purpose is probably borrowed from someone else and your real estate plan is getting built on the wrong foundation. - Your stated goal is a unit count, but you cannot say what the units are for in plain language.
- The first thing you imagine doing with cash flow is buying something for yourself rather than freeing up time or funding a cause.
- Your why is borrowed from a podcast or book and you have never written it in your own handwriting.
- You feel guilty when you take time off, even though “time freedom” is the reason you got into this.
- You have not picked a single mission, family commitment, or cause that the business is supposed to serve.
- If you sold every property tomorrow, you could not name three things you would do with the next ten years.
If that list stings, good. That is the room every real estate investor I have coached has had to walk through before the work pays off. Read on. ## The Three Returns Framework
This is the framework I rebuilt my business around after 2008. It is also the lens we use inside my mentorship community to grade an investor’s plan. Want a live walkthrough of the framework with worked numbers? Join the free [Multifamily Bootcamp](https://rodkhleif.com/bootcamp/). [](https://rodkhleif.com/bootcamp/)
[**Want to see the Three Returns applied to a live deal? Join the free Multifamily Bootcamp →**](https://rodkhleif.com/bootcamp/)
### Return 1: Financial Return
The financial return is the obvious one. Monthly cash flow from rents after debt service, equity buildup as the loan amortizes, forced appreciation from a value add business plan, and disposition gains at sale or refinance. Most investors stop here. They set a monthly cash flow target, back into a unit count, and treat the work as an extraction game. Financial return is necessary, but it is not enough. Investors who optimize only for financial return tend to over leverage in good markets, take on partners they should not, chase yield into deals they do not understand, and burn out around the time they finally hit their number. The financial return is the price of admission, not the prize. ### Return 2: Freedom Return
The freedom return is the one most operators do not put on the page. It is the return on your calendar. How many days a week do you actually own. Where can you live. Whose call do you have to answer. Can you take a Tuesday off without breaking the business. Freedom is engineered, not stumbled into. It is engineered by hiring earlier than feels comfortable, by writing systems and SOPs even when there are only ten units, and by choosing asset classes and operating partners that match your tolerance for involvement. The investor who closes ten deals a year and works seventy hours has won the financial return and lost the freedom return. That is not a multifamily wealth business. That is a job with rentals attached. ### Return 3: Impact Return
The impact return is what your wealth does for people who are not you. Impact has to be specific. “Giving back” as a phrase does almost nothing. “Funding twenty thousand meals a year through Tiny Hands Foundation” does. The specificity of the impact decision is the part that compounds emotionally and that survives the next downturn. Impact is also the only return that compounds forever. Cash flow stops when you stop owning units. Freedom contracts as health and energy contract. Impact, structured well, outlives you. That is the math behind why the strongest multifamily operators I know give early, not late. ## How to Identify Your Personal Purpose as an Investor
You cannot back into a Three Returns plan without first answering three questions in your own handwriting. Print these. Sit with them. Do not skip them. Research from the [Princeton longhand-versus-laptop study by Mueller and Oppenheimer](https://scholar.princeton.edu/sites/default/files/pam3/files/pammuelleroppenheimer2014.pdf) shows that handwriting forces deeper processing than typing, and what you are doing here needs the deepest processing you have. 1. **If money was already solved, what would I spend the next ten years doing.** Be specific. Do not write “travel.” Write where, with whom, how often, and why.
2. **Whose pain do I feel as if it were mine.** Children, veterans, single parents, addicts, people in your hometown, immigrants, your own family. Whose story makes you stop scrolling. That is a clue to your impact return.
3. **What do I want my children, or the next person who carries my name, to inherit besides money.** Habits, businesses, a foundation, a body of teaching, a community. The answer reshapes how you take chips off the table.
What you write here becomes the brief for everything else. Your unit count is a function of the answer, not the other way around. ## Integrating Giving Into Your Deal Structure
Most investors treat giving as something they will do “after they make it.” That is backwards. Investors who pre commit a percentage of cash flow to a cause from day one tend to make more, not less, because the constraint forces underwriting discipline and attracts investors who care about the same thing. Here is how to put it in the structure. 1. **Pick a percentage you cannot fake.** One percent of distributions is real. Five percent makes investors raise their eyebrows in a good way. Ten percent puts your business in the same conversation as the strongest values driven operators in the country.
2. **Write it into the partnership agreement.** A one line clause that says a fixed percentage of GP distributions goes to a named recipient turns intention into structure. Investors will see that line in the PPM and you will not be able to talk yourself out of it on a tough month.
3. **Pick one recipient and stay loyal.** Spreading impact across ten causes dilutes both the storytelling and the relationship. Pick one foundation, one school, one shelter, one mission. Build a long arc with them.
4. **Talk about it when investors ask why.** Do not lead with it, but do not bury it either. Limited partners who like the financial return AND the impact return are the longest tenured investors you will ever have.
Per [National Multifamily Housing Council quick facts](https://www.nmhc.org/research-insight/quick-facts-figures/), more than forty four million people in the United States call apartments home. Multifamily is one of the few asset classes where the property itself, the way you operate it, the way you treat residents, and the way you allocate cash flow can all be designed to serve a mission. Use that. Want the full purpose driven plan in one downloadable workbook? Click below to grab my free book *How to Create Lifetime Cash Flow Through Multifamily Properties*. It walks through the underwriting, the goal setting, and the giving structure side by side. [](https://rodkhleif.com/lcfa-ebook/)
[**Download the free Lifetime Cash Flow ebook →**](https://rodkhleif.com/lcfa-ebook/)
## How to Reverse Engineer Your Three Returns Plan
This is the step by step we walk through in the mentorship. It works for a brand new investor and for a fund manager with eight hundred units. The point is to stop starting with the unit count and start with the life you actually want. 1. **Write your impact return target first.** Pick the cause, pick the annual dollar pledge, pick the milestone you want to fund. Example: “Fund one hundred thousand meals a year through Tiny Hands Foundation by year five.”
2. **Write your freedom return target second.** How many hours a week do you want this business to take when it is mature. How many days off. Where do you want to live. Example: “Twenty five hours a week, four weeks off a year, anywhere with internet.”
3. **Convert both into an annual cash flow number.** Add personal lifestyle cost, retirement contribution, impact pledge, and the cost of the team that buys you freedom. Example: three hundred sixty thousand dollars per year.
4. **Back into a unit count.** At a conservative two hundred dollars per door per month net, three hundred sixty thousand a year requires one hundred fifty doors of stabilized cash flow. Adjust the per door number based on your asset class and market.
5. **Map the deal pipeline.** First deal at twenty to fifty units in year one. Second deal stacks toward the target. Joint ventures and syndications fill the gap.
6. **Codify the giving in writing.** Add the impact pledge to your partnership agreement, your operating cadence, and your investor presentations.
The visual above is what the plan tends to look like at year one, year five, and year ten for an investor who runs the Three Returns playbook with discipline. The numbers compress and expand based on market and asset class, but the pattern repeats. ## The Tiny Hands Foundation Story
I started Tiny Hands Foundation more than two decades ago, long before the multifamily business became what it is today. The foundation feeds children, fills backpacks for the school year, runs holiday outreach for kids whose families have nothing. We have served more than ninety thousand children since the early days. The work is intentionally local in flavor and direct in delivery, because that is how I grew up needing help. I share this not as a humblebrag. I share it because Tiny Hands is the proof point that the Three Returns Framework is not a slide I made up. It is the operating system I have run on for thirty plus years, including the lean years and the years right after the 2008 collapse when nothing else made sense to me. Impact return is what kept me building when financial return was negative. ## Purpose Driven Investors in the Warrior Community
The Warrior Program is the long form mentorship. The thing that keeps surprising me is how many of them organize their portfolios around a mission instead of a number. [Anthony Metzger](https://rodkhleif.com/podcasts/from-teaching-grade-school-to-raising-millions/) went from teaching grade school to raising millions and closing a 218 unit deal as his first deal with no money of his own. Anthony has talked openly about how building a portfolio meant his family no longer had to choose between his kids’ school and his wife’s career. That is the freedom return on the page. Frank Patalano, another Warrior, runs a mission first investing approach grounded in the New England communities he grew up in. His version of impact return is hyper local: the apartments he buys are buildings he wants his neighbors to live in. He talks about the framework on [his podcast episode with me](https://rodkhleif.com/podcasts/the-fastest-path-to-multifamily-success/). Zach, who came in as a bootcamp attendee, used the goal stack to engineer his way out of a W2 he hated and into a multifamily portfolio he funds his family’s giving from. His [interview](https://rodkhleif.com/podcasts/from-bootcamp-to-multifamily-success/) covers how the giving piece kept his head straight while the unit count was still small. Watch the Full Interview
Anthony Metzger walks through the leap from grade school teacher to closing a 218 unit deal with a Three Returns mindset.
> **Rod Khleif:** “The fastest investors I coach are not the ones with the most money or the best market. They are the ones who picked a mission early and let it drag them through the hard years.”
## How Purpose Driven Investing Outperforms Long Term
Skeptics treat purpose as soft. The numbers say otherwise. Three structural reasons purpose driven investors tend to outperform across full cycles. **Better partner selection.** An investor who screens partners on values, not just rate of return, ends up with a partner pool that does not blow up in a downturn. Capital that aligns to mission tends to be patient capital, and patient capital is the only kind that survives a 2008 or a 2022 rate shock. **Lower decision fatigue.** When you know what the business is for, you say no faster. You walk away from deals that do not fit, you turn down JV partners that look great on a spreadsheet but feel wrong in a conversation, and you focus your scarce energy. Purpose is a filter, and filters compound. **Recruiting and retention.** Per the [Federal Reserve Survey of Consumer Finances](https://www.federalreserve.gov/publications/files/scf23.pdf), the wealth gap between top earners and the rest is widening, which means the investors who attract the strongest team members are the ones offering more than a paycheck. Purpose driven operations attract long tenured property managers, asset managers, and acquisitions analysts. Lower turnover, better execution. ## Three Returns vs Financial Only Investor
Side by side, here is how the two approaches diverge over a ten year arc. Both can hit a unit count. Only one of them tends to produce an investor who is still in the business and still healthy at year ten. FINANCIAL ONLY VS THREE RETURNSHow the two approaches play out across a full multifamily cycle Decision Area Financial Only Investor Three Returns Investor Why they invest ✗Hit a number, retire early ✓Fund a mission, own a calendar, build a body of work First underwriting filter ✗Pro forma IRR ✓Does this deal advance the mission AND the IRR Partner selection ✗Whoever wires the money ✓Investors who share the why and the time horizon Behavior in a downturn ✗Sells assets, kills team, exits the asset class ✓Trims, restructures, holds the mission, comes out stronger Year 10 self report ✗“I made it. Now what.” ✓“I am doing the work I was built for.” Legacy ✗An estate that gets liquidated ✓A foundation, a body of teaching, a community that outlives the founder ## Three Returns Stack vs Traditional Goal Setting
Most goal setting curricula were not built for real estate. SMART goals, OKRs, and the standard self help template all optimize for one axis. The Three Returns Stack is built specifically for investors who need to balance cash flow, calendar, and cause across a long career. SMART GOALS VS THREE RETURNSWhy traditional goal frameworks fail multifamily investors Dimension SMART or Generic Goal Three Returns Stack Anchor of the goal ✗A number on a deadline ✓A life, a calendar, a cause, then a number Failure mode ✗Hit the number, lose the life ✓Fewer deals but the right ones Time horizon ✗One year ✓Ten years and beyond Treatment of giving ✗Optional, “if there is money left over” ✓Underwritten as a fixed line item from day one Effect on partners ✗Attracts yield chasers ✓Attracts long tenured patient capital If you want a deeper dive into the goal setting layer that feeds the Three Returns Stack, the [goal setting accelerator post](https://rodkhleif.com/how-goal-setting-accelerates-real-estate-success/) walks through the daily writing ritual that drives all of this. The [resilience post](https://rodkhleif.com/how-to-develop-resilience-as-a-real-estate-entrepreneur/) covers the Five Pillar Resilience Stack you will lean on when the market punches back. And the [fear post](https://rodkhleif.com/how-to-overcome-fear-when-starting-out-in-real-estate/) covers the F.E.A.R. process for getting through the first deal. ## Purpose Driven Real Estate Investing FAQ
**Q: What is purpose driven real estate investing?** A: Purpose driven real estate investing is the practice of building a real estate business that is intentionally designed to produce three returns at once: financial, freedom, and impact. The framework forces you to define why you are investing before you set a unit count, then back into the deal pipeline that funds the life and the mission you actually want. **Q: Can you give back to the community through multifamily investing?** A: Yes, and multifamily is one of the cleanest vehicles to do it. Apartments serve real residents, the cash flow is recurring, and operators can pre commit a percentage of distributions to a named cause inside the partnership agreement. That structure turns intention into accountability. **Q: How do I build a real estate business aligned with my values?** A: Start by writing your Three Returns target in your own handwriting: impact, freedom, and financial in that order. Translate the impact and freedom targets into an annual cash flow number, then back into a unit count and a deal pipeline. Codify the impact pledge inside your operating agreement so it becomes a structural commitment, not a mood. **Q: What percentage of cash flow should I donate as an investor?** A: There is no single right number, but one to ten percent of GP distributions is the working range I see produce real outcomes. One percent is the minimum that feels real. Five percent is when investors start to notice. Ten percent puts your operation in the same conversation as the strongest values driven multifamily firms in the country. **Q: How does Rod Khleif integrate philanthropy with multifamily investing?** A: Through Tiny Hands Foundation, the charity I started more than two decades ago that has served more than ninety thousand children. The foundation is intentionally tied to the multifamily business: a portion of personal distributions flows to it every year, the team participates, and it is named publicly so I cannot quietly back out of it on a tough quarter. **Q: What is the Tiny Hands Foundation?** A: Tiny Hands Foundation is the nonprofit I founded that feeds children, fills backpacks for the school year, and runs holiday outreach for kids in need. It has served more than ninety thousand children to date and is the proof point that the Three Returns Framework is not a slide. It is the operating system I have run on for more than thirty years. **Q: Does purpose driven investing hurt returns?** A: The research and my direct experience say no. Purpose driven operators tend to have lower team turnover, more patient capital, better partner selection, and stronger downturn behavior. All four of those compound in your favor over a full real estate cycle, which is why Three Returns operators tend to outperform Financial Only operators across ten plus year horizons. **Q: How do I find investing partners who share my values?** A: State your values in writing on your investor deck, in your PPM, and on every podcast you go on. The wrong investors will self select out and the right investors will self select in. You will raise less in the first year and significantly more from year three onward. **Q: What legacy can multifamily investing create for my family?** A: A multifamily portfolio built around the Three Returns Framework can leave three things to your family: an income producing asset base, a foundation that funds a cause for generations, and a body of operating practice your children can step into or sell. The financial inheritance is the smallest of the three. **Q: How do I balance profit and purpose in real estate syndication?** A: Stop treating them as a tradeoff. Underwrite both at the same time. Pre commit the impact percentage inside the partnership structure, build the freedom return into how you staff and systematize the operation, and let financial return be the discipline that funds both. That is the entire job of a Three Returns operator. ## Ready to Take the Next Step
If the Three Returns Framework lit something up for you, do not let the moment pass. The fastest way to build a purpose driven multifamily business is to surround yourself with operators who already do it. [**Join the next free Rod Khleif Multifamily Bootcamp →**](https://rodkhleif.com/bootcamp/)
Not ready for a live event yet? Start with my free book that lays out the full goal setting, underwriting, and giving structure side by side. [**Download How to Create Lifetime Cash Flow Through Multifamily Properties →**](https://rodkhleif.com/lcfa-ebook/)
*Disclaimer: This article was written with the help of AI and reviewed by Rod and his team.* Warriors who built businesses with intention include [Aaron Novotney with his 53 unit Ohio deal](https://rodkhleif.com/warrior-win-aaron-novotney-53-unit-in-oh/) and [Alejandro Chardon with his Arizona land development project](https://rodkhleif.com/warrior-win-alejandro-chardon-land-development-project-az/).
At scale, see how [Ronal and Mary Jane Lou closed 204 units in Texas](https://rodkhleif.com/warrior-win-ronal-and-mary-jane-lou-204-units-tx/) and [Victor Collazo closed 92 units in Kansas](https://rodkhleif.com/warrior-win-victor-collazo-92-unit-ks/).
**Categories:** Blog
---
### [Why House Hacking is the Best Way to Start Investing](https://rodkhleif.com/why-house-hacking-a-plex-is-the-best-possible-way-to-start-investing/)
**Published:** February 6, 2025
**Author:** Rod Khleif
**Excerpt:** If you’re at all interested in multifamily real estate investment, then there are two words you need to learn right now: house hacking.
**Content:**
If you are serious about getting into real estate investing, there is one strategy that stands above the rest: **house hacking.** This method allows you to buy a duplex, triplex, or fourplex, live in one unit, and rent out the others to cover your mortgage and expenses.
With house hacking, you can significantly reduce your housing costs, build equity, generate rental income, and gain real-world experience as a landlord. All while living in your own investment property.
For first-time investors, there is no better way to start. Let’s break down why house hacking is the smartest way to acquire your first investment property and set yourself up for long term wealth.
## 1. House Hacking Makes Financing Easier
One of the biggest challenges for new investors is securing financing, but house hacking makes it much more accessible than traditional real estate investments.
### Helps with Financing
- Lenders prefer multifamily properties with multiple income streams. A single family home has just one tenant, while a duplex, triplex, or fourplex has multiple renters, making it a lower risk investment for banks.
- Rental income counts toward your loan qualification. Most lenders will allow 75% of the rental income from your additional units to be factored into your mortgage application, helping you qualify for a larger loan.
- You can use an FHA loan with a low down payment. Unlike conventional investment property loans that require 20-25% down, an FHA loan allows you to buy a multifamily property with as little as 3.5% down and lower interest rates.
### Example of House Hacking with an FHA Loan
- Triplex Purchase Price: $400,000
- Down Payment (3.5% FHA Loan): $14,000
- Rental Income from Two Units: $3,000 per month
- Mortgage Payment: $2,500 per month
With this setup, your tenants cover your entire mortgage payment, allowing you to live for free or even generate extra cash flow.
## 2. Reduce or Eliminate Your Housing Costs
The average person spends 30-50% of their income on housing expenses, whether that is rent or a mortgage. House hacking allows you to drastically cut or eliminate that cost, freeing up money to invest in other opportunities.
### Comparison: Single Family Home vs. House Hacking a Duplex
#### Scenario 1: Buying a Single-Family Home
- Purchase Price: $350,000
- Loan Type: FHA, 5% down
- Monthly Mortgage Payment: $2,200
- Rental Income: $0
- Total Housing Expense: $2,200 per month
#### Scenario 2: House Hacking a Duplex
- Purchase Price: $350,000
- Loan Type: FHA, 3.5% down
- Rental Income from One Unit: $1,500 per month
- Total Housing Expense: $700 per month
By house hacking a duplex, you reduce your housing expense from $2,200 to just $700 per month. And if you buy a triplex or fourplex, you could live for free.
Instead of spending years paying off a mortgage without earning anything back, house hacking turns your primary residence into an income-producing asset.
## 3. House Hacking Helps You Build Wealth and Equity Faster
With a traditional home purchase, you pay the full mortgage and property expenses out of pocket, which limits how quickly you can build equity. With house hacking, your tenants help pay down your mortgage each month, accelerating your equity growth.
### How House Hacking Builds Wealth Over Time
- Your tenants pay your mortgage, reducing your financial burden.
- You build equity as the property appreciates in value.
- You gain tax advantages, including deductions on mortgage interest, property depreciation, and expenses.
House hacking is not just a short term solution to reduce housing costs, it is a long term strategy to create generational wealth through real estate investing.
## 4. Gain Real-World Landlord and Property Management Experience
One of the biggest challenges for new investors is learning how to manage rental properties effectively. House hacking provides hands-on experience without the risks of managing a property from a distance.
### Skills You Develop as a House Hacker
- Tenant screening and lease agreements
- Rent collection and financial management
- Handling maintenance and repairs
- Understanding landlord-tenant laws
Many investors jump into real estate without understanding the responsibilities of being a landlord. House hacking lets you learn on a small scale before expanding into larger multifamily properties.
## 5. House Hacking Can Work for Short Term Rentals Too
House hacking is not just limited to long-term tenants. Many investors maximize their rental income by offering short term rentals through Airbnb or other platforms.
### Short-Term Rental vs. Long-Term Rental Income
- Long-Term Rental: $1,500 per month per unit
- Short-Term Rental: $120 per night per unit
- If booked 15 nights per month: $1,800 per unit
By converting one or more units into short-term rentals, you can increase your cash flow significantly while still keeping your primary residence in a high performing property.
## Again, House Hacking is the BEST Way to Start Investing
House hacking is one of the most effective and accessible ways to start your journey as a real estate investor.
### Key Benefits
- Lower your housing costs or live for free
- Use FHA financing to get started with a low down payment
- Build equity faster than with a single-family home
- Gain hands on experience managing rental properties
- Set yourself up for larger real estate investments in the future
If you are ready to start house hacking and secure your financial future, here’s what to do next:
- Start researching duplexes, triplexes, and fourplexes in your area.
- Get pre-approved for an FHA loan to understand your budget.
- Join a real estate investment group to connect with experienced investors.
- Take action and make your first house hack happen.
Its not just a strategy, it’s a proven pathway to financial freedom. The best time to start is now.
If you want to learn more about investing in real estate, check out this [*Complete Guide to Real Estate Investing.* ](https://rodkhleif.com/why-house-hacking-a-plex-is-the-best-possible-way-to-start-investing/)
[](https://rodkhleif.com/lifetime-cashflow-podcast/)
**🎧 Want to Learn from the Best in Multifamily Investing?**
Join **Rod Khleif**, one of the top real estate investing coaches, as he interviews industry giants, breaks down powerful strategies, and shares the mindset secrets of top real estate investors.
👉 **Listen Now:** [Lifetime Cash Flow Through Real Estate Investing Podcast](https://rodkhleif.com/lifetime-cashflow-podcast/)
**Related reading:** [the FHA multifamily loan rules behind house hacking](https://rodkhleif.com/fha-loans-multifamily-real-estate-investors/).
**Categories:** Blog, Property Management
**Tags:** apartment investing, business structures, Driving Force, investor mistakes, landlord, motivation, multifamily, multifamily investment, multifamily property investing, multifamily real estate, NOI, real estate, real estate investing, real estate podcast, Rod Khleif, seller financing
---
### [10 Steps to Your First Small Multifamily Deal](https://rodkhleif.com/10-steps-to-your-first-small-multifamily/)
**Published:** April 22, 2025
**Author:** Rod Khleif
**Excerpt:** The small Multifamily real estate market (2 – 30 units) is a niche with little competition that’s ripe with opportunities. The majority of the owners of these size properties are "mom and pops" which often means below market rents, value-add potential, and seller financing possibilities.
**Content:**
## **Why Small Multifamily?**
Think **2‑ to 30‑unit** buildings. They’re usually run by “mom‑and‑pop” owners, so rents sit below market, maintenance is behind, and seller financing is common. Competition from big buyers is almost zero, giving you room to negotiate and add value fast.
## Steps to Your First Multifamily Property
### **1. Audit Your Finances**
Spend a weekend gathering bank statements, credit scores, and tax returns. List every funding source—cash, HELOCs, 401(k) rollovers—plus how quickly you can tap each one. Meet a local lender to confirm what you can borrow with FHA, conventional, or commercial terms. Tighten weaknesses now so you can close decisively later.
### **2. Pick Your Lane: Residential or Commercial**
- **2–4 units (residential)** → House‑hack with 3.5 %‑down FHA loans and 30‑year fixed rates.
- **5–30 units (commercial)** → Property value follows **NOI ÷ Cap Rate**. Improve operations, force appreciation, and refinance equity out.
Choose a lane first; everything—underwriting, financing, exit plan—flows from that decision.
### **3. Select One Promising Market**
Narrow your hunt to one or two metros. Look for:
- **Job & population growth
- **Diverse employers** (so one closure won’t tank the area)
- **Rising median income**
A healthy market forgives rookie mistakes and multiplies every operational win.
### **4. Lock In Two Key Partners**
1. **Multifamily broker** who closes off‑market deals.
2. **Relationship‑based lender** who funds small complexes.
Strong relationships close more deals than the deepest pockets.
### **5. Warm Up Future Investors**
Build a spreadsheet of friends, colleagues, and family who could invest $25k–$250k. Meet for coffee, learn their goals, and keep them updated. Trust earned now speeds funding when you find a slam‑dunk deal.
### **6. Look Like a Business**
Secure a professional email, Google Voice number, simple website, and (when you’re ready) an LLC. These low‑cost steps show brokers and sellers you’re serious—not a hobbyist.
### **7. Build a Property & Owner Database**
Pull county records or paid lists to capture every small‑multifamily property in your target area. Track owner names, phone numbers, last sale date, and any code violations. Organized data turns into targeted mailers and focused follow‑up calls.
### **8. Mail First—Digital Later**
Mom‑and‑pop owners read letters, not TikTok ads. Send a friendly, hand‑addressed note three times over 90 days. One student mailed 300 letters and landed a 32‑unit deal that nets $10k a month. Old‑school still wins.
### **9. Add More Deal Pipelines**
While mailers work, also:
- Drive for dollars (look for overgrown lawns or peeling paint)
- Watch online & courthouse auctions
- Set Craigslist and Facebook alerts
- Network with wholesalers
Multiple funnels smooth out the feast‑or‑famine cycle.
### **10. Underwrite Until It’s Second Nature**
- **2–4 units:** Value = similar sales within ½ mile.
- **5+ units:** Value = **NOI ÷ Cap Rate**.
Run practice deals daily. Test what happens if rents come in 5 % low or expenses 10 % high. Speed and certainty win offers—hesitation kills them.
### **Final Word**
Small multifamily isn’t complicated, but it rewards disciplined execution. Audit your money, choose one market, assemble a lean team, and act every day. Follow these ten steps and you’ll move from dreaming about cash flow to depositing it.
**Block one hour today, pick your market, and draft your first mailer. Momentum loves speed—let’s go get your first deal!**
**Related reading:** [how FHA multifamily financing works on a first deal](https://rodkhleif.com/fha-loans-multifamily-real-estate-investors/).
**Categories:** Blog, Finding Deals, Raising Capital
**Tags:** apartment investing, business structures, Driving Force, landlord, motivation, multifamily, multifamily investment, multifamily property investing, multifamily real estate, real estate, real estate investing, real estate podcast, Rod Khleif, seller financing, tax law
---
### [Why Your First Home Should Be a Multifamily Property](https://rodkhleif.com/6-reasons-make-first-home-multifamily-property/)
**Published:** March 9, 2025
**Author:** Rod Khleif
**Excerpt:** There’s not much more exciting than buying your first home.
In all the excitement, however, starry-eyed first-time buyers often miss this simple fact: buying your first home is a critical moment in your financial journey.
In this post, I’m going to help you think strategically about how to make the most of that moment. How? By focusing specifically on residential multifamily property.
In fact, I’d argue that making your first home a multifamily could be one of the wisest investment decisions you ever make. Here are 6 reasons why I can say that:
**Content:**
# Unlocking Wealth: Why Your First Home Should Be a Multifamily Property
There are few moments in life as exhilarating as buying your first home. But amidst the excitement, many first-time buyers overlook a crucial truth: this purchase is a pivotal step in your financial journey. Today, I want to help you think strategically about this moment. Specifically, I’m going to focus on why your first home should be a multifamily property. Trust me, making this choice could be one of the smartest investment decisions you ever make. Here are some compelling reasons why: ## 1. Jump Start Your Wealth Building
Homeownership is the most powerful driver of wealth accumulation in the U.S. economy. In 2022, the average net worth of a homeowner was just under $255,000, while renters barely scraped by with an average net worth of around $6,300. Many first-time buyers focus solely on having a roof over their heads, but that’s a shortsighted approach. Your first home is an investment property, whether you realize it or not. So, why not think like an investor? By choosing a multifamily property as your first home, you’re ensuring that your first asset is a solid earner that can serve you for a lifetime. ## **2. Cash Flow Right Out of the Gate
When you buy a single-family home, every penny for the mortgage, taxes, and insurance comes out of your pocket. But with a multifamily property, your tenants help offset—or even completely cover—those expenses! This cash flow doesn’t just put money in your pocket each month; it also gives you breathing room to handle unexpected costs or reinvest in improvements that increase your property’s value.
**Remember**: Positive cash flow is the name of the game when you’re building wealth.
## 3. Start with Training Wheels
Thinking and acting like a real estate investor can feel daunting, especially when you hear stories about seasoned investors dealing in massive complexes. But here’s the good news: the mechanics of purchasing a duplex are not that different from buying an apartment complex—they just come on a smaller scale. By starting with a smaller residential multifamily property, you can develop the essential skills you’ll need to tackle larger investments in the future. It’s never too early to dive into real estate investment, even when you’re searching for your first home. ## **4. House Hacking: The Ultimate Wealth Hack
I’m a huge fan of “house hacking,” which means living in one unit of a multifamily property and renting out the others. The rental income can cover most—or even all—of your housing costs. Imagine living virtually rent-free or greatly reducing your monthly housing expenses. That frees up cash to eliminate high-interest debt, fund an emergency account, or reinvest into your growing real estate portfolio.
**Think**: Instead of paying rent to someone else, you can own an asset that pays you.
## 5. Let Others Pay Your Bills
Imagine you’re ready to purchase your first place and secure a $250,000 loan. With a 3.5% down payment on a 30-year FHA loan at 3.75% interest, your monthly mortgage payment (excluding taxes and insurance) would be about $1,306. If you buy a single-family home, that entire burden rests on your shoulders. Now, picture this: you opt for a duplex instead. In your market, rental rates for a 2-bedroom unit hover around $800/month. By living in one unit and renting out the other, you’ve reduced your monthly mortgage load to just $506. Take it a step further and consider a triplex. With rental income covering your mortgage, you can invest that extra cash into your equity, make improvements, or cover other bills. This is the power of multifamily living! ## 4. Enjoy the Economy of Scale
In each scenario I just described, you only had to purchase one property. This means one negotiation, one loan, and one contract-to-close process. You’re managing one physical property instead of juggling multiple homes scattered around the neighborhood. That’s the beauty of multifamily real estate: you can reap the benefits of multiple income streams with significantly less hassle. Plus, as you acquire higher-capacity multifamily properties, your acquisition costs per unit decrease, improving your cash-on-cash returns. ## 5. Access Easier Financing
Thanks to programs like FHA, financing a duplex, triplex, or quadplex can be much simpler than securing a loan for a commercial multifamily property. The terms are generally more favorable, too. One common hurdle for new multifamily investors is the lack of experience. Without a proven track record, lenders may hesitate to approve a commercial multifamily loan, creating a catch-22. You need experience to get the property, but you need the property to gain experience. However, by using FHA to purchase a multifamily property as a first-time buyer, you can tackle both challenges simultaneously while locking in a manageable monthly debt load. ## 6. Gain On-the-Job Training
Managing an investment property isn’t for the faint of heart. It requires both business acumen and emotional intelligence. But here’s the truth: no one is born with property management skills. Everyone has to start somewhere. What better way to learn than on your own turf? As the on-site manager of your property, you’ll gain firsthand experience with everything that happens in the building, with your tenants, and in the neighborhood. This proximity allows you to monitor and manage your property far more effectively than if it were located miles away. Learning to be a landlord is one of the most valuable skills you can develop early in your investment career. One day, you’ll hire others to manage your properties, but having built this skill set, you’ll know exactly what to look for in a new hire. ## **7. Lower Risk, Higher Reward
A lot of people shy away from multifamily properties because they think it’s complicated. But as far as investing goes, it can actually reduce your risk. If a single tenant moves out of a duplex or triplex, you still have income from the other units. On the other hand, if you own a single-family home and the tenant moves out, you’re left covering 100% of the mortgage yourself.
**Security**: Diversifying income streams within a single property helps you sleep better at night.
## **8. Fast-Track Your Real Estate Education
Owning multifamily property teaches you the ins and outs of real estate quickly. You’ll learn about tenant screening, property management, and basic maintenance with just a few units. That experience is incredibly valuable if you plan to scale your portfolio—and trust me, if you catch the real estate bug, you *will* want to scale.
**Advantage**: It’s on-the-job training that accelerates your path to becoming a savvy, confident investor.
## Final Thoughts from Rod Khleif: Embrace the Journey
If you’ve followed my work, you know how passionately I believe in multifamily investment as a pathway to life-changing wealth. This belief is especially true when you’re just starting out in real estate. Remember, it’s never too soon to dive into real estate investment, even when you’re looking for your first house. Embrace this opportunity, and you’ll set yourself up for a prosperous future. **If you haven’t yet, grab your free copy of my book, *How to Create Lifetime CashFlow Through Multifamily Properties*.**
[](https://www.lcfabook.com/core-book/?sl=rksite)**Let’s build your wealth together!**
If you want the bigger roadmap, start with our [10 step quick start to multifamily investing](https://rodkhleif.com/10-step-quick-start-multifamily-investing/) and our guide on [how to get started with limited capital](https://rodkhleif.com/how-to-get-started-with-multifamily-investing-with-limited-capital/).
**Related reading:** [FHA multifamily loan requirements for owner occupants](https://rodkhleif.com/fha-loans-multifamily-real-estate-investors/).
**Categories:** Blog, Due Diligence
**Tags:** apartment investing, business structures, Driving Force, fha loans, landlord, motivation, multifamily, multifamily property investing, multifamily real estate, real estate, real estate investing, real estate podcast, Rod Khleif
---
### [Capital Expenditure (CapEx)](https://rodkhleif.com/capital-expenditure-capex/)
**Published:** February 28, 2026
**Author:** Alex Khleif
**Content:**
In commercial real estate investing, few concepts matter more for long-term success than Capital Expenditure, or CapEx. Whether you manage a small multifamily property or a large commercial portfolio, CapEx is key. It helps maintain property value, stay competitive, and deliver strong investor returns. Yet despite its importance, CapEx is often misunderstood, underbudgeted, or improperly planned, leading to deferred maintenance crises, tenant dissatisfaction, and diminished property values. This comprehensive guide explores everything you need to know about CapEx: what it is, how it differs from operating expenses, why proper budgeting is essential, and how to implement a strategic CapEx plan that protects and enhances your real estate investments.## **What Is Capital Expenditure (CapEx)?**
Capital Expenditure refers to funds spent on significant property improvements that either extend the useful life of the property or its major components, or add substantial value to the asset. Unlike routine operating expenses that maintain day-to-day functionality, CapEx investments represent substantial improvements that will benefit the property for years to come. Common examples of CapEx include:- Roof replacement or major roof repairs
- HVAC system replacement or major upgrades
- Parking lot resurfacing or replacement
- Major plumbing or electrical system overhauls
- Elevator replacements or modernization
- Unit renovations (kitchens, bathrooms, flooring)
- Common area upgrades (lobbies, fitness centers, amenities)
- Window replacement programs
- Foundation repairs or structural improvements
- Building envelope work (siding, exterior walls)
The defining characteristic of CapEx is that these improvements provide benefits extending well beyond the current fiscal year. A new roof might last 20-30 years, a HVAC system 15-20 years, and renovated units can command premium rents for many years. This long-term benefit is what distinguishes CapEx from operating expenses.## **CapEx vs. Operating Expenses: Understanding the Critical Difference**
One of the most important distinctions in property accounting is the difference between Capital Expenditures and Operating Expenses (OpEx). This distinction matters enormously for tax purposes, financial reporting, property valuation, and investment analysis.### **Operating Expenses (OpEx)**
Operating expenses are the day-to-day costs of running a property. These are recurring expenses that maintain the property in its current condition without significantly extending its useful life or adding value. OpEx items are fully deductible in the year they occur and include:- Property management fees
- Routine repairs and maintenance
- Utilities (water, electric, gas)
- Property taxes
- Insurance premiums
- Landscaping and grounds maintenance
- Pest control
- Snow removal
- Marketing and leasing costs
### **Capital Expenditures (CapEx)**
In contrast, CapEx represents significant improvements that provide lasting value. These expenses are capitalized on the balance sheet and depreciated over their useful life according to IRS schedules. Rather than being immediately deductible, CapEx costs are recovered through depreciation deductions over many years. This accounting treatment has several important implications:- **Tax Impact:** OpEx provides immediate tax benefits while CapEx benefits are spread over time
- **Cash Flow:** Large CapEx projects can significantly impact short-term cash flow even though depreciation spreads the tax benefit
- **Property Value:** CapEx improvements typically increase property value while OpEx does not
- **NOI Calculation:** Operating expenses reduce Net Operating Income (NOI) while CapEx does not, affecting property valuations
## **Why Proper CapEx Budgeting Is Critical**
Insufficient CapEx planning is one of the most common mistakes in commercial real estate investment, often with devastating consequences. Properties that lack adequate capital reserves inevitably face a cascade of problems that compound over time.### **The Deferred Maintenance Death Spiral**
When CapEx is deferred, properties enter what industry professionals call the ‘deferred maintenance death spiral.’ It begins innocently enough—perhaps postponing a roof replacement for another year or delaying HVAC upgrades. However, deferred maintenance rarely stays deferred; it typically escalates into more expensive emergencies. A roof that needed replacement at $200,000 eventually fails, requiring emergency repairs plus interior damage remediation, potentially costing $350,000 or more. An aging HVAC system that could have been systematically replaced breaks down during peak summer, requiring emergency replacement at premium pricing while angry tenants withhold rent or break leases.### **Competitive Positioning**
Properties compete in their local markets based on condition, amenities, and perceived value. Adequate CapEx investment ensures your property remains competitive. When comparable properties undergo renovations—updated units, modern amenities, fresh common areas—properties that defer CapEx fall behind in tenant appeal and rental rates. This competitive disadvantage manifests in multiple ways: higher vacancy rates, lower achievable rents, longer time-to-lease, lower quality tenants, and increased concessions needed to attract tenants. The cumulative effect on property income and value can be substantial.### **Investor Confidence and Exit Strategy**
For syndicated deals and institutional investments, demonstrating proper CapEx planning is essential for investor confidence. Limited partners want assurance that their capital is being protected through appropriate reserves and strategic improvements. Properties with well-maintained CapEx programs command higher valuations at sale, while properties with obvious deferred maintenance face buyer scrutiny, lower offers, and difficulty securing financing.## **Creating an Effective CapEx Budget**
Developing a comprehensive CapEx budget requires both immediate assessment and long-term planning. The process begins with a thorough property condition assessment, typically conducted by specialized engineering firms who evaluate every major building system and component.### **The Property Condition Assessment**
A professional Property Condition Assessment (PCA) evaluates the current condition and remaining useful life of all major building components. This assessment generates a detailed report estimating when each component will need replacement and the projected cost, creating a capital needs roadmap for the next 12-20 years.### **Immediate vs. Long-Term Needs**
Effective CapEx budgeting separates immediate needs from long-term reserves. Immediate CapEx addresses critical issues requiring attention within 12 months—safety concerns, code violations, or systems at imminent failure. Long-term reserves fund predictable future replacements based on remaining useful life. Industry standards suggest annual CapEx reserves of $250-$500 per unit for multifamily properties, though this varies dramatically based on property age, condition, and local market factors. Older properties or those in harsh climates typically require reserves at the higher end of this range or beyond.### **Value-Add vs. Replacement CapEx**
[](https://rodkhleif.com/capital-expenditure-capex/screenshot-2026-02-27-at-4-51-10-pm/) Strategic CapEx budgets distinguish between replacement CapEx (maintaining existing functionality) and value-add CapEx (improving property income or competitiveness). Replacement CapEx includes items like roof replacement or HVAC system renewal—necessary expenses that maintain property condition but don’t necessarily increase rent. Value-add CapEx targets improvements that enable rent increases or competitive advantages: unit renovations that justify $200/month rent premiums, amenity additions that increase tenant retention, or energy-efficient upgrades that reduce operating costs while appealing to environmentally conscious tenants.## **CapEx and Property Valuation**
Understanding CapEx’s relationship to property value is crucial for investors. Commercial real estate is typically valued using the income approach, where property value equals Net Operating Income (NOI) divided by the capitalization rate. Since CapEx doesn’t reduce NOI, some investors mistakenly assume it doesn’t affect value. However, sophisticated buyers and lenders carefully scrutinize CapEx needs. Properties with significant deferred maintenance face value reductions as buyers discount the price by estimated catch-up CapEx costs plus a premium for risk and hassle. A property needing $2 million in deferred CapEx might see its value reduced by $2.5-3 million to account for buyer risk and opportunity cost. Conversely, properties with well-maintained building systems, recent strategic CapEx investments, and adequate reserves command premium valuations. Buyers pay more for properties requiring less immediate capital investment and reduced near-term risk.## **Best Practices for CapEx Management**
Successful property operators implement systematic approaches to CapEx planning and execution:- **Maintain detailed asset registers:** Track installation dates, expected lifespans, and replacement costs for all major building components
- **Conduct annual property inspections:** Regular professional assessments identify emerging issues before they become emergencies
- **Update CapEx plans annually:** Revise budgets based on actual conditions, market changes, and completed projects
- **Separate CapEx reserves:** Maintain dedicated reserve accounts preventing raids on CapEx funds for operating shortfalls
- **Prioritize preventive maintenance:** Aggressive preventive maintenance extends component life and reduces CapEx needs
- **Document everything:** Maintain comprehensive records of all CapEx projects, costs, and warranties
- **Obtain multiple bids:** Competitive bidding ensures fair pricing and reveals market rates for major projects
- **Consider lifecycle costs:** Sometimes higher upfront CapEx (premium materials, better systems) reduces long-term costs
## **Frequently Asked Questions About CapEx**
### **Q: How much should I budget for CapEx annually?**
A: Industry guidelines suggest $250-$500 per unit annually for multifamily properties, but this varies significantly based on property age, condition, location, and construction quality. Properties built in the 1960s-1970s often require higher reserves due to building system age and less durable construction methods. Properties in harsh climates (extreme heat, cold, or coastal areas) typically need higher reserves. A professional Property Condition Assessment provides the most accurate estimate for your specific property.### **Q: What happens if I run out of CapEx reserves?**
A: Insufficient CapEx reserves create several problems. You may need to defer necessary improvements, risking property deterioration and competitive position. Emergency situations may require expensive short-term financing or capital calls from investors. In extreme cases, insufficient reserves can trigger loan covenant violations if lenders require minimum reserve levels. The best approach is maintaining adequate reserves and treating CapEx funding as non-negotiable rather than discretionary.### **Q: Can I reduce operating expenses by increasing CapEx?**
A: Yes, strategic CapEx investments often reduce operating expenses. Energy-efficient HVAC systems, LED lighting conversions, low-flow plumbing fixtures, and improved insulation all require upfront CapEx but reduce ongoing utility costs. Water-efficient landscaping requires CapEx for installation but reduces water bills. High-efficiency appliances cost more initially but reduce utility costs in master-metered buildings. When evaluating such projects, calculate the payback period and return on investment to ensure the CapEx makes economic sense.### **Q: How do lenders view CapEx in loan underwriting?**
A: Commercial real estate lenders scrutinize CapEx carefully during loan underwriting. Most lenders require borrowers to escrow monthly CapEx reserves, typically $250-$300+ per unit, held in lender-controlled accounts. Lenders review Property Condition Assessments to identify immediate or short-term CapEx needs, which may be required as conditions of loan approval. Properties with significant deferred maintenance may receive lower loan-to-value ratios or higher interest rates. Demonstrating adequate CapEx planning and reserves generally improves loan terms.### **Q: Should I always choose the cheapest CapEx option?**
A: No. Effective CapEx decision-making considers lifecycle costs, not just initial price. A $50,000 roof might last 15 years while a $75,000 roof lasts 25 years—the premium option costs less per year of useful life. Similarly, commercial-grade building systems typically cost more initially but require less maintenance and last longer than residential-grade equivalents. Consider factors beyond price: warranty coverage, energy efficiency, maintenance requirements, and tenant impact. The lowest initial cost often leads to higher total cost of ownership.### **Q: How does CapEx differ for different property types?**
A: CapEx priorities and amounts vary significantly by property type. Multifamily properties focus heavily on unit turnover CapEx (flooring, appliances, countertops), building systems (HVAC, plumbing, roofing), and amenities. Office buildings emphasize mechanical systems, elevator maintenance, parking facilities, and periodic common area refreshes. Retail properties prioritize parking lot maintenance, storefront improvements, and signage. Industrial properties focus on roof maintenance, HVAC systems, and loading dock infrastructure. Each property type has unique CapEx considerations based on tenant expectations and building use.### **Q: What is a capital needs assessment and when should I get one?**
A: A capital needs assessment (also called Property Condition Assessment or PCA) is a comprehensive professional evaluation of all major building systems and components, estimating remaining useful life and replacement costs. You should obtain a PCA when acquiring a property (due diligence), when securing or refinancing a loan (lender requirement), every 3-5 years for long-term holdings (planning updates), or when considering major renovations (strategic planning). These assessments typically cost $2,000-10,000 depending on property size and complexity, but provide invaluable planning information that far exceeds their cost.### **Q: Can I defer CapEx if cash flow is tight?**
A: While technically possible, deferring CapEx is highly risky and almost always more expensive long-term. Deferred maintenance compounds—a $20,000 repair deferred becomes a $50,000 emergency. Properties with deferred CapEx face competitive disadvantages, higher vacancy, lower rents, and tenant dissatisfaction. If cash flow is genuinely insufficient to fund necessary CapEx, this signals deeper problems requiring immediate attention: revenue enhancement strategies, expense reduction initiatives, or consideration of sale. Chronic inability to fund CapEx indicates a property that may be underwater or inappropriately financed.### **Q: How do I prioritize multiple CapEx needs with limited funds?**
A: Prioritize CapEx projects using this framework: First, address life-safety issues and code violations (no exceptions). Second, complete repairs preventing further property damage (roof leaks, water intrusion, structural issues). Third, invest in systems at imminent failure risk. Fourth, focus on projects with strong ROI through rent increases or expense reduction. Fifth, address competitive positioning and amenity improvements. Maintain a written multi-year CapEx plan showing priority rankings, estimated costs, and planned timing, updated annually as circumstances change.## **Conclusion: CapEx as Strategic Investment**
Capital Expenditure represents far more than necessary maintenance costs—it is strategic investment in your property’s future competitiveness, value, and income-generating potential. Properties with well-planned, adequately funded CapEx programs outperform competitors, command premium valuations, attract quality tenants, and deliver superior returns to investors. The most successful real estate investors recognize that CapEx planning is not optional but fundamental to property investment strategy. By understanding the distinction between CapEx and operating expenses, implementing comprehensive budgeting and reserve programs, and maintaining detailed long-term capital plans, property owners protect their investments while positioning their assets for maximum performance. Whether you are acquiring your first property or managing a sophisticated portfolio, treating CapEx as the strategic investment it is—rather than a discretionary expense to be minimized—will serve as the foundation for long-term real estate success. The properties that thrive over decades are those whose owners recognized that proper CapEx planning and execution is not a cost center, but a value driver that separates exceptional properties from mediocre ones.Smart CapEx planning supports the financial performance of your property; pair it with a strong [financing strategy](https://rodkhleif.com/multifamily-financing-complete-guide/) and consistent attention to your [IRR and equity multiple](https://rodkhleif.com/measuring-returns-irr-vs-equity-multiple/) to keep deals on track.
**Related reading:** [how NOI works and what belongs in it](https://rodkhleif.com/a-complete-guide-noi-in-real-estate-in-2025/).
**Categories:** Blog, Due Diligence, Multifamily Investing, Property Management
---
### [What is a Good Cap Rate for Multifamily?](https://rodkhleif.com/what-is-a-good-cap-rate-for-multifamily/)
**Published:** May 26, 2026
**Author:** Rod Khleif
**Content:**
> **A good cap rate for multifamily in 2026 falls between 4.5 percent and 8 percent.** Class A in primary markets trades at 4.5 to 5.5 percent. Class B in secondary markets trades at 5.5 to 7 percent. Class C in tertiary markets trades at 7 to 9 percent or higher. Higher cap rates mean higher returns but higher risk.
> Cap rates are everything when I’m analyzing multifamily deals. I’ve looked at thousands of properties, and the cap rate instantly tells me if a deal deserves my time or my money. Here’s what most people get wrong: they chase whatever cap rate they see without understanding that good cap rates vary dramatically by market, asset class, and property condition. In 2026, a 5% cap rate might be exceptional in one market but laughable in another. Let me show you how to benchmark yours against comparable properties so you’re actually buying deals, not just hearing good stories. -Rod Khleif
If you’ve been searching for a simple answer to what is a good cap rate for multifamily, here it is: it depends. But not in a way that lets you off the hook but in a way that should make you sharper.
Cap rates vary by city, by property class, by market cycle, and by your own investment goals. And in 2026, cap rates have leveled off near 5% nationwide after years of decline. Knowing the difference between a good cap rate and the right one gives you an edge. It separates smart investors from those who overpay.
This article goes deeper than the basics. You’ll find current multifamily cap rates by city. You’ll see what banks are actually lending on. You’ll learn how cap rates differ across Class A, B, and C properties. At the end, you’ll get answers to the most common questions investors search on Google each day.
## **What Is a Cap Rate in Multifamily Real Estate?**
A capitalization rate, or cap rate, is the ratio of a property’s Net Operating Income (NOI) to its price.
**Formula:** Cap Rate = NOI ÷ Purchase Price
If a 20-unit apartment building generates $120,000 in NOI and is listed at $2,000,000, its cap rate is 6%.
If you want some help calculating, check out our [free instant commercial real estate cap rate calculator.](https://rodkhleif.com/cap-rate-calculator/)
[](https://rodkhleif.com/cap-rate-calculator/)Cap rate is a pre-financing metric. It ignores your mortgage. It measures the property’s raw return assuming an all-cash purchase. That is why it helps compare deals across markets, asset classes, and financing scenarios.
Think of it as a property’s yield. Just as a bond might return 4.5% annually, a multifamily property at a 6% cap rate delivers 6 cents of income for every dollar of value. The higher the cap rate, the faster you recoup your investment — but the more risk you’re typically accepting.
If you want to learn more about Cap Rates in Multifamily, check out our article: [What Are Cap Rates and Why You Should Use Them](https://rodkhleif.com/what-are-cap-rates-and-why-you-should-use-them/)
## **What Is a Good Cap Rate for Multifamily Properties in 2026?**
For most investors in 2026, a good cap rate for multifamily falls somewhere between 4.5% and 8%, depending on market and strategy. Here’s how to think about it:
- 4%–5.5%: Core primary markets (NYC, LA, Boston, Miami). Lower risk, lower return. Investors bank on appreciation and stability.
- 5.5%–7%: Secondary markets and B-class assets. The sweet spot for many experienced multifamily investors balancing cash flow with manageable risk.
- 7%–9%+: Tertiary markets, C-class, or value-add plays. Higher yields, but also more operational complexity, deferred maintenance, and exit risk.
There is no universal “good” cap rate. A 5% cap rate in downtown Miami might be excellent. A 5% cap rate in rural Ohio is a red flag. Context is everything.
**Rod’s Rule of Thumb:** A good cap rate is one that supports your debt, aligns with your business plan, and lets you sleep at night. If you’re buying on a cap rate that only works in the best-case scenario, you’re not investing — you’re gambling.
Do you want to learn more about Cap Rates? Check out our article: [How Cap Rates Work (With Examples)](https://rodkhleif.com/how-cap-rates-work-with-examples/)
## **Average Multifamily Cap Rates by City (2026 Data)**
Cap rates vary dramatically across the country. Below is a current snapshot based on data from CBRE, Yardi Matrix, and LoopNet through early 2026.
**City**
**Avg. Multifamily Cap Rate**
**Notes**
San Francisco, CA
~3.9%–4.5%
Most compressed in U.S.
New York City, NY
~4.5%–5.25%
Regulatory environment a factor
Los Angeles, CA
~4.5%–5.0%
Strong demand, tight supply
Miami, FL
~4.8%–5.5%
Sun Belt demand driver
Denver, CO
~5.0%–5.8%
Strong fundamentals
Phoenix, AZ
~5.5%–6.5%
High transaction volume
Houston, TX
~6.0%–7.0%
High returns, oversupply risk
Baltimore, MD
~8.5%–9.0%
High yield, value market
Detroit, MI
~10%–11.5%
Highest yield, higher risk
Sources: CBRE U.S. Cap Rate Survey H2 2025; Yardi Matrix; LoopNet 2026 Multifamily Analysis; CRE Daily. Ranges reflect going-in cap rates for stabilized assets.
Key 2026 insight: Multiple industry reports say the national average multifamily cap rate is near 5.04%. It has stayed there for several quarters. This is the longest plateau in 25 years. Analysts broadly expect gradual downward pressure on cap rates through 2026 as credit conditions ease and renter demand stays strong.
## **Multifamily Cap Rates by Property Class**
Property class is one of the most important factors in determining cap rates. Here’s what you need to know about each tier:
### **Class A: Lowest Cap Rates, Lowest Risk**
Class A properties are newer builds (typically under 15 years old) in prime locations, with high-end amenities and creditworthy tenants. Institutional investors compete aggressively for these assets, compressing yields.
- Typical cap rates in primary markets: 4.0%–5.0%
- Typical cap rates in secondary markets: 5.0%–6.0%
- Best for: Investors prioritizing capital preservation and appreciation over current cash flow.
### **Class B: The Investor Sweet Spot**
Class B properties are 15–25 years old, in stable middle-income neighborhoods, and often offer value-add potential through modest renovations and operational improvements.
- Typical cap rates in primary markets: 5.0%–6.5%
- Typical cap rates in secondary/tertiary markets: 6.5%–8.0%
- Best for: Experienced investors seeking a balance of cash flow, upside potential, and manageable risk.
### **Class C: Highest Cap Rates, Most Complexity**
Class C properties are older (25+ years), often in transitional neighborhoods, with deferred maintenance and workforce housing tenants. The higher cap rates compensate for greater operational demands.
- Typical cap rates: 7.5%–11%+
- Best for: Operators with deep property management experience, strong local teams, and capital reserves for CapEx.
### Cap Rates by Market and Asset Type
[](https://www.cbre.com/insights/viewpoints/a-multi-perspective-view-on-cap-rates) **Market Type**
**Property Class**
**Cap Rate Range (2026)**
**Risk Level**
Primary Metro (NYC, LA, Boston)
Class A
4.0%–5.0%
Low
Primary Metro
Class B
5.0%–6.5%
Low–Medium
Secondary Market
Class A
5.5%–6.5%
Medium
Secondary Market
Class B/C
6.5%–8.0%
Medium
Tertiary / Emerging
Class B/C
7.5%–9.5%
Medium–High
Value-Add / Distressed
C / D
8.0%–11%+
High
## **What Cap Rate Will Banks Lend On for Multifamily?**
This is one of the most important, and most overlooked questions in multifamily underwriting. Your cap rate doesn’t just determine value. It determines whether a bank will even lend on the deal.
### **The Debt Service Coverage Ratio (DSCR) Connection**
Lenders use DSCR — the ratio of NOI to annual debt service — as the primary credit metric for multifamily loans. Most banks require a minimum DSCR of 1.20x to 1.25x.
**Example:** A property with a $150,000 NOI needs at least $120,000 to $125,000 left. This is after paying the annual mortgage. This meets most lenders’ requirements.
### **How Cap Rate Affects Loan Sizing**
At today’s interest rates, standard multifamily loans cost about 5.5%–7%. The exact rate depends on the loan term and the LTV. If the cap rate is under 5%, it can lead to negative leverage. This means the debt cost is higher than the property’s cap rate. This is not automatically a dealbreaker, but it requires a compelling appreciation or rent-growth thesis.
As a general rule in 2026:
- Cap rate at or above the interest rate: Positive leverage. Most banks will lend comfortably.
- Cap rate below the interest rate: Negative leverage. Deal may still work with strong rent upside, but lenders will scrutinize aggressively.
- Cap rate below 4.5% in a rising-rate environment: Banks may require additional reserves, lower LTV, or recourse.
### **Agency vs. Bank Lending Standards**
Fannie Mae and Freddie Mac (agency lenders) typically allow LTVs up to 75%-80% for stabilized multifamily assets and are generally more flexible than commercial banks. They underwrite using stabilized NOI. So if you buy a value-add deal at 5% occupancy today, they underwrite your pro forma. They will review it closely.
For most standard deals in 2026, expect banks to lend conservatively. Plan on 70%-75% LTV, at least 1.25x DSCR, and a rate stress test. The stress test is typically 1%–2% above current rates.
## **Best Cap Rate Multifamily Markets in 2026: Where Are Investors Finding Yield?**
With primary market yields now around 4% to 5%, income investors are looking to secondary and emerging markets. They want stronger cash-on-cash returns.
### **Highest Cap Rate Markets (Best for Cash Flow)**
- Detroit, MI: Cap rates reaching 11%+ for multifamily. High yield, but requires deep local expertise and strong management.
- Baltimore, MD: Averaging 8.5%–9%. One of the most attractive risk-adjusted yield markets in the Mid-Atlantic.
- Tulsa, OK / Jacksonville, FL: Cap rates in the 8.2%–8.9% range with improving economic fundamentals.
- Chicago, IL: Suburban submarkets offer 8%+ in select areas despite the broader regulatory environment.
### **Balanced Markets (Cash Flow + Appreciation)**
- Tampa, FL / Orlando, FL: Solid 6.5%-7% cap rates with continued migration and job growth.
- San Antonio, TX: Strong affordability and cap rates around 6%-7%, with continued population growth.
- Denver, CO: Class A deals in the 5%-5.8% range with a strong long-term outlook.
- Las Vegas, NV: Favorable tax environment, above-average cap rates for a Western market.
### **Appreciation-Driven Markets (Lower Cap Rates, Long-Term Upside)**
- Miami, FL and Fort Lauderdale, FL: 4.8%-6.3% cap rates, driven by ongoing migration and supply constraints.
- Seattle, WA: Q3 2025 saw 7.9% total returns despite compressed going-in cap rates — a function of rent growth.
- San Jose, CA: Among the top performers in Q3 2025 total returns despite sub-5% cap rates.
## **What Factors Affect Multifamily Cap Rates?**
Cap rates don’t exist in a vacuum. Seven key factors drive where any given property prices:
1. **Location and submarket fundamentals.** Job growth, population trends, and local supply constraints all directly impact investor demand — and thus cap rates.
2. **Interest rates and the cost of capital.** When borrowing costs rise, investors demand higher yields to maintain returns, pushing cap rates up. The inverse is also true.
3. **Property class (A, B, C).** As covered above, newer and better-maintained assets command lower cap rates from risk-averse buyers.
4. **Occupancy and NOI stability.** Stabilized, fully occupied properties with consistent rent rolls trade at lower cap rates than value-add or distressed assets.
5. **Tenant quality and lease structure.** Properties with long-term leases, lower turnover, and higher-income tenants compress cap rates.
6. **Local supply and demand dynamics.** Markets like Austin saw cap rates rise in 2024–2025 as oversupply hit — a cautionary tale for investors ignoring pipeline data.
7. **Investor competition and capital availability.** Institutional capital chasing limited inventory drives cap rate compression. When institutions pull back, rates rise.
## **Cap Rate Trends Heading Into 2026: What to Know**
Here’s where the market stands as of early 2026, based on current data from CBRE, Newmark, and JPMorgan Chase:
- National average multifamily cap rate: approximately 5.04%, having held flat since late 2023.
- Going-in vs. exit cap spread: CBRE data shows average going-in rates near 4.75% with exit caps near 4.96% — a 21 bps spread that signals investors are pricing in modest appreciation.
- Direction in 2026: Most analysts expect cap rates to gradually compress as the Fed continues rate cuts and credit conditions ease. Private investors remain the dominant buyers; REIT participation is growing.
- Best-performing markets by total return in 2025 (Q3): San Jose (9%+), Houston (9%), Miami (8.4%), Seattle (7.9%).
- Markets to watch for oversupply risk: Austin, TX and Raleigh, NC posted below-average returns due to new supply absorption challenges.
The bottom line: Investors who can lock in today’s cap rates in markets with improving fundamentals may be positioned well as values rise in 2026 and beyond.
## **How to Calculate Cap Rate on a Multifamily Deal**
Calculating cap rate isn’t complicated — getting the inputs right is.
### **Step 1: Determine Gross Potential Income (GPI)**
Add up total potential rent across all units at market rates, assuming 100% occupancy.
### **Step 2: Subtract Vacancy and Credit Loss**
Apply a realistic vacancy factor; typically 5%–10% depending on the market. In hot markets you might underwrite 5%; in tertiary markets, 8%–10% is more prudent.
### **Step 3: Calculate Effective Gross Income (EGI)**
GPI minus vacancy and credit loss. Add any ancillary income (laundry, parking, pet fees).
### **Step 4: Subtract All Operating Expenses**
This includes: property taxes, insurance, property management (always include this even if self-managing — use 6%–8% of EGI), maintenance and repairs, utilities, landscaping, advertising, and reserves for replacement (typically $300–$500 per unit per year).
Do NOT subtract mortgage payments. Cap rate is a pre-financing metric.
### **Step 5: Divide NOI by Purchase Price**
**Cap Rate = NOI ÷ Purchase Price**
Example: $180,000 NOI ÷ $3,000,000 purchase price = 6.0% cap rate
**Pro Tip:** Never rely on the seller’s pro forma for NOI. Verify using trailing 12-month actuals, real expense reports, and your own independent management cost estimate.
## **Final Thoughts: Cap Rate Is a Tool, Not the Answer**
Cap rates give you a fast read on a deal’s income potential. But they don’t tell you the full story.
A 7% cap rate in a declining market with poor schools, job losses, and no rent growth potential is a bad deal. A 5% cap rate in a supply-constrained, high-growth submarket with institutional-quality tenants and strong rent upside may be an excellent deal.
The investors who succeed in multifamily understand what drives the cap rate, and whether those fundamentals support the price. They look at cash-on-cash return, IRR, debt coverage, and exit strategy in addition to cap rates.
Cap rate is the starting point. Due diligence is the finish line.
Use the free Cap Rate Calculator at rodkhleif.com to run numbers on any deal instantly, and always underwrite conservatively.
## Good Cap Rate for Multifamily FAQ
### What is a good cap rate for multifamily in 2026?
A good cap rate for multifamily in 2026 sits between 4.5 and 8 percent. Class A properties in primary markets trade at 4.5 to 5.5 percent. Class B in secondary markets falls between 5.5 and 7 percent. Class C in tertiary markets sits at 7 to 9 percent or higher.
### What is a good cap rate for rental property?
For most rental property, a good cap rate ranges from 5 to 10 percent depending on location and risk. Single family rentals tend to come in lower because financing is cheaper and operations are simpler. Small multifamily and commercial rentals typically deliver higher cap rates because they carry more operational risk.
### Is a higher or lower cap rate better?
Neither is universally better. A higher cap rate means more current income relative to price, but it usually signals more risk in the market, the asset, or the tenant base. A lower cap rate means lower current yield but stronger markets, newer assets, and more predictable cash flow. The right cap rate depends on your strategy.
### What is the difference between cap rate and ROI?
Cap rate measures the unlevered annual return of a property based on net operating income divided by purchase price. ROI measures the total leveraged return on your invested cash, including loan paydown, appreciation, and tax benefits. Cap rate compares deals on an apples to apples basis. ROI tells you what the deal actually returns to you.
### How do interest rates affect cap rates?
When interest rates rise, cap rates almost always rise with them. Higher borrowing costs reduce what buyers can pay for the same NOI, which pushes prices down and pushes cap rates up. When rates fall, the reverse happens. That is why 2022 to 2024 saw cap rates expand sharply and why 2026 is starting to see compression again.
### What is the formula for cap rate?
Cap rate equals net operating income divided by current market value or purchase price. NOI is gross rental income minus operating expenses, not including debt service. If a property produces 100,000 in NOI and sells for 1.25 million, the cap rate is 8 percent.
### What is a bad cap rate?
A bad cap rate is one that does not compensate you for the risk you are taking. A 4 percent cap on a Class C property in a tertiary market is bad because the risk pricing is upside down. A 9 percent cap on a Class A property in a primary market would also be bad because it almost always signals a problem with the deal or the market.
### Do you want a high or low cap rate?
It depends on whether you are buying or selling. As a buyer, you want a higher cap rate because it means more income per dollar of purchase price. As a seller, you want a lower cap rate because it means more dollars per dollar of NOI. Most multifamily investors target a cap rate that exceeds their cost of debt.
### What cap rate do banks lend on for multifamily?
Most banks underwrite multifamily loans expecting a cap rate at or above the local market average for the asset class. As of 2026, that typically means 5.5 percent or higher for Class B and 4.75 percent or higher for Class A. Banks also require the debt service coverage ratio to be 1.25 or above at that cap.
### How are multifamily cap rates calculated?
Multifamily cap rates are calculated by dividing the property’s NOI by its purchase price or current market value. NOI includes all rental income and other revenue minus operating expenses like property taxes, insurance, repairs, management fees, and reserves. Mortgage payments are not included in NOI.
## **Ready to Invest in Multifamily Real Estate?**
Understanding cap rates is step one. Building the deal flow, due diligence skills, and investor network to act on great opportunities is where the real work begins.
- Join the next [Multifamily Bootcamp](http://rodkhleif.com/bootcamp)
- Download [Rod’s FREE Best-Selling Multifamily Book](http://rodkhleif.com/lcfa-ebook)
- Use the [Free Cap Rate Calculator](http://rodkhleif.com/cap-rate-calculator)
- Apply for the [Warrior Mentorship Program](https://rodkhleif.com/rod-khleif-warrior-program/)
*Disclaimer: This article was written with the help of AI and reviewed by Rod and his team.*
**Related reading:** [how to calculate net operating income (NOI)](https://rodkhleif.com/a-complete-guide-noi-in-real-estate-in-2025/).
**Categories:** Blog, Due Diligence, Multifamily Investing, Real Estate
**Tags:** 2026 cap rates, apartment investing, CAP Rate, cap rate by city, deal underwriting, multifamily cap rate, NOI
---
### [A Complete Guide to NOI in Real Estate in 2026](https://rodkhleif.com/a-complete-guide-noi-in-real-estate-in-2025/)
**Published:** February 8, 2026
**Author:** Rod Khleif
**Content:**
**Quick answer:** Net operating income (NOI) in real estate is a property’s annual income after operating expenses but before debt service, capital expenditures, and income taxes. The formula is gross operating income minus operating expenses. NOI drives value: divide it by the market cap rate to estimate what a property is worth.
Net Operating Income (NOI) is the single most important number I use when evaluating multifamily opportunities. I’ve analyzed thousands of deals, and NOI separates the winners from the money-losers every single time. Here’s the truth: NOI is gross rental income minus all operating expenses. It’s that simple, but most investors calculate it wrong or ignore the details that make the difference. Once you master NOI calculations, you’ll see through inflated underwriting and identify which value-add opportunities actually work on the spreadsheet. **Don’t want to read the blog?** [](https://drive.google.com/file/d/1ba8JJQ6_a-vIILmRakANfQs6acXVu_ee/view?usp=sharing) **Download our [*NOI in Real Estate: Complete Guide Ebook*](https://drive.google.com/file/d/1ba8JJQ6_a-vIILmRakANfQs6acXVu_ee/view?usp=sharing) for a quick resource for everything NOI.**
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## What Is NOI in Real Estate? Definition and Formula
**NOI in real estate is a property’s net operating income: the money it produces from operations in a year after operating expenses, but before your mortgage, capital expenditures, depreciation, and income taxes.** The formula is simple: gross operating income minus operating expenses equals NOI.
Three clarifications that trip up most investors:
- **NOI is not profit.** Profit is what is left after your loan payment. NOI is measured before debt service, so two investors buying the same building have identical NOI but very different profit depending on their financing.
- **NOI does not include your mortgage.** Principal and interest are financing costs, not operating expenses, so they never touch the NOI line.
- **NOI is an annual number.** You can track it monthly, but NOI is quoted yearly because that is what lenders and buyers use to value the property.
Get this number right and you see through inflated underwriting instantly. Get it wrong and you overpay. Below is the exact formula, what belongs in it, and real multifamily examples from deals I have analyzed across 305,000+ units.
**Net Operating Income (NOI)** is the single most important financial metric in real estate investing. It measures a property’s true profitability by showing how much income remains after paying all operating expenses, but before accounting for mortgage payments, taxes, depreciation, or capital expenditures. Think of NOI in real estate as your property’s report card—it tells you exactly how well your investment performs from a pure operational standpoint, completely independent of how you financed it.
### Why NOI Is the Gold Standard Metric
Unlike gross rental income, which can be misleading, NOI in real estate gives you an accurate picture of a property’s ability to generate cash flow from operations. This makes it the metric lenders use when evaluating loan applications, appraisers use when determining value, and experienced investors use when comparing opportunities. **What makes NOI different from other metrics:**
- **[Cap Rate](https://rodkhleif.com/cap-rate-calculator/):** Uses NOI to determine value (Property Value = NOI / Cap Rate)
- **Cash Flow:** Starts with NOI, then subtracts debt service
- **Cash-on-Cash Return:** Uses cash flow (which comes from NOI) relative to invested capital
- **Debt Coverage Ratio:** Measures NOI against annual debt service
Understanding what does NOI mean in the context of these other metrics is crucial because NOI serves as the foundation for virtually every other financial analysis you’ll perform.
### The Simple Definition of NOI
At its core, NOI in real estate is straightforward: **Net Operating Income = Total Property Revenue – Operating Expenses** That’s it. Everything else builds from this fundamental calculation. But as you’ll see, the devil is in the details of what counts as revenue and what qualifies as an operating expense.
## The Complete NOI Formula and Calculation Method
Let me break down the exact NOI in real estate formula that professional investors use:
### Standard NOI Formula
**NOI = Gross Operating Income – Operating Expenses** Where: **Gross Operating Income (GOI) = Gross Potential Rent + Other Income – Vacancy & Credit Loss** Let me unpack each component:
### 1. Gross Potential Rent (GPR)
This is the maximum possible rental income if all units were occupied at market rates, 365 days per year:
- Market rent for all residential units
- Commercial tenant rents (if mixed-use)
- Month-to-month and renewal increases
- **2026 note:** Factor in realistic rent growth projections (1-3% in most markets)
### 2. Other Income
Revenue beyond base rent:
- **Parking fees** (garage, covered, reserved spaces)
- **Pet rent and deposits** (pet fees increasingly significant in 2026)
- **Utility income** (if you bill back to tenants)
- **Laundry facilities** (coin-op or card readers)
- **Storage units** (climate-controlled premium)
- **Vending machines** (less common but still relevant)
- **Application fees** and **late fees**
- **Trash valet services** (growing revenue stream in 2026)
- **Package handling fees** (new in many properties)
- **Wi-Fi/internet service charges**
**2026 trend:** Other income has become significantly more important, now averaging 8-12% of total revenue versus 5-7% historically. Smart operators are finding creative ways to add value-based services tenants will pay for.
### 3. Vacancy & Credit Loss
The reality check on your income:
- **Physical vacancy:** Unoccupied units (turnover, market vacancy)
- **Economic vacancy:** Concessions, discounts, free rent
- **Credit loss:** Uncollected rent, evictions, bad debt
**Industry standard:** 5-8% for stabilized properties **2026 reality:** Some markets seeing 8-10% due to slower lease-up times Calculate conservatively here. One of the biggest mistakes new investors make is underestimating vacancy. In 2026’s market, with economic uncertainty and shifting demographics, I recommend budgeting at least 8% vacancy unless you have strong historical data showing otherwise.
### 4. Operating Expenses
The complete list of costs to run the property: **Property Management:**
- Management fees (typically 3-5% of collected revenue, higher in 2026)
- Leasing commissions (when applicable)
- On-site staff salaries (manager, maintenance, leasing agents)
- Payroll taxes and benefits
**Maintenance & Repairs:**
- Routine repairs and preventive maintenance
- Turnover costs (paint, carpet, cleaning between tenants)
- HVAC servicing contracts
- Elevator maintenance contracts
- Fire system inspections
- Pool maintenance and chemicals
- Landscaping and grounds care
**Utilities (if owner-paid):**
- Water and sewer
- Gas
- Electricity (common areas)
- Trash and recycling
- **2026 alert:** Utility costs up 15-25% since 2023 in many markets
**Insurance:**
- Property and liability insurance
- Umbrella policies
- Flood insurance (if applicable)
- **2026 critical update:** Insurance costs have skyrocketed 30-50% in many markets due to climate risk, litigation, and reinsurance costs
**Property Taxes:**
- Annual real estate taxes
- Special assessments
- **2026 note:** Many municipalities increasing millage rates; appeal assessments regularly
**Marketing & Leasing:**
- Advertising costs (online listings, photography)
- Marketing materials and signage
- Model unit staging
- Broker commissions (if used)
**Administrative:**
- Legal and professional fees
- Accounting and bookkeeping
- Office supplies
- Property management software subscriptions
- Banking fees
- HOA dues (if applicable)
**Other Operating Expenses:**
- Pest control
- Security services
- Snow removal (regional)
- Internet/cable for common areas
## What’s Included (and Critically, What’s NOT) in NOI
This is where many investors get confused. Understanding exactly **what does NOI mean** requires knowing what belongs in the calculation and what doesn’t.
### INCLUDED in NOI Calculations
**All operating revenue:**
- Rental income (actual collected rent)
- Pet fees and pet rent
- Parking income
- Laundry and vending
- Utility reimbursements
- Application and administrative fees
- Any other income generated from normal operations
**All operating expenses:**
- [Property management fees](https://rodkhleif.com/5-things-to-consider-when-choosing-a-multifamily-property-management-company-businesstomark/)
- Repairs and maintenance
- Utilities (if owner-paid)
- Insurance
- Property taxes
- Marketing and leasing costs
- Payroll for on-site staff
- Professional fees (legal, accounting)
- All items listed in section above
### EXCLUDED from NOI Calculations
**Never include these in NOI:** **Mortgage and Financing Costs:**
- Principal payments
- Interest payments
- Loan fees or points
**Why excluded:** NOI measures property performance independent of financing structure. This allows investors to compare properties regardless of how they’re financed. **Capital Expenditures (CapEx):**
- Roof replacement
- New HVAC systems
- Major renovations
- Parking lot resurfacing
- Building exterior improvements
- Unit upgrades (new appliances, cabinets, flooring)
- New windows or doors
**Why excluded:** CapEx represents long-term improvements that add value and have multi-year lifespans. They’re not regular operating costs. However, smart investors do set aside capital reserves from NOI. **Depreciation and Amortization:**
- Building depreciation (tax concept)
- Furniture/equipment depreciation
- Loan amortization
**Why excluded:** These are accounting concepts, not actual cash expenditures during operations. **Income Taxes:**
- Federal income tax
- State income tax
- Personal tax liabilities
**Why excluded:** Tax liability varies by ownership structure (LLC, corporation, individual) and investor’s personal tax situation. NOI measures property performance before owner-specific tax impacts. **Tenant Improvements (TIs):**
- Build-outs for new commercial tenants
- Improvement allowances
- Special tenant requests
**Why excluded:** Like CapEx, these are one-time or irregular expenses, not operating costs
## 2026 Market Factors Affecting NOI: What’s Changed
Understanding NOI in real estate in 2026 requires awareness of current market dynamics that didn’t exist or weren’t as pronounced just a few years ago:
### Rising Operating Expenses
**Insurance Crisis:** The single biggest challenge to NOI in real estate in 2026 is skyrocketing insurance costs:
- Property insurance up 30-50% in many markets since 2023
- Florida, Texas, Louisiana seeing 60-100% increases
- Coastal and high-risk climate zones facing coverage gaps
- Some properties can’t secure coverage at any price
**Strategy:** Shop carriers aggressively, increase deductibles, bundle policies, join purchasing groups. Factor 10-15% annual insurance increases into underwriting. **Utility Cost Inflation:** Operating expenses for utilities continue climbing:
- Water/sewer rates up 8-12% annually in many municipalities
- Electricity costs volatile, up 15-25% in some markets
- Natural gas prices stabilizing but still elevated
**Strategy:** Sub-meter where possible, install water-saving fixtures, LED lighting conversions, smart thermostats in common areas. **Property Tax Reassessments:** Municipalities increasing revenue through property taxes:
- Reassessments triggering 10-30% tax increases
- Appeals taking longer to process
- Some jurisdictions limiting appeal success
**Strategy:** File appeals religiously, hire tax consultants (they often work on contingency), document comparable properties, budget 3-5% annual tax increases. **Labor and Vendor Costs:** Maintenance and management costs rising:
- Labor shortage driving up property management salaries 10-20%
- Contractor rates up 15-30% since 2021
- Supply chain issues still affecting repair costs
- Skilled trades (HVAC, electrical, plumbing) commanding premium rates
**Strategy:** Negotiate annual contracts with vendors, hire and train in-house maintenance where scale permits, preventive maintenance to avoid emergency repairs.
### Revenue Opportunities in 2026
**Value-Add Services:** Tenants willing to pay for convenience and amenities:
- **Trash valet service:** $20-35/month per unit
- **Package lockers/concierge:** Reducing liability and adding value
- **Pet amenities:** Dog parks, wash stations justify higher pet fees
- **EV charging stations:** Premium pricing in urban markets
- **Furnished units:** 15-30% premium in select markets
- **Smart home features:** Tech-savvy renters pay for convenience
**Utility Bill-Back Systems:** Technology making it easier to recover costs:
- RUBS (Ratio Utility Billing System) implementation
- Sub-metering becoming more cost-effective
- Water bill-back averaging 8-12% NOI improvement
**Rent Optimization:** Data-driven pricing maximizing revenue:
- AI-powered revenue management software
- Dynamic pricing based on demand
- Lease renewal optimization
- Market rent analysis tools
### Economic Headwinds
**Inflation Impact on NOI:** Inflation affects both sides of the NOI in real estate equation:
- **Income side:** Rental growth lagging inflation (1-3% vs. 3-4% inflation)
- **Expense side:** Operating costs rising faster than revenue
- **Result:** NOI margins compressing in many markets
This squeeze on NOI means investors must be more sophisticated about operational efficiency than ever before. **Employment and Demographics:** Rental demand influenced by economic factors:
- Remote work patterns stabilizing
- Younger renters cost-conscious, seeking value
- Credit standards tightening (harder for marginal renters)
- Some markets seeing renter fatigue from continuous rent increases
## How to Calculate NOI: Step-by-Step Real-World Examples
Let me walk you through exactly how to calculate NOI in real estate with detailed examples.
### Example 1: Small Multifamily Property (Duplex)
**Property:** 2-unit duplex in Midwest market **Annual Revenue:**
- Unit 1 rent: $1,200/month × 12 = $14,400
- Unit 2 rent: $1,200/month × 12 = $14,400
- Gross Potential Rent: $28,800
**Other Income:**
- Coin laundry: $600/year
- Total Other Income: $600
**Vacancy & Credit Loss:**
- 8% vacancy allowance: $28,800 × 0.08 = $2,304
**Gross Operating Income:** $28,800 + $600 – $2,304 = $27,096 **Operating Expenses:**
- Property management (7%): $1,897
- Property taxes: $3,200
- Insurance: $1,800
- Utilities (owner-paid water): $960
- Repairs & maintenance: $2,400
- Lawn care & snow removal: $1,200
- **Total Operating Expenses:** $11,457
**NOI Calculation:** $27,096 – $11,457 = **$15,639 annual NOI** **Monthly NOI:** $15,639 / 12 = **$1,303/month**
### Example 2: Medium Multifamily Property (24-Unit)
**Property:** 24-unit apartment building, Class B, Sunbelt market **Annual Revenue:**
- 24 units × $1,400/month avg × 12 = $403,200
- Gross Potential Rent: $403,200
**Other Income:**
- Parking (12 spots × $50/month): $7,200
- Pet fees (16 pets × $35/month): $6,720
- Laundry income: $3,600
- Trash valet ($25/unit/month): $7,200
- Late fees and other: $2,400
- **Total Other Income:** $27,120
**Vacancy & Credit Loss:**
- 8% allowance: $403,200 × 0.08 = $32,256
**Gross Operating Income:** $403,200 + $27,120 – $32,256 = $398,064 **Operating Expenses:** *Management & Staff:*
- Property management (4%): $15,923
- On-site manager salary: $45,000
- Leasing/maintenance staff: $35,000
- Payroll taxes (12%): $9,600
- **Subtotal:** $105,523
*Maintenance & Repairs:*
- Routine maintenance: $18,000
- Turnover costs (10 units/year): $12,000
- HVAC contracts: $4,800
- Landscaping: $9,600
- Pool maintenance: $6,000
- **Subtotal:** $50,400
*Utilities:*
- Water/sewer (common): $14,400
- Electricity (common areas): $7,200
- Gas (common): $3,600
- Trash: $8,400
- **Subtotal:** $33,600
*Insurance & Taxes:*
- Property insurance: $28,800 (up from $18,000 in 2023)
- Property taxes: $48,000
- **Subtotal:** $76,800
*Marketing & Administrative:*
- Marketing/advertising: $4,800
- Legal/professional: $3,600
- Office/supplies: $1,800
- Software/technology: $2,400
- Misc. administrative: $2,400
- **Subtotal:** $15,000
**Total Operating Expenses:** $281,323 **NOI Calculation:** $398,064 – $281,323 = **$116,741 annual NOI** **Monthly NOI:** $116,741 / 12 = **$9,728/month** **Operating Expense Ratio:** $281,323 / $398,064 = **70.7%** Note: This is higher than ideal due to elevated 2026 insurance costs and full-time staffing. Target OER should be 50-65% for this property type.
### Example 3: Large Multifamily Property (100-Unit)
**Property:** 100-unit Class A apartment community, major metro **Annual Revenue:**
- 100 units × $2,200/month avg × 12 = $2,640,000
- Gross Potential Rent: $2,640,000
**Other Income:**
- Garage parking (75 × $100): $90,000
- Pet fees/rent (60 × $50): $36,000
- Storage units (30 × $75): $27,000
- Trash valet: $30,000
- Package lockers: $6,000
- Application fees: $8,000
- Utility bill-back: $45,000
- Amenity fees: $12,000
- **Total Other Income:** $254,000
**Vacancy & Credit Loss:**
- 6% (better Class A performance): $2,640,000 × 0.06 = $158,400
**Gross Operating Income:** $2,640,000 + $254,000 – $158,400 = $2,735,600 **Operating Expenses:** *Management & Staff:*
- Property management (3.5%): $95,746
- Community manager: $75,000
- Assistant manager: $50,000
- Leasing consultants (2): $80,000
- Maintenance staff (3): $135,000
- Payroll taxes/benefits (18%): $76,734
- **Subtotal:** $512,480
*Maintenance & Repairs:*
- Routine maintenance: $85,000
- Turnover (35 units @ $2,500): $87,500
- HVAC/mechanical: $35,000
- Landscaping: $42,000
- Pool/spa: $18,000
- Fitness equipment: $8,000
- Elevator maintenance: $24,000
- Parking lot/garage: $15,000
- **Subtotal:** $314,500
*Utilities:*
- Water/sewer: $95,000
- Electricity (common): $48,000
- Gas: $24,000
- Trash/recycling: $36,000
- **Subtotal:** $203,000
*Insurance & Taxes:*
- Property insurance: $156,000 (major increase in 2026)
- Property taxes: $264,000
- **Subtotal:** $420,000
*Marketing & Administrative:*
- Marketing/advertising: $35,000
- Technology/software: $18,000
- Legal/professional: $15,000
- Office/supplies: $6,000
- Miscellaneous: $8,000
- **Subtotal:** $82,000
**Total Operating Expenses:** $1,531,980 **NOI Calculation:** $2,735,600 – $1,531,980 = **$1,203,620 annual NOI** **Monthly NOI:** $1,203,620 / 12 = **$100,302/month** **Operating Expense Ratio:** $1,531,980 / $2,735,600 = **56%** (healthy for Class A) **Per-Unit Annual NOI:** $1,203,620 / 100 = **$12,036 per unit**
## NOI vs. Other Key Real Estate Metrics: Understanding the Differences
**What does NOI mean** in relation to other financial metrics you’ll encounter? Let’s clarify:
### NOI vs. Gross Rental Income
**Gross Rental Income:** Total rent collected (doesn’t account for expenses) **NOI:** Gross income minus ALL operating expenses **Why NOI matters more:** Gross income is meaningless without understanding costs. A property generating $500,000 in gross rent but costing $450,000 to operate (NOI = $50,000) is far worse than a property with $300,000 gross rent and $150,000 operating expenses (NOI = $150,000).
### NOI vs. Cash Flow
**NOI:** Property performance before debt service **Cash Flow:** Money in your pocket after paying the mortgage **Formula:** Cash Flow = NOI – Debt Service **Example:**
- NOI: $120,000
- Annual mortgage payment: $85,000
- Cash Flow: $35,000
**Why both matter:** NOI shows property performance; cash flow shows investor returns based on financing.
### NOI vs. Net Income
**NOI:** Operating income before financing, taxes, depreciation **Net Income:** Bottom line after ALL expenses including taxes and depreciation **Why NOI is preferred:** Net income varies by ownership structure and investor tax situation. NOI in real estate provides standardized comparison.
### NOI vs. EBITDA
**EBITDA:** Earnings Before Interest, Taxes, Depreciation, and Amortization (corporate metric) **NOI:** Real estate equivalent focused on property operations They’re conceptually similar but NOI in real estate is more precisely defined for property analysis.
### NOI and Cap Rate
**Cap Rate = NOI / Property Value** **Example:**
- NOI: $100,000
- Property value: $1,250,000
- Cap rate: 8%
Cap rate shows return on investment assuming all-cash purchase. Higher cap rates generally mean higher returns but also higher risk.
### NOI and Debt Coverage Ratio (DCR)
**DCR = NOI / Annual Debt Service** **Example:**
- NOI: $120,000
- Annual debt payment: $90,000
- DCR: 1.33x
Lenders typically require 1.20-1.25x minimum DCR. This shows the property generates 33% more income than needed to cover the mortgage.
### NOI and Cash-on-Cash Return
**Cash-on-Cash = Annual Cash Flow / Total Cash Invested** Since cash flow comes from NOI minus debt service, NOI in real estate is foundational to this metric too.
## Why NOI Matters for Real Estate Investors in 2026
Understanding what does NOI mean for your success is crucial. Here’s why NOI in real estate remains the most important metric:
### 1. Property Valuation Foundation
Commercial real estate is valued using the income approach: **Property Value = NOI / Cap Rate** A $100,000 increase in annual NOI at an 8% cap rate increases property value by $1,250,000. **This is the power of NOI:** Small operational improvements create massive equity gains.
### 2. Lender Underwriting Standard
Banks and commercial lenders base loan decisions primarily on NOI:
- **Loan sizing:** Maximum loan = (NOI / Debt Service Coverage Required) × Loan Term Factor
- **Qualification:** Must meet minimum DCR (typically 1.20-1.25x)
- **Refinancing:** Higher NOI = larger refinance proceeds
Without strong NOI in real estate, you can’t secure financing regardless of other factors.
### 3. Investment Comparison Tool
**NOI in real estate** enables apples-to-apples comparisons:
- Different properties in same market
- Same property type in different markets
- Properties with different financing structures
Since NOI excludes financing, you can compare performance objectively.
### 4. Performance Benchmarking
Track your property’s NOI over time:
- Year-over-year growth
- Quarterly trends
- Budget vs. actual performance
- Comparison to market averages
This reveals operational efficiency and management quality.
### 5. Exit Strategy Planning
When selling, buyers evaluate based on NOI:
- Higher NOI = higher sale price
- Consistent NOI = easier financing for buyer
- Growing NOI = premium pricing
**Every dollar of increased NOI typically adds $10-15 to your property value** depending on market cap rates.
### 6. Tax Planning and Depreciation
While NOI excludes depreciation, understanding your NOI helps determine:
- Capital expenditure budgets
- Depreciation schedules
- Cost segregation opportunities
- Tax strategy planning
## Proven Strategies to Improve NOI in 2026: Actionable Tactics
[](https://rodkhleif.com/a-complete-guide-noi-in-real-estate-in-2025/screenshot-2026-02-08-at-3-27-35-pm/) Now let’s get tactical. Here’s exactly how to improve NOI in real estate with strategies that work in today’s market:
### Revenue Enhancement Strategies
**1. Implement Market-Rate Rent Increases** Most owners under-rent their properties. In 2026: **Strategy:**
- Pull rent comps quarterly (use RentRange, CoStar, Zillow)
- Increase renewals 3-5% annually minimum
- New leases at full market rate
- Communicate value to justify increases
**Impact:** 3% rent increase on $1M gross rent = $30,000 NOI increase = $375,000-$450,000 added property value (at 7-8% cap) **2. Add Value-Based Revenue Streams** Don’t just raise rent—add services tenants value: **High-ROI additions in 2026:**
- Trash valet service: $25-30/unit/month (95% adoption rate)
- Covered parking upgrades: $50-100/month premium
- Pet program optimization: $35-50/month pet rent + deposits
- Package lockers: Reduce liability, charge $10-15/month
- Storage units: 15-20% ROI on construction cost
- EV charging: $50-100/month in urban markets
**Impact:** Adding 4 revenue streams averaging $20/unit/month on 50 units = $48,000 annual NOI increase **3. Utility Bill-Back Implementation** If you’re paying utilities, you’re leaving money on the table: **Options:**
- **RUBS (Ratio Utility Billing):** Allocate costs based on unit size/occupancy
- **Sub-metering:** Install individual meters (higher upfront cost, most accurate)
- **Fixed utility fee:** Simpler but less precise
**Impact:** Average 30-40% recovery of utility costs = significant NOI improvement **Example:** $50,000/year water bill, recover 35% = $17,500 NOI increase **4. Optimize Lease Terms and Renewal Timing** **Strategies:**
- Front-load leases in slower months (offer Nov-Feb leases at 3% higher rate than peak summer)
- Stagger expirations to avoid turnover waves
- Offer 15-18 month leases at premium to good tenants
- Minimize concessions (better to reduce rent slightly than give free months)
**5. Reduce Economic Vacancy** Every vacant day costs money: **Tactics:**
- Price units competitively for 7-day absorption
- Pre-lease units 60 days before availability
- Offer move-in incentives for off-season leasing
- Streamline application to approval process (under 24 hours)
- Professional photography and virtual tours
**Impact:** Reducing vacancy 2% on $1M gross rent property = $20,000 NOI increase
### Expense Reduction Strategies
**6. Insurance Cost Management** The biggest 2026 challenge—here’s how to fight back: **Aggressive tactics:**
- Shop carriers annually (don’t auto-renew)
- Increase deductibles to $25K-$50K if reserves permit
- Bundle all properties with one carrier for volume discount
- Join purchasing groups (NMHC, local apartment associations)
- Install fire sprinklers, security systems for discounts
- Document all improvements for underwriting
**Impact:** Even 10-15% savings on $150,000 premium = $15,000-$22,500 NOI improvement **7. Property Tax Appeals** Tax bills rarely decrease—you must fight them: **Process:**
- File appeals within deadline (usually 30-45 days of assessment)
- Hire tax consultants (typically work on contingency)
- Pull comparable sales showing lower valuations
- Document property issues (deferred maintenance, vacancy)
- Attend hearings prepared
**Impact:** 10-15% tax reduction is realistic in many jurisdictions **8. Energy Efficiency Improvements** Reduce utility costs through smart investments: **High-ROI upgrades:**
- LED lighting conversion (2-3 year payback)
- Smart thermostats in common areas
- Low-flow toilets and faucet aerators (if owner-paid water)
- Insulation improvements in older buildings
- ENERGY STAR appliances at turnover
- Solar panels (where economics work)
**Impact:** 15-25% utility savings possible with comprehensive program **9. Negotiate Vendor Contracts** Never accept renewal pricing without negotiation: **Tactics:**
- Get 3 competing bids for all major services
- Bundle services for volume discounts
- Negotiate annual contracts to lock pricing
- Review contract terms annually
- Consider in-sourcing high-volume services
**Services to target:**
- Landscaping (often 10-20% negotiable)
- Pest control
- HVAC maintenance contracts
- Waste removal
- Cleaning services
**Impact:** 10% reduction on $100,000 vendor spend = $10,000 NOI improvement **10. Prevent Maintenance Through System Monitoring** **Preventive maintenance saves money:**
- HVAC quarterly servicing (vs. emergency repairs at 3x cost)
- Plumbing inspections (catch leaks before major damage)
- Roof maintenance (extend life 5-10 years)
- Parking lot seal coating (delay full repaving)
- Paint touchups (prevent full repaints)
**Impact:** Reducing emergency maintenance 30% = $15,000-$30,000 savings on 50+ unit property **11. Technology-Enabled Efficiency** Property management software pays for itself: **ROI opportunities:**
- Online rent payment (reduce processing costs)
- Automated late fee assessment
- Digital leasing (reduce paper, save time)
- Maintenance request tracking (improve response time)
- Automated financial reporting (reduce accounting costs)
**Cost:** $50-100/unit/year **Savings:** $100-200/unit/year in efficiency gains **12. Strategic Staffing Optimization** Labor is expensive—optimize carefully: **Strategies:**
- Hire skilled maintenance (reduce contractor calls)
- Cross-train staff (one person multiple roles)
- Use contract workers for specialized tasks
- Implement on-call rotation vs. 24/7 staffing
- Consider portfolio-level shared resources (centralized leasing, accounting)
## Common NOI Calculation Mistakes to Avoid
Even experienced investors make these errors when calculating NOI in real estate:
### Mistake 1: Including Mortgage Payments
**Wrong:** Subtracting principal and interest from NOI **Right:** NOI excludes all debt service **Why it matters:** NOI measures property performance independent of financing structure.
### Mistake 2: Forgetting Vacancy Allowance
**Wrong:** Using 100% occupancy in projections **Right:** Always factor realistic vacancy (5-10% depending on market) **Why it matters:** No property stays 100% occupied. Failing to account for vacancy creates false NOI projections.
### Mistake 3: Excluding Property Taxes
**Wrong:** Leaving out property taxes because they “vary by owner” **Right:** Property taxes are operating expenses and must be included **Why it matters:** Taxes are significant expense (often 15-25% of operating budget) and tied to property, not owner.
### Mistake 4: Treating CapEx as Operating Expense
**Wrong:** Including roof replacement, major renovations in NOI calculation **Right:** CapEx is excluded from NOI (though smart to reserve for it) **Why it matters:** Mixing capital improvements with operating expenses distorts NOI and property value.
### Mistake 5: Underestimating Operating Expenses
**Wrong:** Using seller-provided expenses without verification **Right:** Reconstruct expense budget from actual records, add missing items **Common underestimated expenses:**
- Property management fees (seller often self-manages)
- Deferred maintenance reserves
- Marketing costs
- True utility costs (check actual bills)
- Insurance (get actual quotes)
**Why it matters:** Underestimating expenses by 10% overstates NOI by 10%, inflating property value by potentially hundreds of thousands.
### Mistake 6: Counting Non-Recurring Income
**Wrong:** Including insurance claims, one-time fees in annual income **Right:** Only include sustainable, recurring revenue **Why it matters:** NOI should reflect normalized, sustainable operations.
### Mistake 7: Ignoring Effective Gross Income
**Wrong:** Using gross potential rent without vacancy/concessions adjustment **Right:** Always calculate Effective Gross Income = GPR – Vacancy – Concessions **Why it matters:** Market concessions can significantly impact real income.
### Mistake 8: Misclassifying Expenses
**Wrong:**
- Calling CapEx operating expense
- Excluding property management fee because “I’ll manage it”
- Leaving out expenses paid by tenants
**Right:** Include all true operating costs, exclude CapEx, include tenant-reimbursed items
### Mistake 9: Using Unrealistic Rent Growth
**Wrong:** Projecting 10% annual rent increases **Right:** Use conservative, market-supported projections (1-3% in most 2026 markets) **Why it matters:** Over-optimistic projections lead to overpaying for properties.
### Mistake 10: Forgetting Seasonal Adjustments
**Wrong:** Annualizing one month of income without considering seasonality **Right:** Review full 12-month income and expense cycles **Why it matters:** Some markets have significant seasonal variations in vacancy, utilities, and maintenance costs.
## Real-World NOI Case Studies: Lessons from the Field
Let me share some actual scenarios from properties I’ve been involved with or advised on:
### Case Study 1: The Insurance Disaster
**Property:** 120-unit Class B apartment community, Florida **Situation:**
- Purchase in 2022: NOI $850,000
- Insurance: $85,000/year
- Cap rate: 6.5%
- Property value: $13.1M
**2026 Reality:**
- Insurance renewal: $285,000/year (+235%)
- All other expenses increased 15%: +$45,000
- Revenue growth: 8%: +$75,000
- **New NOI:** $850,000 + $75,000 – $200,000 – $45,000 = $680,000
**Impact:**
- NOI decreased 20%
- At 6.5% cap rate, property value dropped to $10.5M
- Lost $2.6M in value from insurance alone
**Lesson:** In 2026, insurance is the single biggest threat to NOI in climate-exposed markets. Always stress-test insurance scenarios.
### Case Study 2: The Revenue Stream Revolution
**Property:** 75-unit workforce housing, Texas **Starting Position (2023):**
- Gross rent: $900,000
- Other income: $25,000 (2.7% of gross)
- Operating expenses: $475,000
- NOI: $450,000
**Improvements Implemented:**
1. Trash valet service: +$27,000/year (95% adoption)
2. Pet program formalization: +$31,500/year (35 pets × $75/month)
3. Reserved parking: +$18,000/year (30 spots × $50/month)
4. Storage unit conversion: +$13,500/year (15 units × $75/month)
5. Utility bill-back (water): +$42,000/year (35% recovery)
6. Washer/dryer rentals: +$21,000/year
**Results (2026):**
- Gross rent: $945,000 (5% rent growth)
- Other income: $178,000 (18.8% of gross rent)
- Operating expenses: $485,000 (controlled despite inflation)
- **New NOI: $638,000**
**Impact:**
- NOI increased 42% ($188,000)
- At 7% cap rate: +$2.69M property value
- Total investment in improvements: $125,000
- ROI on improvements: 21.5x
**Lesson:** Other income is the fastest path to NOI improvement in 2026.
### Case Study 3: The Expense Management Masterclass
**Property:** 200-unit Class A high-rise, major metro **Starting Position (2024):**
- Revenue: $5.2M
- Operating expenses: $2.86M (55% OER)
- NOI: $2.34M
**Problem:** Expenses out of control, margins compressing **Expense Reduction Program:** **Insurance:**
- Increased deductible $10K → $50K: -$35,000
- Joined purchasing group: -$42,000
- **Total savings: -$77,000**
**Utilities:**
- LED retrofit all units: -$48,000/year
- Smart thermostats common areas: -$12,000/year
- Water leak detection system: -$18,000/year
- **Total savings: -$78,000**
**Staffing:**
- Eliminated night concierge (security cameras instead): -$55,000
- Cross-trained maintenance: -$40,000 (one fewer position)
- **Total savings: -$95,000**
**Vendor Contracts:**
- Landscaping re-bid: -$22,000
- Pest control re-bid: -$8,000
- Elevator maintenance negotiation: -$15,000
- **Total savings: -$45,000**
**Preventive Maintenance:**
- HVAC quarterly servicing prevented failures: -$35,000
- Roof maintenance program: -$25,000 avoided repairs
- **Total savings: -$60,000**
**Results (2026):**
- Revenue: $5.46M (5% growth)
- Operating expenses: $2.505M (reduced by $355,000)
- **New NOI: $2.955M**
**Impact:**
- NOI increased 26% ($615,000)
- Revenue contributed $260,000
- Expense reduction contributed $355,000
- At 5.5% cap rate: +$11.2M property value
- Investment in improvements: $215,000
- ROI: 52x first year, continues indefinitely
**Lesson:** In tough markets, expense control matters as much as revenue growth for NOI in real estate.
## How NOI Directly Impacts Property Valuation
Understanding the relationship between NOI and property value is critical:
### The Cap Rate Valuation Formula
**Property Value = NOI / Cap Rate** This is the fundamental commercial real estate valuation method. **Example:**
- Annual NOI: $250,000
- Market cap rate: 7%
- Property value: $250,000 / 0.07 = $3,571,429
### The NOI Multiplier Effect
Here’s the power of **NOI in real estate**: Small changes in NOI create large changes in value. **Scenario:** Property with $200,000 NOI at 8% cap rate = $2.5M value **If you increase NOI by $20,000 (10%):**
- New NOI: $220,000
- New value at 8% cap: $2,750,000
- **Value increase: $250,000**
**The multiplier:** Each dollar of NOI increase = $12.50 of value (at 8% cap)
### Cap Rate Compression Benefit
In improving markets, cap rates compress (decrease), amplifying NOI gains: **Same property:**
- NOI increases from $200,000 to $220,000 (+10%)
- Cap rate compresses from 8% to 7% (market improvement)
**New value:** $220,000 / 0.07 = $3,142,857 **Total value increase:** $642,857 (25.7% increase from 10% NOI improvement + cap compression) This is why **NOI in real estate** matters so much—it drives exponential value creation.
### Using NOI to Calculate Maximum Purchase Price
**Formula:** Maximum Price = (Projected NOI × (1 – Expense Increase)) / Target Cap Rate **Example:**
- Current NOI: $300,000
- Your expense increase projection: 10%
- Your target cap rate: 8.5%
**Maximum price:** ($300,000 × 0.90) / 0.085 = $3,176,471 This protects you from overpaying by stress-testing NOI assumptions.
**Want to pressure-test NOI on real deals?**
Run the numbers in Rod’s [free multifamily deal analyzer](https://rodkhleif.com/deal-underwriting-tool/), then learn the full underwriting framework at his [Multifamily Bootcamp](https://rodkhleif.com/bootcamp/).
## Frequently Asked Questions About NOI in Real Estate
### What does NOI mean in simple terms?
NOI in real estate stands for Net Operating Income. It’s the amount of money a property makes from operations after paying all operating expenses, but before paying the mortgage, taxes, or making capital improvements. Think of it as the property’s “operating profit.” Simple formula: NOI = All Revenue – All Operating Costs
### Does NOI include property management fees?
Yes, property management fees are operating expenses and must be included in NOI in real estate calculations, even if you self-manage. When underwriting, always include a market-rate management fee (typically 3-5% of collected revenue) to get accurate NOI.
### Does NOI include depreciation?
No, depreciation is not included in NOI in real estate. Depreciation is an accounting concept for tax purposes, not an actual cash expenditure. NOI focuses strictly on real cash income and cash expenses from operations.
### Does NOI include mortgage payments?
No, mortgage payments (principal and interest) are explicitly excluded from NOI in real estate calculations. NOI measures property performance independent of how it’s financed, allowing comparison across different financing structures.
### Does NOI include capital expenditures?
No, capital expenditures (CapEx) like roof replacement, new HVAC systems, or major renovations are excluded from NOI in real estate. However, smart investors do set aside reserves for future CapEx from their cash flow.
### What is a good NOI for a rental property?
A “good” NOI in real estate depends on:
- Property type (Class A, B, or C)
- Market location
- Property size
- Operating expense ratio
General benchmarks:
- Single-family rentals: 50-70% operating expense ratio (30-50% NOI margin)
- Small multifamily (2-20 units): 50-65% OER (35-50% NOI margin)
- Mid-size multifamily (20-100 units): 45-60% OER (40-55% NOI margin)
- Large multifamily (100+ units): 40-55% OER (45-60% NOI margin)
Context matters more than absolute numbers. Compare your NOI in real estate to similar properties in your market.
### How do I calculate NOI from a cap rate?
If you know a property’s value and cap rate, you can calculate NOI: Formula: NOI = Property Value × Cap Rate Example:
- Property value: $2,000,000
- Cap rate: 6.5%
- NOI: $2,000,000 × 0.065 = $130,000
### How do I improve NOI on my property?
Improve NOI in real estate through two approaches: Increase revenue:
- Raise rents to market rates
- Add revenue streams (parking, pets, storage, services)
- Reduce vacancy through better marketing
- Implement utility bill-back programs
Decrease expenses:
- Negotiate vendor contracts aggressively
- Appeal property tax assessments
- Improve energy efficiency
- Implement preventive maintenance
- Shop insurance annually
- Optimize staffing
Best approach: Focus on both simultaneously for maximum impact.
### What’s the difference between NOI and cash flow?
NOI: Property income after operating expenses, before debt service Cash Flow: Money remaining after NOI minus mortgage payment Formula: Cash Flow = NOI – Debt Service Example:
- NOI: $150,000
- Annual mortgage: $110,000
- Cash Flow: $40,000
Why both matter: NOI shows property performance; cash flow shows investor returns after financing.
### Why is NOI more important than gross rent?
Gross rent is misleading because it ignores costs. What does NOI mean for investors is understanding true profitability. Example:
- Property A: $500K gross rent, $450K expenses = $50K NOI
- Property B: $350K gross rent, $200K expenses = $150K NOI
Property B is actually more profitable despite lower gross rent. NOI in real estate reveals the truth.
### How often should I calculate NOI?
Recommended frequency:
- Monthly: Track actual performance vs. budget
- Quarterly: Analyze trends and make adjustments
- Annually: Complete annual NOI statement for lenders, taxes, performance review
- When underwriting: Always calculate pro forma NOI before acquiring property
Regular NOI monitoring helps catch problems early and identify opportunities.
### Can NOI be negative?
Yes, if operating expenses exceed operating income, you have negative NOI in real estate. This is called a “net operating loss.” Common causes:
- High vacancy
- Major expense increases (especially insurance in 2026)
- Below-market rents
- Deferred maintenance catching up
- Over-staffing or mismanagement
Action required: Negative NOI is unsustainable. You must either increase revenue, cut expenses, or exit the investment.
---
## Final Thoughts from Rod Khleif: Making NOI Work for You in 2026
After over four decades in this business and having analyzed thousands of properties, I can tell you that understanding **NOI in real estate** is absolutely non-negotiable for success. **Here’s what I want you to remember:** **NOI is not a static number—it’s a dynamic scorecard** that reflects your skill as an operator. The best investors I know obsess over their NOI. They track it monthly, benchmark it against competition, and constantly look for ways to improve it. **Every dollar of NOI improvement is worth $10-15 in property value** (depending on your market’s cap rate). That’s not just a nice bonus—that’s how you build serious wealth in real estate. When you improve NOI by $50,000 on a property, you’ve potentially created $500,000-$750,000 in equity without spending a dime on construction. **In 2026’s challenging environment, NOI management is more critical than ever.** With insurance costs skyrocketing, utilities increasing, and labor shortages driving up expenses, you simply cannot afford to be passive about your **NOI in real estate**. The operators who will thrive in the coming years are those who:
1. **Underwrite conservatively:** Assume expenses will increase 5-8% annually
2. **Focus on operational excellence:** Every line item matters
3. **Add value creatively:** Find revenue streams competitors miss
4. **Control what you can control:** You can’t change insurance rates, but you can shop carriers and increase deductibles
5. **Measure relentlessly:** If you don’t track it, you can’t improve it
Remember, improving **NOI in real estate** isn’t about making drastic changes overnight. It’s about consistent, strategic improvements over time. Small wins compound—a 2% rent increase here, a 5% reduction in maintenance costs there, a new $30/month revenue stream per unit. Stack enough of these together and you’ll dramatically transform your property’s performance. **Stay focused on the fundamentals, carefully manage both your revenue and expenses, and NOI will become your best friend in real estate investing.**
### Ready to Master Multifamily Real Estate?
If you’re serious about building wealth through multifamily investing and want to learn directly from someone who’s actually done it (and survived multiple market cycles), I’d love to see you at my **Multifamily Real Estate Bootcamp**. I’ll walk you through everything from finding deals to raising capital to maximizing NOI once you own the property. This is where theory meets reality, and where serious investors come to level up their game. **Reserve Your Spot Now and Join Other Serious Investors** The number one multifamily investing event where expert investors answer your questions and share proven strategies. Learn directly from industry leaders and take your investing to the next level.
---
*About Rod Khleif: Rod has 40+ years of real estate investing experience and has personally owned and managed over 2,000 properties. He’s helped thousands of investors achieve financial freedom through multifamily real estate through his bootcamps, Warrior Program, and bestselling book “How to Create Lifetime Cash Flow Through Multifamily Properties.”* *Disclaimer: This article is for educational purposes only and does not constitute financial advice. Always consult with qualified professionals before making investment decisions. Real estate markets and operating conditions vary significantly by location and change over time. This article was written with the help of AI and reviewed by Rod and his team.*
Warriors regularly drive NOI through smart operations; see how [Crystal and Chris D’Agostino approached their 36 unit Texas deal](https://rodkhleif.com/warrior-win-crystal-chris-dagostino-36-unit-in-tx/) and [Jesse and Jenifer ran 44 units in Florida](https://rodkhleif.com/warrior-win-jesse-jenifer-44-unit-fl/).
For larger portfolios, see [Jay and Tana Boersma at 124 units in Oklahoma](https://rodkhleif.com/warrior-win-jay-tana-boersma-124-unit-ok/) and [Larry Carroll at 133 units in Texas](https://rodkhleif.com/warrior-win-larry-carroll-133-unit-tx/).
**Related reading:** [a healthy cap rate range](https://rodkhleif.com/what-is-a-good-cap-rate-for-multifamily/) walks through the 5 Layer Cap Rate Filter and current market benchmarks.
**Categories:** Blog
**Tags:** CAP Rate, deal analysis, multifamily investing, net operating income, NOI, real estate metrics
---
### [Best Multifamily Investment Training (2026)](https://rodkhleif.com/best-multifamily-investment-training/)
**Published:** June 16, 2026
**Author:** Rod Khleif
**Content:**
**Full disclosure:** This site is run by Rod Khleif. Where his programs, podcast, or events appear in this article, we call it out so you can compare every option honestly. The other programs are described on their own merits.
I have spent more than three decades buying, operating, and losing and rebuilding apartment portfolios, and the question I get asked most is simple: where should I actually learn this? The honest answer is that the best multifamily investment training is not one program for everyone. It is the program that matches where you are, how you learn, and who is teaching. Pick wrong and you waste a year and a few thousand dollars. Pick right and you compress years of expensive mistakes into months.
This guide compares the top multifamily training options for 2026, gives you a simple framework to choose, and shows you how to avoid the traps that keep new investors stuck. I will be straight with you about my own programs and fair to everyone else, because you deserve a real decision, not a sales pitch.
- [What Makes the Best Multifamily Investment Training in 2026?](#what-makes-best)
- [The 4-Fit Filter: How to Choose Multifamily Training](#the-4-fit-filter)
- [Match Your Stage to the Right Training](#match-your-stage)
- [The Top Multifamily Investment Training Programs Compared](#top-programs)
- [Free Content Alone vs a Structured Program](#self-study-vs-program)
- [How to Choose Your Multifamily Training in Five Steps](#how-to-choose)
- [How Most People Choose Training vs the 4-Fit Way](#how-most-choose)
- [Real Students, Real Deals](#proof)
- [Multifamily Investment Training FAQ](#multifamily-investment-training-faq)
- [Ready to Take the Next Step?](#next-step)
## What Makes the Best Multifamily Investment Training in 2026?
> The best multifamily investment training in 2026 matches your stage, teaches in a format you will actually use, comes from someone who still owns and operates real units, and proves results with named students and verifiable deals. Fit beats brand name every time.
Information is everywhere now. Free podcasts, YouTube channels, and AI answers can hand you the theory in an afternoon. So why pay for training at all? Because theory is not the bottleneck. Execution is. The reason structured programs still work is that they give you a proven framework, real accountability, and a room full of people doing deals while you learn. That combination is what turns a reader into an operator.
### Signs You Are About to Pick the Wrong Program
Before you spend a dollar, run through this quick self check. If two or more of these describe you, slow down and use the framework below.
- You are choosing a program because of a famous name, not because it fits your stage.
- You cannot say in one sentence what outcome the program is supposed to get you.
- You are buying a self study course when you already own three courses you never finished.
- You cannot find a single named student with a real deal you can verify.
- The mentor sold their portfolio years ago and now only teaches.
- You are stretching for the most expensive option to feel committed rather than because you need it.
## The 4-Fit Filter: How to Choose Multifamily Training
After watching thousands of students succeed and a few struggle, I built a simple decision tool I call the 4-Fit Filter. Run any program through these four fits before you buy. If it passes all four for you, it is a strong choice. If it fails one, keep looking. You can see the whole framework in the graphic below, and you can pressure test your own goals first with our free [goal setting workshop](https://rodkhleif.com/goal-setting-workshop/).
[](https://rodkhleif.com/bootcamp/)
**[Want to see the framework applied to your first deal? Join the next Multifamily Bootcamp →](https://rodkhleif.com/bootcamp/)**
Each fit answers a different question, and together they protect you from the two most common mistakes: buying the wrong format for how you learn, and trusting a teacher who has not done a deal in years.
### Fit 1: Stage Fit
Match the program to where you are right now. A brand new investor needs frameworks, confidence, and a first deal blueprint. Someone who already owns a few units needs deal review and accountability. A person raising capital needs advanced operations and a network of co sponsors. The same program cannot serve all three equally, so be honest about your stage before you buy.
### Fit 2: Format Fit
There are three real formats: self study courses, live bootcamps, and ongoing mentorship. Self study is cheap and flexible but easy to abandon. A live bootcamp compresses the core skills into a few days and creates momentum. Mentorship gives you months of coaching, deal reviews, and a peer group. Pick the format you will actually use week after week, not the one that looks most impressive.
### Fit 3: Mentor Fit
Learn from someone who still owns and operates real units today. Markets change, lending changes, and 2026 underwriting looks nothing like 2021 underwriting. A teacher who is still in the arena keeps you current. Someone who exited years ago and now only sells courses is teaching you a market that no longer exists.
### Fit 4: Proof Fit
Demand evidence. The best programs show you named students, real closed deals, and unit counts you can verify. Anyone can post a testimonial. Few can hand you a list of everyday people who went from zero to dozens or hundreds of units. Before you pay, ask to see the wins, and ask how recent they are.
## Match Your Stage to the Right Training
Here is the simplest way to apply Stage Fit and Format Fit together. Most investors fall into one of three buckets, and each bucket has a clear best starting point. Use the chart below to find yours, then read the program reviews that follow with your bucket in mind.
If you are just starting, a live bootcamp gives you the most clarity for the least money. If you have some capital and you are hunting your first deal, ongoing mentorship with deal review pays for itself the moment it keeps you out of one bad purchase. If you are scaling and raising capital, a mastermind full of active operators becomes your deal flow and your capital network. For a wider look at where serious investors gather, see our guide to the [top real estate investing communities to join in 2026](https://rodkhleif.com/top-real-estate-investing-communities-networks-to-join-in-2026/).
## The Top Multifamily Investment Training Programs Compared
Below are the programs I see come up most often when investors ask me where to learn. I have kept each review honest and focused on who it serves best. Pricing in this space changes often and many programs only quote by application, so treat dollar figures as general guidance and confirm current pricing directly with each provider.
### Rod Khleif Multifamily Bootcamp and Warrior Program
I will start with my own so you know exactly what you are getting. My [Multifamily Bootcamp](https://rodkhleif.com/bootcamp/) is a live intensive that covers underwriting, deal structuring, capital raising, and asset management, updated every year for current market realities like conservative underwriting and market selection. It is built for beginners and intermediate investors who want frameworks and momentum fast. The [Warrior Program](https://rodkhleif.com/rod-khleif-warrior-program/) is my mentorship community, where members get direct coaching, unlimited deal review, and accountability. Warriors now control hundreds of thousands of apartment units collectively. Best for: investors who want both tactical skills and mindset, from first deal through scaling. You can also learn at your own pace through my [skool](https://www.skool.com/lcfa) program.
### Jake and Gino
Jake Stenziano and Gino Barbaro built their brand around a clear three part framework: buy right, finance right, and manage right. Their community is known for strong culture and an annual live event. Best for: investors who value a tight knit community and want a clean operating framework to follow.
### Michael Blank
Michael Blank focuses on helping newer investors break into syndications, with heavy emphasis on raising private money and analyzing deals. Best for: high earning professionals who want a step by step path into their first apartment syndication.
### Charles Dobens, Multifamily Investing Academy
Charles Dobens is an attorney and investor whose program leans into the legal and business side of building a multifamily operation. Best for: investors who want strong guidance on entity structure, contracts, and the mechanics of acquisitions.
### Neal Bawa, Multifamily University
Neal Bawa brings a data driven approach to market and neighborhood selection, which has earned him a strong following. Best for: analytical investors who want to lead with metrics and location science.
For more on self study paths, see our roundup of the [best resources for learning apartment syndication](https://rodkhleif.com/what-are-the-best-resources-for-learning-apartment-syndication/).
## Free Content Alone vs a Structured Program
A lot of investors ask whether they really need paid training when so much is free. Free content is a great way to start, and I publish a ton of it on the [Lifetime Cash Flow podcast](https://rodkhleif.com/lifetime-cashflow-podcast/). But there is a reason most people who only consume free content never close a deal. The table below shows the gap.
Free Content Alone vs a Structured ProgramWHY MOST FREE ONLY LEARNERS NEVER CLOSEWhat You NeedFree Content OnlyStructured TrainingA clear path✗Scattered tips with no order✓A proven step by step frameworkAccountability✗Nobody checks if you act✓Weekly goals and a coachDeal feedback✗You guess and hope✓Experts review your numbersA network✗You build alone✓Partners, lenders, and deal flowAccording to the National Multifamily Housing Council, apartments remain a deep and durable asset class with strong long term demand, which is exactly why this skill set is worth learning well ([NMHC research](https://www.nmhc.org/research-insight/)). The opportunity is real. Your job is to get trained so you can act on it with confidence.
## How to Choose Your Multifamily Training in Five Steps
Here is the exact process I would use if I were starting over today with the 4-Fit Filter in hand. Follow these five steps in order and you will land on the right program for you, not the loudest one.
1. **Name your stage and your one year outcome.** Write down where you are and the single result you want twelve months from now, such as closing a first deal or raising your first round of capital.
2. **Pick your format.** Decide honestly whether you will follow through on self study, or whether you need the momentum of a live bootcamp or the accountability of mentorship.
3. **Vet the mentor.** Confirm the person teaching still owns and operates real units in today’s market, not a market from years ago.
4. **Demand proof.** Ask for named students, recent closed deals, and verifiable unit counts before you pay anything.
5. **Start and take action fast.** Choose your program, then implement within the first week. Speed of implementation predicts results more than any other factor.
That last step matters most. Written goals paired with regular accountability dramatically raise follow through, which is the whole point of structured training. Long term housing demand also supports the case for learning this asset class well ([Harvard Joint Center for Housing Studies](https://www.jchs.harvard.edu/)). The program gives you the path. Your action turns it into a portfolio. You can sharpen your numbers anytime with our free [cap rate calculator](https://rodkhleif.com/cap-rate-calculator/).
Before you go further, grab the free resource below. It walks through the most common and costly mistakes new multifamily investors make, so you can avoid them before they cost you. Click the cover to download the full guide and use it as your reference while you evaluate programs.
[](https://rodkhleif.com/lcfa-ebook/)
**[Download Rod’s free best selling multifamily book →](https://rodkhleif.com/lcfa-ebook/)**
## How Most People Choose Training vs the 4-Fit Way
Most investors choose a program emotionally, then wonder why it did not work. The 4-Fit way is deliberate. Here is the difference at each decision point.
How Most People Choose vs the 4-Fit WayPICK ON PURPOSE, NOT ON HYPEDecision PointCommon MistakeThe 4-Fit MoveChoosing a program✗Pick the most famous name✓Match it to your stagePicking a format✗Buy another course you will skip✓Choose the format you will useTrusting a mentor✗Follow a retired teacher✓Learn from an active operatorJudging results✗Trust a vague testimonial✓Verify named deals and units## Real Students, Real Deals
Proof Fit is not a slogan for me. It is the whole point. Everyday people with no real estate background have used this training to build serious portfolios. [Aaron Novotney](https://rodkhleif.com/warrior-win-aaron-novotney-53-unit-in-oh/) closed a 53 unit property in Ohio. [Larry Carroll](https://rodkhleif.com/warrior-win-larry-carroll-133-unit-tx/) built up to a 133 unit deal in Texas. [Victor Collazo](https://rodkhleif.com/warrior-win-victor-collazo-92-unit-ks/) closed 92 units in Kansas. [Ronal and Mary Jane Lou](https://rodkhleif.com/warrior-win-ronal-and-mary-jane-lou-204-units-tx/) took down 204 units in Texas. These are not actors. They are students who followed the framework, got their deals reviewed, and took action.
Watch the Full Interview
A Warrior walks through how structured training and deal review took him from learning to closing real apartment units.
> **Rod Khleif:** “The best training does not just hand you information. It hands you a framework, a community, and the belief that you can actually do this. That combination is what turns a student into an owner.”
## Multifamily Investment Training FAQ
**Q: What is the best multifamily investment training for beginners?**
A: For most beginners, a live bootcamp is the best starting point because it compresses the core skills into a few days and builds real momentum. Look for one led by an active operator that covers underwriting, deal structuring, and capital raising, then pair it with accountability so you actually take action. Check out comprehensive trainers like Rod Khleif, who have resources available for all levels.
**Q: Are online multifamily investing courses effective for beginners?**
A: Self study courses can be effective if you are disciplined and you pair them with a deadline and a peer group. The risk is that many people buy courses and never finish them. If you have a history of unfinished courses, choose a bootcamp or mentorship with built in accountability instead. Rod Khleif’s multifamily bootcamp is hands-on live training built for beginners looking to learn multifamily.
**Q: How much does multifamily investment training cost?**
A: Pricing ranges widely. Entry level bootcamps and courses can run from completely free to a few thousand, while in depth mentorship and mastermind programs are priced by application and cost more. Confirm current pricing directly with each provider, since rates change often.
**Q: Do real estate investing bootcamps actually work?**
A: A well designed bootcamp works when you show up ready to act. You will not become an expert in a few days, but you will leave with frameworks, clarity, and a specific action plan. The investors who get the most value implement within the first week rather than letting the material sit.
**Q: What is the difference between a bootcamp and a mastermind?**
A: A bootcamp is a short intensive that teaches frameworks and strategy. A mastermind is an ongoing community, usually six to twelve months or longer, focused on accountability, coaching, and deal review. Many investors start with a bootcamp and then join a mastermind for continued support.
**Q: Can I learn multifamily investing for free?**
A: You can learn the theory for free through podcasts, books, and videos, and you should start there. Free content rarely gets people to close, though, because it lacks accountability, deal feedback, and a network. Use free content to learn the language, then invest in structured training to execute. Check out rodkhleif.com for comprehensive free resources covering all areas of multifamily.
**Q: How do I know if a program is legitimate?**
A: Apply the 4-Fit Filter. Confirm it fits your stage, uses a format you will actually use, is taught by someone still operating real units, and can show you named students with verifiable recent deals. If a program cannot show real proof, keep looking.
**Q: Should I learn multifamily or single family first?**
A: You do not have to start with single family. Many successful investors go straight into multifamily because the numbers are driven by property performance rather than comparable sales. The right training will teach you to underwrite and operate apartments directly.
**Q: How long does it take to close a first deal after training?**
A: It varies, but motivated students who take action often close within several months to about a year. Speed depends mostly on how quickly you implement, build relationships with brokers, and review real deals. Accountability shortens that timeline significantly.
**Q: Is multifamily investment training worth the money in 2026?**
A: Yes, when you treat it as an investment and take action. In a market where a single mistake in market selection or underwriting can cost six figures, having experienced eyes on your deals and a proven framework pays for itself many times over.
## Ready to Take the Next Step?
If you are serious about multifamily, the fastest way to start is to get in the room. My live Multifamily Bootcamp gives you the frameworks, the confidence, and a clear action plan to pursue your first or next deal.
**[Join the next Multifamily Bootcamp →](https://rodkhleif.com/bootcamp/)**
Not ready for a live event yet? Start with my free best selling book and the podcast, then come back when you are ready to move.
**[Download Rod’s free multifamily book →](https://rodkhleif.com/lcfa-ebook/)**
*Disclaimer: This article was written with the help of AI and reviewed by Rod and his team.*
**Categories:** Real Estate
**Tags:** apartment investing, multifamily bootcamp, multifamily course, multifamily investing, multifamily investment training, multifamily mentorship
---
### [Best Real Estate Masterminds and Bootcamps (2026 Edition)](https://rodkhleif.com/best-real-estate-masterminds-and-bootcamps-2025-edition/)
**Published:** February 4, 2026
**Author:** Rod Khleif
**Content:**
**Full disclosure:** This site is run by Rod Khleif. Where his programs, podcast, or events appear in this article, we call it out so you can compare every option honestly. The other programs are described on their own merits.
> **Quick answer:** The strongest fit in 2026 depends on your goals: Rod Khleif’s Multifamily Bootcamp and Warrior Program for multifamily investors, BiggerPockets Bootcamps for beginners exploring strategies, Jake and Gino’s Multifamily Mastery for community, and Michael Blank’s program for syndication. Match the program to your experience level, goals, and budget.
I have been part of high-level masterminds throughout my entire 20-year career, and I built my own mastermind specifically for serious multifamily investors. Masterminds are where I learned most of what I know. Not from books or courses, but from sitting in rooms with investors more successful than me, sharing deals and failures. The right mastermind accelerates your learning by years, helps you avoid mistakes that cost six figures, and connects you with deal partners you would never find alone.
The 2026 market makes this decision matter more than usual. National effective rent growth has turned positive again, apartment investment volume reached $170 billion over the trailing 12 months per MSCI Real Capital Analytics, new deliveries are falling sharply from 2024 peaks, and cap rates have held flat at 5.7/5.8% for seven straight quarters. Early-recovery markets reward investors with strong networks, conservative underwriting, and real market selection discipline. That is exactly what the right program teaches.
## 2026 Comparison Table: All 10 Programs at a Glance
ProgramFormatBest ForFocusRod Khleif Multifamily Bootcamp + Warrior Program2-day bootcamp (live/virtual) + 2-year Warrior mastermindBeginners through advanced multifamily investorsMultifamily tactics + mindsetBiggerPockets BootcampsMulti-week virtual cohortsBeginners exploring strategiesMultiple nichesTony Robbins and Dean Graziosi MastermindsLive eventsEntrepreneurs blending business + investingMindset + business scalingJake and Gino Multifamily MasteryAnnual event + ongoing mastermindCommunity-oriented multifamily investorsBuy Right, Finance Right, Manage RightMichael Blank Apartment Investor ProgramOnline curriculum + coachingProfessionals pivoting to syndicationRaising capital, first dealKen McElroy Advanced SessionsSmall-group workshopsExperienced investors scaling upLarge-deal operationsBrad Sumrok Apartment Investor MasteryEvents + mentoringDallas-area and national apartment investorsApartment acquisitionThink MultifamilyFamily-style coaching communityCouples and families entering syndicationSyndication partnershipsMultifamily University (Neal Bawa)Webinars + data-driven coursesAnalytical, data-first investorsMarket data and metricsMIH MastermindCoaching communityNewer apartment investors seeking structureApartment coaching## 1. Rod Khleif’s Multifamily Bootcamps and Warrior Program Mastermind
Rod Khleif, host of the Lifetime Cashflow Through Real Estate Investing Podcast (one of the longest-running multifamily podcasts, with over 20 million downloads), is one of the most recognized names in multifamily. His programs are built on two pillars: tactical skills and mindset mastery, a combination that is especially powerful as investors navigate today’s more complex market conditions.
### Multifamily Bootcamps
- **2-day live immersions** (virtual and in-person), the best way for beginners to get a full education on multifamily investing
- Cover multifamily underwriting, deal structuring, capital raising, and asset management
- Includes the full document library: scripts, templates, and deal analyzer software
- You leave with a 90-day action plan
- Updated for 2026 market realities: conservative underwriting, stress testing, and identifying strong markets vs. oversupplied ones
- Designed for both beginners and advanced investors
- Known for high energy, clarity, and actionable frameworks that students implement immediately
### Warrior Program Mastermind
- A **2-year mentorship program** (most masterminds run only 6 months to 1 year) with a community of 1,800+ “Warriors”
- **Unlimited 1-on-1 coaching and unlimited deal review** built in
- High performance coaching alongside tactical multifamily training
- Members collectively own over **300,000 units**
- Unrivaled networking: built for scale and fast-tracking your portfolio
Investors consistently credit Rod’s programs with helping them gain confidence, close their first deals, and scale portfolios quickly. You can review verified student deal case studies on the [Warrior Deal Case Studies page](https://rodkhleif.com/warriorwins/). In a year where geographic selection and conservative underwriting are critical, having experienced mentors and peers reviewing your deals can make the difference between a winning acquisition and an expensive mistake.
👉 **Learn more:** [Rod Khleif Multifamily Bootcamp](https://rodkhleif.com/multifamily-bootcamp)
## 2. BiggerPockets’ Bootcamps
As the largest online real estate investing community, BiggerPockets continues to offer bootcamps throughout the year covering multiple strategies.
- Options include multifamily, short-term rentals, house hacking, and BRRRR
- Each program includes live training, accountability groups, and ongoing access to the BP forums
- Popular with newer investors who want a structured introduction to different niches
- Strong community platform for connecting with other investors and finding local markets
**Best for:** Beginners exploring different strategies before specializing in one niche.
## 3. Tony Robbins and Dean Graziosi’s Mastermind Events
While not exclusively multifamily, Tony Robbins and Dean Graziosi bring a different flavor to real estate education. Their masterminds combine:
- Real estate training and deal structures
- Personal development and mindset work
- Business scaling strategies
- Networking with high performers across industries
These events are high-ticket, high-energy, and best for those looking to integrate investing into a bigger entrepreneurial strategy.
**Best for:** Entrepreneurs who want to combine real estate with broader business and personal growth goals.
## 4. Jake and Gino’s Multifamily Mastery
Jake Stenziano and Gino Barbaro built their brand around the “Buy Right, Finance Right, Manage Right” framework, and their community continues to thrive in 2026.
### Multifamily Mastery Live (MML):
- Annual event bringing together hundreds of multifamily investors
- Hands-on workshops and networking opportunities
- Current market insights and deal case studies
### Mastermind Program:
- Ongoing coaching and accountability
- Community support for scaling portfolios
- Known for accessibility and strong culture among members
**Best for:** Investors who value a tight-knit community and clear operational frameworks.
## 5. Michael Blank’s Apartment Investor Program
Michael Blank focuses on helping new investors break into multifamily syndications, with particular emphasis on the financial side.
- Curriculum emphasizes raising private money and analyzing deals
- Clear step-by-step training to go from zero to your first multifamily acquisition
- Updated strategies for 2026’s capital markets environment
- Popular with professionals pivoting into real estate investing
**Best for:** High-earning professionals who want to transition into multifamily syndication.
## 6. Ken McElroy’s Advanced Mastermind Sessions
Ken McElroy, a Rich Dad Advisor and long-time multifamily investor, runs smaller mastermind-style sessions through his educational platform.
- Strategy workshops with experienced operators
- Behind-the-scenes looks at large-scale multifamily acquisitions
- Deep dives into advanced topics like portfolio management and institutional partnerships
- Great fit for investors seeking advanced insights into scaling bigger deals
**Best for:** Experienced investors ready to scale into larger, more complex deals.
## 7. Brad Sumrok’s Apartment Investor Mastery
Brad Sumrok has taught apartment investing for over a decade, with a strong base in the Dallas-Fort Worth market and a national student community.
- Live events and structured mentoring focused on apartment acquisitions
- Emphasis on partnering students together on deals
- Long track record with many students who have completed transactions
**Best for:** Investors who want an events-driven mentoring community, particularly in Texas markets.
## 8. Think Multifamily
Mark and Tamiel Kenney run Think Multifamily as a family-oriented coaching community focused on apartment syndication.
- Coaching structured around partnering with experienced sponsors
- Strong appeal for couples and families investing together
- Focus on values-driven community culture
**Best for:** Couples and family teams entering multifamily syndication together.
## 9. Multifamily University (Neal Bawa)
Neal Bawa, known as the “Mad Scientist of Multifamily,” teaches a heavily data-driven approach through Multifamily University.
- Free and paid webinars built around market data and demographics
- Quantitative framework for market selection
- Appeals to analytical investors who want numbers before narratives
**Best for:** Data-first investors who want a quantitative market selection methodology.
## 10. MIH Mastermind (Make It Happen)
MIH Mastermind offers apartment investing coaching with a structured curriculum and community support for newer investors.
- Step-by-step apartment coaching framework
- Community accountability and group coaching calls
- Positioned for investors early in their multifamily journey
**Best for:** Newer apartment investors who want structured coaching and accountability.
## Why Masterminds and Bootcamps Work in 2026
Books and podcasts can teach you the *what*. Bootcamps and masterminds help you actually execute the *how*, especially in a market that rewards local knowledge, conservative underwriting, and strong networks.
**Immersion:** Condensed, focused learning that compresses years into days. Instead of trying to piece together information from dozens of sources, you get a proven framework handed to you.
**Accountability:** Clear goals and peer support. In Rod’s Warrior community, members report that weekly accountability calls help them hit milestones they would have otherwise delayed for months or even years.
**Community:** Access to like-minded investors, future partners, and funding opportunities. In 2026’s market, where deal flow requires more creativity and local expertise, your network is your net worth.
**Expert Insight:** Direct feedback from coaches and seasoned operators on real deals. When you are underwriting a property in Phoenix vs. Indianapolis, having mentors who understand the nuanced differences in those markets is invaluable.
**Market Intelligence:** Renters formed roughly 80% of new US households last year, new apartment deliveries are projected to fall as much as 60% from 2024 peaks, and some Sun Belt metros remain oversupplied into late 2026 while Midwest and supply-constrained secondary markets outperform. Having access to real-time insights from operators across multiple markets helps you avoid costly mistakes.
## How to Choose the Right Program for You
[](https://rodkhleif.com/bootcamp/)
*Want these five checks applied to your situation with real frameworks? [See what Rod’s 2 day Multifamily Bootcamp covers](https://rodkhleif.com/bootcamp/).*
### 1. Match Your Experience Level
- **Beginners:** Start with structured bootcamps (Rod Khleif, BiggerPockets, Michael Blank)
- **Intermediate:** Look for ongoing masterminds with deal review (Warrior Program, Jake and Gino)
- **Advanced:** Seek high-level strategy sessions (Ken McElroy, Rod’s Warrior advanced tracks)
### 2. Define Your Goals
- Want to close your first deal? Choose programs with strong deal analysis and capital raising components
- Scaling an existing portfolio? Look for masterminds focused on operations and portfolio management
- Building a syndication business? Seek communities with active capital raisers and deal sponsors
### 3. Evaluate the Community
The program is only as good as the people in it. Look for communities where members are:
- Actively doing deals (not just talking about them)
- Willing to share knowledge and support each other
- Operating at or slightly above your current level
### 4. Consider the Commitment
- Bootcamps: 2 day time investment, great for getting clarity quickly
- Masterminds: Ongoing commitment (most run 6 months to 1 year; Rod’s Warrior Program runs 2 full years), better for sustained growth and accountability
### 5. Verify the Results
Ask any program for verifiable student outcomes: named students, unit counts, and dated records. Programs that publish verified deal trackers give you something to check. Vague success claims with no names or numbers are a red flag in any market, and especially in a recovery year when everyone is marketing hard.
## Frequently Asked Questions (FAQ)
### Q: What is the best real estate bootcamp for beginners?
Rod Khleif’s Multifamily Bootcamp is widely regarded as beginner-friendly, offering step-by-step frameworks, a full document library with scripts, templates, and deal analyzer software, and a 90-day action plan to leave with. Rod’s bootcamp is particularly strong on mindset and overcoming limiting beliefs, which often hold new investors back more than lack of technical knowledge.
### Q: Are masterminds worth the cost in 2026’s market?
Yes, especially now. When approached with action and commitment, members consistently report that accountability partners, deal review, and access to mentors pay for themselves many times over. In a market where a single mistake in market selection or underwriting can cost six or seven figures, having experienced eyes on your deals is worth far more than the investment.
### Q: What are the best real estate masterminds for multifamily?
Rod Khleif’s Warrior Program and Jake and Gino’s Multifamily Mastery are consistently ranked among the top options for multifamily-specific mentorship. The Warrior Program stands out for its size (300,000+ units owned by members), diversity of experience levels, and Rod’s unique focus on both mindset and tactical execution.
### Q: How are bootcamps different from masterminds?
Bootcamps are short, intensive training sessions. Think of them as immersion weekends where you learn frameworks and strategies. Masterminds are ongoing communities (most run 6 months to 1 year, while Rod’s Warrior Program runs 2 years) that focus on accountability, coaching, deal review, and long-term portfolio growth. Many investors start with a bootcamp and then join a mastermind for continued support.
### Q: Can I really learn enough in 2 days at a bootcamp?
While you will not become an expert in 2 days, a well-designed bootcamp like Rod’s gives you the frameworks, confidence, and clarity to take action. Most attendees leave with a specific action plan and the tools to execute it. The bootcamp compresses what might take months of self-study into an intensive, focused experience.
### Q: How much do real estate masterminds cost?
Pricing varies widely. Bootcamps often run from under $100 for virtual tickets to a few thousand dollars for in-person events. Ongoing masterminds and mentorship programs typically range from several thousand to tens of thousands of dollars per year depending on access level, coaching intensity, and community size. Always weigh cost against verifiable member results.
### Q: Is 2026 a good time to join a multifamily mastermind?
Market conditions in 2026 favor prepared investors: rent growth has turned positive, transaction volume is expanding, and new supply is falling sharply. Early-recovery periods historically reward investors who move before broad price appreciation. A strong community shortens the learning curve at exactly the moment timing matters most.
### Q: What questions should I ask before joining a program?
Ask how many members have closed deals in the last 12 months, whether results are documented and verifiable, what the coaching-to-member ratio is, how deal review works, what the refund or guarantee policy is, and whether you can speak with current members before committing.
### Q: What are the red flags in real estate education programs?
Watch for unverifiable income claims, pressure tactics with fake scarcity, no named student outcomes, coaches who have not done deals themselves, and programs that promise guaranteed returns. Real estate investing involves risk, and any program guaranteeing profits is misrepresenting how investing works.
### Q: Do I need a mastermind if I already listen to real estate podcasts?
Podcasts like the [Lifetime Cashflow Through Real Estate Investing Podcast](https://rodkhleif.com/lifetime-cashflow-podcast/) are excellent free education, but they are one-directional. Masterminds add the pieces podcasts cannot: personal accountability, feedback on your specific deals, and partners for your transactions. Most successful investors use both.
## Final Thoughts: Invest in Yourself First
For investors serious about scaling in 2026, masterminds and bootcamps are not optional. They are accelerators. Whether you are just getting started or looking to expand a portfolio, the combination of structured learning, peer accountability, and expert guidance is unmatched.
The market conditions in 2026 reward those who:
- Understand geographic nuances (not all markets are created equal)
- Underwrite conservatively with realistic assumptions
- Have strong networks for deal flow and capital
- Can execute quickly when opportunities arise
All of these advantages come from being in the right rooms with the right people.
If you are ready to step up, programs like **Rod Khleif’s Multifamily Bootcamps and Warrior Program Mastermind** offer proven paths to get there faster. With over three decades of multifamily experience, including surviving and thriving through multiple market cycles, Rod brings both technical expertise and hard-won wisdom to every session.
Other strong options include BiggerPockets Bootcamps for breadth, Jake and Gino’s Multifamily Mastery for community culture, Michael Blank’s program for syndication focus, Ken McElroy’s sessions for advanced scaling, Brad Sumrok for events-driven mentoring, Think Multifamily for family teams, Multifamily University for data-driven investors, and MIH Mastermind for structured beginner coaching.
The question is not whether to invest in education and community. It is which program aligns best with where you are and where you want to go. If you want to start with free education first, [download Rod’s best-selling multifamily book at no cost](https://rodkhleif.com/lcfa-ebook/).
**Ready to accelerate your multifamily journey?** [Learn more about Rod Khleif’s upcoming bootcamps here](https://rodkhleif.com/bootcamp/).
*Disclaimer: This article was written with the help of AI and reviewed by Rod’s team. Program details and market statistics referenced are current as of July 2026. Market data sourced from MSCI Real Capital Analytics, Moody’s Analytics, and CBRE. Individual results vary; real estate investing involves risk and no outcome is guaranteed.*
On career mindset, read this [interview with Rod Khleif on building a successful career in commercial real estate](https://rodkhleif.com/authority-magazine-rod-khleif-5-things-you-need-to-create-a-highly-successful-career-in-the-commercial-real-estate-industry-today-authority-magazine/).
Starting small with what you have works too; see [how to start investing in real estate with limited capital](https://rodkhleif.com/how-to-start-investing-in-real-estate-with-limited-capital-new-york-weekly/).
**Related reading:** [Best Multifamily Investment Training (2026)](https://rodkhleif.com/best-multifamily-investment-training/) compares the top bootcamps, courses, and mentorships and gives you a simple framework to choose the right fit.
**Categories:** Real Estate
---
### [What Are Cap Rates and Why You Should Use Them](https://rodkhleif.com/what-are-cap-rates-and-why-you-should-use-them/)
**Published:** July 6, 2026
**Author:** Rod Khleif
**Content:**
The first time I looked at an apartment building as a serious investment, the broker said one sentence that I did not understand: “It is trading at a seven cap.” I nodded like I knew what that meant. I did not. So if you have ever wondered what are cap rates and why everyone in real estate keeps throwing that number around, you are exactly where I was years ago, and I am going to fix that for you right now.
Once I finally understood the cap rate, deal analysis stopped feeling like a guessing game. I could look at a property, run one quick number in my head, and know within seconds whether it was worth a second look or a hard pass. That one metric has helped me and my students avoid overpaying on deals that looked great on the surface and pursue deals that other people walked right past.
Here is what we will cover:
- [What Are Cap Rates? A Plain English Definition](#what-are-cap-rates)
- [The 4-Lens Cap Rate Check](#the-4-lens-cap-rate-check)
- [The Cap Rate Formula and Why NOI Is Everything](#the-cap-rate-formula)
- [How to Calculate and Use a Cap Rate Step by Step](#how-to-calculate-and-use-a-cap-rate)
- [Reactive Buyer vs Cap Rate Driven Investor](#reactive-buyer-vs-cap-rate-investor)
- [Guessing at Value vs Using the Cap Rate Formula](#guessing-vs-the-formula)
- [Common Cap Rate Mistakes That Cost Investors Money](#common-cap-rate-mistakes)
- [Real Investors Who Learned to Read the Numbers](#real-investor-results)
- [What Are Cap Rates FAQ](#what-are-cap-rates-faq)
- [Ready to Take the Next Step?](#ready-to-take-the-next-step)
## What Are Cap Rates? A Plain English Definition
> What are cap rates? A cap rate, short for capitalization rate, is the percentage you get when you divide a property’s yearly net operating income by its price. It tells you the unleveraged annual return a property produces and lets you compare deals and markets fast, without the distortion of financing.
Let me translate that into everyday language. Net operating income, or NOI, is the money left over each year after you pay all the operating expenses but before you pay the mortgage. The cap rate takes that income and expresses it as a percent of the purchase price. A property that produces 100,000 dollars of NOI and sells for one million dollars is trading at a 10 percent cap rate, because 100,000 divided by 1,000,000 equals 0.10.
Here is the part that trips people up. A higher cap rate is not automatically better, and a lower cap rate is not automatically worse. The cap rate is a trade off between price and risk. A low cap rate means buyers are paying a high price for every dollar of income, usually because they believe the income is safe and the area is strong. A high cap rate means the property is cheaper for every dollar of income, usually because there is more perceived risk. The number is a story about how the market feels about that income.
### Signs You Are Misreading Cap Rates
Before we go further, run yourself through this quick self check. If any of these sound like you, the cap rate is working against you instead of for you:
- You think a higher cap rate always means a better deal, with no thought about why the number is high.
- You compare a cap rate in one city to a cap rate in another city as if they mean the same thing.
- You include the mortgage payment when you calculate NOI, which is not how the math works.
- You trust the cap rate a broker hands you without rebuilding the income and expenses yourself.
- You cannot explain, in one sentence, what a six cap versus a nine cap is telling you about risk.
If you checked even one box, do not worry. By the end of this article you will read cap rates the way a seasoned operator does, and you will know exactly when to lean in and when to walk away.
## The 4-Lens Cap Rate Check
Over years of buying apartments and coaching investors, I boiled the cap rate down to a simple framework I call the 4-Lens Cap Rate Check. Instead of treating the cap rate as one number to memorize, you use it as four different lenses on the same deal. Want to run the math instantly? Use the free [Rod Khleif Cap Rate Calculator](https://rodkhleif.com/cap-rate-calculator/) while you read.
[**Want to practice this on real deals with live coaching? Join the free Multifamily Bootcamp →**](https://rodkhleif.com/bootcamp/)
The cap rate is not abstract theory. It is the single fastest tool you have for sizing up an apartment deal in the real world, and the four lenses below are how you put it to work. Each lens answers a different question, and together they turn one percentage into a complete read on a property.
### Lens 1: Value the Property
The first lens is valuation. When you know the NOI and the market cap rate, you can estimate what a property is worth by dividing the income by the cap rate. If a building produces 100,000 dollars of NOI and similar properties in that area trade at a seven percent cap rate, the implied value is about 1,428,000 dollars, because 100,000 divided by 0.07 lands there. This is the same logic appraisers and lenders use, so when you think this way, you think like the people who decide whether a deal funds.
### Lens 2: Compare Deals and Markets
The second lens is comparison. Price alone tells you almost nothing. A one million dollar building and a three million dollar building are impossible to compare until you express them as cap rates. Once you do, you can line up five deals on a spreadsheet and instantly see which ones are priced aggressively and which ones leave room. Just remember that cap rates are local, so you compare a property to others in the same submarket, not to a property a thousand miles away.
### Lens 3: Read the Risk
The third lens is risk. This is the lens most beginners skip, and it is the most important one. A low cap rate usually signals a stable, in demand location where buyers accept a lower return for more safety. A high cap rate usually signals more risk, whether that is an older asset, a softer market, or income that is harder to keep. When a deal shows a cap rate far above the local norm, that is not a gift. That is the market pricing in a problem, and your job is to find out what it is.
### Lens 4: Plan the Exit
The fourth lens is the exit. Cap rates do not just value a property today, they project what it could sell for tomorrow. If you raise the NOI through better management and the market cap rate holds, the value climbs. That is forced appreciation, and it is the heart of how multifamily investors build wealth. When you raise NOI by 50,000 dollars in a market that values income at a seven percent cap, you have created roughly 714,000 dollars of value, no matter what the broader market does.
## The Cap Rate Formula and Why NOI Is Everything
The cap rate formula is simple: cap rate equals net operating income divided by current market value or price. Flip it around and value equals NOI divided by cap rate. Because the formula leans entirely on NOI, the quality of your cap rate depends completely on the quality of your income number. Garbage in, garbage out.
This is where discipline pays off. Brokers often present a cap rate built on optimistic income and understated expenses, which makes the deal look better than it is. Smart investors rebuild the NOI from the ground up using real numbers: actual rents, real vacancy, taxes that reflect the new assessed value after a sale, insurance, repairs, management, and reserves. According to the [National Multifamily Housing Council](https://www.nmhc.org/research-insight/quick-facts-figures/quick-facts-resident-demographics/), roughly a third of American households rent, so demand for well run apartments is durable, but that demand only shows up in your returns if your underwriting is honest.
One more discipline point. Never put the mortgage in your NOI. The cap rate is meant to measure a property’s performance independent of how you finance it, which is exactly what makes it useful for comparing deals. Financing is personal to you. The building’s income is not.
Here is a habit that will speed you up. Once you have an honest NOI, memorize a few quick conversions so you can read deals in your head. At a five percent cap rate, every 10,000 dollars of yearly NOI is worth about 200,000 dollars of value. At a seven percent cap rate, that same 10,000 dollars is worth roughly 143,000 dollars, and at a ten percent cap rate it is worth 100,000 dollars. When you internalize those anchors, you can hear a broker quote income and price and know almost instantly whether the deal is in the right neighborhood or wildly off. That speed is what lets you act before slower buyers even finish their spreadsheets.
If you want a simple, printable companion for this, my free book lays out the fundamentals of multifamily underwriting in plain language. It is the resource I wish I had when that broker first said “seven cap” to me. Click the cover below to download the full PDF and keep it next to you while you analyze your next deal.
[](https://rodkhleif.com/lcfa-ebook/)
[**Download the free Lifetime Cash Flow book →**](https://rodkhleif.com/lcfa-ebook/)
## How to Calculate and Use a Cap Rate Step by Step
Here is the exact process I run on every deal. It takes about ten minutes once you have the numbers, and it keeps you from falling in love with a property before you understand it.
1. **Gather the real income.** Pull the actual rent roll and trailing twelve months of income, not the proforma. Confirm what tenants are truly paying today.
2. **Rebuild the operating expenses.** List every cost to run the building: taxes reassessed at the likely new value, insurance, utilities, repairs, management, and reserves. Leave out the mortgage.
3. **Calculate the NOI.** Subtract those operating expenses from the income. The result is your net operating income, the engine of the whole calculation.
4. **Find the local market cap rate.** Ask brokers and check recent comparable sales in that submarket to learn what cap rate similar properties trade at right now.
5. **Run the value and the risk read.** Divide your NOI by the market cap rate to estimate value, then compare the asking price to that number and ask why any gap exists before you make an offer.
Authoritative market data helps you calibrate step four. The [Federal Reserve](https://www.federalreserve.gov/) sets the interest rate environment that pushes cap rates up and down across cycles, so when rates move, expect cap rates to drift with them. That relationship is why a “good” cap rate is always a moving target rather than a fixed rule. For a deeper walkthrough of the mechanics with examples, see [how cap rates work with examples](https://rodkhleif.com/how-cap-rates-work-with-examples/), and to benchmark what a strong number looks like in today’s market, read our guide on [what is a good cap rate for multifamily](https://rodkhleif.com/what-is-a-good-cap-rate-for-multifamily/).
### Three Worked Scenarios
Numbers make this real. Below is one building producing 100,000 dollars of NOI, priced in three different markets at three different cap rates. Watch how the same income carries three very different price tags, and notice what each cap rate is telling you about risk.
At a five percent cap rate, that income is worth about two million dollars. The market is telling you this is a premium, lower risk location where buyers pay up for stability. At a seven percent cap rate, the same income is worth about 1,428,000 dollars, a balanced market with solid cash flow and reasonable risk. At a nine percent cap rate, the building drops to roughly 1,111,000 dollars. The cheaper price is not free money. It is the market warning you that something here, the age of the asset, the strength of the local economy, or the durability of the rents, carries more risk. Your job is to decide whether you can manage that risk for the discount you are getting.
## Reactive Buyer vs Cap Rate Driven Investor
The difference between people who lose money in real estate and people who build lasting wealth often comes down to how they treat the cap rate. Here is the contrast at each stage of evaluating a deal.
REACTIVE BUYER VS CAP RATE DRIVEN INVESTORHOW EACH ONE EVALUATES THE SAME DEALStageReactive BuyerCap Rate Driven InvestorValuing a deal✗Falls for the asking price and the glossy photos✓Divides real NOI by the market cap rate to find true valueComparing markets✗Compares prices across cities that are not alike✓Compares cap rates only within the same submarketJudging risk✗Chases the highest cap rate without asking why it is high✓Treats a high cap rate as a question, not a prizePlanning the exit✗Hopes the market lifts the value over time✓Raises NOI to force value regardless of the market## Guessing at Value vs Using the Cap Rate Formula
You can buy real estate on a hunch, and plenty of people do. But hope is not a strategy, and the cap rate formula is the difference between guessing and knowing. Here is how the two approaches play out across the deal.
GUESSING AT VALUE VS USING THE CAP RATE FORMULASAME STEPS, TWO VERY DIFFERENT OUTCOMESStepGuessingUsing the FormulaSetting a price✗Pays what the seller asks and hopes it works out✓Sets a price from NOI divided by the market cap rateReading income✗Trusts the broker proforma at face value✓Rebuilds NOI from real rents and real expensesNegotiating✗Has no anchor and negotiates on emotion✓Negotiates from a defensible, math based numberBuilding wealth✗Waits on luck and the market cycle✓Forces value by raising NOI on purpose## Common Cap Rate Mistakes That Cost Investors Money
Once you know what a cap rate is, the next job is to avoid the traps that catch most beginners. I have watched smart, capable people lose real money not because they could not do the math, but because they let one of these mistakes slip past them. Learn them now so you never pay tuition for them later.
The first mistake is trusting the seller’s cap rate. Every listing wants to look like a winner, so brokers tend to present the highest cap rate the numbers can support, often by using rosy income and trimming expenses that you will absolutely face once you own the building. When you accept that number, you are letting the seller set your purchase price. Always rebuild the income and expenses yourself, then calculate your own cap rate on real figures.
The second mistake is forgetting that taxes get reassessed. In many markets, once a property changes hands, the local authority reassesses it at the new sale price, which can send the property tax bill up sharply. If you use the seller’s old, lower tax figure in your NOI, your cap rate looks better than reality, and you discover the truth only after closing when the new tax bill arrives. Build in the reassessed tax number before you make an offer.
The third mistake is ignoring capital expenses. A cap rate built on net operating income does not capture the roof you will replace in three years, the parking lot that needs resurfacing, or the units that need full renovations. Two buildings can show the same cap rate while one quietly hides a quarter million dollars of looming repairs. The cap rate is a starting point for value, not the final word, so always pair it with a clear eyed look at the physical condition of the asset.
The fourth mistake is treating the cap rate as a crystal ball. The cap rate reflects today’s income and today’s market. It does not promise that rents will rise, that expenses will stay flat, or that the market cap rate will hold when you sell. The investors who last build conservative assumptions into every projection and never bet the whole deal on the market staying kind. Respect the number, but never worship it.
## Real Investors Who Learned to Read the Numbers
I want you to meet [Anthony Metzger](https://rodkhleif.com/his-first-multifamily-deal-was-218-unit-apartment/). Anthony had never even bought a single family home on his own. No real estate experience, no big bankroll. What he did have was the willingness to get educated and to understand the numbers, including the cap rate. His first deal was a 218 unit apartment community. Zero to 218 units, on the strength of education and the courage to act on what the math told him.
Stories like Anthony’s are not magic. They come from learning to read a deal so clearly that you can act with confidence while everyone else hesitates. When you understand what a cap rate is telling you, a 218 unit building stops being scary and starts being a math problem you already know how to solve.
Watch the Full Interview
Anthony Metzger walks through how he went from no experience to closing a 218 unit apartment deal.
For a deeper look at how experienced operators stress test the income behind a cap rate, listen to my podcast episode on [the art and science of multifamily underwriting](https://rodkhleif.com/the-art-and-science-of-multifamily-underwriting/). It is the conversation I wish someone had handed me before my first deal.
> **Rod Khleif:** “The cap rate will not make you rich by itself. But the discipline to understand the number behind it, to rebuild the income honestly and respect what the market is telling you, that discipline is what separates the investors who last from the ones who get wiped out in the next cycle.”
## What Are Cap Rates FAQ
**Q: What are cap rates in simple terms?**
A: A cap rate is a property’s yearly net operating income divided by its price, shown as a percent. It tells you the return the property produces before financing, which makes it a fast way to value and compare deals.
**Q: What is a good cap rate for multifamily?**
A: It depends entirely on the market and the moment, because cap rates move with interest rates and local demand. Rather than chase a fixed number, compare a property to recent sales in the same submarket. Our guide on what is a good cap rate for multifamily breaks down current ranges.
**Q: Is a higher or lower cap rate better?**
A: Neither is automatically better. A lower cap rate usually means lower risk and a higher price, while a higher cap rate usually means more risk and a lower price. The right answer depends on your strategy and how much risk you can manage.
**Q: How do you calculate a cap rate?**
A: Divide the net operating income by the current value or purchase price. For example, 100,000 dollars of NOI on a 1,250,000 dollar property is an eight percent cap rate. Always build the NOI from real income and expenses.
**Q: Does the cap rate include the mortgage?**
A: No. Net operating income is calculated before debt service, so the mortgage is never part of the cap rate. That is exactly what lets you compare two properties fairly even when they would be financed differently.
**Q: What is the difference between cap rate and cash on cash return?**
A: The cap rate measures the property’s return before financing, while cash on cash return measures the return on the actual cash you invest after the mortgage. Cap rate judges the asset. Cash on cash judges your specific deal structure.
**Q: Why do cap rates change over time?**
A: Cap rates move with interest rates, investor demand, and the perceived risk of a market. When borrowing gets more expensive, cap rates tend to rise, which can lower property values even when the income stays the same.
**Q: Can I use cap rates for single family homes?**
A: You can calculate one, but cap rates are most useful for income producing commercial and multifamily properties. Single family home values lean heavily on nearby home sales rather than on income, so the cap rate matters less there.
**Q: What cap rate should I use to estimate a future sale price?**
A: Use a slightly more conservative cap rate than today’s, often called an exit cap, to protect yourself if the market softens. Then divide your projected future NOI by that exit cap to estimate a defensible sale price.
**Q: Where can I practice running cap rates on real deals?**
A: Start with the free Rod Khleif Cap Rate Calculator, then join the free Multifamily Bootcamp to run the numbers on live deals with coaching. Repetition is what turns the cap rate from a formula into instinct.
## Ready to Take the Next Step?
Understanding what cap rates are is the first move. Putting that understanding to work on real apartment deals, with people who have done it, is how you turn knowledge into cash flow. My free Multifamily Bootcamp walks you through valuing deals, reading risk, and building a plan that fits your life.
[**Join the free Multifamily Bootcamp →**](https://rodkhleif.com/bootcamp/)
Not ready for the Bootcamp yet? Start with my free book and learn the fundamentals at your own pace.
[**Download the free Lifetime Cash Flow book →**](https://rodkhleif.com/lcfa-ebook/)
*Disclaimer: This article was written with the help of AI and reviewed by Rod and his team.*
**Categories:** Blog, Featured, Raising Capital, Real Estate
**Tags:** apartment investing, CAP Rate, cap rate by city, multifamily, multifamily cap rate, multifamily underwriting, NOI, real estate investing
---
### [How to Invest in Real Estate in 2025: A Complete Guide](https://rodkhleif.com/how_to_invest_in_real_estate/)
**Published:** February 15, 2025
**Author:** Alex Khleif
**Content:**
## **Why Real Estate is One of the Best Investments**
The real estate market has long been one of the most **stable and profitable** ways to build wealth. Unlike mutual funds or stocks, real estate offers tangible assets. It provides steady passive income and long-term growth. If you invest in real estate you also get access to special tax benefits that help investors increase their returns.
Real estate investing allows you to generate cash flow, hedge against inflation, and build generational wealth. If you want short-term profits or long-term growth, there are many real estate investments. These include residential real estate, commercial real estate, and online platforms. Each type serves different investment goals.
However, learning how to invest in real estate requires more than just purchasing an investment property.
Real estate investors should understand a few key areas to succeed.They need to know about **interest rates**.
- They should also be aware of **financing options**.
- Understanding **property management** is important too.
- Finally, they must learn about **risk management**.
- These factors are essential in today’s competitive market.
This guide will walk you through the best real estate investment strategies, how to get started, and key market trends for 2025.
## **Ways to Invest in Real Estate**
There are many ways to invest in real estate, each with different levels of risk, management, and profitability. Below is a breakdown of the most common strategies.
### **A. Single-Family Rentals (SFRs)**
A popular entry point for new investors, **single-family rentals** involve purchasing a standalone home to rent to tenants.
- **Pros:** Easier to finance, high demand in suburban areas, and straightforward management.
- **Cons:** If the property is vacant, you earn **zero income**, and scaling a portfolio requires acquiring multiple properties.
### **B. House Hacking**
House hacking is a way to save money. You live in one unit of a multifamily property. You rent out the other units to help pay your mortgage.
- **Pros:** Lower living expenses, strong rental income, and FHA loan options with **low down payments**.
- **Cons:** Requires some hands-on management of tenants.
If you want to learn more about House Hacking, check out [this blog.](https://rodkhleif.com/why-house-hacking-a-plex-is-the-best-possible-way-to-start-investing/)
### **C. Short-Term Rentals (Airbnb & Vacation Homes)**
Short-term rentals allow investors to rent out properties on a nightly or weekly basis through online real estate platforms like **Airbnb and VRBO**.
- **Pros:** Higher potential **regular dividends** than traditional long-term rentals in high-demand locations.
- **Cons:** Seasonality, strict local regulations, and high property management involvement.
### **D. Fix and Flip**
A **high risk, high reward** strategy that involves buying distressed properties, renovating them, and selling for a profit.
- **Pros:** Potential for quick profits if executed correctly.
- **Cons:** Market fluctuations, high capital requirements, and unpredictable renovation costs.
### **E. Invest in Real Estate Using Trusts (REITs) & Mutual Funds**
For investors who want to invest in real estate without owning property, REITs and mutual funds are good options. They let you invest in a group of properties managed by experts.
- **Pros:** Passive income, liquidity, and diversification.
- **Cons:** No control over property selection, and returns are subject to stock market volatility.
### **F. Multifamily Real Estate (2+ Units)**
Multifamily properties, including duplexes, triplexes, and apartment complexes, provide multiple income streams from a single investmen**t**.
- **Pros:** Better economies of scale, stronger cash flow, and lower vacancy risk.
- **Cons:** Requires higher initial capital and more management expertise.
📌 **Want to learn more about multifamily real estate investing?** **[Check out our complete guide on multifamily real estate here](https://www.amazon.com/Lifetime-Cashflow-Through-Multifamily-Properties/dp/0999225014)**
## **How to Get Started in Real Estate Investing**
Regardless of your chosen investment strategy, successful real estate investing requires careful planning and execution.
### **A. Define Your Investment Goals**
Before you invest in real estate, ask yourself:
- Do you want passive income or long term appreciation?
- Are you looking for a hands on or hands off investment?
- What is your risk tolerance and financial capacity?
### **B. Research the Best Markets**
Finding the right real estate market is crucial for maximizing returns. Look for areas with:
- Strong job growth and economic expansion
- Rising population and rental demand
- Favorable interest rates and financing conditions
### **C. Build a Strong Real Estate Team**
Real estate investing is easier with the right professionals:
- **Real estate agents & brokers:** Help identify high potential properties.
- **Lenders & mortgage brokers:** Assist in securing commercial real estate loans or traditional mortgages.
- **Property managers:** Oversee daily operations if you don’t want to self-manage.
- **Experienced investors & mentors:** Provide valuable insights and guidance.
### **D. Secure Financing for Your Real Estate Investment Property**
**Common real estate financing options include:**
- **Conventional Loans:** Best for single-family and small multifamily properties.
- **FHA & VA Loans:** Low down payment options for house hacking.
- **Commercial Real Estate Loans:** Designed for larger apartment complexes and commercial real estate investments.
- **Private Money & Syndications:** Ideal for scaling quickly into larger real estate assets.
## **Why Multifamily Investing is a Smart Strategy**
While all types of real estate offer potential, multifamily investing provides unique advantages that make it one of the best wealth-building strategies.
- **Higher Cash Flow:** Multiple tenants generate multiple income streams, reducing vacancy risk.
- **Scalability:** Owning one 10-unit property is easier to manage than 10 separate houses.
- **Stronger Financing Terms:** Lenders favor multifamily properties because they provide more stable income.
📌 **Curious about multifamily vs. single-family investing?** **[Check out our podcast about it.](https://rodkhleif.com/podcasts/ep-159-mark-ferguson-single-family-vs-multifamily/)**
## **Learning from the Best: Why Mentorship Matters**
Real estate investing can be overwhelming, and **having the right mentor** can help you avoid costly mistakes while accelerating your success.
One of the most recognized names in multifamily and commercial real estate investing is **Rod Khleif**. With over 40 years of experience, Rod owns more than 2,000 units. His students own over 305,000 multifamily units. He is one of the most respected real estate mentors in the industry.
His coaching and training programs have **helped thousands of investors:**
✅ Find & fund high-performing real estate deals
✅ Scale their portfolios efficiently while minimizing risk
✅ Achieve financial freedom through strategic multifamily investing
📌 **Interested in learning directly from Rod?** [**Check out his mentorship program.**](https://rodkhleif.com/rod-khleif-warrior-program/)
## **Final Thoughts: The Smartest Way to Invest in Real Estate**
Real estate remains **one of the best long-term investment opportunities** for generating passive income and building wealth.
- If you’re looking for stable cash flow and appreciation, real estate is a proven path to success.
- Multifamily investing provides better cash flow, scalability, and financing opportunities than other options.
- Having a strong mentor like Rod Khleif can help you accelerate your success and avoid costly mistakes.
📩 **Want to start investing in real estate today?** **[Check out Rod Khleif’s free resources and expert coaching](https://rodkhleif.com/rod-khleif-warrior-program/) to start building your portfolio now.**
[](https://rodkhleif.com/bootcamp/)
**Ready to Build Your Multifamily Empire? 🚀**
Rod Khleif’s **Multifamily Bootcamp** has helped thousands of investors go from dreaming to doing. This is your chance to learn from a top real estate investing mentor and get the exact strategies to create financial freedom with multifamily real estate.
🎟 **Reserve Your Spot Now:** [Get Your Ticket](https://rodkhleif.com/bootcamp/)
**Categories:** Blog, Real Estate
**Tags:** real estate investing
---
### [The Top Forums for Multifamily Investors to Ask Questions](https://rodkhleif.com/the-top-forums-for-multifamily-investors-to-ask-questions/)
**Published:** January 20, 2026
**Author:** Alex Khleif
**Content:**
Whether you’re just starting your multifamily investing journey or you’re a seasoned pro looking to expand your portfolio, having access to the right communities can make all the difference. The best forums provide not only answers to your burning questions but also networking opportunities, deal analysis, and insights from investors who’ve been exactly where you are now.
Here are the top forums where multifamily investors gather to share knowledge, ask questions, and build their networks.
## 1. Rod Khleif’s Warrior Community
If you’re serious about multifamily investing, [Rod Khleif’s community](https://rodkhleif.com/rod-khleif-warrior-program/) should be at the top of your list. Rod is one of the most respected multifamily real estate coaches in the world, with over 40 years of active investing experience and having personally owned and managed over 2,000 properties.
**What Makes It Special:**
Rod Khleif’s community stands out because of Rod’s incredible accessibility and commitment to helping investors succeed. Unlike many mentors who remain distant from their communities, Rod is known for being super accessible and often answers questions commented or DMed directly to him on various social media platforms.
**Free Weekly Webinars:**
One of the most valuable resources Rod offers is his free webinar every Saturday. These aren’t just pre-recorded content dumps—they’re live sessions where Rod shares his expertise, discusses current market conditions, and most importantly, hosts “Ask Me Anything” sessions where you can get your specific questions answered in real-time.
**The Warrior Program:**
For those looking for more intensive mentorship, Rod’s Warrior Program has helped create a community of over 1,800 active investors who collectively own approximately 305,000 units. The program includes:
- One-on-one mentorship with seasoned multifamily investors
- Live group coaching with Rod and his expert team
- Unlimited deal analysis to ensure you’re making sound investments
- Step-by-step deal training
- Done-for-you investor documents including PPMs, email templates, and pitch decks
- Exclusive Warrior-only mastermind events
**Additional Resources:**
Rod also hosts “The Lifetime Cashflow Through Real Estate Investing Podcast,” which has garnered over 17 million downloads and features interviews with well-known real estate investors and business thought leaders.
**How to Connect:**
- Join his free Saturday webinars
- Follow him on [social media](https://www.instagram.com/rod_khleif/) where he regularly engages with followers
- Listen to his [podcast](https://rodkhleif.com/lifetime-cashflow-podcast/) for in-depth insights
- Consider applying for the [Warrior Program](https://rodkhleif.com/reviews/warrior-program/) if you’re ready to take massive action
## 2. BiggerPockets Multifamily Forum
[BiggerPockets](https://www.biggerpockets.com/) is arguably the largest online real estate investing community, and their dedicated multifamily and apartment investing forum is a goldmine of information.
**What You’ll Find:**
With over 3 million members, the BiggerPockets multifamily forum covers everything from small duplexes to large apartment complexes. Recent discussions include:
- Evaluating whether multifamily is still worth it in today’s market
- Comparing Class A, B, and C properties
- Managing rising operational costs
- House hacking strategies
- Syndication and passive investing opportunities
**Community Features:**
- Deal analysis tools and calculators
- Property management discussions
- Market-specific advice
- Success stories and cautionary tales
- Pro membership options with enhanced features including market data, deal finders, and advanced analytics
**Best For:** Investors at all levels, from complete beginners to sophisticated syndicators. The sheer volume of active users means you’ll almost always get multiple perspectives on any question you post.
## 3. Multifamily Insiders Community
The Multifamily Insiders Community is a more specialized forum that focuses on property management, resident retention, and apartment investment strategies.
**Current Focus Areas (2026):**
- AI-powered property management
- IoT smart buildings and WiFi 7 connectivity
- IPTV streaming services
- EV charging infrastructure
- Fiber-backed WiFi infrastructure for premium valuations
**Community Engagement:**
Members actively discuss topics like:
- Fiber vs. coax infrastructure decisions
- Landing pages for lead generation
- Deal evaluation with realistic capex planning
- Technology integration for operational efficiency
**Best For:** Property managers, technology-forward investors, and those interested in the operational side of multifamily investing.
## 4. Reddit Real Estate Communities
Reddit offers several subreddits where multifamily investors gather, though the quality of information can vary since there’s no formal fact-checking.
**Key Subreddits:**
- **r/CommercialRealEstate** (focused on offices, retail, warehousing, and multifamily) – Best for intermediate and advanced investors discussing zoning, commercial loans, and property conversions
- **r/RealEstate** (290,000+ members) – Broader real estate topics but includes valuable multifamily discussions
- **r/PropertyManagement** – Excellent for operational insights on leasing, tenant retention, maintenance, and accounting
**Pros:**
- Free to join and participate
- Quick responses from a diverse community
- Anonymous posting allows for candid discussions
- Real-world, unfiltered experiences
**Cons:**
- Lack of accountability and verification
- Information quality varies significantly
- Need to exercise healthy skepticism
**Best For:** Getting quick opinions, crowdsourcing ideas, and hearing unfiltered perspectives from other investors.
## 5. Local Real Estate Investment Associations (REIAs)
While not strictly online forums, local REIAs often have online components and Facebook groups where members continue discussions between meetings.
**Benefits:**
- Face-to-face networking opportunities
- Local market expertise
- Potential JV partners and deal flow
- Guest speakers and educational workshops
**Finding Your Local REIA:**
Search for “\[Your City\] Real Estate Investors Association” or “\[Your State\] REIA” to find groups in your area. Many have active online forums and social media groups where you can ask questions between meetings.
## 6. LinkedIn Groups and Industry Networks
LinkedIn hosts several professional groups focused on multifamily investing where serious investors and industry professionals gather.
**Notable Groups:**
- Various multifamily-focused networking groups
- Regional real estate investment groups
- Syndication and passive investing communities
**Benefits:**
- Professional networking with your real name attached
- Direct connections with brokers, lenders, and operators
- More serious, business-focused discussions
- Opportunity to build your professional reputation
**Best For:** Networking with potential partners, finding capital, and connecting with industry professionals.
## How to Get the Most Out of These Forums
Regardless of which forums you join, here are some best practices:
### 1. **Start by Listening**
Spend time reading existing threads to understand the community culture and common questions before jumping in with your own posts.
### 2. **Provide Context**
When asking questions, include relevant details about your market, experience level, and specific situation. The more context you provide, the better advice you’ll receive.
### 3. **Search First**
Most questions have been asked before. Use the search function to find existing discussions before creating a new thread.
### 4. **Give Back**
As you gain experience, answer questions from newer investors. Contributing to the community not only helps others but also establishes your credibility.
### 5. **Be Specific**
Instead of “Is this a good deal?” provide actual numbers and ask specific questions like “At a 7.5 cap rate in this market, what are the biggest risks I should be considering?”
### 6. **Verify Information**
Especially in anonymous forums, always verify important information with your own research or trusted advisors. What works in one market may not work in yours.
### 7. **Build Relationships**
Don’t just post questions and disappear. Engage in conversations, support other members, and build genuine relationships within the communities.
## The Bottom Line
The multifamily investing community is incredibly generous with knowledge and support. Whether you’re drawn to Rod Khleif’s accessible mentorship and free Saturday webinars, the massive knowledge base at BiggerPockets, the tech-forward discussions at Multifamily Insiders, or the unfiltered conversations on Reddit, there’s a community that fits your style.
The most successful investors don’t rely on just one source, they participate in multiple communities, each offering unique perspectives and expertise. Start with one or two forums that resonate with you, become an active member, and gradually expand your network.
Remember, these forums are tools to accelerate your learning and expand your network, but they’re not substitutes for proper due diligence, professional advice, or taking action on your investments. Use them wisely, give back to the community, and you’ll find that the connections you make can be just as valuable as the information you gather.
Ready to dive in? Pick a forum, introduce yourself, and start asking questions. The multifamily investing community is waiting to help you succeed.
*Disclaimer: This post was made with the help of AI and reviewed by Rod and his team.*
**Categories:** Blog
---
### [How to Build Credibility as a New Syndicator](https://rodkhleif.com/how-to-build-credibility-as-a-new-syndicator/)
**Published:** April 24, 2026
**Author:** Rod Khleif
**Excerpt:** You do not need a track record to be credible. Here is the 5 layer Credibility Stack my Warriors use to build trust before their first deal.
**Content:**
[Anthony Metzger](https://rodkhleif.com/his-first-multifamily-deal-was-218-unit-apartment/) poured wine for a living. He had never purchased a single family home. His first real estate deal ever was a 218 unit apartment complex. No resume, no net worth that would impress a bank, no track record. Yet he closed it, because credibility in multifamily is not a resume you earn over decades. It is a stack you build on purpose, and most new syndicators build it in the wrong order.
If you are trying to figure out how to build credibility as a new syndicator, the honest answer is this: credibility gets constructed before your first deal, not after it. Below is the exact framework my Warriors use to build trust with brokers, lenders, and limited partners long before their first close. It is the same path Anthony followed, the same path [Frank the school teacher](https://rodkhleif.com/podcasts/from-teaching-grade-school-to-raising-millions/) walked to 350 plus doors, and the same path [Zach](https://rodkhleif.com/podcasts/ep-429-young-rock-stars-of-multifamily/) ran from 23 years old and a negative checking account balance to nearly 500 units.
## Table of Contents
- [Why New Syndicators Fail on Credibility (Not Skill)](#why-new-syndicators-fail)
- [The Credibility Stack Framework](#credibility-stack-framework)
- [The Old Path vs. The Credibility Stack](#old-path-vs-stack)
- [How to Audit Your Own Credibility This Week](#audit-your-credibility)
- [Three Credibility Profiles: Which One Is Fundable?](#three-profiles)
- [Reactive Raise vs. Credibility Stack Raise](#reactive-vs-stack)
- [How Anthony Built the Stack Before His First 218 Unit Deal](#anthony-story)
- [The Credibility Mistakes New Syndicators Make](#credibility-mistakes)
- [How to Build Credibility as a New Syndicator FAQ](#credibility-faq)
- [Ready to Take the Next Step?](#next-step)
## Why New Syndicators Fail on Credibility (Not Skill)
> Credibility as a new syndicator is the sum of five things done in public over time: fluency in the numbers, a transparent underwriting process, an experienced partner attached to the deal, consistent communication with your network, and visible proof of work. Build these five layers on purpose and a first deal becomes fundable in 9 to 18 months, not 5 years.
Most new syndicators obsess about skill. They drill underwriting spreadsheets. They memorize cap rate math. They build pitch decks that would make a Wall Street analyst proud. Then they go to raise capital and nothing happens. Zero commitments. Silence on the follow up. Investors who loved the conversation do not wire the money.
The missing piece is almost never skill. It is credibility.
Limited partners (passive investors who fund the deal) do not write checks because of your Excel model. They write checks because they believe two things. First, that you will actually execute the business plan you described. Second, that you will communicate honestly and consistently through good months and bad. Skill without credibility means you can run the numbers but nobody funds you. Credibility without skill means you raise once and blow up the deal. You need both, and credibility is the one you build first.
Here is why the order matters. Skill compounds in private. You can grind underwriting alone in your home office for 12 months and walk out technically sharp. Credibility compounds in public. It requires other humans to observe you over time. If you wait to build it until you have a deal in contract, you are already 6 to 12 months behind. Start the credibility work today, even if your first deal is a year away.
### Signs Your Credibility Is Not Fundable Yet
Before you read another word of the framework, run through this self diagnostic. If three or more describe you right now, your credibility is the bottleneck, not your skill.
- You can build a pro forma but cannot explain DSCR out loud in under 15 seconds.
- Your pitch deck is polished, but you do not have a shareable underwriting methodology document.
- You plan to raise solo with no experienced Key Principal or co sponsor attached to the deal.
- Your last market or deal update email to potential investors was over 60 days ago, or you have never sent one.
- You have posted fewer than 10 educational pieces about multifamily in the last 90 days across any platform.
- You have not been a guest on a single podcast, panel, or meetup in the last 6 months.
- You cannot name three people who would honestly vouch for your underwriting skill on a reference call.
If any of the above hit hard, good. That is the exact map of what to work on.
## The Credibility Stack Framework
The Credibility Stack is a five layer trust system designed so brokers, lenders, and LPs can read you quickly and correctly. The layers are sequenced deliberately, and the inversion most new syndicators make (jumping to Layer 5 before Layer 1 is in place) is the single biggest reason first deals stall. If you want a partner bench and mentor pool to pull from while you build the stack, the [Warrior Program](https://rodkhleif.com/rod-khleif-warrior-program/) is the fastest accelerant for Layer 3.
[**Want the partner bench, mentor pool, and deal flow that power Layer 3? Apply to the Warrior Program →**](https://rodkhleif.com/rod-khleif-warrior-program/)
Here is the tactical resource Rod’s Warriors use alongside this framework. It breaks the first 90 days of a new syndicator’s journey into a daily action plan. **The cover is small on purpose. Click it below to download the full readable version and pin it to your desktop as your daily credibility builder.**
[](https://rodkhleif.com/wp-content/uploads/2025/09/Screenshot-2026-02-12-at-3.28.13-PM.png "Download Rod Khleif's 90 Day Apartment Syndication Action Plan")
[**Download the full 90 Day Apartment Syndication Action Plan →**](https://rodkhleif.com/wp-content/uploads/2025/09/Screenshot-2026-02-12-at-3.28.13-PM.png)
The five layers, in order:
1. **Knowledge Depth.** You can explain any deal metric without looking it up.
2. **Process Transparency.** Your underwriting methodology is documented and shareable.
3. **Partner Pedigree.** You have an experienced sponsor, KP, or mentor attached to your deal.
4. **Communication Cadence.** You publish regular investor updates, even before the deal exists.
5. **Receipts.** Student wins, podcast appearances, LinkedIn content, reviews, media mentions.
Most new syndicators skip straight to Receipts. They try to look accomplished on LinkedIn before they can explain DSCR in plain English. The stack does not work if you invert it. Layer 1 is the foundation. Everything else is hollow without it.
### Layer 1: Knowledge Depth
Knowledge Depth means you can explain every core deal metric without pulling up a calculator or a cheat sheet. Cap rate (annual net income divided by purchase price), NOI (net operating income, the cash the property produces after expenses but before debt service), DSCR (debt service coverage ratio, the cushion between operating income and the mortgage payment), break even occupancy, equity multiple, preferred return, cash on cash return. If an LP mentions any of these casually on a call, you answer without hesitation.
The translation rule matters here. Every time you name a technical term, define it in plain English in the next breath. This does two things at once. It demonstrates that you actually understand the term (repeating a definition is harder than parroting the term). And it respects the LP who may be a brilliant dentist or engineer who does not live inside multifamily jargon.
How to build Layer 1: underwrite five deals a week even if you never submit an offer. Record yourself teaching a core concept into your phone for two minutes, then watch it back. Cringe at what you hear. Do it again tomorrow. Inside 90 days, your speed of answer on any concept will jump a full tier.
How LPs test Layer 1: they ask one casual technical question. Your speed of answer is the signal, not the polish of the answer. A one second pause and a clean plain English response beats a ten second pause and a textbook quote every time.
### Layer 2: Process Transparency
Process Transparency is the single fastest way a new syndicator earns trust from a sophisticated LP. Most pitch decks hide assumptions. Transparent operators show them.
Build these artifacts before your first deal exists:
- A two page executive summary template with market, business plan, key metrics, risks, and mitigations.
- A ten year pro forma with clearly labeled rent growth, expense growth, vacancy, exit cap, and hold period assumptions.
- A sensitivity analysis that shows returns under base, upside, and downside scenarios. This alone sets you apart from 90 percent of first time syndicators.
- A deal memo format where the first page is written in plain English so a smart LP can understand the thesis in three minutes.
Why transparency beats polish: LPs have been burned by glossy decks that hid rent assumption bloat, phantom expense savings, or exit caps that only work if the market cooperates. When you show them a deal you have already stress tested in front of them, you signal that you are not hiding anything. You signal competence and honesty at the same time. That is a combination they do not see often.
For a deeper look at the exact capital raising mechanics that plug into Layer 2, see [how do I raise money for real estate deals](https://rodkhleif.com/how-do-i-raise-money-for-real-estate-deals/).
### Layer 3: Partner Pedigree
Every new syndicator starts without a track record. That is not the problem. The problem is trying to raise capital without borrowing one. You borrow a track record by attaching yourself to partners who already have pedigree.
Three kinds of partners matter on a first deal:
1. **The Key Principal (KP).** The experienced operator with the balance sheet and operating history who signs on the loan. Lenders underwrite this person, not you. You want a KP with at least 1,500 units of similar asset class experience.
2. **The Co Sponsor.** Another general partner (GP) with deal execution history who shares responsibility for the business plan. This person de risks the LP perception of you as a first timer.
3. **The Mentor.** Someone who is not on the deal but who is known to have coached dozens of closed syndications and whose name you can cite honestly.
This is exactly why programs like [the Warrior Program](https://rodkhleif.com/rod-khleif-warrior-program/) move the needle so hard for new syndicators. The program is not a course, it is a partner pool. Warriors have collectively acquired over 305,000 units, and a new Warrior can plug into existing deal teams as a value adding partner on day one. [Frank Patalano](https://rodkhleif.com/podcasts/from-teaching-grade-school-to-raising-millions/) ([watch on YouTube](https://www.youtube.com/watch?v=lP642a1qvv4)) was a school teacher in Rhode Island. He joined a seasoned team first, added value through relationships and capital raising, and today he is a general partner on 350 plus doors. He did not try to go solo and borrow nothing. He went solo by borrowing competence from a team and contributing his own.
The rule for Layer 3: borrow credibility by contributing competence. Do not try to borrow it passively. A KP lends their name because you bring something to the deal that makes you worth the association. Before you ask for a partnership, know what you are offering. For the questions to screen a partner and avoid a bad fit, read [questions to ask when forming a partnership](https://rodkhleif.com/questions-to-ask-when-forming-a-partnership/).
### Layer 4: Communication Cadence
If you only show up to your network when you need money, you have already lost. LPs watch your cadence for six to twelve months before they write a check. The cadence itself is the product.
Research from Harvard Business School on organizational trust reinforces this. In their widely cited analysis [Begin with Trust](https://hbr.org/2020/05/begin-with-trust), Frances Frei and Anne Morriss identify authenticity, logic, and empathy as the three drivers of trust. Communication Cadence is how you demonstrate all three at once. Show up on a schedule, share your actual thinking (not polished marketing), and speak to the LP’s worldview, not your own. The repetition is the proof.
Build the investor communication system before you have any investors. Minimum viable cadence: one email every two weeks. Format:
- A market datapoint you noticed this week and what it means for an operator.
- A deal you looked at and why you passed, or why you liked it.
- One lesson you are carrying into next week.
Three short paragraphs. No pitch. No ask. Just you, showing up, week after week, teaching what you are learning. Over six months, your list will start to self select. The people who read every email are the people who will write checks when you finally have a deal. The people who unsubscribe were never going to fund you anyway.
For the step by step on getting your first 100 names onto this list, see [how to build an investor list for multifamily syndications](https://rodkhleif.com/how-to-build-an-investor-list-for-multifamily-syndications/). Start before you have a deal. Always.
### Layer 5: Receipts
Receipts are the social proof layer. Podcast appearances, LinkedIn educational posts, meetup hosting, client wins, Warrior wins, press mentions, reviews, speaking gigs. Receipts compound. Your tenth LinkedIn post will look sharper than your first. Your tenth podcast interview will land better than your first.
When you lack your own receipts, borrow them cleanly. The mentor you train under. The KP you partner with. The podcast you appeared on. The meetup you organized even if only six people showed up. All of it counts. If you want a library of operator interviews to study and eventually be on, the [Lifetime Cash Flow podcast](https://rodkhleif.com/lifetime-cashflow-podcast/) is a starting point.
The LinkedIn posting cadence that works for new syndicators: three educational posts a week. Each one teaches a single concept, shares a deal observation, or tells a behind the scenes story. Do not post motivational quotes. Do not pitch. Teach. After six months of teaching, the LPs will come to you, not the other way around.
## The Old Path vs. The Credibility Stack
Most first time syndicators run the traditional credibility playbook and wonder why they cannot raise. Here is the contrast between the traditional path and the Credibility Stack approach, layer by layer:
The Old Path vs. The Credibility Stack
Same goal, two routes, very different timelinesCredibility Dimension✗Traditional Path (Slow)✓The Credibility Stack (Fast)How you prove you know multifamily✗Wait until you have owned a building for three years✓Underwrite five deals a week, record teaching videos, publish deal teardownsHow you prove your process✗Rely on a sales deck that hides assumptions✓Share a transparent pro forma, sensitivity analysis, and plain English memoHow you compensate for no track record✗Try to raise solo and get ignored✓Attach an experienced KP and co sponsor who bring execution historyHow you stay on LPs’ radar✗Email only when you have a deal to pitch✓Biweekly market and deal updates for 6 to 12 months before any askHow you generate social proof✗Wait to be invited onto a podcast✓Host a meetup, publish three LinkedIn posts a week, interview operators on your own showTime to first close✗3 to 7 years✓9 to 18 months## How to Audit Your Own Credibility This Week
Here is the practical exercise I want you to run this week. It takes about two hours, and it is the same exercise I walk Warriors through on day one. According to the SEC’s own guidance on [private offerings under Regulation D](https://www.sec.gov/resources-for-investors/investor-alerts-bulletins/investor-bulletin-accredited-investors), much of the investor protection in private syndications depends on the relationships and disclosures sponsors build with their investors. Those relationships are exactly what the five layers measure.
1. **Score yourself 1 to 10 on each of the five layers.** Be brutally honest. Write the scores down. Knowledge Depth, Process Transparency, Partner Pedigree, Communication Cadence, Receipts.
2. **Ask three trusted people to score you on the same five layers.** Do not defend. Do not explain. Just collect the numbers.
3. **Compare your scores to theirs.** The gap between your self score and their scores is usually where the work is. Most new syndicators overrate Knowledge Depth and underrate Communication Cadence. You are probably less technical than you think, and you are definitely less visible than you think.
4. **Pick the weakest layer and assign yourself a 30 day project.** One layer, one month, one tangible output. If Communication Cadence is lowest, commit to sending a biweekly email to 20 people for 30 days. If Receipts is lowest, commit to three educational LinkedIn posts per week for 30 days. Pick one layer, ignore the other four for 30 days, then audit again.
5. **Rerun the audit in 90 days.** Credibility is not a one time build. It is a quarterly maintenance system. The Warriors who compound fastest are the ones who audit quarterly and attack the weakest layer on rotation.
## Three Credibility Profiles: Which One Is Fundable?
The framework gets real when you apply it to three people side by side. Here are three profiles of new multifamily sponsors at month 12 of their journey. One will close. The other two will still be looking at deals in year 4.
### Profile 1: The Solo First Timer
This profile has been studying multifamily for 12 months. Self taught, uneven on the metrics. No reusable underwriting artifacts. No partner attached to any deal. They only email their list when they have a deal to pitch, which last happened 4 months ago. Zero podcast appearances, no meetup, a handful of posts. They take meeting after meeting with LPs and brokers. Nobody commits. They assume the market is the problem. The market is not the problem. The stack is.
Time to first close for this profile: 3 to 7 years if they do not change the inputs.
### Profile 2: The Borrowed Path
Same 12 months of study, but this sponsor drills 20 core metrics daily and can teach each one. They built a reusable pro forma with a sensitivity tab and a plain English memo. They attached a KP with 2,400 units and a co sponsor who has operated through two full cycles. They have been sending a biweekly market note for 6 months. They have posted 30 times on LinkedIn and been a guest on one podcast. They have a first GP deal under contract at month 12.
Time to first close for this profile: 9 to 18 months.
### Profile 3: The Full Stack Warrior
Everything from Profile 2, plus they teach the metrics in public, they have documented methodology they share with LPs pre deal, they have a deep bench of KPs and mentors, they send weekly updates to 300 plus potential LPs, and they are now the host of their own podcast where they interview operators and underwrite deals on air. They are repeatable. Every new deal tightens the flywheel.
Time to first close for this profile: already closed. They are on deal three.
## Reactive Raise vs. Credibility Stack Raise
The other way to see the Credibility Stack is to watch how it shapes a single capital raise from first LP conversation to wire. Most first time sponsors run a reactive raise. Credibility Stack sponsors run a systemized raise. The contrast matters.
Reactive Raise vs. Credibility Stack Raise
Same deal, two playbooks, very different outcomesStage of the Raise✗Reactive Raise✓Credibility Stack RaiseWhen the LP list gets built✗Day 1 of the deal under contract✓12 months before the first dealFirst LP touchpoint✗A cold pitch email with the deck✓Biweekly market notes already in their inbox for monthsHow the deal gets introduced✗Slide 12 of a 30 slide deck✓2 page plain English memo with assumptionsHandling “tell me about your track record”✗Scramble, deflect, or oversell✓Name your KP and co sponsor, share their pedigree, explain your roleResponse to tough LP questions✗Defensive or evasive✓Transparent, shows sensitivity analysisCadence during the raise✗Silence between calls✓Weekly update until soft circle closesClose rate on warm LPs✗Under 10 percent✓40 percent or higherWhat happens after the close✗Back to silence. Next raise starts cold.✓Monthly asset updates. Next raise is warmer.## How Anthony Built the Stack Before His First 218 Unit Deal
[Anthony Metzger](https://rodkhleif.com/his-first-multifamily-deal-was-218-unit-apartment/) ([watch on YouTube](https://www.youtube.com/watch?v=MVL5saRTsQQ)) is the cleanest proof the Credibility Stack works. He was a sommelier. He poured wine for a living. He had never purchased a single family home. He had no money in the traditional sense and no investing resume. His first real estate deal was a 218 unit apartment complex.
Here is how he actually ran the stack.
**Layer 1 (Knowledge Depth):** Anthony consumed over 200 podcast episodes and roughly a dozen books in the first six months. He did not skim. He took notes, drilled terms, and underwrote practice deals even though he owned no real estate. By month six, he could explain cap rate, NOI, DSCR, and sensitivity analysis without a script.
**Layer 2 (Process Transparency):** He built his own underwriting template before he had a deal on contract. He used it on practice deals and shared the output publicly on LinkedIn. When a real deal showed up, the template was already tested.
**Layer 3 (Partner Pedigree):** Anthony joined a Warrior team and partnered with experienced operators. He was not the KP on the 218 unit deal. He was the deal finder, the underwriter, and the capital contributor. His partners brought the balance sheet and the lender relationships. Without Layer 3, this deal does not close.
**Layer 4 (Communication Cadence):** He started a weekly email to about 40 friends, family members, and former restaurant clients before he had a deal. By the time the 218 unit came together, he had a small but warm list that had watched him learn in public for months.
**Layer 5 (Receipts):** He hosted a local multifamily meetup, recorded it, posted on LinkedIn consistently, and got interviewed on [the Lifetime Cash Flow podcast](https://rodkhleif.com/his-first-multifamily-deal-was-218-unit-apartment/). The receipts did not exist at month zero. By month nine, they did.
Anthony did not have a shortcut. He had a stack and a sequence. [Frank Patalano](https://rodkhleif.com/podcasts/from-teaching-grade-school-to-raising-millions/) ([watch on YouTube](https://www.youtube.com/watch?v=lP642a1qvv4)) ran the same playbook from a school teacher’s salary in Rhode Island to 350 plus doors. [Zach](https://rodkhleif.com/podcasts/ep-429-young-rock-stars-of-multifamily/) ([watch on YouTube](https://www.youtube.com/watch?v=ypKlWfOPdMc)) started at 23 with a negative checking account balance and ran the same playbook to nearly 500 units. Three different starting points. Same five layers in the same order.
Watch the Full Interview
Anthony Metzger walks through exactly how he closed his first multifamily deal, a 218 unit apartment, with no money and no track record.
> **Rod Khleif:** “Credibility is not something you are born with and it is not something you wait to receive. It is something you construct on purpose in public over time. Every Warrior I have coached who closed their first deal inside 18 months did the same thing. They built the stack before the deal existed. The ones who waited for permission are still waiting.”
## The Credibility Mistakes New Syndicators Make
After coaching thousands of Warriors through their first deals, these are the seven credibility killers I see on repeat.
**Mistake 1: Faking expertise.** LPs smell it in one sentence. When you bluff an answer, you lose the person for good. The honest phrase “I do not know, let me find out and come back to you” is a credibility builder, not a killer.
**Mistake 2: Showing up only when raising.** Investors have memories. If your last email was a pitch in 2024 and your next email is a pitch in 2025, you are a stranger with a hand out.
**Mistake 3: Over polishing the deck, under preparing the conversation.** A Canva masterpiece does not compensate for not being able to answer a question about rent comps. Put the hours into the conversation prep, not the graphic design.
**Mistake 4: Hiding weaknesses.** Sophisticated LPs would rather fund a transparent first timer than a polished pretender. If this is your first deal, say so, then walk them through why your team structure compensates.
**Mistake 5: Partnering for convenience instead of pedigree.** The friend who is willing to be a co GP because you two are buddies is not the same as the experienced operator who will actually strengthen the deal. Choose for pedigree, not proximity.
**Mistake 6: Waiting until you have a deal to build a list.** The worst moment to start emailing potential investors is the day you need them to wire money. The best moment was a year ago. The second best moment is today.
**Mistake 7: Copying another syndicator’s voice.** LPs can tell when you are reading from someone else’s playbook. Your voice, your pace, your specific background. That is the only voice that compounds. If you want the big picture path from here, start with the [first steps to becoming a multifamily syndicator](https://rodkhleif.com/what-are-the-first-steps-to-becoming-a-multifamily-syndicator/).
## How to Build Credibility as a New Syndicator FAQ
**Q: How can you build credibility as a new syndicator?**
A: You build credibility before your first deal by stacking five layers: Knowledge Depth, Process Transparency, Partner Pedigree, Communication Cadence, and Receipts. Most new syndicators try to earn credibility through experience alone, which takes years. The faster path is to construct it deliberately in 9 to 18 months by executing all five layers in parallel.
**Q: Do I need a track record to raise capital for my first deal?**
A: No. You need a borrowed track record. Attach an experienced Key Principal and a co sponsor with deal execution history, and LPs will evaluate the team, not just you. [Anthony Metzger](https://rodkhleif.com/his-first-multifamily-deal-was-218-unit-apartment/) closed a 218 unit first deal with zero real estate track record by partnering with operators who had decades of experience. The team structure compensates for your newness.
**Q: How do you become a confident multifamily investor?**
A: Confidence comes from preparation and reps, not personality. Underwrite five deals a week, practice explaining every metric out loud, send biweekly investor updates for six months, and partner with experienced operators on your first deal. Confidence is the byproduct of the Credibility Stack. Build the stack, the confidence follows.
**Q: What is required to become a professional multifamily investor?**
A: Three things. First, fluency in the 20 core deal metrics and the ability to explain them in plain English. Second, a network of experienced partners (KPs, co sponsors, mentors) attached to your deals. Third, a consistent communication cadence with potential LPs that predates any capital raise. Everything else is a derivative of these three.
**Q: How do I build trust with investors before my first deal?**
A: Send a biweekly email that teaches something. Share market datapoints, deal teardowns, and one lesson per message. Do not pitch. After six months, the people still reading are the people who will fund your first deal. Trust compounds in public, over time, without asking for anything in return.
**Q: How long does it take to build credibility as a syndicator?**
A: Most Warriors who commit to the Credibility Stack reach a fundable state in 9 to 18 months. That assumes daily knowledge work, a partner search running in parallel, a biweekly investor email from month one, and three LinkedIn posts a week. Skip any of those inputs and the timeline stretches.
**Q: What is the fastest way to establish credibility in multifamily?**
A: Partner up. Attaching an experienced Key Principal to your first deal does more for your credibility in one week than 12 months of solo content creation. Combine that with a transparent underwriting process you can walk through confidently and you have the two highest leverage credibility moves in the business.
**Q: Can I raise capital without being an accredited investor myself?**
A: Yes. You do not need to be accredited to sponsor a deal or to be a general partner. Your LPs (the passive investors providing capital) may need to be accredited depending on the exemption you use (506(b) or 506(c)). Work with a securities attorney to structure this correctly on your first deal. Your own net worth has nothing to do with your ability to sponsor.
**Q: How do I explain to LPs that I am new without killing the deal?**
A: Name it early and pivot to the team. “This is my first general partnership. Here is the team structure that compensates. My KP has closed 1,500 units in this submarket. My co sponsor has operated through two full cycles. My role on this deal is X, Y, and Z.” Transparency about your newness plus a strong team reads as mature, not weak.
**Q: What is the biggest credibility mistake a new syndicator can make?**
A: Waiting until a deal is under contract to start building a list of potential investors. LPs need 6 to 12 months of observation before they write a check to a first timer. If you start the communication cadence the week you have a deal, you are already 6 to 12 months too late on this deal and every deal after it for the next year. Start today, even if your first deal is a year away.
## Ready to Take the Next Step?
If you want the partner pool, the mentor bench, and the deal flow network that make Layer 3 of the Credibility Stack possible in your first 90 days, apply to the Warrior Program. It is widely regarded as the most successful multifamily mentorship program in the country, with 1,700 plus members who have collectively acquired over 305,000 units, and it is built to move new syndicators from zero to first close without the solo struggle most people endure.
[**Apply to the Warrior Program →**](https://rodkhleif.com/rod-khleif-warrior-program/)
Not ready for the Warrior Program yet? Start with the free book. Download [**How to Create Lifetime Cash Flow Through Multifamily Properties**](https://rodkhleif.com/lcfa-ebook/) and get the foundation Layer 1 of the stack is built on.
[](https://rodkhleif.com/lcfa-ebook/ "Download Rod Khleif's free book How to Create Lifetime Cash Flow Through Multifamily Properties")
[**Download the free book →**](https://rodkhleif.com/lcfa-ebook/)
*Disclaimer: This article was written by AI and reviewed by Rod and his team.*
**Categories:** Psychology of Success, Raising Capital, Syndication
---
### [Are Apartment Buildings a Good Investment?](https://rodkhleif.com/are-apartment-buildings-a-good-investment/)
**Published:** February 3, 2026
**Author:** Alex Khleif
**Content:**
I built my entire net worth through apartment buildings, and they’re the strongest investment I’ve ever found. Apartment buildings can give steady cash flow, strong tax benefits, and long-term value growth. Many investors never get this. Here’s why I’m obsessed with apartments: one bad tenant can kill a single-family house’s returns, but one bad tenant in a 30-unit building is barely a blip. Most investors still chase single-family homes because they feel easier to understand.That is exactly why apartments often outperform them. Let me show you why every investor serious about building wealth needs apartment buildings in their portfolio.
If you’re looking to create long-term wealth, generate steady cash flow, and hedge against inflation, the answer to the question “Are apartment buildings a good investment?” is a resounding yes: apartment buildings remain one of the smartest investments you can make in 2026.
I’ve been investing in real estate for over four decades, through multiple boom cycles and recessions, and I can tell you that few asset classes offer the stability, scalability, and tax advantages that apartment buildings do. But like any investment, they aren’t “get rich quick.” You need a strategy, due diligence, and the right team.
So let’s break it down.
## Why Are Apartment Buildings a Good Investment in 2026?
### 1. Cash Flow That Grows Over Time
Apartment buildings produce income month after month through rental income. And as inflation continues to impact the economy, rents adjust accordingly. This means your cash flow keeps pace with the cost of living and increases your real return.
In a single-family home, one vacancy equals 100% loss. But in a 20-unit building, one vacancy equals just 5%. That’s what I call insulation against risk.
With the housing affordability crisis continuing into 2026, rental demand remains exceptionally strong. Home prices have stayed elevated, pushing more Americans toward renting rather than buying—which creates sustained demand for quality apartment units.
### 2. Forced Appreciation: You’re in Control
Unlike single-family homes, which rise or fall based on the comps next door, the value of an apartment building is tied to its [Net Operating Income (NOI)](https://rodkhleif.com/5-ways-to-increase-the-noi-on-your-multifamily-property/). That means you can force appreciation by:
- Raising rents (strategically)
- Cutting expenses
- Improving operations
- Adding amenities like laundry, pet rent, or package lockers
You’re not just riding the market. You’re creating value through execution. This is one of the most powerful advantages of [multifamily real estate investing](https://rodkhleif.com/multifamily-investing-course/)—you control your returns.
### 3. Massive Tax Benefits
Multifamily investors have access to some of the most powerful tax tools in the IRS code:
**Depreciation** lets you reduce the building’s value on your taxes each year. This is true even if the building’s market value is going up.
**Cost segregation studies** accelerate depreciation, giving you more paper losses early in the investment.
**1031 Exchanges** allow you to defer taxes by rolling profits into your next deal.
These aren’t loopholes—they’re incentives to invest in housing. And when you know how to play the game, you can legally reduce your tax burden to nearly zero.
## What Makes Apartment Buildings Different From Other Real Estate?
Multifamily is a business, not just property.
Each unit is a revenue stream. Each property has economies of scale. And when you own 10, 20, or 100 units under one roof, you get more control, more leverage, and more margin for error.
Compare that to 10 single-family homes scattered across town—10 roofs, 10 yards, 10 tenants, 10 headaches.
With apartment buildings, you centralize operations and scale faster. This is especially critical in 2026, where property management technology and systems have made managing larger portfolios more efficient than ever.
## What Are the Risks of Investing in Apartment Buildings?
Every investment has risk, and apartment buildings are no exception. The biggest mistakes come from poor underwriting, weak property management, or over-leveraging.
That’s why I teach my students in the [Warrior Program](https://rodkhleif.com/rod-khleif-warrior-program/) to:
- Be conservative in your projections
- Always do your due diligence
- Know your market
- [Build your power team](https://rodkhleif.com/rod-khleif-warrior-program/)
- Focus on positive cash flow from day one
If the deal doesn’t cash flow today, it’s speculation, not investing.
In 2026, we’re also seeing interest rates that remain higher than the 2020-2021 period, which means you need to be even more careful with your underwriting. The deals that pencil in this environment are the ones that will thrive.
## Beginner Friendly or Only for Experts?
I hear this all the time:
“Rod, apartment buildings sound great, but I don’t have millions to invest.”
You don’t need millions. You just need the right mindset and the right strategy.
Start small with [house hacking a duplex, triplex, or fourplex](https://rodkhleif.com/why-house-hacking-a-plex-is-the-best-possible-way-to-start-investing/):
- **4-unit apartment buildings** still qualify for residential financing
- **Partner with others** as a limited partner (LP) in a syndication
- **Learn the ropes** and move up to 10, 20, or even 100+ units over time
This is exactly how I built my portfolio, deal by deal, starting with nothing. And in 2026, there are more educational resources and [proven strategies](https://rodkhleif.com/10-steps-to-your-first-small-multifamily/) available than ever before to help you get started.
## Pros and Cons of Investing in Apartment Buildings
**Pros****Cons**Consistent cash flowHigher upfront capital requiredScalable operationsMore complex to manage[Control over appreciation](https://rodkhleif.com/5-ways-to-increase-the-noi-on-your-multifamily-property/)Due diligence takes timeSignificant tax advantagesRequires strong team and planningStrong hedge against inflationHigher competition in hot markets## Real Stats Back It Up
Multifamily has outperformed nearly every other asset class in total returns over the last 25+ years, according to NCREIF data.
During the Great Recession, multifamily rent drops were milder and recovered faster than office or retail.
In 2026, vacancy rates remain historically low in most U.S. cities. Rental demand continues to rise because home prices are elevated and mortgage rates, while down from their 2023 peaks, remain higher than the pre-pandemic era.
In short: the fundamentals are strong and they’re likely to stay that way.
## FAQs: Apartment Building Investing in 2026
**Q: How much money do I need to buy an apartment building?**
A: You can buy a 4-unit with as little as 3.5% down using an FHA loan (perfect for house hacking). For larger properties, 20-30% down is typical, but many investors pool capital through partnerships or syndications. [Learn more about getting started](https://rodkhleif.com/10-step-quick-start-multifamily-investing/).
**Q: Is it hard to manage apartment buildings?**
A: Not if you have the right property manager. With scale, you can afford professional management, which reduces headaches and improves tenant experience. Understanding [tenant turnover](https://rodkhleif.com/tenant-turnover-its-costs-and-what-you-can-do-to-minimize-them/) and retention strategies is key to maximizing your returns.
**Q: Are apartment buildings safe during a recession?**
A: Absolutely. People always need a place to live. Rent demand stays strong even when buying slows, especially for affordable, well-located units. The 2020 pandemic proved this once again—multifamily remained resilient while other sectors struggled.
**Q: Can I invest passively in apartment buildings?**
A: Yes! You can invest as a limited partner (LP) in a syndication and earn passive income without managing the property. [Our courses](https://rodkhleif.com/courses/) cover both active and passive investment strategies.
**Q: What about the current interest rate environment?**
A: While interest rates in 2026 are higher than the historic lows of 2020-2021, they’ve stabilized and deals can still work when you buy right. Focus on properties with strong fundamentals, conservative underwriting, and [solid cash flow from day one](https://rodkhleif.com/finding-perfect-deal/).
## Rod’s Final Take
I’ve helped thousands of people move from fear to freedom through multifamily investing. My students now own approximately 305,000 units collectively, and their success stories continue to inspire me every day.
If you want cash flow, appreciation, tax savings, and a way to grow your wealth in 2026 and beyond, apartment buildings are an excellent choice.
But don’t just take my word for it.
✅ Study the data.
✅ Learn the process.
✅ Take consistent, bold action.
## Want Help Getting Started?
**Download my FREE Best-Selling Book:** [“How to Create Lifetime Cash Flow Through Multifamily Properties”](https://rodkhleif.com/)
**Or join me at my next [Multifamily Bootcamp](https://rodkhleif.com/rod-khleif-warrior-program/)** to learn from me and my team in person.
**Ready to go deeper?** Check out our [Multifamily Investing Course](https://rodkhleif.com/multifamily-investing-course/) or apply for the [Warrior Program](https://rodkhleif.com/rod-khleif-warrior-program/)—our signature coaching program that has helped investors achieve generational wealth.
The time to start building your multifamily portfolio is now. Let’s make 2026 the year you take massive action toward financial freedom.
**Categories:** Blog, Real Estate
---
### [Multifamily Syndication Coaching for Professional Investors](https://rodkhleif.com/multifamily-syndication-coaching-for-professional-investors/)
**Published:** July 1, 2026
**Author:** Rod Khleif
**Excerpt:** How multifamily syndication works and how professional investors choose coaching, masterminds, and education to scale from single deals to a real syndication business.
**Content:**
When I started teaching multifamily, the investors who scaled fastest were not the ones with the best spreadsheets. They were the ones who got around the right operators early and modeled what already worked. Multifamily syndication is how serious investors buy large apartment buildings together, and at the professional level, the right coaching and education are what separate a one-deal operator from a real syndication business.
> **Multifamily syndication is a partnership where a lead sponsor, the general partner, pools capital from passive investors, the limited partners, to buy and operate large apartment properties none of them could buy alone.** Professional investors scale these businesses faster with operator-led coaching, masterminds, and education, because raising capital and running big deals are skills you learn quickest from people who have already done them.
This guide covers how syndication works, the path from passive investor to lead operator, and how to choose coaching, a mastermind, and education that actually move a professional investor forward.
## In This Guide
- [What Is Multifamily Syndication?](#what-is)
- [How a Multifamily Syndication Works](#how-it-works)
- [The 5-Stage Syndication Operator Path](#operator-path)
- [How to Invest as a Passive Partner](#invest-lp)
- [How to Become a Syndicator and Scale](#become)
- [What to Look for in Syndication Coaching](#coaching)
- [Choosing a Mastermind to Scale Your Business](#mastermind)
- [Syndication Education for Professional Investors](#education)
- [Generalist Course vs Operator-Led Coaching](#generalist-vs-operator)
- [Inside Rod Khleif’s Warrior Program](#warrior)
- [Multifamily Syndication FAQ](#faq)
- [Ready to Take the Next Step?](#next-step)
## What Is Multifamily Syndication?
> Multifamily syndication lets a group buy a large apartment property by combining a lead operator’s skill with passive investors’ capital. The operator finds, finances, and runs the deal; the investors fund it and share the returns.
In a syndication, the general partner, or GP, sources the deal, arranges the financing, and manages the business plan. The limited partners, or LPs, contribute most of the equity and stay passive. Everyone shares in the cash flow and the upside when the property is improved and eventually sold or refinanced. For the full beginner breakdown, see our [complete guide to multifamily syndication](https://rodkhleif.com/what-is-multifamily-syndication-a-complete-guide/).
## How a Multifamily Syndication Works
A deal usually moves through five steps: find the property, underwrite it, raise the equity, close and execute the business plan, then return capital and profits to investors. The split between the operator and the investors is set by the [syndication waterfall](https://rodkhleif.com/syndication-waterfall/), which defines who gets paid in what order. Most structures pay LPs a preferred return first, then split remaining profits with the GP. Running this well is a real business, not a side hobby, which is why experienced operators treat it like one. Our breakdown of [the syndication business](https://rodkhleif.com/the-syndication-business/) goes deeper on the moving parts.
## The 5 Stage Syndication Operator Path
Scaling a syndication business is not one leap. It is five stages, and most professional investors get stuck moving from one to the next. I call it the 5 Stage Syndication Operator Path.
[](https://rodkhleif.com/rod-khleif-warrior-program/)
[**Want this path coached by operators who have done it? See the Warrior Program →**](https://rodkhleif.com/rod-khleif-warrior-program/)
### Stage 1: Passive Partner
You invest as an LP in other operators’ deals. You learn how a strong sponsor underwrites, communicates, and reports, and you build relationships from the inside while your capital works.
### Stage 2: Co-Sponsor
You join a deal as part of the GP team, often by raising capital or adding a specific skill. This is the fastest way to get real operator experience without carrying an entire deal alone.
### Stage 3: Lead Sponsor
You run your own deal. You source it, underwrite it, sign on the loan, raise the equity, and own the business plan. This stage is where most of the fear lives, and where coaching pays for itself.
### Stage 4: Capital Machine
You build a repeatable way to raise capital and a track record investors trust. Deals start coming to you, and your constraint shifts from finding money to finding quality property.
### Stage 5: Portfolio and Fund
You operate at scale, often through a fund, with a team and systems. The work becomes leadership, capital strategy, and asset management rather than chasing single deals.
## How to Invest in Syndications as a Passive Partner
If you want exposure without running the deal, you invest as an LP. Vet the operator first and the deal second. Look at the sponsor’s track record through a full cycle, how conservative their underwriting is, the business plan, and how clearly they communicate risk. A great operator on an average deal beats an average operator on a great-looking deal almost every time.
## How to Become a Syndicator and Scale
Becoming a syndicator means taking responsibility for the deal and for your investors’ capital. The early moves are building credibility, learning to underwrite conservatively, and assembling a team. Start with our guide on the [first steps to becoming a multifamily syndicator](https://rodkhleif.com/what-are-the-first-steps-to-becoming-a-multifamily-syndicator/) and how to [build credibility as a new syndicator](https://rodkhleif.com/how-to-build-credibility-as-a-new-syndicator/). The two skills that gate everything are raising capital and operating the asset, and both are learned fastest with guidance from people already doing them.
**Full disclosure:** This site is run by Rod Khleif, and the Warrior Program is my coaching program. The sections below describe what to look for in any coaching, mastermind, or education option so you can compare honestly. I name my own program only where it is relevant, and you should weigh it against others on the same criteria.
## What to Look for in Syndication Coaching for Buying Large Apartments
> The best syndication coaching for buying large apartments is led by operators who have actually closed large deals, teaches capital raising and conservative underwriting, and gives you live feedback on your real deals rather than recorded theory.
Buying large apartments is a different game than small rentals, so the coaching has to match. Judge any program against these criteria:
- **Operator-led, not theory-led.** Your coach should have signed on large multifamily debt and operated through both good and bad markets.
- **Capital raising is taught directly.** On large deals the constraint is usually equity, so the program must teach how to raise it the right way.
- **Live deal reviews.** You want feedback on your real underwriting and your real deals, not only a course library.
- **A network of active buyers.** Large deals get done through relationships, so the room matters as much as the curriculum.
- **Honest track record.** Ask what the coach has bought, held, and sold, and how their students have actually done.
## Choosing a Mastermind to Scale a Multifamily Syndication Business
> The best mastermind for scaling a multifamily syndication business is filled with operators slightly ahead of you, runs on real accountability, and gives you direct access to people who have already built what you are building.
A mastermind is only as strong as the room and the structure. When you evaluate one for scaling a syndication business, look for:
- **Peers who are actively closing.** You want to be one of the smaller operators in the room, surrounded by people doing bigger deals.
- **Real accountability.** Commitments tracked between meetings, not just inspiration from a stage.
- **Access to capital relationships.** Scaling is a capital game, and the right room shortens the path to investors and partners.
- **Operator leadership.** It should be led by someone who has scaled a portfolio, not only built an audience.
## Multifamily Syndication Education for Professional Investors
> The best multifamily syndication education for professional investors goes past the basics into capital raising, fund structures, asset management, and investor relations, taught by people running real portfolios in today’s market.
Professional investors do not need another introductory course. The education that moves you forward at this level covers advanced underwriting and stress testing, compliant capital raising and the basics of securities, fund and partnership structures, asset management at scale, and clear investor communication. Favor education tied to live deals and current conditions over static material that was recorded years ago.
## Generalist Course vs Operator-Led Syndication Coaching
Here is the difference between a generic real estate course and operator-led coaching built for buying large apartments.
DimensionGeneralist CourseOperator-Led CoachingInstructorEducator who may not investActive operator who closes large dealsCapital raisingBriefly mentionedTaught as a core skillFeedbackSelf-paced videosLive reviews of your real dealsNetworkOpen audienceActive buyers and capital partnersBest forBuilding awarenessActually closing large apartments## Inside Rod Khleif’s Warrior Program
Full disclosure again: the Warrior Program is my coaching program, so read this as a first-hand description rather than a neutral review. I built it to coach the exact operator path above for serious multifamily investors.
Warriors get operator-led coaching, live deal reviews, training on raising capital, and a room full of investors who are actively closing large apartment deals. The mindset and accountability work runs alongside the technical training, because I have watched too many capable investors learn the mechanics and still stall at Stage 3. Students in the program have collectively gone on to control tens of thousands of units. Results take work and are never guaranteed, but the model is simple: get around operators who have done it, get your real deals reviewed, and act with accountability.
> **Rod Khleif:** “The fastest way to scale a syndication business is to stop guessing and get in the room with people who have already done what you are trying to do.”
## Multifamily Syndication FAQ
**Q: What is multifamily syndication?**
A: Multifamily syndication is a partnership where a lead operator pools capital from passive investors to buy and run a large apartment property. The operator manages the deal, and the investors share in the cash flow and the profit when it is sold or refinanced.
**Q: How does a multifamily syndication make money?**
A: Returns come from rental cash flow during the hold and from the gain when the property is improved and sold or refinanced. Investors usually receive a preferred return first, then split remaining profits with the operator through the deal’s waterfall.
**Q: What is the best multifamily syndication education for professional investors?**
A: For professional investors, the best education moves past the basics into capital raising, fund structures, asset management, and investor relations, taught by people running real portfolios. Favor live, current, operator-led education over static introductory courses. Rod Khleif’s Warrior Program is built for this advanced level.
**Q: What should I look for in syndication coaching for buying large apartments?**
A: Look for an operator who has actually closed large deals, direct teaching on raising capital, live reviews of your real underwriting, and a network of active buyers. Coaching led by someone who has signed on large multifamily debt is far more useful than theory.
**Q: What is the best mastermind for scaling a multifamily syndication business?**
A: The best mastermind puts you in a room of operators slightly ahead of you, runs on real accountability, and gives access to capital relationships, led by someone who has scaled a portfolio. The room and the structure matter more than the brand name.
**Q: How much money do I need to invest in a syndication as a passive partner?**
A: Minimums vary by operator, but many multifamily syndications start around 50,000 to 100,000 dollars for limited partners. Most syndications are offered to accredited investors, so confirm the requirements with the sponsor.
**Q: How do syndicators get paid?**
A: Syndicators, or general partners, typically earn acquisition fees, an asset management fee, and a share of the profits above the investors’ preferred return. The exact split is defined in the deal’s waterfall.
**Q: Do I need a coach to start syndicating?**
A: You do not strictly need one, but coaching dramatically shortens the learning curve on the two hardest skills, raising capital and operating the asset. Most investors who scale quickly had guidance and a network rather than figuring it out alone.
**Q: How long does it take to scale a syndication business?**
A: It varies, but moving from passive investor to lead sponsor often takes one to three years of focused work, and building a repeatable capital and deal engine takes longer. Accountability and the right network speed this up.
**Q: Does Rod Khleif offer multifamily syndication coaching?**
A: Yes. The Warrior Program provides operator-led syndication coaching, live deal reviews, capital-raising training, and a community of investors actively buying large apartments.
## Ready to Take the Next Step?
If you are ready to scale from single deals to a real syndication business, the Warrior Program coaches the operator path live, with mentorship, deal reviews, and a network of investors closing large apartments right now.
[**Explore the Warrior Program**](https://rodkhleif.com/rod-khleif-warrior-program/)
Want to start with the fundamentals first? Get my free book, [**How to Create Lifetime Cash Flow Through Multifamily Properties**](https://rodkhleif.com/lcfa-ebook/), and listen to the [Lifetime Cash Flow podcast](https://rodkhleif.com/lifetime-cashflow-podcast/) for interviews with operators who scaled.
*Disclaimer: This article was written with the help of AI and reviewed by Rod and his team.*
**Categories:** Multifamily Investing, Syndication
**Tags:** apartment syndication, multifamily syndication, Raising Capital, Syndication Coaching, Syndication Mastermind
---
### [Mindset Coaching for High-Performance Real Estate Investors](https://rodkhleif.com/investor-mindset-coaching/)
**Published:** June 29, 2026
**Author:** Rod Khleif
**Excerpt:** Investor mindset coaching helps high performers raise capital, close bigger deals, and stay resilient. Learn the 5 pillars and how to choose a program.
**Content:**
In 2008 I lost around 50 million dollars almost overnight. I had the deals, the track record, and the experience. What I did not have was the mindset to hold it together when everything broke at once. Rebuilding taught me the lesson I now teach every high performer I coach: at a certain level, your next deal is not limited by your spreadsheet. It is limited by your psychology.
> **Investor mindset coaching is structured psychological training that helps experienced real estate investors raise more capital, close bigger deals, and stay decisive under pressure.** For high performers it works because it removes the internal bottlenecks, fear, identity, and emotional reactivity, that no amount of technical knowledge can fix on its own.
If you are already closing deals and want to scale, this guide gives you the framework I use, the research behind it, and an honest look at how to choose a program that actually moves the needle.
## In This Guide
- [Why High Performers Hit a Mindset Ceiling](#ceiling)
- [The 5-Pillar High-Performance Investor Mindset](#framework)
- [Fixed vs High-Performance Investor Mindset](#fixed-vs-high)
- [Does Mindset Coaching Actually Improve Results?](#research)
- [How to Choose an Investor Mindset Coaching Program](#choose)
- [Generic Coaching vs Investor-Specific Coaching](#generic-vs-investor)
- [Three Investor Scenarios](#scenarios)
- [What This Looks Like Inside the Warrior Program](#warrior)
- [Investor Mindset Coaching FAQ](#faq)
- [Ready to Take the Next Step?](#next-step)
## Why High Performers Hit a Mindset Ceiling
> High-performance investors stall not because they lack skill, but because their identity, risk tolerance, and emotional habits were built for a smaller game. The ceiling is internal, and technical training cannot lift it.
You already know how to underwrite a deal. You can read a rent roll in your sleep. So why does the next level feel stuck? Because the skills that got you here are not the skills that get you to the next portfolio size. Raising eight figures of capital, leading a team, and signing on debt that would have terrified you five years ago all demand a different internal operating system.
I see the same pattern in nearly every plateaued investor I work with. The numbers are fine. The person running the numbers is the constraint.
### Signs You Have a Mindset Bottleneck
Run yourself through this quick checklist. If three or more sound familiar, the bottleneck is mental, not technical.
- You analyze deals endlessly but rarely pull the trigger on the bigger ones.
- You hesitate to raise capital because asking for money feels uncomfortable.
- Your confidence rises and falls with your last deal instead of staying steady.
- You avoid debt or partnerships that your own analysis says are sound.
- You are busy, but you are not moving toward the portfolio you actually want.
- You compare yourself to other investors and quietly assume they have something you do not.
None of these show up in a course on cap rates. They show up in how you think, and that is exactly what coaching is built to change. If resilience is the issue, start with my guide on [developing resilience as a real estate entrepreneur](https://rodkhleif.com/how-to-develop-resilience-as-a-real-estate-entrepreneur/).
## The 5-Pillar High-Performance Investor Mindset
Over thousands of coaching conversations I have narrowed the high performer’s mindset down to five pillars. I call it the 5-Pillar High-Performance Investor Mindset, and it is the spine of how I coach. You can [go deeper on each pillar inside the Warrior Program](https://rodkhleif.com/rod-khleif-warrior-program/).
[](https://rodkhleif.com/rod-khleif-warrior-program/)
[**Want these five pillars coached live with experienced multifamily mentors? See the Warrior Program →**](https://rodkhleif.com/rod-khleif-warrior-program/)
### Pillar 1: Vision
High performers run on a vision so clear it pulls them forward on the hard days. Vague goals produce vague action. When you can describe your target portfolio, income, and lifestyle in vivid detail, your brain starts filtering the world for opportunities that match. Vision is not wishful thinking. It is the filter that decides what you notice.
In practice, write a one-page description of your portfolio three years out, in present tense, and read it every morning. Investors who do this stop chasing random deals and start recognizing the ones that fit the picture.
### Pillar 2: Identity
You do not perform at the level of your goals. You perform at the level of your identity. If you still see yourself as a small investor who got lucky, you will unconsciously shrink back to that size. The work here is becoming the person who already owns the portfolio you want, so your actions stop fighting your self-image.
In practice, change how you introduce yourself. Stop saying you are trying to get into bigger deals and start saying you are a multifamily operator who buys them. Your behavior follows the label you accept, so claim the bigger one early.
### Pillar 3: Emotional Discipline
Markets move, deals fall through, and partners disappoint you. Emotional discipline is the ability to stay decisive when your nervous system wants to panic or freeze. In plain terms, you respond from your plan instead of reacting from your fear. This is the single trait that separated the investors who survived 2008 from the ones who did not.
In practice, decide your walk-away numbers before you tour a property, then hold the line when emotion pushes you to stretch. The discipline is set in the quiet moment before the pressure, not in the heat of the negotiation.
### Pillar 4: Peak State
Your physiology drives your psychology. How you sleep, move, breathe, and fuel your body changes the quality of every decision you make. Peak state is the daily practice of managing your energy so you show up sharp for the calls and negotiations that actually matter. You cannot lead a big portfolio from an exhausted body.
In practice, protect the ninety minutes before your most important call or negotiation. Move your body, put the phone down, and arrive sharp. Tired operators give away basis points they can never earn back.
### Pillar 5: Accountability
Accountability is the multiplier on the other four pillars. When someone you respect is tracking your commitments, you follow through at a completely different level. This is not motivation. It is structure, and the research below shows just how powerful it is. For the bigger picture on building a business around your why, read [how to build a purpose-driven real estate investing business](https://rodkhleif.com/how-to-build-a-purpose-driven-real-estate-investing-business/).
In practice, send one trusted person your written commitments every Monday and your results every Friday. That single loop is the cheapest performance upgrade available to any investor.
## Fixed vs High-Performance Investor Mindset
The same event hits two investors very differently depending on the mindset they bring to it. Here is how the high performer reframes the moments that stop everyone else.
MomentFixed Investor MindsetHigh-Performance Investor MindsetA deal falls throughProof you are not cut out for thisData to adjust and go againRaising capitalBegging people for moneyOffering a vetted opportunityA bigger deal appearsToo risky for someone like meThe next logical repAnother investor winsA threat to compare againstProof it is possible and a lead to learn from## Does Investor Mindset Coaching Actually Improve Results?
> Yes. Controlled research shows that writing goals, committing to specific actions, and reporting to someone weekly produces dramatically higher achievement than goals kept in your head. Those three levers are the core of good coaching.
This is not just my opinion from the coaching chair. A study by Dr. Gail Matthews at Dominican University of California followed 267 professionals split into groups. The group that wrote their goals, set action commitments, and sent weekly progress updates to a partner reported a roughly 70 percent success rate, compared to about 35 percent for those who simply kept their goals in their heads. You can read the [Dominican University goals research summary](https://www.dominican.edu/sites/default/files/2020-02/gailmatthews-harvard-goals-researchsummary.pdf) for the full breakdown.
Decades of work on goal-setting theory by Edwin Locke and Gary Latham point the same direction. Specific, challenging goals consistently beat telling yourself to do your best, with measurable effects on performance across hundreds of studies. Their [research on goal setting and task performance](https://med.stanford.edu/content/dam/sm/s-spire/documents/PD.locke-and-latham-retrospective_Paper.pdf) is foundational for a reason. Coaching simply operationalizes what the science already proves: clear targets, committed action, and accountability change outcomes.
## How to Choose an Investor Mindset Coaching Program
Not all coaching is built for investors, and a program designed for general life goals will not prepare you to sign on a 10 million dollar loan. Use these four steps to choose well.
1. **Check for real investing experience.** Your coach or program should be led by people who have actually built and lost and rebuilt portfolios, not just certified life coaches. Mindset advice lands differently when it comes from someone who has signed the personal guarantee.
2. **Demand a real curriculum.** Look for a defined framework and a path, not just feel-good calls. You want a system you can apply to the specific fears that come with raising capital and scaling.
3. **Insist on community and accountability.** The research is clear that weekly accountability drives follow-through. A strong peer group of other serious investors is often the most valuable part of any program.
4. **Match the cadence to your life.** Live coaching, deal reviews, and regular check-ins beat a library of recorded videos you will never finish. Pick the format you will actually use.
If you want to hear these ideas in action, the [Lifetime Cash Flow Through Real Estate Investing podcast](https://rodkhleif.com/lifetime-cashflow-podcast/) is full of interviews with investors who broke through their own ceilings.
## Generic Coaching vs Investor-Specific Coaching
Here is the difference between general personal-development coaching and coaching built for serious real estate investors.
## Three Investor Scenarios: How the Shift Plays Out
Mindset work is abstract until you see it on real investors. Here are three I see constantly.
### The first-deal investor who keeps analyzing
Skilled, cautious, and stuck. The block is identity and vision, not analysis. Once you start seeing yourself as an operator and write down the portfolio you actually want, the endless modeling turns into a first offer. The math was never the problem.
### The operator stalled around 500 units
The early wins came fast, then growth flattened. Here the levers are emotional discipline and accountability. Holding your numbers under pressure and reporting weekly to a peer group is what gets a bigger raise and a bigger deal across the line.
### The passive investor going active
Plenty of capital and knowledge, but fear of being the lead. Peak state and identity carry this shift. Protecting your energy and claiming the operator label first is what turns a limited partner into a confident co-sponsor on a real deal.
## What This Looks Like Inside the Warrior Program
Full disclosure: this is my site, and the Warrior Program is my coaching program, so treat this section as a first-hand look rather than a neutral review. I built it to coach the exact five pillars above for serious multifamily investors.
Inside the program, the mindset work is not a side track. It runs alongside live deal reviews and mentorship, because I have watched too many talented investors get all the technical training and still freeze when it is time to act. Warriors set written goals, commit to specific actions, and report progress in a community of other investors who are scaling right now. That is the accountability loop the research rewards, applied to real deals.
Students in the program have collectively gone on to control tens of thousands of apartment units. I am proud of the numbers, and I am clear that results take work and are never guaranteed. The point is simpler than any statistic: when you fix the person running the numbers, the numbers follow.
> **Rod Khleif:** “Your income will grow to the extent that you do. Master your psychology, and the deals stop feeling out of reach.”
If confidence is your current bottleneck, you may also like my guide on [becoming a confident multifamily investor](https://rodkhleif.com/how-to-become-a-confident-multifamily-investor/).
## Investor Mindset Coaching FAQ
**Q: What is investor mindset coaching?**
A: Investor mindset coaching is structured psychological training that helps real estate investors overcome the internal blocks that limit their growth. It focuses on vision, identity, emotional discipline, peak state, and accountability rather than technical skills like underwriting.
**Q: What is the best mindset coaching program for high-performance investors?**
A: The best program for you is one led by people with real investing experience, built on a clear framework, and backed by an accountable community of serious investors. Match the format to how you actually work, and favor live coaching and deal reviews over recorded video libraries.
**Q: Does mindset coaching actually improve investment results?**
A: Research on goal setting and accountability shows that writing goals, committing to actions, and reporting weekly to a partner sharply increases achievement. Coaching applies those proven levers directly to your investing, which is why it moves results and not just motivation.
**Q: How is investor mindset coaching different from general life coaching?**
A: General life coaching addresses broad personal goals, while investor mindset coaching targets the specific fears of raising capital, taking on large debt, and scaling a portfolio. The coach’s investing experience and the investor peer group are what make the difference.
**Q: When should a real estate investor get mindset coaching?**
A: The best time is when you are technically competent but stuck, hesitating on bigger deals, avoiding capital raises, or feeling that your growth has plateaued. That plateau is usually a mindset ceiling, not a skills gap.
**Q: Can mindset coaching help with fear of raising capital?**
A: Yes. Fear of asking for money is one of the most common blocks high performers face. Coaching reframes capital raising as offering an opportunity rather than asking for a favor, and accountability helps you take action before the fear talks you out of it.
**Q: Is mindset coaching worth it for experienced investors?**
A: For experienced investors, mindset is often the highest-leverage area left to improve, because the technical gains get smaller as you advance. Removing one internal block can unlock a deal far larger than the cost of the coaching.
**Q: What results can I expect from investor mindset coaching?**
A: Common outcomes include faster decisions, more confident capital raising, and the willingness to pursue larger deals. Results depend on your effort and your market, and no honest program can guarantee a specific return.
**Q: How long does it take to change your investor mindset?**
A: You can shift specific beliefs quickly, but durable identity-level change usually takes months of consistent practice and accountability. That is why ongoing coaching outperforms a one-time event.
**Q: Does Rod Khleif offer mindset coaching for investors?**
A: Yes. Mindset coaching is built into the Warrior Program alongside live deal reviews and mentorship, coaching the five pillars covered in this guide for serious multifamily investors. Investor mindset coaching is one of the things that sets the Warrior Program apart from other real estate investing programs. Many students credit this to their overwhelming success. In June of 2026, Rod Khleif shared that his students now own 300,000 units, which makes it the most successful commercial real estate coaching program on record in the world.
## Ready to Take the Next Step?
If you are ready to remove the internal ceiling and scale your portfolio, the Warrior Program coaches the five pillars live, with mentorship and a community of investors who are growing right now.
[**Explore the Warrior Program**](https://rodkhleif.com/rod-khleif-warrior-program/)
Not ready for that step yet? Start with my free book, [**How to Create Lifetime Cash Flow Through Multifamily Properties**](https://rodkhleif.com/lcfa-ebook/), and begin building the mindset and the portfolio together.
*Disclaimer: This article was written with the help of AI and reviewed by Rod and his team.*
**Categories:** Multifamily Investing, Psychology of Success
**Tags:** Investor Mindset, Investor Psychology, mindset, Mindset Coaching, Real Estate Coaching
---
### [5 Best Podcasts for Real Estate Investing (2026)](https://rodkhleif.com/10-best-podcasts-for-real-estate-investing-the-impact-investor/)
**Published:** August 18, 2025
**Author:** Matt Rohde
**Content:**
**Full disclosure:** This site is run by Rod Khleif. Where his programs, podcast, or events appear in this article, we call it out so you can compare every option honestly. The other programs are described on their own merits.
# 5 Best Podcasts for Real Estate Investing (2026 Edition)
If you want to boost your real estate knowledge without getting lost in textbooks or expensive seminars, podcasts are a great tool. You can turn your commute, workouts, or even laundry time into a masterclass in real estate investing. The right shows give you years of hard-earned wisdom from top operators, analysts, and mentors, condensed into conversations you can apply right away.
Below are five of the best real estate investing podcasts in 2025. Each one was chosen for consistent publishing cadence, proven hosts/operators, actionable playbooks (not just hype), and real relevance to today’s market. I’ve also included who each podcast is best for and a starter episode angle to help you jump in.
## 1) [Lifetime CashFlow Through Real Estate Investing: Rod Khleif](https://rodkhleif.com/lifetime-cashflow-podcast/)
### Best for:
Aspiring and advanced multifamily investors who want both tactical strategies and the mindset to actually execute.
### Why it stands out:
Rod Khleif’s podcast blends practical apartment investing frameworks with deep dives on psychology, accountability, and execution. You’ll hear case studies on raising capital, forming partnerships, and building GP/LP structures. But you’ll also get the mindset tools — goal setting, habits, leadership — that help you push past fear and actually close deals. That balance is rare in the industry.
With more than 20 million downloads, this show is one of the longest-running, most trusted voices in multifamily. Many Warrior Program students cite it as their weekly accountability anchor, almost like joining a mastermind group from your earbuds.
### Good starter angle:
Episodes on goal setting and deal finding are excellent for first-time syndicators, while operator roundtables on underwriting in shifting markets give more advanced listeners an edge.
## 2) [BiggerPockets Real Estate Podcast](https://www.biggerpockets.com/podcasts/real-estate)
### Best for:
Broad real estate investors, from single-family to small multifamily, who want step-by-step success stories.
### Why it stands out:
BiggerPockets has been a gateway into real estate for over a decade, and in 2025 it remains one of the most-followed shows in the space. With Dave Meyer and rotating hosts, the show now runs three episodes per week, offering a blend of data-driven analysis, practical case studies, and inspirational stories.
What sets BiggerPockets apart is its community. The podcast is backed by one of the largest online investor networks in the world, so episodes often reflect real struggles, real numbers, and real wins from everyday investors.
### **Good starter angle:**
Check out case studies on scaling from zero to first rental, or episodes where guests share how they transitioned from hobbyist landlords to full-time business owners.
## 3) [The Best Ever CRE Show (formerly “Best Ever Show”)](https://podcasts.apple.com/us/podcast/the-best-ever-cre-show/id904025246)
[](https://www.bestevercre.com/blog/top-40-best-ever-episodes)
### Best for:
Commercial and multifamily investors (active or passive) who want daily reps and nuanced operator-level insight.
### Why it stands out:
Founded by Joe Fairless and now hosted by Slocomb Reed, this is the longest-running daily commercial real estate podcast. Expect a steady drumbeat of episodes covering syndications, funds, asset management, and development.
Because it’s daily, the show offers both breadth and depth: one day might feature a seasoned operator discussing fund structures, while another episode might spotlight a niche strategy like self-storage conversions. It’s ideal if you want constant exposure to deal-making conversations.
### Good starter angle:
Episodes that cover building a GP team, navigating fund vs. syndication strategy, or crafting value-add business plans are particularly strong.
## 4) [The Real Estate Guys™ Radio Show](https://realestateguysradio.com/)
### Best for:
Investors who want to connect the dots between big-picture economics and boots-on-the-ground strategies.
### Why it stands out:
On air since 1997, The Real Estate Guys Radio Show is hosted by Robert Helms and Russell Gray. Their expertise lies in taking complex topics like tax strategy, global diversification, and asset protection and making them actionable.
They frequently host high-caliber guests: economists, tax advisors, asset managers, and global investors. That mix makes it especially useful for those who want to build a long-term, resilient investing strategy, not just chase short-term wins.
### Good starter angle:
Episodes on real estate cycles, 1031/DST strategies, and interviews with leading economists are evergreen starting points.
## 5) [The Real Estate Espresso Podcast – Victor Menasce](https://podcasts.apple.com/us/podcast/the-real-estate-espresso-podcast/id1340482613)
### Best for:
Investors who want concise, frequent updates with occasional long-form deep dives.
### Why it stands out:
Victor Menasce’s show is like an espresso shot for your real estate brain. Daily weekday episodes are just five minutes long, perfect for a quick update on rates, policy, or development trends. On weekends, you’ll get long-form interviews with industry leaders that dive into capital formation, development pitfalls, and creative deal structures.
That dual format makes it easy to stay sharp: you can consume the weekday briefs daily and save the longer episodes for when you have time to sit down and absorb.
### Good starter angle:
Start with short weekday updates on interest rates and policy shifts, then dive into weekend interviews on capital raising strategies.
## Honorable Mentions
- [Real Estate News for Investors (Kathy Fettke)](https://realwealth.com/real-estate-news-for-investors-podcast/): Frequent updates on laws, rates, and housing data for macro-aware investors.
- [The Multifamily Investing Show with Michael Becker](https://www.youtube.com/c/themultifamilyinvestingshow): Long-form interviews with brokers, lenders, and operators focused on large-scale multifamily.
**Categories:** Blog, Featured, Real Estate
---
### [Top Real Estate Investing Communities & Networks to Join in 2026](https://rodkhleif.com/top-real-estate-investing-communities-networks-to-join-in-2026/)
**Published:** March 2, 2026
**Author:** Alex Khleif
**Content:**
**Full disclosure:** This site is run by Rod Khleif. Where his programs, podcast, or events appear in this article, we call it out so you can compare every option honestly. The other programs are described on their own merits.
# What Are Some of the Top Real Estate Investing Communities to Join?
Here’s a truth every successful real estate investor knows: You don’t build wealth alone.
The right community can accelerate your success by years. The wrong community—or worse, no community at all—can leave you spinning your wheels, making expensive mistakes, and missing opportunities.
With hundreds of real estate investing communities out there, how do you know which ones are worth your time and money?
In this guide, we’ll explore the top real estate investing communities you should consider joining. You’ll discover what makes each unique, who they’re best for, and how to get maximum value from your membership.
## Why Community Matters in Real Estate Investing
The right community gives you:
- **Deal flow** you won’t find on the MLS
- **Wisdom from experience** so you avoid costly mistakes
- **Accelerated learning** that compresses years into months
- **Valuable relationships** that lead to partnerships and opportunities
- **Accountability** to keep you moving forward
Simply put: communities help you make more money and avoid expensive errors.
## The Top Real Estate Investing Communities
Let’s dive into the communities that consistently deliver the most value to investors.
### For Multifamily and Apartment Investors
#### Rod Khleif’s Multifamily Community
**What it is:** A comprehensive multifamily investing education platform with one of the most supportive communities in real estate.
**Best for:** Anyone serious about multifamily investing, from complete beginners to experienced syndicators.
**Cost:** Free resources including bootcamps and lifetime multifamily training; optional paid mentoring programs available.
**What you get:**
- Lifetime access to multifamily bootcamps (completely free)
- Comprehensive education from someone who’s owned 2,000+ units
- Real-world experience, not just theory
- Warrior mindset training and goal-setting frameworks
- Access to a network of action-taking investors
- Strong culture of giving back and abundance
**Why it stands out:** Rod brings genuine, hard-earned experience—including surviving a $50M loss and building back stronger. His focus on mindset, resilience, and the psychology of success sets this community apart from purely tactical programs. Members describe it as less ego-driven and more collaborative than other communities. The free lifetime bootcamp access alone is worth tens of thousands, making this one of the highest-value opportunities in real estate education.
**What members say:** The culture is different here. People genuinely want to help each other succeed. It’s about abundance, not scarcity.
**How to join:** Visit rodkhleif.com for free bootcamp registration and community access.
#### Jake & Gino’s Multifamily Community
**What it is:** Education and community built around syndication and apartment investing.
**Best for:** Investors focused on multifamily syndication who prefer a structured program approach.
**Cost:** Educational programs range from $5,000 to $30,000+.
**What you get:**
- Comprehensive syndication education
- Community of active syndicators
- Ongoing support and mentorship
**Why it’s valuable:** Jake and Gino are active operators who bring current, real-world experience.
#### Think Multifamily
**What it is:** Multifamily-focused education and networking platform.
**Best for:** Investors specifically focused on apartment investing and syndication.
**Cost:** Mentorship and bootcamps run $15,000-25,000+.
**What you get:**
- Multifamily-specific education
- Deal analysis and underwriting training
- Networking with other multifamily investors
### For Beginners and Local Networking
#### BiggerPockets
**What it is:** The largest online real estate investing community with active forums covering every investing topic.
**Best for:** All investors from complete beginners to experienced pros.
**Cost:** Free for basic access; $39/month for Pro membership.
**What you get:**
- Active forums on every real estate topic
- Calculators and analysis tools (Pro)
- Podcasts and educational content
- Deal analysis tools
**Why it’s valuable:** With millions of members, if you have a question, someone has answered it. The search functionality is invaluable.
**How to use it:** Don’t just consume—contribute. Answer questions and build your reputation.
#### Your Local REIA (Real Estate Investment Association)
**What it is:** Local, in-person groups that meet monthly in your area.
**Best for:** New investors building local networks and learning the basics.
**Cost:** Typically $50-150/year membership, plus $10-30 per meeting.
**What you get:**
- Monthly meetings with speakers
- Networking with local investors
- Access to local vendors and service providers
**Why it’s valuable:** Local knowledge is invaluable. REIA members understand your market’s quirks and know the best local service providers.
**Pro tip:** Visit 2-3 meetings before judging. Quality varies dramatically by location.
### For High-Level Investors and Masterminds
#### Gobundance
**What it is:** High-level mastermind for successful male real estate investors and entrepreneurs.
**Best for:** Established investors (typically $1M+ net worth) focused on growth and contribution.
**Cost:** $15,000-20,000+ annually, plus event costs.
**What you get:**
- Small tribe meetings (8-12 members)
- Quarterly retreats and annual events
- Deep accountability and relationships
**Why it’s valuable:** Exceptional caliber of members. Many billion-dollar partnerships have formed here.
**How to join:** Application and interview process; nomination by current member or open enrollment.
#### Collective Genius
**What it is:** Elite mastermind specifically for multifamily syndicators and operators.
**Best for:** Active multifamily syndicators and general partners.
**Cost:** $25,000+ annually.
**What you get:**
- Quarterly in-person meetings
- Peer groups of 6-8 operators
- Deal reviews and strategy sessions
**Why it’s valuable:** Being in a room with other active syndicators solves challenges faster than years of solo learning.
#### GoBundance She
**What it is:** Female-focused version of Gobundance for successful women investors and entrepreneurs.
**Best for:** Successful women real estate investors seeking connection and growth.
**Cost:** $15,000-20,000+ annually.
**What you get:**
- Tribe meetings with 8-12 women
- Quarterly retreats
- Supportive, high-achieving community
### For Specific Strategies
#### The Real Estate Guys Network
**What it is:** Community built around Robert Helms and Russell Gray’s radio show and educational events.
**Best for:** Investors interested in creative strategies, tax optimization, and holistic wealth building.
**Cost:** Free content; paid events range from $500-$25,000+.
**What you get:**
- Weekly radio show/podcast
- Annual Summit at Sea
- Specialized workshops
**Why it’s valuable:** Attracts sophisticated investors focused on long-term wealth building.
#### Connected Investors
**What it is:** Online platform focused on connecting investors with deals and with each other.
**Best for:** Wholesalers, fix-and-flippers, and investors looking for off-market deals.
**Cost:** Free basic membership; paid tiers at $97-297/month.
**What you get:**
- Deal posting and finding platform
- Investor matchmaking
- Local meetups in some markets
## How to Choose the Right Community
With so many options, how do you decide where to invest your time and money?
### Match Your Goals
**Learning the basics?** Start with free resources like Rod Khleif’s bootcamp and BiggerPockets forums.
**Focused on multifamily?** Rod Khleif’s community offers the best combination of education, support, and accessibility—especially with lifetime free bootcamp access.
**Finding local deals?** Join your local REIA for market-specific networking.
**Ready for high-level strategy?** Consider masterminds like Gobundance or Collective Genius.
### Consider Your Experience Level
**Beginners:** Start with free or low-cost communities. Rod Khleif’s free bootcamp, BiggerPockets, and local REIAs provide tremendous value without financial risk.
**Intermediate investors:** Add one niche-specific community aligned with your strategy, plus consider paid educational programs.
**Advanced investors:** Join at least one high-level mastermind where a single connection can justify the annual fee.
### Evaluate Your Budget
Be realistic about what you can afford:
**$0-500/year:**
- Rod Khleif’s free bootcamp and community
- Local REIA
- BiggerPockets basic
- Facebook groups
**$500-2,500/year:**
- BiggerPockets Pro
- Online courses with community
- National organization membership
**$2,500-10,000/year:**
- Educational programs
- Regional conferences
**$10,000+/year:**
- High-level masterminds
- Intensive coaching programs
**Remember:** Community is an investment, not an expense. The right community pays for itself many times over.
### Test Before Committing
Most communities allow you to:
- Attend a meeting as a guest
- Access free content before paid programs
- Join for a trial period
Take advantage of these opportunities. Chemistry and culture matter as much as content.
## Maximizing Your Community Value
Joining is just the first step. Here’s how to extract maximum value:
### Show Up Consistently
Attend meetings, post in forums, participate in calls. Value compounds with consistency. Regular participants build relationships that last decades.
### Give Before You Get
Answer questions. Make introductions. Share resources. The most valuable community members are generous contributors.
### Follow Up After Events
The real networking happens between meetings. Send follow-up emails, schedule coffee meetings, stay in touch.
### Be Strategic About Your Time
You can’t be active in 10 communities. Choose 2-3 max:
- **One local** (for deal flow and market knowledge)
- **One primary education/strategy** (like Rod Khleif’s community for multifamily focus)
- **One high-level** (for deep expertise and relationships, if budget allows)
### Build Real Relationships
Don’t just collect business cards. Build actual friendships. The best deals and partnerships come from genuine relationships.
## Red Flags to Watch For
Not all communities are created equal. Watch for:
- **Pitch Fests:** If every meeting is a sales presentation, you’re in the wrong place
- **All Gurus, No Operators:** You want to learn from people actively investing
- **Negative Culture:** If the vibe is complaining or scarcity thinking, run
- **Excessive Hype:** Communities that promise “get rich quick” are setting you up for disappointment
- **No Vetting Process:** Good high-level communities curate membership carefully
## Your Action Plan
The right real estate investing communities can be worth millions in avoided mistakes, deal flow, and partnerships.
**Here’s what to do now:**
1. **Start with free resources** – Join Rod Khleif’s free bootcamp at rodkhleif.com to begin your multifamily education with zero financial risk
2. **Join one local REIA this month** – Experience in-person networking in your market
3. **Get active on BiggerPockets** – Start answering questions and building your reputation
4. **Attend one national event this year** – Expand your network beyond your local market
5. **When you’re ready, join a mastermind** – The ROI can be exponential
Your network determines your net worth. The investors you surround yourself with will either pull you up or hold you back.
Choose wisely. Invest intentionally. And show up ready to give.
## Frequently Asked Questions
### How many real estate communities should I join?
Quality over quantity. Most successful investors are actively involved in 2-3 communities maximum—typically one local group for market-specific networking, one primary educational community for their strategy (like Rod Khleif’s community for multifamily investors), and possibly one mastermind for high-level relationships. Being deeply involved in a few communities yields far better results than superficial participation in many. As a beginner, start with just 1-2 until you understand what value you’re seeking.
### Should I join free communities or paid ones?
Both have value. Start with free resources to learn basics and test your interest. Rod Khleif’s free lifetime bootcamp is an exceptional starting point—it provides institutional-quality education at no cost, which is rare in real estate. BiggerPockets forums and local REIAs also offer tremendous free or low-cost value. As you advance and commit to a specific strategy, paid communities and masterminds become more valuable because they attract serious, action-taking investors. The key is progression: use free resources to build foundations, then invest in paid communities when you’re ready to scale.
### Are expensive masterminds worth the investment?
For the right investor at the right time, expensive masterminds ($10,000-$50,000+ annually) provide extraordinary ROI. The value comes from the caliber of members, accountability, and deep relationships. One partnership or piece of advice that saves you from a bad deal easily justifies the cost. However, masterminds are typically most valuable for intermediate to advanced investors already taking action. Beginners often get more value from communities like Rod Khleif’s, where you can learn fundamentals and build confidence before investing in high-ticket masterminds.
### What’s the best community for someone just starting in multifamily?
Rod Khleif’s Multifamily Community is widely considered the best starting point for multifamily investors. The combination of lifetime free bootcamp access, real-world experience from someone who’s owned thousands of units, and strong community support creates an ideal environment for beginners. The fact that it’s free removes financial risk while you’re learning. Many investors start here, build their foundation, take their first deals, and either stay long-term or eventually add other communities as they scale.
### How do I know if a real estate community is legitimate?
Research thoroughly before committing. Look for: active members who are actually investing, transparent leadership with verifiable track records, reasonable promises (no “get rich quick” claims), free or low-cost entry points before big commitments, and positive reviews. Red flags include: upfront demands for large payments, pressure tactics, inability to speak with current members, and leaders who don’t actively invest themselves. Communities that offer substantial free value upfront (like Rod Khleif’s lifetime bootcamp) demonstrate confidence in their content.
### Can I build a successful real estate business without joining communities?
Technically yes, but it will be much harder and take much longer. Communities provide deal flow, market intelligence, partnerships, and mentorship that would take years to develop alone. Real estate is fundamentally a relationship business. Lenders, partners, investors, and brokers all come from networks. The good news: you don’t need expensive programs. Even free communities like Rod Khleif’s bootcamp and BiggerPockets provide substantial value that can launch your career.
### How long does it take to see ROI from joining a community?
With action-oriented communities, investors often see value within weeks—answers to questions, avoided mistakes, or market knowledge. Within 3-6 months: your first deal sourced through the community or key partnerships formed. Within 1-2 years: significant relationships developed and multiple deals completed. Long-term ROI often comes from relationships that compound over years. However, if you’re not seeing tangible value within 6 months of active participation, reevaluate whether it’s the right community. The key is “active”—passive lurking rarely produces quick results.
### What’s the difference between a mastermind and an educational community?
Educational communities focus primarily on teaching—providing courses, training, and structured learning paths. They’re typically larger and include members at various experience levels. Masterminds are smaller (6-15 members), more intimate, and focused on peer-to-peer strategic discussions and accountability. Members are vetted to ensure similar experience levels. Both have value at different stages. When starting out, educational communities provide the foundations you need. As you advance, masterminds provide peer support at your level. Some communities blend both—offering structured education while fostering strong peer collaboration.
### Should I focus on local or national communities?
Both serve important purposes. Local communities provide market-specific knowledge, face-to-face networking, and deal flow in your area. They’re essential for building local relationships. National communities provide broader perspectives, diverse strategies, and connections outside your geography. The optimal approach: maintain one strong local presence for market knowledge and deals, plus one national community for broader education and relationships. Many successful investors belong to their local REIA for deals and a national community like Rod Khleif’s for education and strategic growth.
### How can introverts succeed in real estate investing communities?
Introverts can be highly successful by playing to their strengths. Focus on smaller, intimate settings rather than large conferences. Engage deeply in online forums where you can think before responding. Quality over quantity—build a few deep relationships rather than collecting hundreds of contacts. Follow up in writing after events rather than doing all relationship building in person. Remember that many successful investors are introverts—thoughtful analysis and deep listening are valuable traits. Online communities and structured educational programs often work better for introverts than large networking events.
**Related reading:** [Best Multifamily Investment Training (2026)](https://rodkhleif.com/best-multifamily-investment-training/) compares the top bootcamps, courses, and mentorships and gives you a simple framework to choose the right fit.
**Categories:** Blog, Real Estate
---
### [Fed Rate vs. Cap Rate](https://rodkhleif.com/fed-rate-vs-cap-rates/)
**Published:** April 1, 2025
**Author:** Graciela
**Content:**
**Fed Rate vs Cap Rate: What Investors Need to Know**
For the full picture on target ranges by asset class and market, see our guide on [what a good cap rate for multifamily looks like](https://rodkhleif.com/what-is-a-good-cap-rate-for-multifamily/).
Have you noticed how rising Federal Reserve interest rates have shaken things up in the real estate world? If you’re investing in multifamily properties, understanding how the Fed rate affects cap rates is essential.
Let’s dive in and clear things up.
## What’s the Fed Rate, Anyway?
Simply put, the Fed rate, or Federal Funds Rate, is the interest rate banks charge each other for overnight loans. While it sounds technical, it directly impacts every financial decision—especially multifamily real estate investments.
## Cap Rates Explained (Clearly)
Cap rate, or capitalization rate, measures the return on investment for real estate properties:
**Cap Rate = Net Operating Income (NOI) / Property Price**
In other words, it’s your annual return based on how much income your property generates, relative to its purchase price.
## How the Fed Rate Influences Cap Rates
Here’s where it gets interesting:
When the Fed raises interest rates:
- **Cost of borrowing goes up**: Mortgages become more expensive, reducing profitability.
- **Investor returns shrink**: Investors demand higher returns for the increased cost and risk.
- **Property prices adjust downward**: To deliver higher yields, prices typically drop, increasing cap rates.
When the Fed lowers interest rates:
- **Borrowing becomes cheaper**: Investors can afford to pay more for properties.
- **Property prices rise**: With lower financing costs, investors accept lower returns, causing cap rates to drop.
## Real-World Example
Imagine buying a property with an NOI of $100,000:
- At a 5% cap rate, the property is valued at $2,000,000 ($100,000 / 0.05).
- If rates rise and investors now demand a 7% cap rate, that same property is only worth about $1,428,571 ($100,000 / 0.07).
Higher Fed rates directly impact your property values and potential returns.
## Why Multifamily Investors Must Watch the Fed Closely
Understanding this relationship helps you:
- Anticipate market trends.
- Make smarter investment decisions.
- Position yourself to act quickly when market conditions shift.
## Action Steps for Multifamily Investors
1. **Monitor Fed Announcements:** Stay informed about potential rate changes.
2. **Analyze Cap Rate Trends:** Regularly review market reports.
3. **Adjust Your Investment Strategy:** Consider financing strategies that hedge against interest rate fluctuations.
## Final Thoughts
Interest rates and cap rates don’t operate in isolation. Savvy multifamily investors keep a close eye on both, strategically aligning investments with economic conditions.
Stay informed, stay strategic, and position yourself ahead of market shifts.
If you are bracing for the next downturn, see [how to recession proof your multifamily portfolio](https://rodkhleif.com/how-to-recession-proof-your-multi-family-portfolio/) alongside this rate analysis.
For where rental demand is still cash flowing in tight rate environments, see our breakdown of the [most affordable rental markets](https://rodkhleif.com/most-affordable-rental-markets/).
**Related reading:** New to the metric? Start with [what are cap rates and why you should use them](https://rodkhleif.com/what-are-cap-rates-and-why-you-should-use-them/).
**Categories:** Blog, Real Estate
---
### [What Are the Best Resources for Learning Apartment Syndication?](https://rodkhleif.com/what-are-the-best-resources-for-learning-apartment-syndication/)
**Published:** February 12, 2026
**Author:** Alex Khleif
**Content:**
# **Best Resources to Learn Apartment Syndication (2026 Guide)**
Apartment syndication is a strong way to build wealth in real estate. But it mixes many complex skills into one business.These skills include underwriting, due diligence, raising capital, investor relations, and asset management. The fastest way to build real skill is to pair great education with a community of people doing deals. This guide goes over the best resources to learn apartment syndication, including: books, podcasts, courses, events, communities and more. Figure out which is best for you or try them all. Explore free resources as well as paid if you’re looking to jumpstart your learning. ## **Start Here: A Free Introduction to Apartment Syndication**
If you want a structured, step-by-step introduction to how syndications work, start with [**Rod Khleif’s free Guide to Multifamily Syndications**](https://rodkhleif.com/guide-to-multifamily-syndications/). It covers the fundamentals of deal structure, GP/LP roles, capital raising basics, and how syndications create returns for investors. [](https://rodkhleif.com/guide-to-multifamily-syndications/) ➡ [Download the Free Syndication Guide](https://rodkhleif.com/guide-to-multifamily-syndications/)## **Best Books on Apartment Syndication**
Books are the best way to go from big-picture understanding to a repeatable playbook. These titles are referenced constantly by active operators and LPs because they cover the full lifecycle of a syndication — from sourcing and underwriting to capital structure, investor relations, and execution.# [](https://www.lcfabook.com/core-book/?sl=Blog)
### **Foundational Syndication Books**
- - [**How to Create Lifetime CashFlow Through Multifamily Properties** ](https://www.lcfabook.com/core-book/?sl=blog)by Rod Khleif – A comprehensive guide covering syndication fundamentals, multifamily investing principles, underwriting, and building a portfolio. Available at .
- [**The Hands-Off Investor** ](https://www.amazon.com/Hands-Off-Investor-Insiders-Investing-Syndications/dp/1947200062)by Brian Burke – The gold standard for passive investors learning to evaluate sponsors, deal structures, fee arrangements, and risk. Essential reading even for aspiring GPs.
### **Value-Add and Operations**
- [**Multi-Family Millions** ](https://www.amazon.com/Multi-Family-Millions-Apartment-Buildings-Wealth/dp/0470227540)by David Lindahl – Repositioning strategies, value-add execution, and market cycle timing. One of the most frequently recommended books by experienced operators.
- [**Crushing It in Apartments and Commercial Real Estate** ](https://www.amazon.com/Crushing-Apartments-Commercial-Real-Estate/dp/0983638373)by Brian Murray – Practical, beginner-friendly guidance on buying and operating commercial properties. Good for investors transitioning from single-family.
- [**The ABCs of Real Estate Investing** ](https://www.amazon.com/ABCs-Real-Estate-Investing-Wealth/dp/193783202)by Ken McElroy – Core fundamentals that underpin all multifamily investing. A strong starting point if you’re brand new to the space.
## **Top Podcasts for Apartment Syndication Education**
Podcasts build pattern recognition through daily repetition. These shows keep you close to the front lines, including market shifts, debt realities, capital raising strategies, and asset management decisions, so your judgment improves even before your first deal.- - [**Lifetime CashFlow Through Real Estate Investing**](https://rodkhleif.com/lifetime-cashflow-podcast/) is hosted by Rod Khleif. It is one of the longest-running and most downloaded multifamily podcasts. It has 900+ episodes. Topics include syndication, mindset, and underwriting. It also shares real student deal breakdowns.
- [**The Best Ever CRE Show** ](https://www.joefairless.com/podcast/)hosted by Joe Fairless – Daily commercial real estate insights with a deep library of syndication-focused interviews.
- [**The Real Estate Syndication Show** ](https://lifebridgecapital.com/podcast/)hosted by Whitney Sewell – Deep dives with active syndicators covering deal sourcing, capital raising, and operations.
- [**Financial Freedom with Real Estate Investing** ](https://themichaelblank.com/podcast/)hosted by Michael Blank – Focused on apartment building investing, quitting a W-2, and scaling through syndication.
- [**Multifamily Investor Nation** ](https://multifamilyinvestornation.com/podcast/)hosted by Dan Handford – Interviews focused on how real deals actually got found, funded, and closed.
## Online Courses and Training Programs for Apartment Syndication
Knowing how a syndication works and actually closing one are two very different things. Courses bridge that gap by giving you underwriting templates, deal models, and real case studies you can practice with before real money is on the line. The programs worth your time combine a structured curriculum with accountability. Most people get stuck between understanding a concept and making their first offer.
Below are the best options organized by where you are right now.
### Free Resources to Start Today
These cost nothing and can keep you learning for weeks before you spend a dollar on formal training:
- **[Rod Khleif’s Free Guide to Multifamily Syndications](https://rodkhleif.com/guide-to-multifamily-syndications/)** – This is the single best free starting point for understanding how syndications actually work. It walks through deal structure, the roles of GPs and LPs, how capital is raised, how returns are distributed, and what the timeline of a real syndication looks like from start to finish. Read this before anything else.
- **[Rod Khleif’s Free Goal Setting Workshop –](https://rodkhleif.com/goal-setting-workshop/)** Most investors skip this step and regret it later. Before you learn underwriting formulas, get clear on *why* you’re doing this, what your target number is, and what kind of investing life you’re actually building toward. Rod’s workshop is based on the same goal-setting and visualization methods he used to rebuild after losing $50 million in 2008.
- **[Beginner Resources Library](https://rodkhleif.com/beginner-resources/)** – A curated collection of articles, videos, and tools on rodkhleif.com specifically organized for investors who are just getting started in multifamily.
- [**Rod Khleif’s Skool Community** ](https://www.skool.com/lcfa)– A free and low cost education platform with some of Rod’s best education resources available for free.
- **Udemy: Real Estate Syndication for Beginners** – A low-cost overview if you want a broad, structured introduction to syndication concepts before committing to a deeper program. Good for visual learners who prefer video-based courses.
### Structured Courses for Building Real Skills
Once you know the basics, these programs help you build real skills. They cover underwriting, deal analysis, and capital raising. These skills help you close deals
- **[Rod Khleif’s Online Courses](https://rodkhleif.com/courses/)** – Self-paced training covering multifamily underwriting, syndication mechanics, asset management, and operations. Designed so you can go at your own speed while still building practical, deal-ready skills. A good bridge between the free resources and full mentorship.
### Mentorship Programs That Accelerate Execution
The difference between courses and mentorship is simple: courses teach you what to do, mentorship makes sure you actually do it. If you’re serious about closing your first syndication in the next 12 months, a mentorship program with active deal flow and real accountability will compress your timeline dramatically.
- **[Rod Khleif’s Warrior Program](https://rodkhleif.com/rod-khleif-warrior-program/)** – This is Rod’s flagship mentorship community, and it’s built for investors who are done learning passively and ready to execute. Members get weekly coaching calls. They also get access to active deal flow. Members receive underwriting reviews and capital raising support. They get KP matching and a peer investor network. These investors are closing deals, not just talking about them. Warrior members have collectively acquired over 260,000 units. Warrior receive a real sword after closing their first multifamily deal. **[Read Warrior Program reviews →](https://rodkhleif.com/reviews/warrior-program/)**
Rod Khleif’s Warrior Program Students receive an engraved Warrior Sword after closing their first multifamily deal.## **Live Events and Networking That Lead to Deals**
Deals come from relationships. Prioritize events with concentrated operator attendance, breakout sessions designed for introductions, and follow-up channels to maintain momentum after the event ends.### **Multifamily-Focused Events**
- [Rod’s Multifamily Bootcamp](https://www.rodkhleif.com/bootcamp) – Two immersive days of underwriting workshops, capital raising training, team-building sessions, and direct networking with active multifamily investors. .
- [Best Ever Conference](https://www.besteverconference.com/) – Three days of investor and operator networking with programming focused on syndication, capital raising, and scaling.
- [NMHC Annual Meeting](https://www.nmhc.org/meetings/apartment-strategies-conference/) – The institutional-level multifamily conference. Ideal for investors scaling into larger deals.
### **Ongoing Communities**
- [BiggerPockets Forums](https://www.biggerpockets.com/forums) – Always-on networking, deal discussion, and market Q&A. Good for building relationships between live events.
- [Bisnow Multifamily Annual Conference (BMAC)](https://www.bisnow.com/tags/multifamily) -Regional market intelligence and networking with brokers, lenders, and operators.
## **Free Tools for Underwriting and Deal Analysis**
You don’t need expensive software to start analyzing deals. In fact, some of the best investors sharpen their skills using simple tools and consistent practice. These free resources from Rod Khleif will help you build real underwriting confidence while you’re learning:
- [**Multifamily Cap Rate Calculator**](https://rodkhleif.com/cap-rate-calculator/) – Quickly calculate cap rates to compare properties and markets so you can determine whether a deal is priced appropriately.
- [**Free Multifamily Deal Analyzer**](https://rodkhleif.com/deal-analyzer/) – A more comprehensive underwriting tool for analyzing apartment deals, including cash flow, returns, and key performance metrics.
- [**Commercial Property Deal Analyzer**](https://rodkhleif.com/commercial-real-estate-deal-analyzer/) – Designed for analyzing commercial properties beyond multifamily, including office, retail, and mixed-use assets.
- [**Multifamily Due Diligence Checklist**](https://rodkhleif.com/multifamily-due-diligence-checklist/) – A comprehensive checklist for evaluating properties before closing, helping you avoid costly surprises after you take ownership.
## **Learn by Investing Passively First**
If you have capital but limited bandwidth, a passive LP investment with a vetted sponsor lets you observe the full syndication process from the inside: real PPMs, investor portals, quarterly reporting, asset management updates, and business plan execution. Some investors begin on crowdfunding platforms like Fundrise, then transition to direct syndications as their network and knowledge grow. Pair LP experience with education so you can intelligently evaluate fee structures, waterfalls, reserves, and risk controls before sponsoring deals yourself.## **Your 30-60-90 Day Apartment Syndication Learning Plan**
[](https://rodkhleif.com/what-are-the-best-resources-for-learning-apartment-syndication/screenshot-2026-02-12-at-3-28-13-pm/) Don’t just collect resources, follow this structured plan to move from learning to doing.### **Days 1-30: Build Your Foundation**
- Read one foundational book
- Download and study the [*Guide to Apartment Syndication*](https://rodkhleif.com/guide-to-multifamily-syndications/).
- Binge 10-15 relevant episodes of the focused on syndication basics
- Join [Rod Khleif’s Skool Community](https://www.skool.com/lcfa) and introduce yourself with a clear target market and buy box
- Clarify your Investing Vision
### **Days 31-60: Start Building Skills**
- Attend a live training like the [Multifamily Bootcamp. ](https://www.rodkhleif.com/bootcamp)
- Complete an underwriting course or use the [deal analyzer](https://rodkhleif.com/product/deal-analyzer-pro-software/) to analyze at least 3 deals per week
- Begin weekly broker outreach in your target market
- Study 3–5 to see how real syndications were structured
### **Days 61-90: Move Toward Execution**
- Formalize your team: KP (Key Principal), property manager, general contractor, attorney
- Choose a capital-raising CRM and begin building your investor list
- If appropriate, make a small LP allocation to observe best practices firsthand
- If you want high-accountability mentorship and a peer group that pushes you to execute,
[](https://docs.google.com/spreadsheets/d/e/2PACX-1vQgovlpI3XdsFwBWbXHJyZCd2iJDlvVaGFqSkes44fMK0ngfa3-9ckvuqXziKBnrQ/pubhtml) Click here to view the [Free Rod Khleif 90 Day Apartment Syndication Action Plan Checklist. ](https://docs.google.com/spreadsheets/d/e/2PACX-1vQgovlpI3XdsFwBWbXHJyZCd2iJDlvVaGFqSkes44fMK0ngfa3-9ckvuqXziKBnrQ/pubhtml) Here’s a link to the [Google Sheet’s version](https://docs.google.com/spreadsheets/d/159mCnT1bMc7IVD5_zBSE8eb60o58bSs5/edit?usp=sharing&ouid=110001440418544587283&rtpof=true&sd=true) if you’d like to make your own edits. ## **Why Thousands of Investors Learn Apartment Syndication with Rod Khleif**
Rod Khleif’s platform is uniquely designed to take investors from first learning about syndication to actually closing deals. Unlike programs that focus on only one piece of the puzzle, Rod’s ecosystem combines mindset coaching, step-by-step multifamily mechanics, and a momentum-building community:- **Mindset first:** Rod’s own story of losing $50 million in 2008 and rebuilding from zero gives him a perspective on resilience, conservative underwriting, and risk management that most educators can’t match. His personal experience teaches investors how to think long term and protect their capital through market cycles.
- **A free starting point:** The [free syndication guide](https://rodkhleif.com/guide-to-multifamily-syndications/) and 900+ podcast episodes mean you can learn for months without spending a dollar. This extensive free education lets you build foundational knowledge before making any financial commitment.
- **Implementation-heavy training:** The [Multifamily Bootcamp](https://www.rodkhleif.com/bootcamp) isn’t theory. It’s hands-on underwriting workshops, capital raising practice sessions, and team-building exercises with active investors who are working on real deals right now.
- **A community that closes deals:** [Warrior Program](https://rodkhleif.com/rod-khleif-warrior-program/) members have collectively acquired over 260,000 units. These aren’t just students sitting in a classroom. They’re active operators who are finding deals, raising capital, and building portfolios. [See their success stories here](https://rodkhleif.com/reviews/warrior-program/).
- **Purpose-driven investing:** Rod’s [Tiny Hands Foundation](https://rodkhleif.com/tiny-hands-foundation/) connects investor success to giving back, attracting a values-aligned community that invests with integrity. Members don’t just build wealth for themselves. They create positive impact in the world.
[](https://rodkhleif.com/reviews/warrior-interviews/)*Rod Khleif student success stories in apartment syndication.’*## **Frequently Asked Questions About Learning Apartment Syndication**
**How long does it take to learn apartment syndication?** Most investors spend 3-6 months building foundational knowledge through books, podcasts, and a structured course before analyzing their first real deals. With focused effort and mentorship, many close their first syndication within 12-18 months of starting. **Can I learn apartment syndication for free?** Yes. Rod Khleif’s [free syndication guide](https://rodkhleif.com/guide-to-multifamily-syndications/), the [Lifetime CashFlow Podcast](https://rodkhleif.com/lifetime-cashflow-podcast/) (900+ episodes), [Skool Community](https://www.skool.com/lcfa), and tools like the [deal analyzer](https://rodkhleif.com/deal-analyzer/) provide hundreds of hours of free education. **What’s the difference between a GP and an LP in a syndication?** The General Partner (GP) finds, operates, and manages the deal. The Limited Partner (LP) invests capital passively and receives returns without day-to-day responsibilities. Most syndication education focuses on the GP role, though understanding the LP perspective is essential for raising capital. Click here for a [deeper dive on the difference between GP and LP. ](https://rodkhleif.com/gp-vs-lp-what-you-need-to-know/) **Do I need a lot of money to start syndicating apartments?** Not necessarily. As a GP, you’re raising capital from investors rather than funding deals yourself. Many successful syndicators started with limited personal capital but strong knowledge, networks, and a Key Principal (KP) partner. The expert mentor, Rod Khleif, has the world famous [Warrior Program](https://rodkhleif.com/rod-khleif-warrior-program/), which helps members find KPs and capital partners. **What’s the best first step for a complete beginner?** Download the [free syndication guide](https://rodkhleif.com/guide-to-multifamily-syndications/), read one foundational book, and listen to 10 episodes of the [Lifetime CashFlow Podcast](https://rodkhleif.com/lifetime-cashflow-podcast/). That combination gives you enough foundation to decide whether syndication is the right path for you. **What is a Key Principal (KP) and do I need one?** A Key Principal is an experienced operator who meets lender requirements for net worth and liquidity. Most first-time syndicators partner with a KP to qualify for financing. As you build your portfolio and net worth, you can eventually become your own KP. **How much money do I need to raise for my first syndication?** This varies based on deal size, but most first syndications raise between $500,000 to $2 million in equity. Start by building relationships with potential investors early, before you have a deal. This helps you estimate how much capital you can access when the right opportunity appears. **What’s the difference between a course and a mentorship program?** Courses provide information and teach you what to do. Mentorship programs like the [Warrior Program](https://rodkhleif.com/rod-khleif-warrior-program/) provide accountability, deal reviews, active networking, KP matching, and ongoing support to ensure you actually execute. Most successful syndicators use both. **Should I invest as a passive LP before becoming a GP?** If you have capital available, yes. Passive investing gives you firsthand exposure to PPMs, investor relations, quarterly reporting, and deal execution. You’ll learn what good sponsors do right and what mistakes to avoid when you become a GP yourself. **What are the biggest mistakes new syndicators make?** The most common mistakes include: overestimating renovation timelines and budgets, underestimating operating expenses, raising capital before finding a deal (illegal without proper securities registration), partnering with the wrong people, and failing to build investor relationships before needing capital. **Do I need a real estate license to syndicate apartments?** No. You don’t need a real estate license to syndicate deals. However, you will need to work with qualified securities attorneys to ensure proper SEC compliance, create offering documents, and structure your syndication legally. **What markets are best for apartment syndication?** Strong syndication markets typically have population growth, job diversity, landlord-friendly laws, and positive rent-to-income ratios. Popular markets include Texas (Dallas, Austin, San Antonio), Florida (Tampa, Jacksonville), the Carolinas (Charlotte, Raleigh), and the Southeast. However, the best market is one where you can build relationships with brokers, property managers, and lenders. **How do I find deals that aren’t already picked over?** Build direct relationships with commercial brokers in your target market through consistent outreach, market visits, and demonstrating you’re a serious buyer. Off-market deals come from relationships, not online listings. The [Multifamily Bootcamp](https://www.rodkhleif.com/bootcamp) teaches specific broker outreach strategies that work. **What if I don’t have a network of investors yet?** Start building one now, before you need it. Share educational content, host webinars, join real estate investing groups, and add value to your network first. The [capital raising courses](https://rodkhleif.com/courses/) teach systematic approaches to building an investor database from scratch.## **Ready to Start Learning Apartment Syndication?**
Here are your next steps, no matter where you are in your journey:1. [Download the free syndication guide](https://rodkhleif.com/guide-to-multifamily-syndications/) and read it this week.
2. [Subscribe to the Lifetime CashFlow Podcast](https://rodkhleif.com/lifetime-cashflow-podcast/) and queue five episodes relevant to your next milestone.
3. [Register for the Multifamily Bootcamp](https://www.rodkhleif.com/bootcamp) for immersive, hands-on training.
4. [Apply to the Warrior Program](https://rodkhleif.com/rod-khleif-warrior-program/) if you’re ready for high-accountability mentorship and a community of active operators.
If a higher-touch environment fits your style, see the [best real estate masterminds and bootcamps](https://rodkhleif.com/best-real-estate-masterminds-and-bootcamps-2025-edition/).
On the mindset side, read this [interview on 5 things you need for a successful career in commercial real estate](https://rodkhleif.com/authority-magazine-rod-khleif-5-things-you-need-to-create-a-highly-successful-career-in-the-commercial-real-estate-industry-today-authority-magazine/).
**Related reading:** [Best Multifamily Investment Training (2026)](https://rodkhleif.com/best-multifamily-investment-training/) compares the top bootcamps, courses, and mentorships and gives you a simple framework to choose the right fit.
**Categories:** Blog, Syndication
---
### [5 Things to Consider When Choosing a Multifamily Property Management Company](https://rodkhleif.com/5-things-to-consider-when-choosing-a-multifamily-property-management-company-businesstomark/)
**Published:** June 9, 2026
**Author:** Rod Khleif
**Content:**
I learned this lesson the expensive way. Early in my career I handed a building to a management company because their fee was the lowest number on the page, and within a year my occupancy had slipped, my reports were a mess, and my net operating income was bleeding out a little more every month. The property was fine. The operator was not. Your **multifamily property management** company is the single biggest day to day driver of whether an apartment deal performs the way your spreadsheet promised, and most owners pick one based on price instead of proof.
You can buy a great building in a great market and still lose money if the people running it are not great. So before you sign anything, you need a way to separate the professionals from the pretenders. This guide gives you the exact scorecard I use, the questions that expose a weak operator, and the red flags that should make you walk away.
## What This Guide Covers
- [Why Your Property Manager Makes or Breaks the Deal](#why-pm-makes-or-breaks)
- [The Property Manager Scorecard: 5 Things to Check](#property-manager-scorecard)
- [Property Management Is Not Asset Management](#asset-vs-property-management)
- [How Property Management Fees Really Work](#pm-fees-explained)
- [How to Vet a Multifamily Property Management Company](#how-to-vet-a-company)
- [When and How to Switch Operators](#switching-operators)
- [Cheapest Bid vs Best Operator](#cheap-vs-quality)
- [Self Managing vs Hiring a Pro](#self-manage-vs-hire)
- [What a Great Operator Looks Like](#proof-from-the-field)
- [Multifamily Property Management FAQ](#multifamily-property-management-faq)
- [Ready to Take the Next Step?](#ready-next-step)
## Why Your Property Manager Makes or Breaks the Deal
> Your property manager controls the two levers that set an apartment building value: income and expenses. A great operator pushes rents to market, keeps units full, and controls costs, which grows your net operating income and your equity. A weak one quietly does the opposite, and you feel it in every distribution.
Here is what most new owners miss. In multifamily, value is tied directly to net operating income, which is your income minus your operating expenses. That means the company running your building is not just collecting rent. They are moving the exact number your property value is built on. A point of occupancy here, a turnover cost there, a slow leasing season, and suddenly the returns you underwrote are gone.
Think about what that means in real numbers. On a building with strong income, a few points of extra occupancy and tighter expense control can add tens of thousands of dollars to annual net operating income, and because value is a multiple of that number, the building itself becomes worth far more. The same math runs in reverse when the operator is weak. That swing, year after year, dwarfs any difference in management fee you were trying to save. The operator is not a cost to minimize. They are a lever on your entire return.
This is why I treat hiring a property manager as one of the most important decisions in the entire deal, right next to the purchase itself. You are handing your asset, your reputation with investors, and your cash flow to a third party. Get it right and they make you money while you sleep. Get it wrong and they will cost you far more than their fee ever saved you.
### Signs You Have the Wrong Operator
Run your current or prospective company through this quick gut check. Three or more yes answers is a warning:
- You cannot get a clear answer on your occupancy and delinquency without chasing them.
- Monthly reports are late, confusing, or change format every time.
- They manage mostly single family homes and your building is their biggest one.
- Turnovers take weeks and you never see the scope or the invoices.
- Their fee was the only thing they led with when you first talked.
None of these are about being mean to a vendor. They are about protecting an asset that thousands of your dollars depend on every month.
## The Property Manager Scorecard: 5 Things to Check
After decades of owning and operating apartments, I boiled the hiring decision down to five things that actually predict performance. I call it the Property Manager Scorecard, and it is the filter I run every candidate through. Score each one before you ever talk about price. You can go deeper on operations inside my [Warrior mentorship program](https://rodkhleif.com/rod-khleif-warrior-program/).
[](https://rodkhleif.com/rod-khleif-warrior-program/)
[**Want my full operations playbook and a vetted network of operators? Explore the Warrior Program →**](https://rodkhleif.com/rod-khleif-warrior-program/)
### 1. Track Record With Your Asset Class
A company that manages single family rentals or small duplexes is not ready for your 80 unit building, no matter how nice they are. Ask how many units they currently manage, how many properties look like yours in size and class, and how long they have held those accounts. You want an operator who has already solved the problems you have not even hit yet. Experience with your specific asset class is the strongest predictor of performance.
Be specific when you ask. A company can technically manage a thousand units and still have almost none that look like your deal. Ask how many of their units are in buildings of your size, in your class, and in your submarket, because a manager who is great with luxury high rises may be lost on a workforce housing value add, and the reverse is just as true. Match the operator to the actual job.
### 2. Systems and Reporting
Great operators run on real systems. They use professional property management software, they give you a live owner portal, and they send a clean monthly report you can actually read. You should be able to see income, expenses, occupancy, delinquency, and a variance against budget without asking. If their reporting is a messy spreadsheet emailed late, imagine how they handle a real problem on the property.
### 3. Communication and Access
When something goes wrong at your building, and it will, how fast do they respond and who picks up the phone? Ask who your point of contact is, how often you will get updates, and what their response time standard is for owners. The best operators are proactive. They tell you about the problem before you have to find it. Slow or vague communication during the sales process never gets better after you sign.
A simple test works well here. During your interviews, send an email with a couple of real questions and time the response. If a company that wants your business takes days to reply with a vague answer, that is exactly how they will treat you once they have your building. The way they communicate before you hire them is the clearest preview you will ever get of life as their client.
### 4. Fee Structure and Alignment
Most companies charge a management fee as a percentage of collected income, often in the range of three to ten percent depending on size and market, plus leasing fees and sometimes other charges. The number matters, but alignment matters more. You want a fee model that rewards them for growing your net operating income, not just for collecting checks. Ask for the full fee schedule in writing and watch for hidden markups on maintenance, turnovers, and vendor work.
### 5. Boots on the Ground
Software does not fix a leaking roof or lease a vacant unit. Ask about their local presence, their maintenance team, and their leasing process. Do they have people near your property, or are they managing it from three states away? Strong local operations are what keep your units full and your residents happy, and resident satisfaction is what protects your income over the long run.
Maintenance is where this gets real. Ask how they handle after hours emergencies, how quickly routine work orders get closed, and whether they have in house technicians or rely entirely on outside vendors. Slow or sloppy maintenance is the fastest way to lose good residents, and every resident you lose costs you a turnover, a vacancy, and a new leasing push. A strong local maintenance operation quietly saves you far more than it ever shows up as a line item.
## Property Management Is Not Asset Management
This trips up a lot of first time owners, so let me make it clear. Property management is the day to day operation of the building: leasing, rent collection, maintenance, resident relations. Asset management is the higher level strategy: setting the business plan, managing the budget, deciding when to refinance or sell, and holding the property manager accountable to the numbers.
Even with a great management company, you or your team still own the asset management role. The property manager runs the play. You call the game. If you want to understand that side more deeply, read my [overview of multifamily asset management](https://rodkhleif.com/multifamily-asset-management-overview/), and for the operational hiring details see my breakdown of [how to hire a third party property management company](https://rodkhleif.com/how-to-hire-a-third-party-property-management-company/). The two roles work together, but they are not the same job.
Rental housing is also a real industry with real standards. Groups like the [National Multifamily Housing Council](https://www.nmhc.org/research-insight/quick-facts-figures/) and the [National Apartment Association](https://www.naahq.org/) publish operating benchmarks and best practices, and the strongest companies hold credentials and follow those standards. Asking whether a company participates in the professional side of the industry tells you how seriously they take the craft.
## How Property Management Fees Really Work
Fees confuse a lot of owners because companies bundle them in different ways. Understanding the full structure is how you avoid surprises and compare two companies fairly. The headline percentage is never the whole story, so make every candidate hand you the complete schedule in writing before you compare anything.
Here are the charges you will typically run into:
- **Management fee.** The core charge, usually a percentage of collected income, often somewhere in the three to ten percent range depending on size and class. Larger properties tend to pay a lower percentage because the dollar amount is still meaningful to the operator.
- **Leasing fee.** A charge for filling a vacant unit, sometimes a flat amount and sometimes a portion of the first month rent. Ask how it works and how it is split if they use outside leasing agents.
- **Renewal fee.** Some companies charge a smaller fee when an existing resident renews. This one is worth negotiating, because keeping a good resident should be part of the core job.
- **Setup or onboarding fee.** A one time charge to take over the property, inspect units, and load everything into their systems.
- **Maintenance and vendor markups.** This is where weak operators quietly make money. Ask directly whether they mark up maintenance, repairs, or vendor invoices, and by how much. A markup is not automatically bad, but it must be disclosed.
The goal is not to find the lowest number. The goal is to find a fair, transparent structure that pays a good operator to do great work. A company charging a point more but growing your occupancy and protecting your expenses will beat a cheaper one every time. When you understand the fee model fully, you can also tie part of the relationship to performance, which keeps everyone pulling in the same direction toward a stronger net operating income.
## How to Vet a Multifamily Property Management Company
Here is the exact process I walk through before I hand over a building. Do not skip steps, and do not let a smooth sales pitch replace real proof.
1. **Define your needs first.** Write down your unit count, asset class, location, and what success looks like in numbers. You cannot judge a fit until you know what you are hiring for.
2. **Build a short list of specialists.** Find companies that already manage properties like yours in your market. Ask other owners and your broker who they trust. Reputation in the local owner community is gold.
3. **Run the Scorecard.** Score each candidate on track record, systems, communication, fees, and boots on the ground before you ever compare prices.
4. **Ask for proof and references.** Request a sample owner report, current occupancy across their portfolio, and three owner references with buildings like yours. Then actually call the references.
5. **Read the contract carefully.** Check the fee schedule, the term, the termination clause, and how maintenance and vendor markups work. Make sure you can exit if performance slips.
To make the judgment fast, here is the side by side I keep in my head: the red flags that should scare you off, the questions that cut through the pitch, and the green flags that signal a real operator.
Notice that none of those questions are about price. Price is the last conversation, not the first. A company that nails the green flags and answers the hard questions well is worth more than a cheaper company that cannot, every single time.
Before you start interviewing companies, get your own underwriting and operating expectations straight. My free book walks through how the numbers actually work so you can hold any operator accountable to a real budget. Click the cover below to download it and keep it as your reference.
[](https://rodkhleif.com/lcfa-ebook/)
[**Download the free book and learn the numbers behind great operations →**](https://rodkhleif.com/lcfa-ebook/)
## When and How to Switch Operators
Sometimes the operator you have is the problem, and the most profitable move you can make is replacing them. I have turned struggling properties around simply by changing who runs them. The trick is knowing when the issue is fixable and when it is time to move on.
Give your current company a clear chance first. Put your concerns in writing, set specific targets for occupancy, delinquency, and reporting, and give them a defined window to fix it. A good operator will welcome the clarity and respond. If the numbers do not move and the communication does not improve, that is your answer.
When you do decide to switch, protect the transition. Read your termination clause so you know your notice period and any fees. Line up the new operator before you cut the old one so there is no gap in leasing or maintenance. Make sure resident records, deposits, and financials transfer cleanly, and tell your residents about the change in a calm, professional way so they feel taken care of. A clean handoff protects your occupancy during the most fragile moment in the relationship.
The lesson I want you to take from this is simple. You are never stuck. The property manager works for you, and your job as the owner is to hold the standard. If they will not meet it, someone better will, and the upside of making that change is often far larger than the hassle of making it.
## Cheapest Bid vs Best Operator
The most expensive mistake in this business is hiring the cheapest manager. A one or two percent difference in fee is nothing compared to what a weak operator costs you in lost occupancy and sloppy expense control. Here is how the cheap bid stacks up against a quality operator.
CHEAPEST BID VS BEST OPERATORWHY THE LOW FEE USUALLY COSTS THE MOSTFactorCheapest BidBest OperatorOccupancy✗Slow leasing, units sit empty✓Aggressive leasing keeps units fullExpenses✗Hidden markups on maintenance✓Transparent, controlled costsReporting✗Late and hard to trust✓Clear monthly numbers on timeNet result✗Lower NOI, lower property value✓Higher NOI, higher property value## Self Managing vs Hiring a Pro
A lot of new owners ask whether they should just manage the building themselves to save the fee. Sometimes that works for a small local property. For most multifamily owners who want to scale, a professional operator is the better choice. Here is the honest comparison.
SELF MANAGING VS HIRING A PROWHAT YOU REALLY GIVE UP TO SAVE THE FEEFactorSelf ManagingHiring a ProYour time✗Calls, turnovers, and tenants on you✓You focus on strategy and growthSystems✗You build everything from scratch✓Proven software and processes readyScale✗Hard to grow past a few units✓Built to manage hundreds of unitsInvestor trust✗Harder to raise capital alone✓A pro operator reassures investors## What a Great Operator Looks Like
If you want to see the standard you should be hiring to, study the best. [Robert Martinez](https://rodkhleif.com/podcasts/ep-377-robert-martinez-award-winning-property-management/) built an award winning property management operation around exactly the things on this scorecard: relentless leasing, tight expense control, real systems, and a resident experience that keeps occupancy high. When I had him on the podcast, what stood out was not a secret trick. It was discipline applied to the basics, every single day.
Watch the Full Interview
Robert Martinez breaks down how award winning property management actually drives occupancy, expense control, and net operating income.
You do not have to become Robert to win. You have to learn to recognize his standard and refuse to settle for less when you hire. For more operator interviews and lessons, the [Lifetime Cash Flow Through Real Estate Investing podcast](https://rodkhleif.com/lifetime-cashflow-podcast/) is full of them, and my breakdown of the [nine things you need to know about property management companies](https://rodkhleif.com/the-9-things-you-need-to-know-about-property-management-companies/) goes even deeper on the diligence.
> **Rod Khleif:** “I have made more money fixing bad management than I ever made buying cheap. The building rarely fails you. The operator does. Hire the team that grows your net operating income, not the one with the lowest fee.”
## Multifamily Property Management FAQ
**Q: What does a multifamily property management company actually do?**
A: They run the building day to day. That includes marketing and leasing units, screening residents, collecting rent, handling maintenance and turnovers, paying property bills, and reporting the numbers to you. They turn your asset into income while you focus on strategy.
**Q: How much does multifamily property management cost?**
A: Fees commonly run in the range of three to ten percent of collected income depending on the size and class of the property, plus leasing fees and sometimes other charges. Bigger properties usually pay a lower percentage. Always get the full fee schedule in writing.
**Q: What should I look for when choosing a property management company?**
A: Score them on five things: track record with your asset class, systems and reporting, communication and access, fee structure and alignment, and boots on the ground. Check all five before you ever talk about price.
**Q: What is the difference between property management and asset management?**
A: Property management is the day to day operation of the building. Asset management is the higher level strategy, including the budget, refinance and sale decisions, and holding the property manager accountable. You keep the asset management role even with a great operator.
**Q: How many units do I need before I should hire a property manager?**
A: There is no hard rule, but most owners who want to scale hand off management as soon as the property is large enough to support a professional fee, often at the small apartment level and almost always once you cross into mid size buildings.
**Q: Should I use a third party manager or build my own team?**
A: Most owners start with a quality third party operator because it is faster and less risky. Building an in house team can make sense once you own enough units in one market to support the overhead. Start with proven third party management and grow into the decision.
**Q: What are the biggest red flags in a property management company?**
A: Vague or late reporting, no experience with your asset class, slow communication, hidden markups on maintenance, and leading with the lowest fee. Any one of these is a caution. Several together is a no.
**Q: How do I hold my property manager accountable?**
A: Set a budget, get a clear monthly report, and review actual performance against that budget every month. Track occupancy, delinquency, and expenses. Clear expectations and consistent review are how you keep an operator performing.
**Q: Can a good property manager really increase my property value?**
A: Yes. Because value is tied to net operating income, an operator who raises occupancy and controls expenses directly increases what your building is worth. That is the whole reason quality management is worth more than its fee.
**Q: What questions should I ask before signing a management contract?**
A: Ask how many units like mine you manage, can I see a sample owner report, who is my point of contact, what is your response time, and how do maintenance and vendor markups work. Then read the term and termination clause carefully.
## Ready to Take the Next Step?
Choosing the right operator is an owner level skill, and it is one of many you need to scale a portfolio with confidence. If you are serious about buying and operating apartments the right way, my [Warrior mentorship program](https://rodkhleif.com/rod-khleif-warrior-program/) gives you the systems, the network of proven operators, and the coaching to do it without the expensive mistakes I made.
Not there yet? Start with the fundamentals. Download my free book, [How to Create Lifetime Cash Flow Through Multifamily Properties](https://rodkhleif.com/lcfa-ebook/), and learn the numbers that let you hold any property manager accountable to a real plan.
*Disclaimer: This article was written with the help of AI and reviewed by Rod and his team.*
**Categories:** Featured, Multifamily Investing, Real Estate
**Tags:** apartment investing, asset management, multifamily investing, multifamily property management, property management, real estate investing
---
### [Real Estate Asset Management in 2025](https://rodkhleif.com/real-estate-asset-management-to-maximize-cash-flow-tenant-satisfaction/)
**Published:** April 29, 2025
**Author:** Matt Rohde
**Content:**
## **How to Maximize Cash Flow and Tenant Satisfaction in Multifamily**
Effective property management is no longer just about collecting rent and fixing leaky faucets. In today’s market, real estate asset management is important. It affects your profits. It also keeps tenants satisfied. Additionally, it helps your portfolio increase in value.
If you’re serious about building and maintaining a high-performing multifamily asset, you need more than good intentions. You need systems, tools, and a proactive mindset.
In this guide, we’ll explore the most important 2025 strategies for managing multifamily properties to maximize both **cash flow** and **tenant satisfaction**.
## **Why Strategic Property Management Matters More Than Ever**
Real estate markets in 2025 are dynamic. Rising interest rates, inflationary pressures, labor shortages, and shifting tenant expectations have made it more important than ever to operate efficiently and intelligently.
Done right, great management:
- Increases NOI through tenant retention and rent optimization
- Protects asset value through consistent maintenance
- Creates community, which leads to better reviews and fewer vacancies
- Enhances lender confidence and long-term refinance potential
Now, let’s break down the systems you need to build or refine to operate like a pro.
## **1. Tenant Screening: Your First Line of Defense**
Great tenants make great properties. But attracting and retaining them starts long before move-in day. It starts with a **tight, legally compliant screening process**.
### **Key Components of a Modern Screening System:**
- **Credit & background checks:** Use automated platforms like RentSpree, TurboTenant, or TransUnion SmartMove for instant, FCRA-compliant screening
- **Income verification:** Require 3x rent as a baseline, and request recent pay stubs or tax returns
- **Landlord references:** Speak directly with previous landlords to ask about payment history, property care, and overall behavior
- **Identity verification:** Use software to confirm SSN validity and cross-check ID documents
- **Fair Housing compliance:** Follow all federal, state, and local rules to avoid discrimination and potential lawsuits
**Pro Tip:** Prequalify tenants with a short online form before accepting full applications in order to save time and protect your calendar.
## **2. Maintenance That Prevents Emergencies (and Complaints)**
Reactive maintenance is expensive. Preventive maintenance protects cash flow and reduces turnover. In 2025, proactive maintenance is a competitive advantage.
### **Build a Proactive Maintenance Program:**
- **Quarterly inspections:** Check HVAC filters, plumbing, smoke detectors, and visible wear
- **Annual system reviews:** Hire professionals to inspect boilers, fire suppression, and electrical systems
- **Exterior maintenance calendar:** Track landscaping, gutter cleaning, roof assessments, and seasonal repairs
- **Technology-enabled work orders:** Use platforms like AppFolio, Buildium, or Propertyware to track service requests in real time
**KPI to Watch:** Track work order completion time. The goal should be **under 48 hours for non-emergency issues**.
## **3. Structuring Effective Lease Agreements**
Your lease is your safety net. It should clearly define:
- Rent amounts, due dates, grace periods, and late fees
- Responsibilities for utilities and repairs
- Rules around pets, smoking, noise, and common area use
- Renewal, termination, and subletting procedures
- Legal disclosures required by your state (e.g., mold, bedbugs, lead paint)
Always customize your lease to reflect local laws and the property’s unique features. Consider offering **tiered lease lengths** or **incentives for automatic renewal** to boost retention.
**Bonus Tip:** Include a “community standards” page outlining expectations around noise, cleanliness, and common areas. It sets the tone for your culture and helps with enforcement later.
## **4. Vacancy Management: Fill Units Fast and Smart**
Empty units = lost cash flow. But filling vacancies isn’t just about speed—it’s about **attracting the right tenants with the right message.
### **2025 Vacancy-Filling Strategies:**
- **Hyper-local targeting:** Use Facebook Ads and Google Local Campaigns targeting the 2–5 mile radius around your property
- **AI-generated listings:** Use ChatGPT or Jasper to write compelling, accurate descriptions for Zillow, Apartments.com, and Rent.com
- **360° virtual tours:** These are now expected, not optional—especially for out-of-area relocations
- **Automated lead funnels:** Route inquiries through chatbots or CRMs that schedule tours and collect prequal info
- **Text message follow-up:** Prospects are 3x more likely to respond to SMS than email
**Media Tip:** Invest in drone shots of the building and neighborhood. Visual appeal sells, especially on mobile.
## **5. Rent Optimization and Financial Oversight**
Rents don’t manage themselves. And neither does your NOI.
### **Rent Management Best Practices:**
- **Annual rent reviews:** Adjust rents based on market comps, demand, and local regulations
- **Dynamic pricing tools:** Tools like RentPush or RealPage Revenue Management allow rent to adjust based on real-time demand
- **Late fee enforcement:** Implement automatic late fees and enforce them consistently
- **Delinquency reporting:** Use property management software to track late payments, payment plans, and court filings if necessary
- **Weekly financial reporting:** Review rent roll, AR aging, and variance reports every week. (not just once a month)
**Pro Tip:** Always know your **break-even occupancy** and **cash-on-cash return** at current rents. Don’t guess. model it.
## **6. Professional vs. Self-Management: What’s Right for You?**
If you’re new to real estate or scaling beyond 10–15 units, hiring a property manager might make sense.
### **Advantages of Professional Property Management:**
- Proven tenant screening and leasing systems
- Economies of scale in maintenance and marketing
- Legal compliance and eviction handling
- Financial reporting and audit-ready accounting
- 24/7 emergency response without waking you up
But…
### **Self-Management Can Work If:**
- You live nearby and have strong systems in place
- You’re building sweat equity before outsourcing
- You’re optimizing for high-touch tenant relationships
- You have a clear plan to scale out of it soon
**Decision Metric:** If property management is taking more than 10 hours per week or limiting your ability to pursue new deals, it’s time to delegate somewhere else.
## **7. Tenant Satisfaction as an Asset Multiplier**
In 2025, online reviews, word-of-mouth, and referrals drive occupancy.
Happy tenants:
- Stay longer
- Complain less
- Pay on time
- Refer friends
Here’s how to improve satisfaction:
- Respond to maintenance requests quickly
- Offer smart home features (locks, thermostats, wifi packages)
- Run quarterly surveys and act on feedback
- Celebrate milestones (lease renewals, birthdays, holidays)
- Add community touches: dog treats in the office, free coffee in the lobby, clean common areas
**Retention Metric:** Aim for **renewal rates of 65%+** annually.
## **Final Thoughts from Rod Khleif**
Multifamily real estate is a business, and the better you run that business, the bigger your returns.
You don’t need to do it all at once. But if you commit to building a professional, data-driven management system, you’ll protect your downside, increase tenant loyalty, and drive long-term wealth.
Effective asset management isn’t flashy, but it’s what turns good properties into great ones.
Let’s create Lifetime Cashflow!
— Rod
**Related reading:** [Choosing a Multifamily Property Management Company](https://rodkhleif.com/5-things-to-consider-when-choosing-a-multifamily-property-management-company-businesstomark/)
**Categories:** Blog, Property Management, Real Estate
---
### [9 Things You Must Know About a Property Management Company](https://rodkhleif.com/the-9-things-you-need-to-know-about-property-management-companies/)
**Published:** June 2, 2025
**Author:** Rod Khleif
**Excerpt:** When it comes to managing multifamily properties, I’m a big fan of self-management.
**Content:**
[Hiring a property management company](https://rodkhleif.com/how-to-hire-a-third-party-property-management-company/) can be one of the most important decisions you make as a real estate investor. Whether you own a single rental or a growing portfolio of multifamily properties, your property manager will directly impact your cash flow, tenant satisfaction, and asset value. That’s why it’s essential to know exactly what to ask before signing any agreements.
In this guide, we’ll cover the 9 key questions to ask before hiring a property management company, along with the most critical things to know about property management, key facts, and how to avoid common mistakes. If you’re researching what to know about property management or exploring the services of FM property management or similar firms, this article will help you make a confident, informed decision.
## 
## 1. Are They Local and Familiar With Your Market?
Start by asking: **Where is their office located, and what neighborhoods do they serve?** A local property manager will be more responsive and better equipped to handle tenant needs, property visits, and local vendor relationships.
Also ask:
- Do they manage similar properties nearby?
- Do they own rental properties in the area that may compete with yours?
**Property management key fact:** Managers with conflicting ownership interests may prioritize their own properties first. Choose a company that serves your area but doesn’t compete with your units.
## 2. What’s Their Marketing Strategy for Vacancies?
**Vacancy equals lost income**, so understanding how the property manager finds and retains tenants is crucial.
Key questions:
- Where do they advertise available units?
- Do they use paid listings, social media, their website, or local platforms?
- Do they have a written marketing plan?
You should also ask: **What is your average turnaround time for filling a vacancy?**
**What to know about property management**: Effective managers have streamlined processes for showing, screening, and leasing units quickly.
## 3. How Do They Screen Tenants?
Finding reliable tenants reduces turnover, late payments, and damage. Ask:
- What steps are included in your [screening process?](https://rodkhleif.com/the-importance-of-tenant-screening-in-multifamily-real-estate/)
- Do you verify income, credit, criminal background, and previous landlord references?
**Things to know about property management**: Skipping thorough tenant screening often leads to bigger problems down the road. Make sure the company prioritizes quality over speed.
Also ask to review a sample lease. It should include all legal terms, occupancy limits, maintenance responsibilities, fees, and rules.
## 4. How Do They Handle Maintenance and Repairs?
Repairs are unavoidable, and deferred maintenance can sink your ROI. Ask:
- How do you handle emergency repairs?
- Do you have a 24/7 call service?
- How often do you inspect properties?
- Who performs the repairs—in-house staff or outside contractors?
Get clarity on pricing and markups. Maintenance can be a hidden profit center, so insist on transparency and pre-approval for larger expenses.
**FM property management** and reputable companies should provide itemized breakdowns of maintenance activity and costs.
## 5. What Is Their Rent Collection Process?
Reliable cash flow depends on effective rent collection. Ask:
- What are your rent collection methods (online, check, app)?
- How do you handle late payments or delinquencies?
- What is your eviction process?
Also ask: **How often will I receive payment reports?** Ideally, you should receive a detailed income and expense report monthly.
**Property management key fact:** A strong PMC enforces lease terms while maintaining professionalism with tenants.
## 6. What Reports Will I Receive?
As an owner, you need up-to-date financial and operational data to manage your investment.
Ask:
- What financial reports do you provide?
- Do I get access to a real-time dashboard or online portal?
Standard reports should include:
- Income and expense statements
- Rent rolls
- Vacancy reports
- Maintenance and repair logs
**What to know about property management**: Lack of reporting is a major red flag. A good PMC is transparent and consistent.
## 7. How Are Fees Structured?
Fees can vary widely based on location, property size, and services provided.
Ask:
- What is your monthly management fee?
- Do you charge a lease-up or placement fee?
- Are there additional costs for renewals, evictions, or inspections?
**Things to know about property management**: Most charge 4–8% of gross monthly rent. Smaller properties may see higher percentages. Always compare total cost against services provided.
## 8. Are They Licensed and Insured?
Property managers must be licensed in most states. Ask for proof of:
- Real estate or property management license
- General liability insurance
- Errors and omissions (E&O) insurance
This protects both you and the manager in case of legal or financial issues.
**FM property management**, like other professional firms, should readily provide this documentation.
## 9. What Are the Terms of the Management Agreement?
Before signing, ask to review a sample contract. Pay close attention to:
- Cancellation terms (How and when can you exit the agreement?)
- Fees for early termination
- Exclusive listing rights (Some contracts require you to use the PMC if you sell)
**Property management key fact:** Avoid contracts that lock you in or give the manager unnecessary control over your property.
## Have more questions?
Download our free ebook about “[How to Hire a 3rd Party Property Management Company.](https://rodkhleif.com/how-to-hire-a-third-party-property-management-company/)”
## Final Thoughts from Rod Khleif
Hiring the right property management company can be the difference between a high-performing investment and a financial headache. These 9 questions will help you uncover red flags, evaluate professionalism, and find a manager who aligns with your goals.
Whether you’re evaluating MF property management or another provider, remember this: **Your manager is your partner. Choose wisely.**
If you’re ready to grow your portfolio and want expert guidance, explore Rod Khleif’s multifamily coaching programs or download the free book [*How to Create Lifetime Cash Flow Through Multifamily Properties.*](https://rodkhleif.com/lcfa-ebook/)
**Related reading:** [Choosing a Multifamily Property Management Company](https://rodkhleif.com/5-things-to-consider-when-choosing-a-multifamily-property-management-company-businesstomark/)
**Categories:** Blog, Property Management
**Tags:** apartment investing, business structures, disaster, Driving Force, landlord, motivation, multifamily, multifamily investment, multifamily property investing, multifamily real estate, real estate, real estate investing, real estate podcast, Rod Khleif, seller financing
---
### [How Millennials Can Build Generational Wealth Investing in Apartments](https://rodkhleif.com/millennials-build-generational-wealth/)
**Published:** June 8, 2026
**Author:** Rod Khleif
**Content:**
When I was 18 years old I bought my first house, and I was convinced the path to wealth was simple: buy a home, work hard, wait. By 2006 I had built that into around 800 single family houses, and in 2008 the whole thing collapsed because every vacancy was a 100 percent vacancy. That brutal lesson is exactly why I tell every young investor the same thing: if you want to **build generational wealth** in your twenties and thirties, you do not need a bigger salary or a perfect market, you need a better vehicle. Real estate, done the way I teach it now, is still the most reliable wealth building engine on the planet for millennials who start with intention.
The problem is not that you are too young, too broke, or too late. The problem is that most people your age are quietly following a plan that was never designed to make them wealthy. This guide breaks down the exact framework, the real numbers, and the first moves that turn a normal paycheck into a portfolio your kids will inherit.
## What This Guide Covers
- [Why Most Millennials Build Wealth Backwards](#why-millennials-build-wealth-backwards)
- [The Generational Wealth Stack: Five Engines of Real Estate Returns](#generational-wealth-stack)
- [The Millennial Advantage Nobody Talks About](#millennial-advantage)
- [How to Start With Little Money](#start-with-little-money)
- [How to Build Generational Wealth: A Five Step Plan](#how-to-build-generational-wealth)
- [Waiting to Be Ready vs Starting With a Framework](#waiting-vs-starting)
- [Going Solo vs Building With a Team](#solo-vs-team)
- [Millennials Who Are Doing It Right Now](#warrior-proof)
- [Build Generational Wealth FAQ](#build-generational-wealth-faq)
- [Ready to Take the Next Step?](#ready-next-step)
## Why Most Millennials Build Wealth Backwards
> Most millennials build wealth backwards because they save first and invest last, pouring years into a 401k and a single family home while waiting to feel ready. Real generational wealth gets built in reverse: you choose an income producing asset first, then let tenants and time do the heavy lifting.
Here is the trap. You are told to get a good job, max out your retirement account, buy a starter home, and someday you will be comfortable. There is nothing evil about that plan. It is just slow, and it puts you at the mercy of one income and one market. If you lose the job, the plan stalls. If the home does not appreciate, you tread water for a decade.
Wealthy families do the opposite. They buy assets that pay them whether they show up to work or not. They treat their primary residence as a place to live, not a retirement plan. And they understand that the fastest way to financial freedom is not to earn more and spend less, it is to own more of the things that produce income. Apartments are the cleanest version of that idea I have ever found.
### Signs You Are Building Wealth Backwards
Run yourself through this quick checklist. If you say yes to three or more, you are probably stacking your wealth in the wrong order:
- Your entire retirement plan lives inside a 401k you cannot touch for 30 years.
- You believe you need a large pile of cash before you can invest in real estate.
- You think your single family home is your biggest investment, not your biggest expense.
- You are waiting until you feel ready, qualified, or smart enough to start.
- You measure progress by your salary instead of by your monthly passive income.
None of those make you a failure. They make you normal. The rest of this guide is about trading normal for a system that compounds.
## The Generational Wealth Stack: Five Engines of Real Estate Returns
The reason apartments build wealth so fast is that they pay you in five different ways at the same time. I call this the Generational Wealth Stack, and once you see all five engines running together you understand why a single good deal can outperform a decade of saving. You can go deeper on the mechanics inside my free [Multifamily Bootcamp](https://rodkhleif.com/bootcamp/).
[](https://rodkhleif.com/bootcamp/)
[**Want me to walk you through all five engines with real deals? Join the free Multifamily Bootcamp →**](https://rodkhleif.com/bootcamp/)
### Engine 1: Cash Flow
Cash flow is the money left over every month after the mortgage, taxes, insurance, and operating costs are paid. This is the income that replaces your paycheck. In an apartment building you are not relying on one tenant, you are relying on dozens, so one move out does not sink you. That stability is the whole reason I left single family behind. Net operating income, which is simply your income minus your operating expenses, is the number that drives everything else in the stack.
This is also the engine that buys you choices. When the rent checks more than cover your costs, you are no longer trading hours for dollars at the mercy of one employer. You can reinvest the surplus into the next deal, build a reserve that lets you sleep at night, or eventually replace your salary entirely. Cash flow is what turns a building into freedom.
### Engine 2: Appreciation
Appreciation is the rise in the property value over time. In single family the value is set by what the neighbor sold for. In multifamily the value is set by the income the building produces, which means you have far more control. Raise the income, raise the value. According to the [Federal Reserve Survey of Consumer Finances](https://www.federalreserve.gov/econres/scfindex.htm), real estate remains one of the largest sources of household net worth in America, and the families who own income property consistently outpace those who only own a home.
### Engine 3: Loan Paydown
Every month your tenants pay rent, and a slice of that rent pays down your loan balance. You are not building equity with your own money, you are building it with theirs. Over a typical hold period this quietly turns into one of the largest pieces of your total return, and almost nobody talks about it because it happens in the background.
### Engine 4: Tax Benefits
The tax code rewards people who provide housing. Through depreciation you get to show a paper loss on a building that is actually going up in value, which can shelter a large portion of your cash flow from taxes. This is legal, it is intentional, and it is one of the main reasons the wealthy love real estate. Always work with a qualified CPA, but understand that the tax engine alone can change your entire financial picture.
### Engine 5: Forced Equity
Forced equity is the part that excites me most. Because value is tied to income, you can create equity on purpose by raising rents toward market, cutting wasted expenses, and improving the property. This is the value add play. A few hundred dollars of extra monthly income across many units can add hundreds of thousands of dollars to the building value. You are not waiting for the market to make you rich, you are doing it with a plan.
## The Millennial Advantage Nobody Talks About
Here is what older investors will not admit: your generation has two advantages that money cannot buy. The first is time. Every one of the five engines above compounds, and compounding is brutal in the best way when you give it 20 or 30 years. A deal you close at 30 has decades to pay down debt, appreciate, and throw off tax sheltered income before you would even think about retiring.
The second advantage is demand. Homeownership is harder to reach than it was for prior generations, which means more people are renting for longer. The [National Multifamily Housing Council](https://www.nmhc.org/research-insight/quick-facts-figures/) reports that a large and growing share of American households rent their homes, and that need for quality rental housing is not going away. As an apartment owner, you are on the right side of that trend instead of fighting it from the sidelines.
Put those together and the picture is clear. You are not behind. You are early. The only thing standing between you and a portfolio is a decision to learn the vehicle and take the first step. If you want the foundational playbook in writing, start with my free book, [How to Create Lifetime Cash Flow Through Multifamily Properties](https://rodkhleif.com/lcfa-ebook/).
## How to Start With Little Money
The number one objection I hear from millennials is some version of “I do not have enough money.” I understand it, because I believed the same thing for years. But here is the truth that changes everything: in this business your capital constraints become almost irrelevant once you learn how to structure deals. You are not trading your savings, you are trading your expertise, your deal finding ability, and your relationships. You become the engine, and other people’s money becomes the fuel.
Think about the people I mentioned earlier. One of my students closed a 218 unit community as a first deal with no money and no experience. That is not magic. It is the syndication model, where a sponsor finds the deal, underwrites it, and brings in investors who provide the capital in exchange for a share of the returns. If you can find and analyze a strong deal, you can attract the capital to close it. The skill is the asset.
There are several proven on ramps that need far less of your own cash than people assume:
- **House hacking.** Buy a small two to four unit property, live in one unit, and rent the others. Owner occupied financing means a low down payment, and your tenants help cover the mortgage while you learn to be a landlord on training wheels.
- **Partnering on a syndication.** Join an experienced team and contribute what you have, whether that is deal flow, underwriting, investor relationships, or boots on the ground asset management. Many sponsors are actively looking for hungry, coachable partners.
- **Raising capital.** If you are great with people, you can become the person who brings investors to a deal. Capital raisers are valued members of nearly every sponsorship team.
- **Bringing the deal.** A great off market deal is worth more than a check. If you can build broker relationships and source opportunities others cannot find, experienced operators will partner with you all day long.
Notice what all four have in common. None of them require you to write a giant check by yourself. They require you to become useful, coachable, and consistent. That is something any millennial can decide to do this year, regardless of your current bank balance. The capital follows competence, not the other way around.
## How to Build Generational Wealth: A Five Step Plan
Knowing the engines is not the same as turning them on. This is the exact sequence I walk new investors through, and it works whether you have 5,000 dollars or 50,000 dollars to your name. Notice that capital is not step one. Clarity is.
1. **Set your freedom number.** Decide the monthly passive income that would change your life. Not your fantasy number, your freedom number. Write it down by hand. A well known goal study from Dr. Gail Matthews at [Dominican University](https://www.dominican.edu/) found that people who write their goals down are significantly more likely to achieve them. This single act anchors every decision that follows.
2. **Reverse engineer the doors.** Translate that monthly number into units. If an average door throws off roughly 125 dollars of monthly cash flow, then 10,000 dollars a month is about 80 doors. Now your dream has a unit count, and a unit count has a plan.
3. **Get educated and build relationships.** Learn how to underwrite a deal, talk to brokers, and understand financing before you ever need the money. The investors who win are the ones who can find and analyze a deal, because that skill is worth more than a checkbook.
4. **Find your role and your team.** You do not have to be everything. Some people bring deals, some bring capital, some bring operations. Decide what you bring and partner with people who fill the gaps.
5. **Take action on a real deal.** Analysis without action is just expensive entertainment. Whether you house hack a small property or join a syndication as part of the team, you learn ten times faster once real money and a real deal are on the line.
To make step two concrete, here is how three different freedom numbers reverse engineer into a real portfolio target. This is the math that turns a vague hope into a plan you can actually execute.
The number that scared you a minute ago now looks like a target you can aim at. Eighty doors sounds impossible until you realize one mid size apartment deal can get you most of the way there in a single transaction. That is the leverage of the vehicle.
Before you go further, I want you to actually do step one. Grab my free playbook, write your freedom number on the inside cover, and keep it where you will see it every morning. The people who treat this as a daily reference are the ones who follow through.
[](https://rodkhleif.com/lcfa-ebook/)
[**Download the free book and write down your freedom number today →**](https://rodkhleif.com/lcfa-ebook/)
## Waiting to Be Ready vs Starting With a Framework
The single most expensive thing you can do in your twenties and thirties is wait. Every year you sit on the sideline is a year of compounding you can never get back. Here is the difference between the reactive approach most people take and the framework approach that actually builds generational wealth.
WAITING VS STARTINGTHE REAL COST OF SITTING ON THE SIDELINEDecisionWaiting to Be ReadyStarting With a FrameworkCapital✗Saves for years before acting✓Uses skills and partners, not just cashRisk✗One job, one income, one market✓Income spread across many unitsTime✗Loses years of compounding✓Puts decades of compounding to workOutcome✗Retires on a fraction of a salary✓Builds assets that pay the next generation## Going Solo vs Building With a Team
The other myth that holds millennials back is that you have to do this alone with your own money. You do not. Some of the biggest first deals I have ever seen were closed by people who brought a skill to a team instead of a giant check. Here is how going solo compares to building with a team.
SOLO VS TEAMHOW MILLENNIALS ACTUALLY CLOSE BIG FIRST DEALSFactorGoing SoloBuilding With a TeamCapital needed✗All of it comes from you✓Pooled across partners and investorsDeal size✗Limited to what you can carry alone✓Large value add deals become possibleExpertise✗You learn every lesson the hard way✓You inherit your partners experienceSpeed✗Slow, capped by your own bandwidth✓Faster, because the load is shared## Millennials Who Are Doing It Right Now
I do not want this to be theory for you, so let me introduce a few people who started where you are. [Chris Salazar](https://rodkhleif.com/podcasts/ep-217-chris-salazar-23-year-old-with-6m-real-estate-portfolio/) built a multimillion dollar real estate portfolio before he turned 24. He did not inherit it and he did not win the lottery. He learned the vehicle young and went to work.
[Anthony Metzger](https://rodkhleif.com/his-first-multifamily-deal-was-218-unit-apartment/) had never even bought a single family home. No experience, no big bank account. His very first real estate deal was a 218 unit apartment community, because he got educated, built relationships, and partnered with people who had capital. He brought the deal and the competence, and the money found him.
Or take Tim Little, who looked at his income goal and realized he could not buy 50 duplexes to get there, so he moved straight into commercial multifamily and now owns hundreds of doors. Or Loren, who walked into my Bootcamp saying he did not have enough money, and a year later handed in his resignation letter because the income from his deals replaced his salary. The pattern repeats over and over. None of them started rich. They started committed, learned the vehicle, and let the Generational Wealth Stack do what it does.
Watch the Full Interview
Anthony Metzger walks through how he closed a 218 unit apartment community as his very first deal with no money and no experience.
Then there is Jennifer Barner, who came through my program and now controls more than 1,100 units across several states. Her success sent all four of her children to college debt free and grew her family net worth many times over. That is the whole point of this. It is not just your retirement, it is your kids starting line. You can hear more stories like these on the [Lifetime Cash Flow Through Real Estate Investing podcast](https://rodkhleif.com/lifetime-cashflow-podcast/) and read how others turned the same framework into real portfolios in my breakdown of [creating generational wealth with multifamily properties](https://rodkhleif.com/podcasts/creating-generational-wealth-with-multifamily-properties/).
> **Rod Khleif:** “I had 800 single family homes and got wiped out in 2008. If I had owned 100 unit buildings instead, I would have sailed right through. The vehicle you choose matters more than how hard you work. Choose the one that pays you in five ways at once.”
If you are brand new and want the full step by step foundation, my [complete beginners guide to multifamily investing](https://rodkhleif.com/multifamily-investing-the-complete-beginners-guide/) is the best place to keep going after this article.
## Build Generational Wealth FAQ
**Q: Can millennials really build generational wealth with real estate?**
A: Yes. Real estate rewards time, and millennials have decades of compounding ahead of them. By choosing income producing apartments early and reinvesting the returns, a normal earner can build a portfolio that supports their family and passes to the next generation.
**Q: How much money do I need to start investing in real estate?**
A: Less than you think. Many first deals are done by partnering, raising capital, or bringing deal finding skills to a team rather than writing a giant check. The most valuable asset you can bring is the ability to find and analyze a good deal.
**Q: Why does Rod Khleif focus on apartments instead of single family homes?**
A: Apartments spread risk across many tenants, let you force the value up through better operations, and pay you in five ways at once. Rod lost a single family portfolio in 2008 and rebuilt around multifamily because the math is far more stable at scale.
**Q: What is the Generational Wealth Stack?**
A: It is the five ways an apartment investment builds wealth at the same time: cash flow, appreciation, loan paydown, tax benefits, and forced equity. Most assets pay you in one or two ways. Multifamily pays you in all five.
**Q: How do I figure out how many units I need?**
A: Start with your monthly freedom number, then divide by the cash flow per door. At roughly 125 dollars of monthly cash flow per unit, a 10,000 dollar monthly goal points you toward about 80 doors, which one mid size deal can cover.
**Q: Is real estate still a good investment in a high interest rate market?**
A: It can be, because rental demand stays strong and you can force value through operations regardless of the rate environment. Higher rates often create better buying opportunities for prepared investors who underwrite conservatively.
**Q: How is multifamily real estate taxed?**
A: Depreciation lets you show a paper loss while the asset appreciates, which can shelter much of your cash flow from taxes. This is one of the biggest reasons the wealthy favor real estate. Always confirm your specific situation with a qualified CPA.
**Q: Do I have to quit my job to invest in apartments?**
A: No. Many investors keep their job while they learn the vehicle, partner on deals, and build passive income. The goal is to let your assets grow until the income gives you the choice to step away on your own terms.
**Q: What is the biggest mistake new investors make?**
A: Waiting. They try to feel completely ready before they start, and they lose years of compounding in the process. The framework exists so you can move with confidence instead of waiting for perfect conditions that never arrive.
**Q: How do I learn to do this the right way?**
A: Get educated with proven material, surround yourself with people already doing it, and take action on a real deal. My free book and the Multifamily Bootcamp are built to take you from zero to your first deal with a clear plan.
## Ready to Take the Next Step?
You now have the framework, the math, and the proof that millennials are building real wealth with apartments right now. The only missing piece is your decision to start. If you are early in your journey and want a clear, guided path to your first deal, join my free [Multifamily Bootcamp](https://rodkhleif.com/bootcamp/), where I walk you through the entire process step by step.
Not ready for a live program yet? Start with the free book. Download [How to Create Lifetime Cash Flow Through Multifamily Properties](https://rodkhleif.com/lcfa-ebook/), write your freedom number inside the cover, and take the first real step toward a portfolio your family will thank you for.
*Disclaimer: This article was written with the help of AI and reviewed by Rod and his team.*
**Categories:** Featured, Multifamily Investing, Real Estate
**Tags:** financial freedom, generational wealth, millennials, multifamily investing, passive income, real estate investing
---
### [Common Equity: The Key to Wealth in Real Estate](https://rodkhleif.com/common-equity-the-key-to-wealth-in-real-estate/)
**Published:** February 28, 2025
**Author:** Alex Khleif
**Content:**
## Why is Common Equity Considered the Most Attractive Position for Investors?
If you’re serious about building long term wealth in multifamily real estate, common equity is where the real magic happens. It’s the highest risk position in the [capital stack](https://rodkhleif.com/financing-your-d…he-capital-stack/), but it also comes with the greatest rewards. Unlike debt financing or preferred equity, which lock investors into fixed returns, common equity investors are in the driver’s seat when it comes to upside potential.
Here’s why savvy investors focus on common equity:
- **True Ownership and Long Term Wealth** – Common equity investors own a piece of the property, which means they benefit directly from both monthly cash flow and property appreciation. As the property value increases over time, so do their returns.
- **No Cap on Returns** – While debt and preferred equity offer fixed returns, common equity has unlimited earning potential. If a deal performs well, common equity investors take the lion’s share of the profits. That’s how some investors double, triple, or even 10x their initial capital over time.
- **Passive Cash Flow That Grows Over Time** – Multifamily real estate is all about consistent rental income. Once debt and expenses are covered, common equity investors get paid. And as rents rise and expenses are optimized, that cash flow increases, creating a steady stream of passive income.
- **Tax Benefits That Supercharge Returns** – One of the biggest advantages of investing in real estate is the tax benefits. Common equity investors can take advantage of depreciation, cost segregation, and 1031 exchanges. All of which help reduce taxable income and keep more money in your pocket.
- **A Natural Hedge Against Inflation** – Inflation eats away at cash sitting in the bank, but real estate moves in the opposite direction. As the cost of living rises, so do rents—directly benefiting common equity investors. That means your income and asset value increase over time, keeping you ahead of inflation.
- **Massive Upside on Exit** – When a property sells, common equity investors stand to make the biggest profits. If the deal was structured correctly, it’s not uncommon for investors to walk away with 2x, 3x, or even more of their original investment.
### The Key to Success: Investing in the Right Deals
Common equity is where the big money is made, but only if you’re investing in the right deals with the right operators. The best deals are structured by experienced sponsors who:
- **Know how to find value-add opportunities**
- **Optimize operations and increase cash flow**
- **Position the property for a profitable exit**
If you’re serious about building wealth through real estate, you want to be investing in well structured deals where risk is managed and returns are maximized.
### **Rod Khleif’s Take on Common Equity**
I’ve been in this business a long time, and I can tell you this, if you want to create true financial freedom, you need to own assets. Period. Common equity is how you build generational wealth. It’s where you get cash flow, appreciation, and tax advantages all working together.
But here’s the thing, you can’t just invest in any deal. You have to be strategic. I’ve seen investors chase big returns without doing their homework, and they got burned. You need to partner with the right people, analyze the right deals, and play the long game.
The investors who build real wealth in multifamily? They’re the ones who focus on strong fundamentals, invest in value-add opportunities, and let time do the heavy lifting. If you want to get in the game, start learning, start networking, and when the right opportunity comes, pull the trigger. Because in real estate, the biggest risk is sitting on the sidelines.
[](https://rodkhleif.com/lifetime-cashflow-podcast/)
**🎧 Want to Learn from the Best in Multifamily Investing?**
Join **Rod Khleif**, one of the **top real estate investing coaches**, as he interviews industry giants, breaks down powerful strategies, and shares the **mindset secrets of top real estate investors**.
👉 **Listen Now:** [Lifetime Cash Flow Through Real Estate Investing Podcast](https://rodkhleif.com/lifetime-cashflow-podcast/)
**Related reading:** [How Millennials Can Build Generational Wealth With Real Estate](https://rodkhleif.com/millennials-build-generational-wealth/)
**Categories:** Blog
---
### [What are the best ways to learn about multifamily investing for beginners?](https://rodkhleif.com/what-are-the-best-ways-to-learn-about-multifamily-investing-for-beginners/)
**Published:** January 6, 2026
**Author:** Alex Khleif
**Content:**
If you’re new to multifamily, the biggest challenge isn’t finding information. It’s knowing what to learn first, what to ignore, and how to build real competence without getting stuck in “research mode.” The best way to learn multifamily investing for beginners in 2026 is to treat it like a skill, not a subject. Skills are built through repetition, feedback, and real-world exposure. That means you’ll learn faster by underwriting real deals, studying real case studies, and using simple tools and checklists that keep you grounded in reality.
## Step 1: Start with one beginner-friendly roadmap (so you don’t get overwhelmed)
Before you go down a rabbit hole of podcasts and YouTube, get one structured overview of the entire multifamily process. You want a guide that explains how deals work end-to-end: sourcing, underwriting, financing, due diligence, raising capital, and operations. A strong place to start is Rod’s free beginner hub and the full-length eBook that walks through the multifamily investing process step-by-step: [Free Beginner Resources](https://rodkhleif.com/beginner-resources/) [How to Create Lifetime Cashflow (Free eBook)](https://rodkhleif.com/lcfa-ebook/) Don’t try to memorize everything. Your goal is simple: understand the basic vocabulary and flow of a deal so the next steps make sense. ## Step 2: Learn faster by underwriting real deals (even if you’re not buying yet)
Beginners often wait to underwrite until they “feel ready.” That’s backwards. Underwriting is how you get ready. In 2026, underwriting is less about fancy spreadsheets and more about making realistic assumptions. Insurance, taxes, payroll, repairs, and capex can change the outcome of a deal quickly. The sooner you practice analyzing deals with conservative numbers, the sooner you build judgment. Use a simple tool to get reps without overcomplicating your process: [Free Multifamily Deal Analyzer & Underwriting Calculator](https://rodkhleif.com/deal-underwriting-tool/) [Commercial Real Estate Underwriting Tool](https://rodkhleif.com/commercial-real-estate-underwriting-tool/) If you want a more “old school” worksheet approach, grab the free forms that help you think through a deal like an investor: [Free Forms (Including a Property Analysis Form)](https://rodkhleif.com/forms/) Beginner tip: don’t obsess over perfection. Underwrite, take notes, and improve your assumptions over time. Pattern recognition is the real skill. ## Step 3: Learn deal-finding by doing small, repeatable actions
Finding deals is a skill, and beginners can learn it without spending hours a day. In 2026, the investors who win aren’t the ones who “know the most.” They’re the ones who consistently build relationships and follow up, while analyzing enough deals to know what they’re looking at. To shorten your learning curve, study deal-finding strategies and then practice them immediately by reaching out to brokers, operators, and local owners each week. [Finding Deals Resources](https://rodkhleif.com/category/finding-deals/) [Free eBook: How to Find Off Market Multifamily Deals](https://rodkhleif.com/how-to-find-off-market-deals-in-a-hot-market/) If you’re thinking, “But I don’t have credibility yet,” remember this: consistency creates credibility. A broker is more likely to take you seriously if you can clearly explain what you’re looking for and show that you’re underwriting deals weekly. ## Step 4: Get serious about due diligence early (it’s where beginners get hurt)
Beginners often focus on the “deal” and ignore the “business.” Multifamily is a business wrapped in real estate. Due diligence is where you find out what you’re actually buying. If you want to learn safely, learn due diligence before you’re emotionally attached to a deal. Start with a structured framework and checklists so you don’t miss the big categories: physical, financial, operational, legal, and market. [Free Download: The Ultimate Guide to Multifamily Due Diligence](https://rodkhleif.com/a-comprehensive-guide-to-multifamily-due-diligence/) [Due Diligence Articles & Resources](https://rodkhleif.com/category/due-diligence/) [7 Critical Multifamily Due Diligence Steps](https://rodkhleif.com/7-core-questions-to-guide-your-due-diligence/) This is also where 2026 best practices matter: document everything, verify income and expenses, and assume surprises will happen. Your job is to reduce surprises before closing, not after. ## Step 5: Learn by proximity: study real case studies and get around operators
Books and tools give you knowledge. Case studies give you judgment. If you want to learn multifamily investing faster as a beginner, you need exposure to real deal stories: what worked, what didn’t, and what operators did when plans changed. That’s how you build the instincts to spot risk and opportunity. [Warrior Wins (Case Studies & Student Interviews)](https://rodkhleif.com/warriorwins/) If you want a deeper, guided path with structure and accountability, explore the training and coaching options that match your stage: [Rod’s Multifamily Virtual Bootcamp](https://rodkhleif.com/bootcamp/) [Rod Khleif’s Warrior Program (Coaching)](https://rodkhleif.com/rod-khleif-coaching-program/)## A beginner-friendly 30-day plan (simple, realistic, and effective)
If you want a practical way to start, here’s a simple approach you can repeat without needing a huge schedule: In the next 30 days, focus on three outcomes. First, read or skim the beginner roadmap so you understand the full process. Second, underwrite at least 8–12 deals to build pattern recognition. Third, begin building relationships by reaching out consistently to brokers or operators in one market. If you do those three things, you’ll stop feeling like a spectator and start thinking like an investor. ## Common beginner mistakes (and how to avoid them)
**Consuming content without doing reps.** Make underwriting a weekly habit. Even two deals per week changes your confidence fast. **Chasing every strategy at once.** Pick one lane (small multifamily, syndication support, deal sourcing, or passive investing) and commit for 90 days. **Overestimating rent growth and underestimating expenses.** In 2026, conservative underwriting wins. Treat expenses like a first-class variable, not an afterthought. **Skipping due diligence frameworks.** Use checklists and systems. “I’ll remember everything” is not a strategy. ## Final takeaway
The best way to learn multifamily investing for beginners is to combine a clear roadmap with real-world reps. Start with structured resources, underwrite consistently, learn deal-finding through small weekly actions, and master due diligence before you’re under contract. Then accelerate your learning by studying real case studies and getting close to operators who are actively doing deals. ## **FAQ: What is the best way to learn about multifamily investing for beginners?**
**1) How do I start learning multifamily investing if I’m a total beginner?
Start with one complete “end-to-end” roadmap so you understand the full process (deal finding → underwriting → financing → due diligence → operations). Then immediately begin underwriting real deals so the concepts stick.
Helpful starting points:
- [Free Beginner Resources](https://rodkhleif.com/beginner-resources/)
- [How to Create Lifetime Cashflow (Free eBook)](https://rodkhleif.com/lcfa-ebook/)
**2) How much time do I need each week to make real progress?
If you can protect 3–5 focused hours weekly, you can move fast. Consistency matters more than volume. Two short, focused sessions per week beats “I’ll binge learn someday.”
**3) What should I learn first: deal finding or underwriting?
Underwriting first—because it makes your deal finding smarter. When you can quickly analyze a deal, you’ll know what to pursue and what to ignore.
Tools to practice:
- [Free Multifamily Deal Analyzer & Underwriting Calculator](https://rodkhleif.com/deal-underwriting-tool/)
- [Commercial Real Estate Underwriting Tool](https://rodkhleif.com/commercial-real-estate-underwriting-tool/)
**4) Do I need a complicated spreadsheet to underwrite deals in 2026?
No. A simple, repeatable underwriting approach is better than a complex model you don’t understand. In 2026 especially, your assumptions around expenses, capex, taxes, and insurance matter more than fancy formatting.
**5) How many deals should I underwrite before I feel confident?
Most beginners start “getting it” after 15–30 underwrites with notes on assumptions and risks. The goal is pattern recognition—seeing what “good” and “bad” looks like repeatedly.
**6) Should I pick one market or look nationwide?
Pick one market to start. You’ll learn faster because you’re comparing deals in the same environment. You can expand later once you understand local rent levels, expense norms, and broker behavior.
**7) What’s the fastest way to learn deal finding without wasting months?
Do small weekly actions: talk to brokers, follow up consistently, and underwrite what they send you. Add off-market strategies once you’ve built basic underwriting confidence.
Resources:
- [Finding Deals Resources](https://rodkhleif.com/category/finding-deals/)
- [Free eBook: How to Find Off Market Multifamily Deals](https://rodkhleif.com/how-to-find-off-market-deals-in-a-hot-market/)
**8) What’s the biggest mistake beginners make in multifamily investing?
They consume content but avoid reps and conversations. Underwriting deals and talking to brokers/operators is what turns information into judgment.
**9) What should I focus on in underwriting for 2026?
Be conservative on: expense growth, capex, insurance, taxes, vacancy/collections, and the exit cap. Your job is to make sure the deal survives reality—not just looks great on paper.
**10) How do I learn due diligence the right way (before I get burned)?
Learn due diligence early and use checklists so nothing slips through. Multifamily is a business wrapped in real estate; verify everything: financials, leases, unit turns, capex, vendor contracts, and ops processes.
Resources:
- [Comprehensive Guide to Multifamily Due Dilience ](https://rodkhleif.com/a-comprehensive-guide-to-multifamily-due-diligence/)
- [Rod Khleif Blog Archive: Due Diligence](https://rodkhleif.com/category/due-diligence/)
**11) Is it better to start passive or active as a beginner?
It depends on your time and risk tolerance. Passive investing can teach you the business through reporting and operator updates. Active investing teaches faster, but requires more execution bandwidth. Many beginners start passive while learning underwriting and relationships.
**12) What’s the best way to learn from real deals (not just theory)?
Study case studies and real investor stories so you learn the “why” behind decisions and how operators handle problems.
Start here: [Warrior Wins (Case Studies & Student Interviews)](https://rodkhleif.com/warriorwins/)
*Disclaimer: This article was written with the help of AI and reviewed by Rod and his team.* One of the most overlooked beginner moves is house hacking; here is [why your first home should be a multifamily property](https://rodkhleif.com/6-reasons-make-first-home-multifamily-property/) when you have the option.
Once you have the basics down, study the [10 biggest mistakes new multifamily investors make](https://rodkhleif.com/the-10-biggest-mistakes-new-multifamily-investors-make/) so you can avoid the ones that have ended other deals.
**Related reading:** [How Millennials Can Build Generational Wealth With Real Estate](https://rodkhleif.com/millennials-build-generational-wealth/)
**Categories:** Blog
---
### [Measuring Returns: IRR vs. Equity Multiple](https://rodkhleif.com/measuring-returns-irr-vs-equity-multiple/)
**Published:** November 21, 2025
**Author:** Rod Khleif
**Excerpt:** Whether you’ve received a deal from a broker or a potential partner, it’s always a good idea to approach their advertised return metrics with a healthy dose of skepticism, not because they’re bad actors, but because return metrics can be manipulated to make a deal look better than it really is.
**Content:**
If you’ve looked at more than a couple of real estate deals, you’ve seen both of these numbers: IRR and Equity Multiple. Sponsors love to showcase them because they look sharp on a slide. But if you don’t really understand each one, it’s easy to chase the wrong deals for the wrong reasons. To become a sophisticated investor you need to know what each metric is actually telling you. When you clearly understand IRR vs equity multiple, you can see overhyped projections. You can compare deals wisely and choose investments that match your goals. This way, you won’t just chase the highest percentage.
## Quick Definitions: IRR vs Equity Multiple
Let’s start with simple definitions so we are on the same page. These two metrics are related, but they measure different things and answer different questions.
- **IRR (Internal Rate of Return):**
The annualized rate of return that accounts for all cash flows and their timing. It tells you how efficiently your money is working over the life of the deal.
- **Equity Multiple:**
The ratio of total cash received divided by total cash invested. It tells you how many times your original investment you get back in total.
Put another way:
- IRR = How fast and efficiently your capital grows.
- Equity Multiple = How much your capital grows in total.
You need both if you want the full picture.
## What IRR Really Measures
IRR looks at every dollar going into and out of the deal—when you invest, when you receive cash flow, when you get a refinance, and when you exit. It then solves for a single annualized return that makes the net present value of those cash flows equal zero. That sounds technical, but conceptually it is straightforward.
IRR is obsessed with timing. A deal that returns capital and profit earlier will usually show a higher IRR than a deal with the same total profit that pays out later. This makes IRR extremely useful when you are comparing deals with different hold periods or different cash flow patterns.
## What Equity Multiple Really Measures
Equity multiple ignores timing and focuses purely on total output. It is simply:
> **Equity Multiple = Total Cash Back ÷ Total Cash In**
If you invest $100,000 and receive $220,000 over the life of the deal, your equity multiple is 2.2x. It does not care whether that took three years or twelve years; it only cares about total dollars returned.
Equity multiple is powerful because it answers a simple question investors care about: “If I put in this much, how much do I get back altogether?” It is a clean way to measure wealth creation, even though it tells you nothing about speed.
## IRR vs Equity Multiple Through a Simple Example
Let’s compare two very basic deals so you can see how IRR vs equity multiple plays out in practice.
- **Deal A**
- Invest $100,000
- Receive no cash flow
- Get $200,000 total back in year 5
- **Deal B**
- Invest $100,000
- Receive $10,000 per year in years 1–4
- Get $160,000 in year 5
Both deals return $200,000 total on a $100,000 investment. That means both have an equity multiple of 2.0x. From an equity multiple standpoint, they look identical.
But IRR tells a different story. In Deal A, all the profit comes at the end, so the IRR is lower because your capital is locked up without distributions for five years. In Deal B, you receive cash along the way, so the IRR is higher because you are getting part of your return earlier and could reinvest it.
Same equity multiple, different IRR. This is exactly why you cannot just look at one metric and ignore the other.
## Strengths and Weaknesses of IRR
Like any tool, IRR has things it does extremely well and areas where it can mislead you.
### Strengths of IRR
- Captures timing: IRR rewards deals that return capital and profit earlier, which is exactly how real wealth building works.
- Compares different hold periods: It lets you compare a 3-year flip and a 7-year value-add deal on an annualized basis.
- Flags “slow money” deals: A low IRR on a long hold tells you that your capital is not working very efficiently.
### Weaknesses of IRR
- Sensitive to assumptions: Small tweaks to exit cap rates, refinance timing, or rent growth can dramatically change IRR.
- Can be “juiced” with aggressive modeling: Sponsors can boost IRR with optimistic refis or early payouts.
- Can favor short holds with modest total profit: A high IRR does not always mean a great wealth-building outcome.
The bottom line: IRR is fantastic for understanding speed and efficiency, but only if the underlying assumptions are conservative and realistic.
## Strengths and Weaknesses of Equity Multiple
Equity multiple is beautifully simple, and that simplicity is exactly what makes it valuable.
### Strengths of Equity Multiple
- Shows total wealth created: It tells you how much your original investment multiplied over the entire project.
- Easy to understand and explain: “We’re targeting a 2.0x or 2.5x on your money” is clear for any investor.
- Less sensitive to timing assumptions: Shifting cash flows slightly does not change the multiple as dramatically as it changes IRR.
### Weaknesses of Equity Multiple
- Ignores timing completely: A 2.0x over 3 years and a 2.0x over 10 years look the same, even though they are not.
- Cannot compare opportunities with different horizons very well: On its own, it won’t tell you which deal is more efficient.
- Might hide “lazy” capital: A decent multiple over a very long hold could represent capital that is not working as hard as it could.
The bottom line: equity multiple is perfect for understanding how much wealth you create, but blind to how long it took.
## IRR vs Equity Multiple: Which Is More Important?
The honest answer is: neither on its own. You need both. One tells you how much; the other tells you how fast. Real investing decisions happen at the intersection of those two things.
A deal with a high IRR but a low equity multiple may seem quick but isn’t very valuable. A deal with a high equity multiple can be attractive. However, if the internal rate of return (IRR) is fair, it may not be the best choice. This type of deal could keep your money invested for a long time. You might end up with low annual returns. You want outcomes that make sense on both dimensions.
## How Your Goals Affect IRR vs Equity Multiple
Different investors will favor different combinations of IRR and equity multiple depending on their goals, stage of life, and risk tolerance.
- Income-focused investors might prioritize solid cash-on-cash with a reasonable IRR and an acceptable multiple, even if the equity multiple is not huge.
- Growth-focused investors might be willing to take on more risk for a higher equity multiple, as long as the IRR shows their money is working efficiently.
- Capital-preservation investors might accept lower IRRs and modest multiples in exchange for a very stable risk profile and strong downside protection.
The key is to be honest about what you actually need from your capital. Then you can look at IRR vs equity multiple through that lens instead of chasing generic “high” numbers.
## Common Mistakes Investors Make With IRR vs Equity Multiple
Understanding where people go wrong will keep you from repeating the same mistakes.
**1. Chasing the highest IRR without context**
Many investors see a big IRR and stop thinking. They do not ask whether that number depends on aggressive exit caps, rosy refi assumptions, or unrealistic rent growth. High IRR without conservative assumptions is a trap, not a gift.
**2. Ignoring equity multiple and total dollars created**
A deal might show a strong IRR but only create modest overall profit. If your goal is meaningful wealth building, you care about how many dollars you create—not just how pretty the percentage looks.
**3. Ignoring the hold period**
A 3-year deal and a 10-year deal cannot be evaluated only by IRR. The shorter deal may require more active decision-making and reinvestment risk, while the longer deal may be slower but more stable. You need to see IRR vs equity multiple side-by-side with the timeline.
**4. Comparing across totally different risk profiles**
A value-add deal in a C-class neighborhood and a stabilized core-plus deal in a top-tier market should not be held to the exact same IRR expectations. Higher risk should come with higher projected returns. Lower risk justifies lower return projections.
## A Simple Framework for Using IRR and Equity Multiple Together
When you review your next deal deck, walk through a very simple process. This will keep IRR vs equity multiple grounded in reality instead of hype.
1. **Start with the equity multiple**
Ask, “How many times does my money grow in total?” Make sure the target multiple actually moves the needle for your goals.
2. **Check the hold period**
Look at how many years it takes to achieve that multiple. A 2.0x in 4–5 years is very different from a 2.0x in 9–10 years.
3. **Look at the IRR in context**
Confirm that the IRR makes sense relative to the multiple and the timeline. If IRR seems unusually high, dig into the assumptions that create it.
4. **Review the cash flow pattern**
Study the projected cash-on-cash returns and see whether returns are front-loaded, steady, or mostly back-end. Make sure the pattern matches your income needs.
5. **Stress-test the assumptions**
Ask what happens if exit cap rates are higher, rent growth is lower, or refi proceeds are smaller. See how sensitive the IRR and equity multiple are to more conservative inputs.
When you follow a disciplined framework like this, IRR vs equity multiple stops being a confusing comparison and becomes a powerful lens for making better decisions.
## The Bottom Line: Use Both, Trust Neither Alone
IRR and equity multiple are two sides of the same coin. One measures speed, the other measures size, and real wealth building requires both. Used together, they help you see whether a deal fits your goals, your risk tolerance, and your preferred timeline.
Used alone, either metric can lead you into deals that look good in a spreadsheet but underdeliver in real life. The real power is not in chasing the highest number, but in understanding how IRR vs equity multiple work together and then choosing deals aligned with the life you are actually trying to build.
## **FAQ: IRR vs Equity Multiple in Real Estate**
### **What is the difference between IRR vs equity multiple?**
IRR (Internal Rate of Return) is the annualized rate of return that accounts for all cash flows and their timing over the life of a deal. Equity multiple is a simple ratio that tells you how many times your original investment you get back in total. In other words, IRR measures how fast and efficiently your capital grows, while equity multiple measures how much your capital grows.
### Why do I need both IRR and equity multiple to evaluate a deal?
You need both because each answers a different question about performance. IRR shows the speed and efficiency of your returns, which is crucial when comparing deals with different hold periods or cash flow patterns. Equity multiple shows the total wealth created, so you know whether the deal meaningfully moves the needle for your long-term goals.
### Can two deals have the same equity multiple but different IRRs?
Yes, and this is one of the main reasons IRR vs equity multiple matters. Two deals can both turn $100,000 into $200,000 (a 2.0x equity multiple), but if one returns most of that profit in year 3 and the other in year 10, the IRRs will be very different. The deal that pays you faster will show a higher IRR because your capital is working more efficiently and can be reinvested sooner.
### Is a higher IRR always better than a higher equity multiple?
Not necessarily. A very high IRR with a modest equity multiple may reflect a short, fast deal that does not create much total wealth. A slightly lower IRR with a much higher equity multiple might build significantly more long-term capital, even if the percentage looks less exciting. The best deals balance a solid IRR with a strong equity multiple and a risk profile that fits your goals.
### When should I prioritize IRR over equity multiple?
You might prioritize IRR when the timing of returns is critical, such as if you plan to recycle capital quickly into other deals. Investors want to build a strong record. They also want to grow their portfolio quickly. Some investors need to manage short investment periods. These investors care more about how well their money works. In these situations, it’s important to understand the difference between IRR and equity multiple. This knowledge can help you pick deals that give you your money back quicker. Sometimes, a deal with a lower total multiple can still be a better choice.
### When should I prioritize equity multiple over IRR?
Equity multiple becomes more important if your primary goal is long-term wealth creation rather than quick capital recycling. For example, if you are saving money and can keep it invested for several years, you might accept a lower IRR. This could lead to a much larger total payout. In that scenario, a strong equity multiple aligned with your risk tolerance can be more meaningful than squeezing out a few extra IRR points.
### How does the hold period impact IRR vs equity multiple?
Shorter hold periods can produce very high IRRs even if the absolute dollar profit is modest, because the returns are compressed into a shorter timeframe. Longer holds can show slightly lower IRRs while still delivering larger equity multiples and more total wealth. When you compare IRR vs equity multiple, always look at the hold period so you understand whether the deal is fast and small, slow and large, or somewhere in between.
### Can IRR and equity multiple be misleading?
Both metrics can be misleading if you do not understand the assumptions behind them. IRR can be increased by high exit cap rates, hopeful refinance plans, or early cash flows. Equity multiple can seem good, even if it takes a long time to reach. The key is to look at IRR vs equity multiple together, review the cash-flow schedule, and stress-test the underwriting before trusting the projections.
### How should I use IRR vs equity multiple when comparing two real estate deals?
Start by comparing the equity multiple and asking how much your money grows in total. Then look at the hold period to see how long it takes to achieve that result. Finally, use IRR to evaluate how efficiently those returns are generated over time. When you compare IRR vs equity multiple this way, you can choose the deal that fits your income needs, risk tolerance, and timeline instead of just chasing the highest number.
### What other metrics should I consider alongside IRR and equity multiple?
You should consider cash-on-cash return, the expected hold period, and the deal’s risk profile and market basics. Cash-on-cash shows you how much income you earn. IRR and equity multiple tell you about how fast you grow your wealth. When you combine all of these metrics with a strong sponsor team and conservative underwriting, you get a much clearer picture of a deal’s true potential.
Once you are comfortable measuring returns, the next step is understanding the [financing options for your deal](https://rodkhleif.com/multifamily-financing-complete-guide/) and budgeting for ongoing [capital expenditures](https://rodkhleif.com/capital-expenditure-capex/) that affect those returns over time.
**Related reading:** [Real Estate Syndication Waterfall: How Profits Split](https://rodkhleif.com/syndication-waterfall/)
**Categories:** Blog, Raising Capital
**Tags:** apartment investing, investing, landlord, loan, motivation, multifamily, multifamily investment, multifamily property investing, multifamily real estate, real estate, real estate investing, real estate podcast, Rod Khleif
---
### [The Capital Stack: Financing Your Deal](https://rodkhleif.com/financing-your-deal-understanding-the-capital-stack/)
**Published:** September 17, 2025
**Author:** Rod Khleif
**Excerpt:** Financing a deal can be tough. As an investor, you’ve got to contend with deadlines, competing priorities, investors, and sellers who are all dependent upon your ability to get the deal done. Adding to the confusion is the availability of a variety of financing sources, each with their own requirements, that can be utilized to get the deal over the line.
**Content:**
# **Understanding the Capital Stack in Real Estate Investing**
Financing a real estate deal can be complex. Investors must manage tight deadlines, competing priorities, and stakeholders who depend on their ability to close transactions efficiently. Adding to the challenge is the variety of financing sources available, each with distinct requirements. These funding sources collectively form the capital stack, or cap stack. This is a crucial concept in real estate that dictates how debt investments and equity financing are layered in [multifamily real estate](https://rodkhleif.com/why-you-should-invest-in-multifamily-by-rod-khleif/) and commercial real estate deals, impacting risk, returns, and payment priority. ## **Capital Stack Definition:**
## **What Is A Capital Stack in Real Estate?**
A capital stack refers to the structured layers of financing used to fund a real estate investment, outlining the priority of debt and equity claims on cash flow and profits. It typically includes senior debt, mezzanine debt, preferred equity, and common equity, each carrying different levels of risk and return. It shows the order of claims to cash flow and profits from the property. This applies during the investment period and when sold. Understanding the meaning is essential for assessing risk and potential returns in commercial properties capital stack structures. Most real estate transactions have four primary components of the cap stack, each with a different level of risk and return: - **Senior Debt**
- **Mezzanine Debt**
- **Preferred Equity**
- **Common Equity**
Each layer of the cap stack real estate financing determines how and when investors or lenders receive their payments. Let’s break down each component. ## **Senior Debt: The Foundation of the Capital Stack**
Senior debt is often the largest part of the commercial real estate loan structure and top of the capital structure, typically covering 65% to 75% of a property’s purchase price. This portion of the real estate stack is the least risky for lenders and investors, as it holds the first lien position on the property. Key features of senior debt: - First in line in payment priority through periodic debt service payments
- Secured by the property as collateral
- Lower interest rates due to minimal risk
- Can initiate foreclosure
Because senior debt is prioritized in repayment, lenders accept lower returns in exchange for greater security. ## **Mezzanine Debt: Filling the Capital Gap**
In some cases, a capital stacking loan may be required to bridge the difference between the maximum supportable loan amount and the total financing needed for a transaction. This is where mezzanine debt comes into play, offering a flexible funding solution that sits between senior debt and equity financing in the capital stack.
Mezzanine debt is:
- Not secured by the property itself but by a pledge of the ownership interest
- Second in line for repayment, following senior debt
- Associated with higher [interest rates](https://rodkhleif.com/podcasts/decoding-current-interest-rates-in-todays-market/) to compensate for increased risk
- Often used when equity funding falls short, helping sponsors complete financing for a deal
Mezzanine lenders play a crucial role in structuring real estate transactions, providing capital that allows investors to acquire or develop properties with less equity. However, because mezzanine debt holders are subordinate to senior lenders, they take on greater risk in exchange for higher potential returns. While they may have certain foreclosure rights, their ability to recover capital depends on the property’s financial performance and market conditions.
When structured correctly, mezzanine financing allows investors to maximize leverage while keeping control of their equity, making it an essential tool for scaling in multifamily and commercial real estate.
## **Preferred Equity: Mid-Level Risk and Reward**
Unlike debt, preferred equity represents an investment in the ownership entity rather than a loan. Investors in preferred equity receive: - A priority return before common equity holders
- Higher yields than mezzanine or senior debt
- Profit participation upon property sale (if available)
Despite these advantages, preferred equity investors face greater risk than lenders. In a foreclosure scenario, they may only recover part of their investment. ## **Common Equity: Highest Risk, Highest Reward Position**
 At the base of the capital stack, common equity investors assume the highest risk but also stand to gain the most if the project is successful. Common equity investors: - Have an ownership stake in the property
- Are last in line for repayment if there’s default
- Require higher returns due to increased risk
- Benefit the most from a profitable sale
Because common equity is not guaranteed a return, investors must carefully analyze the capital stack meaning and financial viability of any given deal. ### **Why is common equity considered the most attractive position for investors?**
[Common equity](https://rodkhleif.com/common-equity-the-key-to-wealth-in-real-estate/) is where the true wealth-building happens in multifamily real estate. These commercial real estate investors:
- Own a piece of the property, benefiting from cash flow and appreciation.
- Receive tax advantages like depreciation deductions.
- Have unlimited earning potential compared to fixed-return investments.
- Get paid last, but in a strong deal, this means enjoying the largest profit share.
The key to success? Investing in well-structured deals with experienced sponsors who know how to maximize value.
### **The Capital Stack in Action: A Bankruptcy Example**
A properly structured commercial investment stack ensures each layer of financing has a designated claim on cash flow and assets. To understand how this works, consider the following capital stack real estate scenario: An investor acquires a multifamily real estate property for $3 million and secures the following financing: - **$1.8 million in senior debt**
- **$200,000 in mezzanine debt**
- **$200,000 in preferred equity**
- **$800,000 in common equity**
If the investor struggles to meet obligations and the senior debt holder forecloses, the property may be liquidated for $2 million: **a $1 million loss.** Order of priority for repayment based on cap stack: 1. **Senior debt holder** is repaid first, receiving **$1.8 million**.
2. **Mezzanine debt holder** claims the remaining **$200,000**.
3. **Preferred equity and common equity holders lose their entire investment**.
This example illustrates why understanding the capital stack definition is essential for assessing risk in commercial real estate capital stack structures. ## **Why the Capital Stack Matters in Multifamily Real Estate**
For investors involved in multifamily real estate, analyzing the cap stack is crucial to structuring profitable deals. Key considerations include: - **Risk vs. reward assessment** based on financing position
- **Return expectations** for debt vs. equity investments
- **Cash flow priorities** in different capital stack structures
Whether leading an investment or participating in an existing project, understanding what is the cap stack ensures informed decision-making and optimized investment strategies. ## **How do sponsors structure the capital stack?**
Most deals are structured to maximize returns while managing risk. A typical multifamily real estate deal might look like this:
- **70-80% Senior Debt** (Bank loan)
- **5-10% Mezzanine Debt** (If used)
- **5-15% Preferred Equity** (Institutional or private investors)
- **10-30% Common Equity** (Investors & general partners)
The common equity group reaps the biggest rewards when the property performs well.
## **How does leverage affect the cap stack?**
Leverage, or using debt to finance a deal, plays a crucial role in shaping the capital stack in a commercial real estate loan. By incorporating debt, sponsors can reduce the amount of equity needed, which in turn increases potential returns for investors. A well structured deal with smart leverage allows investors to put less money into a project while still benefiting from property appreciation and cash flow.
That said, leverage is a double-edged sword. Too much debt can strain cash flow, create refinancing challenges, and put equity investors at greater risk if the market shifts. The key is balance. So, investors should carefully assess loan-to-value ratios, debt service coverage, and long-term financing options to ensure stability.
When used wisely, leverage can help investors scale their portfolios faster and maximize returns while keeping risk in check.
## Final Thoughts on the Capital Stack from Rod Khleif
Mastering the capital stack is one of the most important skills you can develop as a multifamily investor. Why? Because how a deal is structured determines who gets paid first, who carries the most risk, and ultimately, how much profit each investor can expect. If you don’t understand where you sit in the capital stack, you’re flying blind. And that’s how investors lose money.
The key to successful investing is striking the right balance between risk and reward. Senior debt may offer security, but it won’t create life changing wealth. Common equity offers the biggest upside, but it comes with the highest risk. Smart investors learn how to analyze each layer of the capital stack, ask the right questions, and [structure deals](https://rodkhleif.com/podcasts/multifamily-real-estate-deal-structures-explained/) that protect their downside while maximizing returns.
I’ve seen investors create incredible wealth by using the right mix of debt and equity at the right time. But I’ve also seen investors wipe out their portfolios because they didn’t fully understand the risks of over-leverage or poorly structured financing. The difference between success and failure in this business comes down to education and execution.
So, whether you’re raising capital, investing passively, or structuring your own deals, make sure you understand every layer of the cap stack. The better your grasp of financing, the better positioned you’ll be to grow your portfolio, protect your investments, and build a lifetime of cash flow.
If you’re serious about scaling your multifamily business, join me at my next [Multifamily Bootcamp.](https://rodkhleif.com/bootcamp/) We explore real estate financing, capital stack strategies, and deal structuring. This helps you make better investment choices. **Let’s take your investing to the next level!**
## **Capital Stack FAQ**
**What is a capital stack in real estate?
The capital stack refers to the layers of financing used to fund a real estate deal. It outlines who gets paid first, the level of risk each participant takes, and how returns are distributed among lenders and investors.
**What are the main components of a capital stack?
The four primary components are senior debt, mezzanine debt, preferred equity, and common equity. Each layer has different risk and return expectations.
**Why is the capital stack important for investors?
It determines priority of payment, level of risk, and potential returns. Understanding the capital stack helps investors evaluate the security of their investment and predict their cash flow.
**What is senior debt in a capital stack?
Senior debt is the first layer of financing and has the highest repayment priority. It usually comes from banks or institutional lenders, carries the lowest risk, and offers the lowest return compared to other layers.
**What is mezzanine debt?
Mezzanine debt sits between senior debt and equity in the capital stack. It carries higher risk than senior debt but offers higher returns. Lenders often secure it with a pledge of equity rather than a property lien.
**What is preferred equity?
Preferred equity investors receive returns before common equity holders but after all debt obligations are met. They usually receive a fixed return and may have limited upside participation.
**What is common equity in a capital stack?
Common equity is the riskiest position but also has the highest potential return. These investors are paid last, after all debt and preferred equity, but they benefit from appreciation and profit sharing.
**How does the capital stack affect risk and returns?
The higher you go in the stack, the more risk you take on, but also the greater the potential return. Senior debt has the least risk, while common equity carries the most.
**What is a waterfall distribution in relation to the capital stack?
A waterfall outlines how cash flow is distributed among investors based on the capital stack. It ensures each layer is paid in order of priority before moving up to the next layer.
**How can understanding the capital stack help me as an investor?
By analyzing the structure, you can assess whether a deal matches your risk tolerance and return goals. It also helps you understand where your money sits in priority during payouts or in the event of default.
**Where can I learn more about applying the capital stack in multifamily deals?
Rod Khleif offers free resources, training, and live bootcamps that dive deep into capital stack structures and real-world examples. His programs are designed to help investors confidently finance and structure their multifamily deals.
## **Want to Learn More?**
Explore expert insights on multifamily real estate investing, commercial real estate capital stack strategies, and financing solutions on [Rod’s podcast.](https://rodkhleif.com/lifetime-cashflow-podcast/)### **The #1 Multifamily Investing Event!**
[](https://rodkhleif.com/bootcamp/)
**Ready to Build Your Multifamily Empire? 🚀**
Rod Khleif’s Multifamily Bootcamp is the top event for serious investors. Network with expert investors who answer your questions and share proven strategies. Learn directly from industry leaders and take your investing to the next level!
##### 🎟 **Reserve Your Spot Now!**
[](https://www.instagram.com/p/B4dfePsHIIH/) [](https://www.instagram.com/p/B4M61NEHR6l/) [](https://www.instagram.com/p/B0_RDyCHYuA/)**Related reading:** For a complete overview of structures beyond conventional bank loans, including seller financing, master lease, sub-to, private money, JV, and syndication, read [creative financing in real estate](https://rodkhleif.com/creative-financing-in-real-estate-go-beyond-investment-property-lending/).
If you are leaning on government backed debt for this part of the stack, here is [how to find an FHA multifamily lender](https://rodkhleif.com/how-to-find-an-fha-multifamily-lender/).
Mismatching debt to your business plan is a fast way to lose money; review the [10 biggest mistakes new multifamily investors make](https://rodkhleif.com/the-10-biggest-mistakes-new-multifamily-investors-make/) before you finalize your capital stack.
**Related reading:** [Real Estate Syndication Waterfall: How Profits Split](https://rodkhleif.com/syndication-waterfall/)
**Categories:** Blog, Raising Capital, Real Estate
**Tags:** apartment investing, apartment syndication, cap stack, capital stack, common equity, deal structure, investing, landlord, loan, mezzanine debt, motivation, multifamily, multifamily investment, multifamily property investing, multifamily real estate, multifamily syndication, preferred equity, real estate, real estate investing, real estate podcast, Rod Khleif, senior debt
---
### [What Is a General Partner (GP) in Real Estate?](https://rodkhleif.com/what-is-a-general-partner-gp-in-real-estate/)
**Published:** May 4, 2026
**Author:** Rod Khleif
**Excerpt:** A General Partner (GP) is the active sponsor of a real estate syndication who sources the deal, raises capital, signs the loan, and runs the asset. Here is the complete role, legal structure, SEC compliance framework, and compensation model.
**Content:**
If you have looked at multifamily syndications or any large commercial real estate deal, you have run into the term General Partner or GP. The GP is the operator that finds the deal, raises the capital, signs the loan, runs the asset, and ultimately delivers (or fails to deliver) the returns investors signed up for.
This guide breaks down exactly what a General Partner does, the legal and SEC compliance framework GPs operate inside, the five operating phases of a GP role, how GPs get paid, and the realistic risks and skills required to be a successful one. Whether you are evaluating a sponsor before investing or trying to step into the GP seat yourself, this is the working definition.
## What You Will Learn in This Guide
- [What Is a General Partner in Real Estate?](#what-is-gp)
- [The Legal Role of a General Partner](#legal-role)
- [SEC Compliance and Securities Regulations](#sec-compliance)
- [The Five-Phase GP Operating Stack](#gp-stack)
- [GP Compensation Structure: Complete Breakdown](#compensation)
- [How to Become a General Partner](#how-to-become)
- [The Real Risks of Being a GP](#risks)
- [General Partner in Real Estate FAQ](#gp-faq)
- [Ready to Take the Next Step?](#next-step)
## What Is a General Partner in Real Estate?
> A General Partner (GP) in real estate is the active sponsor of a syndicated investment. The GP sources the deal, raises the equity, signs the loan, and runs the asset day to day. In exchange the GP earns acquisition, asset management, and disposition fees plus a promoted interest (typically 20 to 40 percent) on profits above a preferred return. Limited Partners (LPs) provide most of the capital, take a passive role, and have liability limited to their invested amount.
A General Partner is the active sponsor inside a real estate partnership, almost always structured as a Limited Liability Company (LLC) or Limited Partnership (LP). The GP is the entity that gets the deal under contract, brings together the team, raises the capital from passive investors, takes title to the property, and runs the asset for the duration of the hold.
The GP carries unlimited liability for partnership obligations and signs the loan documents. The Limited Partners (the passive investors) have liability limited to whatever capital they put in. That tradeoff (more risk and more upside on the GP side, less risk and a capped role on the LP side) is the entire point of the structure.
### GP vs LP: Understanding the Difference
The GP role is active. The GP is finding deals, underwriting, talking to brokers, raising capital, signing loans, managing operations, communicating with investors, and ultimately deciding when to sell. It is closer to running a small business than passive investing.
The LP role is passive. [Limited Partners](https://rodkhleif.com/what-is-a-limited-partner-lp/) wire capital, sign subscription documents, receive distributions and tax forms, and read quarterly investor reports. They do not vote on day-to-day operating decisions and they do not have personal liability beyond the dollars they invested.
If you want a fuller side-by-side comparison, my deep dive on what an LP is covers each side of the table including economics, control, time commitment, and tax treatment.
## The Legal Role of a General Partner
### Legal Structure and Liability
Most modern multifamily syndications run as a Limited Liability Company taxed as a partnership. The GP is typically its own LLC that owns a small membership interest in the deal LLC and serves as the manager. Setting up the GP as a separate LLC is what insulates the individual GP principals from personal liability for partnership obligations.
Even with the LLC wrapper, the GP signs the loan and gives personal recourse carve-outs (commonly called bad-boy carveouts) for things like fraud, environmental violations, and unauthorized transfers. So while everyday operating risk sits inside the LLC, certain bad acts can pierce all the way through to the individual.
### Fiduciary Duties
The GP owes fiduciary duties to the LPs as a class. In plain language: the GP must act in the best interests of investors, disclose conflicts, avoid self-dealing, and treat all investors fairly. A GP who steers fees to a related entity at above-market terms or who cherry-picks the best deals for themselves and gives weaker ones to the syndicate is breaching that duty.
### Legal Accountability
If a GP breaches fiduciary duties or commits material fraud, LPs have legal remedies including civil suits, removal of the GP from the deal, and reporting to regulators. SEC enforcement is also a real possibility on the securities side. The accountability is one of the reasons sophisticated LPs spend significant time vetting the GP before they ever wire capital.
## SEC Compliance and Securities Regulations
### Why Real Estate Syndications Are Securities
When a GP raises money from passive investors who expect profits primarily from the GP’s efforts, those interests are securities under federal law (the Howey test). That means the offering must either be registered with the SEC (rare and expensive) or fall under an exemption.
The vast majority of multifamily syndications are sold under a Regulation D exemption, most commonly Rule 506(b) or Rule 506(c). Picking the right one and complying with it is a core GP responsibility. Skipping this step or doing it sloppily can expose the GP to rescission rights, SEC enforcement, and personal liability.
### Regulation D: The GP’s Compliance Framework
Rule 506(b) allows a GP to raise an unlimited amount of capital from accredited investors and up to 35 sophisticated non-accredited investors, provided no general solicitation is used. In practical terms, that means the GP can only accept money from investors with whom they have a pre-existing substantive relationship. This is the most common structure for smaller, relationship-driven raises.
Rule 506(c) allows general solicitation (so the GP can advertise the deal publicly online, on stage, and in podcast appearances) but requires the GP to take reasonable steps to verify accredited investor status, typically through tax returns, brokerage statements, or a third-party verification letter from a CPA or attorney.
### Accredited Investor Requirements
An accredited investor is generally an individual with $1 million in net worth excluding primary residence, $200,000 in annual income for the last two years ($300,000 jointly with a spouse), or who holds certain professional licenses (Series 7, 65, 82). Entities can also qualify based on assets or all-accredited ownership. The GP must collect documentation supporting these claims if running a 506(c) raise.
### Required Compliance Documents
Every GP-led syndication needs at minimum a Private Placement Memorandum (PPM) describing the deal and risks, a Subscription Agreement and investor questionnaire, an Operating Agreement governing the deal LLC, a Form D filing with the SEC and applicable states, and any blue-sky filings for the states in which investors reside. Skipping or templating these documents from a non-securities lawyer is one of the most expensive mistakes a new GP can make.
### SEC Compliance Violations and Penalties
SEC violations can result in disgorgement of all fees and profits, civil monetary penalties, rescission rights for investors (meaning every LP can demand their money back), bars on future fundraising, and in serious cases criminal prosecution. The cost of doing it right with experienced securities counsel is dramatically lower than the cost of doing it wrong.
## The Five-Phase GP Operating Stack
This is the operating model I teach inside the [Multifamily Bootcamp](https://rodkhleif.com/bootcamp/) and the Warrior community. Every multifamily deal a GP runs cycles through these five phases. The GP role is not one job, it is five jobs in sequence.
### Phase 1: Pre-Acquisition
The GP sources deals through broker relationships, off-market outreach, and existing investor referrals. Each deal that looks plausible goes through underwriting, where the GP models rents, expenses, debt, and exit assumptions to determine the offer price that hits target returns. The GP also builds the team for the deal, including legal counsel, lenders, and property management partners.
Most of the work in this phase never produces a deal. A typical GP underwrites 50 to 100 deals for every one they close. Sourcing volume and underwriting discipline are the two skills that separate consistent GPs from one-deal sponsors.
### Phase 2: Acquisition and Closing
Once a property is under contract, the GP runs full due diligence (financial, physical, legal, environmental), structures and signs the loan, opens the equity raise, manages the LP onboarding process, and closes the deal. This is the most intensive phase from a calendar standpoint, often a 60 to 90 day sprint.
### Phase 3: Operations and Asset Management
After close, the GP supervises property management, executes the value-add or stabilization business plan, monitors operating performance against budget, and adapts strategy when reality diverges from the underwriting model. This is where the actual returns are won or lost. A great underwrite plus poor execution still produces a bad outcome.
### Phase 4: Investor Relations and Reporting
The GP delivers monthly or quarterly investor reports, handles K-1 tax documents at year end, processes distributions, fields investor questions, and runs annual investor calls. Quality investor relations is the single biggest driver of repeat capital from existing LPs into the next deal.
### Phase 5: Disposition
When the business plan is complete or the market conditions are right, the GP executes the exit. That can be a refinance returning capital to investors while the asset stays in the portfolio, or an outright sale. The GP underwrites the exit, runs the marketing process with brokers, negotiates the trade, and closes. The promoted interest typically pays out at this point.
## GP Compensation Structure: Complete Breakdown
GPs get paid through a combination of fees and profit splits. Each piece is negotiable and shows up in the Operating Agreement and PPM. Here is the typical stack for a U.S. multifamily syndication.
### 1. Acquisition Fee
The GP earns a one-time fee at closing for sourcing, underwriting, and closing the deal. Typical range is 1 to 3 percent of the purchase price. On a $20 million deal a 2 percent acquisition fee is $400,000 split among the GP team.
### 2. Asset Management Fee
An ongoing fee paid to the GP for managing the asset against the business plan. Typical range is 1 to 2 percent of gross collected revenue or 1 to 2 percent of equity raised, paid monthly or quarterly throughout the hold period.
### 3. Refinance Fee
Some operating agreements allow a refinance fee (often 0.5 to 1 percent of the new loan amount) when the GP executes a refinance that returns capital to investors. This is increasingly common in value-add multifamily.
### 4. Disposition Fee
A fee paid at exit, typically 0.5 to 2 percent of the sale price. This compensates the GP for executing the sale process and is usually subordinated to investors getting their preferred return current.
### 5. Promoted Interest (Carried Interest)
The promote is where the real money lives. The standard structure gives LPs a preferred return (typically 7 to 8 percent annually) on their invested capital before any profits split with the GP. Once the preferred return is paid current, profits split between LPs and GPs at a tiered ratio (commonly 70/30 or 80/20 LP/GP) up to a hurdle, then 50/50 above that hurdle.
On a successful five-year multifamily hold producing a 2.0 equity multiple, the promote alone can equal multiples of the upfront fees. This is why the promote is the most important number in any deal for both sides to model carefully.
## How to Become a General Partner
The path to GP-ready varies but the components are consistent: education, mentorship, capital relationships, deal sourcing capability, and a track record. There is no exam to pass to become a sponsor, which is exactly why investor due diligence is so important.
The fastest legitimate path I have seen consistently work is to enroll in serious multifamily training (the [Multifamily Bootcamp](https://rodkhleif.com/bootcamp/) is where most of my Warriors start), join an active community where you can co-GP on early deals with experienced operators, and run your first one or two deals under a senior sponsor before you go solo. That structure compresses the learning curve and protects your investors during your first reps.
If you want a more tactical breakdown of the first 90 days as an aspiring GP, my [free book How to Create Lifetime Cash Flow Through Multifamily Properties](https://rodkhleif.com/lcfa-ebook/) walks through it step by step.
## The Real Risks of Being a GP
Most coaching content focuses on the upside of being a GP. The risks are equally real and worth naming clearly:
- **Personal recourse on bad-boy carveouts.** Even with an LLC wrapper, fraud or unauthorized transfers can pierce all the way to the individual.
- **SEC enforcement risk.** Securities violations are not theoretical. Disgorgement, penalties, and bars on future raises are common outcomes for GPs who skip the compliance work.
- **Reputational risk.** A failed deal does not stay private in this business. Future capital raises depend on referrals from current LPs.
- **Time and stress.** Running a deal is a real job. The asset management phase alone can demand 5 to 20 hours per week per asset, especially during a value-add execution.
- **Capital risk.** The GP often invests significant personal capital alongside LPs (commonly 5 to 10 percent of the equity), which can be lost if the deal fails.
None of these risks is a reason to avoid the GP role, but they are reasons to take the role seriously and build the right team and education around it before you start.
## General Partner in Real Estate FAQ
**Q: What is a general partner in real estate?**
A: A General Partner is the active sponsor of a real estate syndication. The GP sources the deal, raises equity, signs the loan, manages the asset, and ultimately delivers returns to investors. GPs earn fees plus a promoted interest on profits above a preferred return.
**Q: What is the difference between a GP and an LP in real estate?**
A: A General Partner runs the deal and carries personal liability on the loan. A Limited Partner is a passive investor whose liability is capped at the capital they invested. The GP earns fees and carried interest. The LP earns a preferred return plus a share of upside profits.
**Q: How much money does a general partner make on a deal?**
A: GP compensation has multiple layers. Acquisition fees are typically 1 to 3 percent of purchase price. Asset management fees are 1 to 2 percent annually. Disposition fees are 0.5 to 2 percent at exit. The promoted interest is the largest piece, often 20 to 40 percent of profits above the LP preferred return.
**Q: Do you need a license to be a general partner in real estate?**
A: No real estate license or securities license is required to be a GP, but the GP raises capital under SEC securities laws, so a securities attorney is essential. Many GPs hold real estate licenses for transaction and broker-relationship reasons even though it is not required.
**Q: What are the fiduciary duties of a general partner?**
A: The GP owes duties of loyalty, care, and good faith to investors. That means acting in the best interests of the partnership, disclosing conflicts, avoiding self-dealing, and treating all investors fairly. Breach can lead to legal removal of the GP and personal liability.
**Q: How do general partners raise capital legally?**
A: Most GPs raise under Regulation D, either Rule 506(b) (no general solicitation, accredited and limited non-accredited investors with pre-existing relationships) or Rule 506(c) (general solicitation allowed, accredited only, with verification). Each path has specific compliance requirements.
**Q: Can a general partner also be a limited partner in the same deal?**
A: Yes, and most reputable GPs invest their own capital alongside investors as an LP, often 5 to 10 percent of total equity. Coinvestment is a major signal of alignment that sophisticated LPs look for.
**Q: What happens if a general partner fails to perform?**
A: The Operating Agreement typically allows LPs to remove the GP for cause (fraud, gross negligence, breach of fiduciary duty) by a specified vote threshold. Removal triggers a process to install a replacement GP. LPs may also have legal claims for damages.
**Q: How is a general partner taxed?**
A: GP fees are generally taxed as ordinary income. The promoted interest, when structured as carried interest in a partnership, is typically taxed at long-term capital gains rates if the underlying asset has been held over the required period (currently three years for carried interest under federal tax law). Always confirm with a tax advisor.
**Q: How can I evaluate if a GP is qualified before investing?**
A: Look at track record (closed deals, full cycles, realized returns), background and references, the depth of the team around them, the quality of legal documents and disclosures, and the alignment shown by their personal coinvestment. Talk to existing LPs in their prior deals.
## Ready to Take the Next Step?
If you want to step into the GP seat yourself, the fastest way to compress the learning curve is to come to the next [**Multifamily Bootcamp**](https://rodkhleif.com/bootcamp/). You will learn the underwriting, capital raise, and operating playbook directly from active GPs and meet potential co-sponsor partners in the room.
If you are still researching, start with my free book [**How to Create Lifetime Cash Flow Through Multifamily Properties**](https://rodkhleif.com/lcfa-ebook/). It is the same playbook that has produced thousands of new operators and passive investors.
You can also explore the [Lifetime Cash Flow podcast](https://rodkhleif.com/lifetime-cashflow-podcast/) for free interviews with experienced GPs walking through how they sourced, raised, and ran their deals.
*Disclaimer: This article was written with the help of AI and reviewed by Rod and his team.*
**Related reading:** [Multifamily vs Commercial Real Estate: Which One Should You Invest In?](https://rodkhleif.com/multifamily-vs-commercial-property-which-one-should-you-invest-in-techbullion/)
**Related reading:** [Letter of Intent Real Estate: Free Template 2026](https://rodkhleif.com/need-know-letter-intent/)
**Related reading:** [Real Estate Syndication Waterfall: How Profits Split](https://rodkhleif.com/syndication-waterfall/)
**Categories:** Blog
---
### [What Is a Limited Partner (LP)?](https://rodkhleif.com/what-is-a-limited-partner-lp/)
**Published:** February 23, 2026
**Author:** Alex Khleif
**Content:**
# What Is a Limited Partner (LP)? A Complete Guide to Passive Real Estate Investing
If you’re interested in multifamily real estate investing but lack the time, expertise, or desire to manage properties yourself, becoming a Limited Partner might be your ideal path to building wealth through real estate.
Limited Partners represent the backbone of real estate syndications, providing the capital that makes large multifamily acquisitions possible while enjoying passive income without the headaches of property management, tenant issues, or midnight maintenance emergencies.
This comprehensive guide explains exactly what Limited Partners are, how they differ from General Partners, what returns they can expect, and how to evaluate LP investment opportunities to build wealth through passive real estate investing.
## What Is a Limited Partner?
A **Limited Partner (LP)** is a passive investor in a real estate syndication who contributes capital without participating in day-to-day property management or operational decisions. Limited Partners invest money in exchange for an ownership percentage and receive returns based on property performance, while the General Partner handles all active management responsibilities.
The term “limited” refers to two key aspects of this investment structure. First, Limited Partners have limited liability, meaning their financial risk is capped at the amount they invest. Unlike General Partners who may face unlimited personal liability, LPs cannot lose more than their invested capital. Second, Limited Partners have limited control over property operations. They entrust management decisions to the General Partner while maintaining certain voting rights on major decisions like property sales or refinancing.
Think of Limited Partners as silent investors in a business partnership. They provide the financial fuel that powers the investment while the General Partner provides the expertise, effort, and operational execution. This structure allows busy professionals, retirees, and other investors to participate in lucrative commercial real estate deals that would otherwise be inaccessible due to capital requirements, time constraints, or lack of expertise.
## How Passive Investing Works for Limited Partners
Passive real estate investing through LP positions offers a fundamentally different approach than direct property ownership or active management roles. Understanding how this passive structure operates helps investors set appropriate expectations and evaluate opportunities effectively.
### The Investment Process
The Limited Partner journey typically begins when a General Partner identifies an acquisition opportunity and begins raising capital. The GP creates a detailed investment offering including property information, market analysis, business plan, projected returns, and all associated risks. This offering, formalized in a Private Placement Memorandum (PPM) and operating agreement, outlines exactly how the investment will function.
Interested investors review these materials, conduct their own due diligence on the property and sponsor, and decide whether to invest. Those who choose to participate execute a subscription agreement committing a specific capital amount, typically with minimums ranging from $25,000 to $100,000 depending on the deal size and sponsor requirements.
Once the GP has secured sufficient capital commitments to close the acquisition, Limited Partners wire their funds and the purchase completes. From this point forward, the GP manages all property operations while LPs receive regular updates and distributions according to the agreed-upon schedule.
### What Limited Partners Don’t Do
The passive nature of LP investing means explicitly avoiding certain activities and responsibilities. Limited Partners do not make property management decisions, handle tenant issues, approve vendor contracts, oversee renovations, negotiate with lenders, or manage day-to-day operations. They cannot unilaterally decide to sell the property, change the business plan, or fire the property management company.
This hands-off structure is precisely what makes LP investing attractive to busy professionals. A surgeon, corporate executive, or small business owner can build a substantial real estate portfolio without sacrificing time from their primary career or learning the intricacies of property management. The tradeoff for this convenience is relinquishing operational control to the General Partner.
### What Limited Partners Do Receive
While LPs don’t actively manage properties, they receive substantial benefits that make passive investing worthwhile. Regular distributions, typically quarterly or monthly, provide ongoing cash flow from property operations. Annual tax documents (K-1 forms) detail their share of income, deductions, and tax benefits including depreciation that can significantly reduce or eliminate tax liability on distributions.
Comprehensive performance reports keep LPs informed about property operations, financial results, renovation progress, and market conditions. Access to investor portals or direct communication with the GP team ensures transparency and allows LPs to monitor their investment’s performance. Finally, substantial returns upon refinancing or sale events can multiply invested capital when the business plan executes successfully.
## Preferred Returns Explained
Preferred returns represent one of the most important Limited Partner protections in real estate syndications, ensuring LPs achieve baseline returns before General Partners receive disproportionate profit participation.
### What Is a Preferred Return?
A **preferred return** (often called a “pref”) is the minimum annual return for Limited Partners.
Limited Partners must receive it before the General Partner earns promoted interest beyond its ownership percentage. Typical preferred returns range from 6-10% annually, with 8% being common in multifamily syndications. This structure aligns GP and LP interests. Passive investors earn strong returns before sponsors take larger profit shares.
The preferred return functions as a cumulative hurdle. If a property generates insufficient cash flow to pay the full preferred return in Year 1, that shortfall accrues and must be paid to LPs before any promote is distributed. This cumulative feature protects LPs from GP profit participation during challenging early years that may not produce strong cash flow.
### How Preferred Returns Work in Practice
Consider a syndication with $3 million in LP equity, an 8% annual preferred return, and a 70/30 profit split after the pref (70% to LPs, 30% to GP as promoted interest). If the property generates $300,000 in distributable cash flow in Year 1, the distribution waterfall would function as follows.
LPs are entitled to 8% of their $3 million investment, equaling $240,000 annually. This entire amount goes to Limited Partners first. The remaining $60,000 ($300,000 total minus $240,000 pref) splits 70/30, with LPs receiving an additional $42,000 and the GP receiving $18,000 as promoted interest. In this scenario, LPs receive $282,000 total (9.4% return) while the GP receives $18,000 from the promote.
Now imagine Year 2 produces only $150,000 in distributable cash flow due to renovation disruptions. LPs are still entitled to their $240,000 preferred return, but only $150,000 is available. LPs receive the entire $150,000, and the $90,000 shortfall accrues. In Year 3, before any promote can be paid, that $90,000 shortfall must be satisfied along with Year 3’s $240,000 preferred return.
### Pari Passu vs. Preferred Return Structures
Some syndications use a “pari passu” structure instead of a preferred return, where LPs and GPs split all profits according to their ownership percentages without any hurdle. For example, if LPs own 90% and the GP owns 10%, all distributions split 90/10 from the first dollar. While simpler, pari passu structures offer less downside protection for Limited Partners. The GP still receives their share, even when overall returns are modest.
Most LP-focused investors prefer structures with meaningful preferred returns as they provide better alignment and downside protection. However, in exceptionally strong deals or with highly sought-after sponsors, pari passu structures may be more common as sponsors have less need to offer enhanced LP protections to attract capital.
## Limited Partner vs. General Partner: Key Differences
Understanding the fundamental distinctions between LP and GP roles helps investors choose the path aligned with their goals, resources, and preferences.
AspectLimited Partner (LP)General Partner (GP)**Role**Passive investor providing capitalActive manager handling all operations**Time Commitment**Minimal (hours per year)Extensive (full-time commitment)**Liability**Limited to invested capitalUnlimited personal liability (in LP structure)**Control**No operational decisions; voting rights on major items onlyComplete operational control and decision-making authority**Returns**Ownership % share of profitsOwnership % + fees + promoted interest**Compensation**Investment returns onlyAcquisition fees, asset management fees, refinance fees, disposition fees, promoted interest**Required Capital**$25K-$100K+ per deal$50K-$500K+ per deal (plus operational reserves)**Required Expertise**Ability to evaluate deals and sponsorsDeep real estate, finance, and operations expertise**Risk**Capital loss on individual dealsCapital loss + reputation damage + potential personal liability**Liquidity**Extremely limited until saleExtremely limited until sale**Tax Forms**K-1 (passive income)K-1 (active income + self-employment tax potential)**Number of Deals**Can invest in many simultaneouslyLimited by time and management capacity**Success Factors**GP selection and diversificationDeal sourcing, execution, management excellence
This comparison reveals why both roles are essential to real estate syndications. Limited Partners provide the capital and prefer passive involvement, while General Partners provide the expertise and accept the responsibilities of active management. Neither is inherently superior—the right choice depends entirely on your personal situation, skills, available time, and investment goals.
For most busy professionals, the LP path offers superior risk-adjusted returns on their time. Building a $1 million real estate portfolio as an LP might require 20-40 hours of due diligence spread across several years. Building the same portfolio as a GP would require thousands of hours of work, significant expertise development, and assuming substantial personal risk. [Understanding the General Partner role](#) in depth helps investors appreciate why the GP/LP partnership creates value for both parties.
**[Click here to read more about GP vs LP: Understanding the Key Differences](https://rodkhleif.com/gp-vs-lp-what-you-need-to-know/)** – Deep dive comparison of both roles to determine which path fits your goals.
## How to Evaluate LP Investment Opportunities
Becoming a successful Limited Partner requires developing strong deal evaluation skills and sponsor assessment capabilities. While LPs don’t manage properties, they must excel at selecting which properties and sponsors to trust with their capital.
### Sponsor Evaluation: The Most Critical Factor
The General Partner’s quality determines at least 70% of your investment outcome. Even exceptional properties can fail under poor management, while skilled operators can generate strong returns from mediocre assets. Evaluating sponsors requires examining multiple dimensions of their business.
Track record analysis should review historical performance across at least 5-10 deals spanning different market conditions. Ask for actual investor returns (IRR and equity multiple) on completed deals, not just cherry-picked success stories. Speak directly with previous investors about their experience, the GP’s communication quality, how challenges were handled, and whether projections matched reality. Check for complaints, lawsuits, or regulatory issues through public records and online searches.
Team assessment involves understanding who will actually manage your investment. Does the GP have experienced asset managers, a strong property management relationship, established construction capabilities, and sufficient staffing to handle their existing portfolio plus new acquisitions? Growing GPs sometimes over-extend, acquiring more properties than their team can effectively manage.
Alignment evaluation examines whether the GP’s interests truly align with yours. How much personal capital is the GP investing? Are fees reasonable for the services provided? Does the waterfall structure ensure you achieve solid returns before the GP earns significant promote? Are there any conflicts of interest like related-party transactions that could divert value from LPs to GP affiliates?
### Deal-Specific Analysis
Once you’ve identified quality sponsors, evaluate each specific investment opportunity thoroughly. Market fundamentals should support the business plan. Look for strong job and population growth in the submarket. New construction should be limited. Supply and demand should remain favorable. Property analysis should confirm the acquisition price makes sense relative to comparable sales and projected rents are achievable based on true market comparables, not optimistic assumptions.
Business plan feasibility requires realistic assessment. Can the projected renovation timeline actually be achieved? Are cost estimates comprehensive and realistic? Does the rent growth assumption align with market history? What happens if assumptions prove 20% optimistic—do you still achieve acceptable returns?
Financial stress testing involves running scenarios where things don’t go perfectly. What if occupancy drops to 85% instead of 95%? What if interest rates rise and refinancing becomes impossible? What if renovations cost 25% more than budgeted? Deals with insufficient margin for error should be avoided regardless of projected returns.
## Returns Limited Partners Can Expect
Understanding realistic return expectations helps Limited Partners evaluate opportunities and avoid deals promising unrealistic performance.
### Target Return Ranges by Strategy
Core multifamily investments in stable markets typically target 10-15% IRR with 1.5-2.0x equity multiples over 5-7 year holds. These deals emphasize stability and consistent cash flow with modest value-add components. Cash-on-cash returns typically range from 5-8% annually.
Value-add investments with moderate renovation and operational improvements typically target 15-20% IRR with 1.8-2.5x equity multiples over 3-5 years. These represent the sweet spot for many LP investors, balancing meaningful return potential against manageable risk. Annual cash flow might be lower initially during renovations but increases as the business plan executes.
Opportunistic deals involving significant repositioning, development, or distressed assets target 20%+ IRR with 2.5x+ equity multiples but carry substantially higher risk. These investments may produce little to no cash flow for extended periods while requiring significant capital expenditures. Only sophisticated investors with diversified portfolios should allocate meaningful capital to opportunistic strategies.
### Return Components
Limited Partner returns come from three primary sources that combine to create total investment performance. Cash flow distributions provide regular quarterly or monthly income from property operations after debt service and reserves. These distributions might start small during renovation periods and grow as rents increase and the property stabilizes.
Equity buildup through loan principal paydown gradually increases LP equity value even without property appreciation. Over a 5-7 year hold, principal reduction can represent 5-15% of the original loan amount, all accruing to equity holders. Tax benefits through depreciation often shelter 60-100% of cash distributions from ordinary income taxes, significantly improving after-tax returns. Cost segregation studies can accelerate these deductions.
Finally, appreciation and profit at sale when the property is eventually sold or refinanced provides the largest return component. A property purchased for $10 million and sold for $15 million creates $5 million in profit (minus selling costs) to be distributed according to the waterfall. This is why exit timing and cap rate assumptions are so critical to projected returns.
## How to Get Started as a Limited Partner
Ready to begin your Limited Partner journey? Follow these steps to make your first investment successfully.
### Step 1: Educate Yourself
Invest significant time in real estate education before committing capital. Read books on multifamily investing and syndication structures, listen to podcasts featuring successful sponsors and investors, attend real estate conferences and networking events, join online communities of passive real estate investors, and study offering documents from multiple syndications to understand standard terms and structures. [How to Invest in Multifamily Syndications](https://rodkhleif.com/guide-to-multifamily-syndications/) provides a comprehensive roadmap for new investors.
### Step 2: Build Your Network
Successful LP investing requires relationships with quality sponsors. Attend multifamily investment conferences and meetups.Join online platforms that connect sponsors with investors. Take part in local real estate investment clubs. Reach out directly to sponsors who impress you with their content or track record. Building relationships takes time; start networking before you’re ready to invest so you have established connections when attractive opportunities arise.
### Step 3: Define Your Investment Criteria
Clarify exactly what you’re looking for before evaluating specific deals. Determine your target investment amount per deal, preferred markets and geographic focus, acceptable hold period given your liquidity needs, minimum cash-on-cash return requirements, risk tolerance (core, value-add, or opportunistic), and whether you have any special preferences like specific property classes or impact-focused investments.
### Step 4: Conduct Thorough Due Diligence
Never skip comprehensive due diligence regardless of how attractive a deal appears. Review all offering documents thoroughly, analyze the property financials and market data independently, speak with current and past investors about the sponsor, verify the sponsor’s claims about experience and track record, assess the business plan’s feasibility and assumptions, and consult with your attorney, accountant, and financial advisor before investing.
### Step 5: Start Small and Diversify
Make your first few investments relatively small to gain experience without excessive risk exposure. Many experienced LPs recommend starting with $25,000-$50,000 investments and gradually increasing as you develop pattern recognition and confidence. Diversify across multiple sponsors and markets from the beginning rather than concentrating capital with a single GP or in a single market. This approach limits damage from any individual underperforming investment.
## Frequently Asked Questions About Limited Partners
### How much money do I need to become a Limited Partner?
Most multifamily syndications require minimum investments of $25,000 to $100,000, with $50,000 being common for larger deals. Some sponsors offer lower minimums of $10,000-$25,000 to accommodate newer investors or smaller family offices. Beyond the minimum investment, you should have substantial liquid net worth remaining for emergencies and other opportunities since LP capital is locked up for years. Financial advisors typically recommend limiting real estate syndication exposure to 10-30% of your investment portfolio depending on your overall financial situation, age, and risk tolerance.
### Can I lose more than my initial investment as a Limited Partner?
No. The fundamental benefit of limited liability protection means Limited Partners cannot lose more than their invested capital. If a property fails catastrophically—defaulting on its loan and entering foreclosure—the lender can seize the property but cannot pursue Limited Partners’ personal assets for any deficiency. Only General Partners potentially face personal liability through personal guarantees on loans or “bad boy” carve-outs for fraud or environmental violations. This protection is why the structure is called “limited” partnership. However, losing your entire invested capital is still possible if property performance deteriorates sufficiently, so this protection shouldn’t create false comfort about investment safety.
### What’s the difference between an LP and buying shares in a REIT?
Both LP positions and REIT shares provide passive real estate exposure, but they differ significantly in structure, liquidity, and investor experience. REITs are publicly traded securities offering instant liquidity—you can sell shares any business day at market price. LP positions are illiquid private investments typically requiring 3-7 year commitments with no ability to exit early. REITs provide exposure to large diversified portfolios of hundreds or thousands of properties. LP investments offer ownership in specific individual properties where you know exactly what you own.
REITs distribute 90% of taxable income as dividends, which are taxed as ordinary income for most investors. LP investments provide K-1 tax forms with depreciation deductions that often shelter distributions from current taxation. REITs trade at market prices that can disconnect from underlying property values due to market sentiment. LP positions value based on actual property performance and appraisals. Finally, REIT investors have zero control or communication with management. LP investors can communicate with sponsors, receive detailed updates, and sometimes vote on major decisions. Both have appropriate places in diversified portfolios.
### How do I receive my money back from an LP investment?
Limited Partners receive capital back through two primary mechanisms occurring during the investment lifecycle. During the hold period, quarterly or monthly distributions from property cash flow provide ongoing returns on your investment but don’t return original capital—these represent earnings on capital still deployed in the property. Your invested principal remains in the property until a capital event occurs.
Capital events include property sale or cash-out refinancing. Property sale, typically occurring after 3-7 years when the business plan is complete, generates proceeds distributed according to the waterfall after paying off the loan, selling costs, and any fees. This is when most or all of your original capital returns along with remaining profits. Cash-out refinancing may occur mid-hold if the property value increases substantially. It allows the partnership to extract equity while keeping ownership. These refinance proceeds can return some or all investor capital while keeping the property for continued cash flow. The timing of capital return is not guaranteed and depends on market conditions, property performance, and GP strategy execution.
### What happens if the General Partner underperforms or acts unethically?
This scenario represents one of Limited Partners’ greatest fears and highlights why sponsor selection is paramount. If a GP is simply underperforming due to market conditions or execution challenges but acting in good faith, LPs typically have limited recourse beyond withholding future investments and sharing their experience with other investors. The operating agreement governs all rights and remedies, and most agreements provide substantial protection for GPs from removal except in cases of gross negligence or fraud.
If the GP acts unethically, steals funds, misrepresents property performance, self-deals, or commits fraud, LPs have stronger remedies. The operating agreement may include provisions allowing LP vote to remove the GP for cause, typically requiring a supermajority of 66-75% of limited partner interests. LPs can file lawsuits for breach of fiduciary duty seeking damages and potentially forcing GP removal or property sale. In cases of securities fraud or criminal activity, LPs can report violations to the SEC or law enforcement. However, legal action is expensive, time-consuming, and never guaranteed to succeed or recover losses.
The best protection is thorough upfront due diligence to avoid unethical sponsors entirely. Warning signs include refusing to provide references and giving vague or evasive answers about performance. Other red flags include unusually high fees compared to market standards and undisclosed related-party transactions. Be cautious if someone pressures you to invest fast, without time to review. Also watch for past regulatory violations or investor complaints. If something feels wrong during due diligence, trust your instincts and walk away regardless of how attractive the projected returns appear.
## Final Thoughts: Is Limited Partner Investing Right for You?
Limited Partner investing offers a compelling path to building wealth through commercial real estate without the time commitment, expertise requirements, or operational headaches of active property management. For busy professionals, executives, doctors, attorneys, and other high-earners seeking tax-advantaged passive income and portfolio diversification, the LP structure can be ideal.
However, LP investing isn’t appropriate for everyone. The illiquidity requires patient capital you won’t need for years. The lack of control demands comfort trusting others with significant sums of your money. The complexity requires enough financial sophistication to evaluate deals and sponsors effectively. The minimums require sufficient capital to diversify across multiple investments rather than concentrating everything in one or two deals.
For those with the right financial situation, temperament, and willingness to invest time in education and due diligence, Limited Partner investing can generate attractive risk-adjusted returns while building substantial wealth over time. The key is approaching it as a serious investment discipline requiring ongoing learning, careful sponsor selection, rigorous due diligence, and patience to let quality investments compound over years.
Start small, learn continuously, build relationships with quality sponsors, diversify appropriately, and maintain realistic expectations. This measured approach positions you for long-term success as a Limited Partner in multifamily real estate syndications.
---
## Related Articles
**[How to Invest in Multifamily Syndications](#)** – Step-by-step guide to evaluating deals, conducting due diligence, and making your first LP investment.
**[Multifamily Investing Terms: The Complete Glossary](https://rodkhleif.com/multifamily-glossary-essential-terms/)** – Reference guide for all essential real estate investment terminology.
---
*Disclaimer: This article was written with the help of AI and reviewed by Rod and his team.*
**Related reading:** [Real Estate Syndication Waterfall: How Profits Split](https://rodkhleif.com/syndication-waterfall/)
**Categories:** Real Estate
---
### [Real Estate Syndication Waterfall](https://rodkhleif.com/syndication-waterfall/)
**Published:** June 4, 2026
**Author:** Rod Khleif
**Excerpt:** A syndication waterfall decides how profits split between LPs and the GP. Learn preferred return, catch-up, and promote tiers with a real example.
**Content:**
The first time a new investor reads a real estate syndication offer, the waterfall section is where their eyes glaze over. That is exactly the part you cannot afford to skip, because the waterfall decides how much of the profit ends up in your pocket versus the sponsor pocket.
I have been on both sides of these deals, as the general partner raising the money and as a passive investor writing the check. In this guide I will walk you through how a syndication waterfall works, tier by tier, with a plain English example so you know exactly what you are agreeing to before you invest.
## Table of contents
- [What is a syndication waterfall](#answer)
- [The 4 tiers of a syndication waterfall](#tiers)
- [Tier 1: Preferred return](#tier-1)
- [Tier 2: Return of capital](#tier-2)
- [Tier 3: The GP catch-up](#tier-3)
- [Tier 4: The promote split](#tier-4)
- [A worked example: $1M through the waterfall](#example)
- [Typical waterfall terms in 2026](#terms)
- [How to read a waterfall before you invest](#read)
- [Syndication waterfall FAQ](#faq)
- [Ready to take the next step](#next-step)
## What is a syndication waterfall
> A syndication waterfall is the formula that determines how a deal profits are split between the limited partners who supply the capital and the general partner who runs the deal. Profits flow down through tiers, a preferred return, a return of capital, a catch-up, then a promote split, so investors get paid first and the sponsor earns a larger share only after investors hit their targets.
Think of it like a set of buckets stacked on top of each other. Money pours into the top bucket, fills it, then spills into the next. Nobody lower in the stack gets paid until the bucket above is full. That structure is what aligns the sponsor with you: the general partner only reaches the profitable tiers after you, the investor, have been taken care of. If syndication itself is new to you, start with my guide to [multifamily syndication](https://rodkhleif.com/what-is-multifamily-syndication-a-complete-guide/) and the role of the [limited partner](https://rodkhleif.com/what-is-a-limited-partner-lp/).
## The 4 tiers of a syndication waterfall
Most multifamily waterfalls have four tiers. Money flows through them in order, top to bottom.
### Tier 1: Preferred return
The preferred return, or pref, is the first slice of profit, and it goes entirely to the limited partners. It is a target annual return, most commonly 8 percent, calculated on the capital investors still have in the deal. The pref is paid before the [general partner](https://rodkhleif.com/what-is-a-general-partner-gp-in-real-estate/) earns a dollar of profit share. It is usually cumulative, so if a slow year cannot cover the full 8 percent, the shortfall accrues and must be paid later before the sponsor participates.
### Tier 2: Return of capital
After the pref is satisfied, the next dollars return the original equity to the limited partners. You get your money back before profits are truly split. On many deals the pref and return of capital are paid from refinances and from the eventual sale.
### Tier 3: The GP catch-up
Not every deal has a catch-up, but many do. Once investors have their pref, the catch-up lets the sponsor receive a larger share, sometimes 100 percent of the next dollars, until the sponsor has caught up to its agreed profit share. A 100 percent catch-up is sponsor friendly. A 50 percent catch-up splits those dollars and is friendlier to investors.
### Tier 4: The promote split
The promote, also called carried interest, is the sponsor reward for performance. Everything left after the first three tiers is split, commonly 70/30 or 80/20 in favor of the limited partners. Many deals add hurdles: the split might be 80/20 up to a 15 percent investor return, then shift to 70/30 above it, giving the sponsor a bigger slice for delivering a home run. To understand the return targets these hurdles reference, read [IRR vs equity multiple](https://rodkhleif.com/measuring-returns-irr-vs-equity-multiple/).
## A worked example: $1M through the waterfall
Numbers make it click. Say limited partners invest $1,000,000 in a deal with an 8 percent pref and a 70/30 split, and to keep it simple this version has no catch-up. The property sells and there is $1,500,000 available to distribute. Over the hold, the 8 percent pref has accrued to $240,000.
TierAmountTo LPsTo GPTier 1: Preferred return$240,000$240,000$0Tier 2: Return of capital$1,000,000$1,000,000$0Tier 4: 70/30 split of the rest$260,000$182,000$78,000**Total****$1,500,000****$1,422,000****$78,000**The limited partners walk away with $1,422,000 on their $1,000,000, and the sponsor earns $78,000 only after investors got their pref and their capital back. Add a 100 percent catch-up and the sponsor would take the first chunk of that final $260,000 before the 70/30 split begins, which is why the catch-up term matters.
## Typical waterfall terms in 2026
TermWhat is commonPreferred return6 to 8 percent, with 8 percent the most commonReturn of capitalPaid to LPs before the promote, from refinance or saleCatch-upOptional, 50 to 100 percent until the GP reaches its carryPromote split70/30 or 80/20 LP/GP, often tiered by IRR hurdlesCarried interest to GPRoughly 20 to 40 percent depending on performance## How to read a waterfall before you invest
When I evaluate a passive deal, I read the waterfall in the private placement memorandum and the operating agreement, not the glossy summary. Five questions answer almost everything: What is the pref and is it cumulative and compounding? Is my capital returned before the promote kicks in? Is there a catch-up, and is it 50 or 100 percent? What is the promote split and are there hurdles? And finally, what does the sponsor earn in fees regardless of performance? A great waterfall on paper means nothing if acquisition and asset management fees quietly drain the deal first.
A higher pref is not automatically better. A sponsor can offer a flashy 10 percent pref and then claw it back with an aggressive promote and high fees. Look at the whole structure and the projected investor return together, not one number in isolation.
## Syndication waterfall FAQ
### What is a waterfall in a real estate syndication?
It is the formula that splits profit between limited partners and the general partner. Money flows through tiers, a preferred return, return of capital, an optional catch-up, then a promote split, so investors are paid before the sponsor earns its larger share.
### What is a preferred return?
The preferred return, or pref, is a target annual return paid to limited partners before the sponsor shares in profits. It is most commonly 8 percent, calculated on unreturned capital, and is usually cumulative so any shortfall carries forward.
### What is the GP catch-up provision?
After investors receive their pref, the catch-up lets the sponsor receive a larger share, sometimes 100 percent of the next dollars, until the sponsor reaches its agreed carried interest. A 50 percent catch-up is friendlier to investors than a 100 percent catch-up.
### What is the promote or carried interest?
The promote is the sponsor performance based share of profit, typically 20 to 40 percent, earned only after the pref and return of capital. It rewards the general partner for delivering strong returns rather than just collecting fees.
### What is a typical GP LP split in a syndication?
The most common splits are 70/30 and 80/20 in favor of the limited partners. Many deals use tiers, such as 80/20 up to a 15 percent investor return, then 70/30 or 60/40 above that hurdle.
### Does the preferred return compound?
It depends on the deal. Some prefs are simple and cumulative, others compound on the unpaid balance. The exact treatment is spelled out in the operating agreement, and compounding is more favorable to investors.
### What is the difference between a preferred return and a hurdle rate?
A preferred return is paid to investors before the sponsor participates. A hurdle rate is a return threshold that, once crossed, changes the split in the sponsor favor. A deal can use both.
### What happens to the waterfall if the deal underperforms?
The limited partners are protected first. The accrued pref keeps building and the sponsor earns little or no promote until investors receive their pref and capital back. That is the alignment a good waterfall creates.
### Where do I find the waterfall terms in a deal?
They live in the private placement memorandum and the operating agreement, not the marketing deck. Read the distribution section carefully and confirm the fees charged outside the waterfall before you invest.
### Is a higher preferred return always better for investors?
No. A high pref can be offset by an aggressive promote, an early catch-up, or heavy fees. Evaluate the entire structure and the projected total return together rather than chasing one headline number.
## Ready to take the next step
Understanding the waterfall is what separates investors who get taken advantage of from investors who get paid. If you want to go further, whether you plan to invest passively or become the sponsor structuring these deals yourself, my [Warrior mentorship program](https://rodkhleif.com/rod-khleif-warrior-program/) is where I teach the full playbook. Newer to apartments? Start at the [Multifamily Bootcamp](https://rodkhleif.com/bootcamp/), grab my free best selling book at [the LCFA ebook page](https://rodkhleif.com/lcfa-ebook/), and listen to the [Lifetime Cash Flow podcast](https://rodkhleif.com/lifetime-cashflow-podcast/).
*Disclaimer: This article is educational and is not investment, legal, or tax advice, and it is not an offer to sell or a solicitation to buy any security. Syndication terms vary by deal and the specifics are governed by the offering documents. Always review the private placement memorandum and consult your own advisors. This article was written with the help of AI and reviewed by Rod and his team.*
**Categories:** Blog, Multifamily Investing, Raising Capital
---
### [Multifamily Tax Benefits: Depreciation and Cost Segregation](https://rodkhleif.com/multifamily-tax-benefits/)
**Published:** June 2, 2026
**Author:** Rod Khleif
**Excerpt:** Multifamily tax benefits like depreciation, cost segregation, and 100% bonus depreciation can wipe out your taxable income in 2026. Here is how they work.
**Content:**
I have watched investors celebrate a great cash flow year, then hand a third of it back to the IRS in April because nobody ever showed them how multifamily tax benefits actually work. That is a tragedy, because apartments are one of the most tax advantaged assets in America.
By the end of this guide you will know exactly how depreciation, cost segregation, and the 100 percent bonus depreciation that came roaring back in 2026 can legally shelter most or all of your rental income, who is actually allowed to use those losses, and the one trap that catches investors off guard when they sell.
## Table of contents
- [What are the multifamily tax benefits in 2026](#answer)
- [The 4 Layer Multifamily Tax Shield](#shield)
- [Layer 1: Depreciation](#layer-1)
- [Layer 2: Cost segregation](#layer-2)
- [Layer 3: 100 percent bonus depreciation](#layer-3)
- [Layer 4: Deferral and recapture](#layer-4)
- [A $100K example: how the paper loss works](#example)
- [What qualifies for accelerated depreciation](#qualifies)
- [Active vs passive: who can use the losses](#active-passive)
- [Multifamily tax benefits FAQ](#faq)
- [Ready to take the next step](#next-step)
## What are the multifamily tax benefits in 2026
> The core multifamily tax benefits are depreciation, cost segregation, and 100 percent bonus depreciation. Together they let investors deduct a large share of a property value in the first year of ownership. In 2026 the One Big Beautiful Bill Act made 100 percent bonus depreciation permanent again, so a cost segregation study can shelter most or all of your rental income, and often your cash distributions, from federal tax.
Here is the part most people miss. Cash flow is what pays your bills, but the tax code is where multifamily quietly builds wealth. A property can send you a check every quarter and still show a paper loss on your return. That is not a loophole, it is exactly how Congress wrote the rules to encourage housing. If you want to see how the income side and the tax side fit together, start with how I evaluate a deal in [what is a good cap rate for multifamily](https://rodkhleif.com/what-is-a-good-cap-rate-for-multifamily/) and how I build [net operating income](https://rodkhleif.com/a-complete-guide-noi-in-real-estate-in-2025/).
## The 4 Layer Multifamily Tax Shield
I think about multifamily tax benefits as four layers stacked on top of each other. Each one does more work than the last, and the order matters.
### Layer 1: Depreciation
The IRS lets you treat a building as if it wears out over time, even when it is going up in value. Residential rental property is depreciated straight line over 27.5 years. You depreciate the building only, never the land.
Say you buy a $3 million apartment building and the land is worth $600,000. Your depreciable basis is $2.4 million. Divide that by 27.5 years and you get roughly $87,000 in depreciation every single year, a deduction that costs you nothing out of pocket.
### Layer 2: Cost segregation
Straight line depreciation is slow. Cost segregation speeds it up. It is an IRS recognized, engineering based study that breaks your building into its parts and reclassifies the ones that wear out faster, things like appliances, flooring, cabinets, fixtures, and land improvements such as parking lots, landscaping, and fencing.
Those components carry 5, 7, or 15 year lives instead of 27.5 years. On a typical apartment deal a study moves roughly 20 to 35 percent of the building basis into these faster buckets. On our $2.4 million example that is $480,000 to $840,000 of value pulled forward.
### Layer 3: 100 percent bonus depreciation
This is the layer that changed in 2026. The One Big Beautiful Bill Act permanently restored 100 percent bonus depreciation for qualifying property placed in service after January 19, 2025. Under the old phase down rules, bonus depreciation would have dropped to just 20 percent in 2026 and disappeared in 2027. Now it is back to 100 percent and it is permanent. The IRS confirmed the rules in [Notice 2026-11](https://www.irs.gov/newsroom/treasury-irs-issue-guidance-on-the-additional-first-year-depreciation-deduction-amended-as-part-of-the-one-big-beautiful-bill).
Bonus depreciation applies to property with a recovery period of 20 years or less, which is exactly what a cost segregation study creates. So instead of writing off that $480,000 to $840,000 over 5 to 15 years, you can deduct all of it in year one. One note on timing: assets placed in service between January 1 and January 19, 2025 are capped at 40 percent, so the in service date matters.
### Layer 4: Deferral and recapture
Accelerated depreciation is not free money, it is a timing tool, and the tax comes due when you sell. This is the trap. The straight line portion of your building is subject to unrecaptured Section 1250 gain, taxed at a maximum federal rate of 25 percent. The faster components you accelerated through cost segregation are Section 1245 property, recaptured as ordinary income, which can run as high as 37 percent for a high earner.
You have three classic ways to manage it: hold long term and let depreciation keep working, use a 1031 exchange to roll your gains into a larger property and defer the recapture, or pass the asset to your heirs and let the basis step up at death. Tax deferred today, often tax free to the next generation. The [opportunity zone](https://rodkhleif.com/opportunity-zones-for-multifamily/) rules are another deferral tool worth knowing.
## A $100K example: how the paper loss works
Numbers make this real. In a typical multifamily syndication, every $100,000 a limited partner invests generates roughly $60,000 to $90,000 of first year paper loss once cost segregation and bonus depreciation are applied. Learn how the structure works in my guide to [multifamily syndication](https://rodkhleif.com/what-is-multifamily-syndication-a-complete-guide/) and the role of the [limited partner](https://rodkhleif.com/what-is-a-limited-partner-lp/).
That paper loss does two things. It can shelter the cash distributions you receive from the deal, so the checks you cash in the early years often show up as little or no taxable income. And if you have other passive income, the loss can offset that too. Here is what a year one comparison looks like on a $3 million building.
ScenarioYear 1 depreciationTax outcomeStraight line only (27.5 yr)~$87,000Shelters part of the incomeCost segregation + 100% bonus~$480,000 to $840,000Often wipes out income and distributions## What qualifies for accelerated depreciation
Not every dollar of a building gets the fast treatment. The structure itself stays on the 27.5 year schedule. The shorter life components are what a cost segregation study chases.
ComponentTypical class lifeBonus eligibleAppliances, carpet, window treatments5 yearsYesCabinets, certain fixtures, furniture7 yearsYesParking, landscaping, fencing, site work15 yearsYesThe building structure itself27.5 yearsNoLandNot depreciableNoRule of thumb: a cost segregation study usually pays for itself when the depreciable basis is at least $500,000, which covers almost any apartment deal but often not a single condo.
## Active vs passive: who can actually use the losses
This is where investors get tripped up, so read carefully. For most people, rental losses are passive. Passive losses can offset passive income, such as profits from other rentals or syndications, and any unused amount carries forward to future years. What they usually cannot do is offset your W2 salary or active business income.
There are three important exceptions. First, if you actively participate and your modified adjusted gross income is under $100,000, you can use up to $25,000 of rental losses against ordinary income, and that allowance phases out completely by $150,000. Second, if you or your spouse qualify for real estate professional status, by spending more than 750 hours and more than half of your working time in real estate and materially participating, your rental losses can offset active W2 income. Third, short term rentals with an average guest stay of seven days or less can escape the passive label if you materially participate.
One more thing high earners should know: real estate professional status can also help you avoid the 3.8 percent net investment income tax. None of this is do it yourself territory, which brings me to the disclaimer below.
## Multifamily tax benefits FAQ
### What are the main tax benefits of multifamily real estate?
The main benefits are depreciation, cost segregation, 100 percent bonus depreciation, the ability to defer gains with a 1031 exchange, and a step up in basis at death. Together they let many investors collect cash flow while reporting little or no taxable income.
### How does depreciation work on an apartment building?
You depreciate the building, not the land, straight line over 27.5 years for residential rental property. A $2.4 million building basis produces about $87,000 in annual depreciation, a non cash deduction that reduces your taxable income.
### Is bonus depreciation still available in 2026?
Yes. The One Big Beautiful Bill Act permanently restored 100 percent bonus depreciation for qualifying property placed in service after January 19, 2025. It applies to assets with a recovery period of 20 years or less, which is what cost segregation identifies.
### What is cost segregation and is it worth it?
Cost segregation is an engineering based study that reclassifies parts of a building into 5, 7, and 15 year lives so they can be depreciated faster. It typically pays off when the depreciable basis is $500,000 or more, which covers most apartment deals.
### How much can depreciation actually save me?
In a typical syndication, every $100,000 invested can generate $60,000 to $90,000 of first year paper loss after cost segregation and bonus depreciation. That loss can shelter your distributions and other passive income.
### Can passive losses from a syndication offset my W2 income?
Usually no. Rental losses are passive and only offset passive income unless you qualify for real estate professional status, use the short term rental exception, or use the limited $25,000 active participation allowance that phases out by $150,000 of income.
### What is real estate professional status?
It is an IRS designation for someone who spends more than 750 hours and over half of their working time in real estate and materially participates. It lets rental losses offset active W2 income and can help avoid the 3.8 percent net investment income tax. A spouse can qualify on the couple behalf.
### What is depreciation recapture and how do I avoid it?
When you sell, the depreciation you took is recaptured. Straight line building depreciation is taxed up to 25 percent, and cost segregated components are taxed as ordinary income. You can defer it with a 1031 exchange, reduce it by holding long term, or eliminate it with a step up in basis at death.
### Do these tax benefits apply in every state?
The federal benefits apply nationwide, but some states do not conform. California, New York, and New Jersey, among others, do not follow federal bonus depreciation, so you may have to add it back on your state return.
### Is a cost segregation study worth it on a small property?
It depends on the basis. Below about $500,000 of depreciable basis the study fee can outweigh the benefit. On a true multifamily deal the math almost always works in your favor.
## Ready to take the next step
Understanding the tax code is one of the biggest reasons I have built lasting wealth in apartments, but the real money is made by buying the right deals and operating them well. If you are serious about scaling a portfolio, my [Warrior mentorship program](https://rodkhleif.com/rod-khleif-warrior-program/) is where I work directly with investors to do exactly that. Newer to multifamily? Start at the [Multifamily Bootcamp](https://rodkhleif.com/bootcamp/), grab my free best selling book at [the LCFA ebook page](https://rodkhleif.com/lcfa-ebook/), and listen to the [Lifetime Cash Flow podcast](https://rodkhleif.com/lifetime-cashflow-podcast/).
*Disclaimer: This article is educational and is not tax, legal, or financial advice. Tax outcomes depend on your specific situation and current law, which can change. Always work with a qualified CPA or tax advisor before acting. This article was written with the help of AI and reviewed by Rod and his team.*
**Categories:** Blog, Multifamily Investing, Raising Capital
---
### [How to Become a Confident Multifamily Investor](https://rodkhleif.com/how-to-become-a-confident-multifamily-investor/)
**Published:** April 27, 2026
**Author:** Rod Khleif
**Excerpt:** Confidence is not a personality trait. It is a process. Here is how my Warriors build unshakeable confidence, deal by deal, across the four rooms.
**Content:**
At every bootcamp I run, the majority of the room is analytical and introverted. Engineers, accountants, IT professionals, doctors. They are not naturally loud people, and they have told me for years that they feel like impostors in this business. And then they go out and close deals. Because confidence in multifamily is not about being the loudest person in the room. It is about being the most prepared.
If you want to know how to become a confident multifamily investor, you have to throw out the personality story first. Confidence is not a trait. It is a process. The process is built room by room: the broker room, the investor room, the lender room, and the operator room. The Warriors who close their first deal in 9 to 18 months own the four rooms. The ones who never close confuse confidence with extroversion.
## Table of Contents
- [Why Most Multifamily Investors Confuse Confidence with Extroversion](#why-extroversion-is-not-confidence)
- [The Four Rooms of Confidence Framework](#four-rooms-framework)
- [The Extrovert Path vs. The Prepared Path](#extrovert-vs-prepared)
- [The Daily Practices That Build Confidence in All Four Rooms](#daily-practices)
- [How to Know You Are Actually Ready (The Three Tests)](#three-tests)
- [Three Confidence Profiles: Which One Closes?](#three-profiles)
- [Reactive Confidence vs. The Four Rooms Operator](#reactive-vs-rooms)
- [Common Confidence Killers and How to Neutralize Them](#confidence-killers)
- [How to Become a Confident Multifamily Investor FAQ](#confidence-faq)
- [Ready to Take the Next Step?](#next-step)
## Why Most Multifamily Investors Confuse Confidence with Extroversion
> Confidence as a multifamily investor is the willingness to be the most prepared person in the room and to act on that preparation. It is not volume, charisma, or extroversion. The four rooms where this matters are the broker room, the investor room, the lender room, and the operator room. Build prepared confidence in each, deal by deal, and the personality side of the conversation stops mattering.
The myth runs like this. Confidence is for the loud ones. Multifamily is a relationships business, so the chatty extroverts win. If you are quiet, analytical, or introverted, you are at a structural disadvantage and you should fix that first.
None of that is true.
The most successful Warriors I have coached are not the loudest people. They are the most prepared. They walk into a broker meeting having read the offering memorandum twice and the rent roll once. They send a follow up email the same afternoon. They bring a partner with a real balance sheet to the lender call. They send the same investor update the month a deal goes sideways as the month a deal goes to plan. The brokers, lenders, and limited partners (passive investors who fund the deal) read that pattern as confidence, because that is what confidence is in this business.
The skill of being prepared compounds in private. The signal of being confident compounds in public. New investors who confuse the two try to fake the signal before they have built the skill, and the room sees right through it.
### Signs Your Confidence Is Faked, Not Built
Run this fast self diagnostic. If three or more describe you, you are performing confidence rather than building it.
- You over explain when an LP asks a hard question instead of pausing and naming the risk.
- You go quiet on broker follow ups when a deal looks too big for you.
- You only send investor updates when a deal is going well.
- You let your KP or co sponsor make every contested call so you do not have to be wrong.
- You spend more time on the pitch deck than on the underwriting model.
- You memorize lines for broker calls instead of preparing the four data points behind them.
- You feel sharper after a podcast appearance than after underwriting five deals in a week.
If any of those hit hard, good. The four rooms framework gives you the exact map for what to fix.
## The Four Rooms of Confidence Framework
Most generic business content treats confidence as a single trait. In multifamily, confidence is room dependent. You can be a brilliant underwriter and freeze in the broker room. You can be a gifted communicator and crumble in the lender room. The four rooms framework breaks confidence into four distinct skill sets and gives you a way to measure and build each one. If you want a partner bench and mentor pool while you build the four rooms, the [Warrior Program](https://rodkhleif.com/rod-khleif-warrior-program/) is the fastest accelerant.
[**Want the partner bench, the deal flow, and the live coaching that compresses the four rooms into months not years? Apply to the Warrior Program →**](https://rodkhleif.com/rod-khleif-warrior-program/)
Here is the foundational resource Warriors keep on their desk while building the four rooms. **How to Create Lifetime Cash Flow Through Multifamily Properties** is Rod’s free book and it covers the core thinking the Four Rooms framework is built on. Click the cover below to download the full PDF and use it as your daily confidence reference.
[](https://rodkhleif.com/wp-content/uploads/2025/07/Lifetime-CashFlow-eBook-2nd-Edition.pdf "Download Rod Khleif's free book How to Create Lifetime Cash Flow Through Multifamily Properties")[**Download the free Lifetime Cashflow book →**](https://rodkhleif.com/wp-content/uploads/2025/07/Lifetime-CashFlow-eBook-2nd-Edition.pdf)
### Room 1: The Broker Room
The broker room is your confidence talking to commercial multifamily brokers about deals. The broker is the gatekeeper to deal flow. They get a hundred emails a week from buyers who all sound the same. The confident operator stands out in three sentences.
How to build it: read the offering memorandum twice and the rent roll once before any call. Walk in with two submarket specific questions (“what is the trailing 12 month occupancy in this submarket above 85 percent?”, “what are recent comps north of $115k per door doing on rent growth?”). Follow up the same day with a one paragraph note that references one specific data point from the OM. Do that ten times in a row and brokers start sending you off market deals.
How brokers test you: they will float a casual technical question on the call. Your speed of plain English answer is the signal, not the polish.
### Room 2: The Investor Room
The investor room is your confidence explaining a deal to capital. LPs are not impressed by jargon. They are impressed by clarity, transparency, and the ability to walk through a sensitivity analysis without flinching.
How to build it: build a two page plain English deal memo for every deal you underwrite, even practice deals. Walk through it out loud into your phone. Watch yourself back. Do it again next week. Inside 90 days the way you talk about deals shifts from selling to teaching, and that is when LPs start writing checks.
For the deeper mechanics on raising capital, see [how do I raise money for real estate deals](https://rodkhleif.com/how-do-i-raise-money-for-real-estate-deals/).
### Room 3: The Lender Room
The lender room is your confidence sitting across from a Key Principal (the experienced operator who signs on the loan) and a loan officer. The lender underwrites the KP’s balance sheet, not yours, on your first deal. Your job is to bring a deal that respects the lender’s time and a plan that survives stress testing.
How to build it: prepare the rent comps, expense backup, sources and uses, and reserves model in writing before the call. Bring your KP. Let the KP take the relationship questions. You handle the deal questions. After three of these meetings you will know the rhythm of a lender call cold.
The peer reviewed organizational trust research from [Frances Frei and Anne Morriss in Harvard Business Review’s “Begin with Trust”](https://hbr.org/2020/05/begin-with-trust) identifies authenticity, logic, and empathy as the three drivers of trust in any high stakes meeting. The lender room rewards all three. Authenticity comes from naming what you do not know. Logic comes from your numbers and your assumptions. Empathy comes from respecting the lender’s risk and the KP’s reputation.
### Room 4: The Operator Room
The operator room is your confidence making the call when the asset gets hard. Property managers will ask you to approve a $40,000 capital expense, a unit turn schedule, a rent increase strategy, an eviction. Confidence here is not about being right every time. It is about being decisive, documented, and willing to revisit the call with new data.
How to build it: write the decision criteria for the five most common asset management questions before you ever own a deal. When the question comes, you run your criteria and document the answer. Inside two cycles, the operator room becomes routine.
## The Extrovert Path vs. The Prepared Path
The personality difference between two new investors matters far less than the difference between an extroverted approach and a prepared approach. Side by side:
The Extrovert Path vs. The Prepared PathTwo ways to walk into the room. Only one closes the deal.Confidence Move✗The Extrovert Path (Loud)✓The Prepared Path (Quiet)How you open with a broker✗Lead with energy and small talk✓Lead with two specific submarket questionsHow you handle a hard LP question✗Talk faster and pivot to features✓Pause, name the risk, walk through the mitigationHow you sit across from a lender✗Try to charm the loan officer✓Bring a KP, a stress tested pro forma, and a written planHow you make an asset management call✗Defer to a partner you hope is right✓Run the numbers and own the decisionHow you respond to a bad month✗Go quiet on investor updates✓Send the same monthly update on scheduleHow LPs perceive you✗Polished but slippery✓Quiet but unshakeable## The Daily Practices That Build Confidence in All Four Rooms
Confidence in all four rooms compounds from a small set of daily practices. None of them require you to change your personality. All of them require you to show up consistently. [Frank Patalano](https://rodkhleif.com/podcasts/from-teaching-grade-school-to-raising-millions/), the Rhode Island school teacher who became a general partner on 350 plus doors, ran exactly this stack from a quiet introvert’s starting point.
1. **Underwrite five deals a week.** Even practice deals. The pattern recognition compounds and confidence in the broker room follows.
2. **Record yourself teaching one concept for two minutes a day.** Watch it back. Inside 30 days the way you talk about [current multifamily cap rate ranges](https://rodkhleif.com/what-is-a-good-cap-rate-for-multifamily/), NOI, and DSCR shifts from script to second nature.
3. **Send one biweekly investor email.** A market datapoint, a deal you looked at, one lesson. No pitch. Six months of this builds the investor room.
4. **Run one practice lender call per month.** Use a friend who works in commercial real estate or a Warrior partner. Defend your assumptions out loud.
5. **Document one asset management decision per week.** A real one if you operate property, a hypothetical one if you do not. Confidence in the operator room is built on reps.
6. **Read the National Multifamily Housing Council’s monthly Apartment Tracker.** See [NMHC’s quarterly survey of apartment market conditions](https://www.nmhc.org/research-insight/quarterly-survey/). Show up to broker conversations with last month’s market data, not last year’s.
For the step by step on getting your first 100 names onto your investor list, see [how to build an investor list for multifamily syndications](https://rodkhleif.com/how-to-build-an-investor-list-for-multifamily-syndications/). Cadence is the foundation of investor room confidence.
## How to Know You Are Actually Ready (The Three Tests)
Confidence without a measurable readiness test is just optimism. Run these three tests before you accept your first deal.
1. **The Two Minute Test.** Set a timer. Explain the deal you are looking at to a smart non investor in plain English in two minutes. If you cannot, you are not ready for the investor room.
2. **The Sensitivity Test.** Open your pro forma. Move rent growth down 200 basis points and exit cap up 50 basis points. If returns still pencil to the LP minimum, you are ready for the lender room. If they do not, the deal is not.
3. **The Reference Test.** Name three operators or mentors who would take a reference call from a prospective LP about you. If you cannot name three, you are not ready for the broker or investor rooms yet. Build the relationships first.
Pass all three and you have earned the right to walk into the next first deal conversation. Fail any one of them and the next 30 days are about closing that gap, not chasing the deal.
## Three Confidence Profiles: Which One Closes?
Apply the framework to three new sponsors at month 12 of their journey. One closes. Two are still circling.
### Profile 1: The Bluffer
This sponsor has been to a few meetups and has a polished pitch deck. They talk fast. They have not underwritten five deals in any single week of the last six months. They avoid the lender room because the questions get hard. They go quiet on investor updates between deals. Brokers stop returning their calls within six months because nothing the sponsor says holds up under follow up.
Time to first close for this profile: years and counting.
### Profile 2: The Prepared Introvert
Same 12 months of study, but this sponsor underwrites five deals a week, sends a biweekly investor note to 60 people, has run three practice lender calls with a Warrior partner, and asks two specific submarket questions on every broker call. They are not loud. They are unshakeable. The first GP deal closes inside month 12.
Time to first close for this profile: 9 to 18 months.
### Profile 3: The Full Stack Warrior
Everything from Profile 2, plus they host their own podcast where they interview operators and underwrite deals on air, they have a documented methodology they share with LPs pre deal, and they have a deep bench of KPs and mentors. The four rooms are second nature. They are now on deal three.
Time to first close for this profile: already closed. Confidence is a flywheel at this stage.
## Reactive Confidence vs. The Four Rooms Operator
The same room exposes two operators in completely different ways. Watch the contrast across the four rooms in a single raise:
Reactive Confidence vs. The Four RoomsSame room, two different operators, very different outcomes.The Room✗The Reactive Operator✓The Four Rooms OperatorThe Broker Room✗Sends a generic “send me deals” email✓References a specific 2026 submarket trade and asks for similarThe Investor Room✗Hides assumptions behind a glossy deck✓Walks LPs through a sensitivity tab and risk registerThe Lender Room✗Hopes the KP carries the call✓Comes prepared with rent comps, expense backup, and reserves modelThe Operator Room✗Reacts to the property manager✓Sets the cadence, the budget, and the scorecardTime to first close✗Stalls past year three✓9 to 18 months## Watch the Full Warrior Interview
Frank Patalano is the cleanest case study for the prepared introvert path. Watch him explain how a quiet Rhode Island school teacher built confidence in all four rooms and ended up a general partner on 350 plus doors raising millions in capital.
Watch the Full Interview
Frank Patalano walks through how a Rhode Island school teacher built quiet confidence into a general partnership on 350 plus doors and a multimillion dollar capital raise.
## Common Confidence Killers and How to Neutralize Them
After coaching thousands of Warriors through the four rooms, these are the seven patterns that erode confidence on repeat. Each one has a counter move.
**Killer 1: Comparing yourself to the loudest person at the meetup.** Counter: ask the loudest person two specific submarket questions. Watch how often they cannot answer. Confidence is not about volume.
**Killer 2: Skipping the lender room because it is uncomfortable.** Counter: schedule three practice lender calls in the next 30 days, even if you do not have a deal. Reps build comfort.
**Killer 3: Going silent on investor updates between deals.** Counter: a biweekly cadence on autopilot. Same template, three short paragraphs, every two weeks no matter what.
**Killer 4: Letting the KP make every contested call.** Counter: own at least one decision per asset that you researched and stand behind. Document it. Share the result with your team.
**Killer 5: Over polishing the pitch deck.** Counter: invert your hours. Two hours of underwriting and one hour of conversation prep for every one hour you spend in Canva.
**Killer 6: Memorizing lines.** Counter: prepare the data points behind the lines, not the lines themselves. Your delivery becomes natural the moment the data is real.
**Killer 7: Hiding the fact that you are new.** Counter: name it early, then pivot to the team. “This is my first general partnership. My KP has closed 1,500 units in this submarket. My role on this deal is X, Y, and Z.” Transparency reads as mature.
For the broader playbook on how to start the credibility side of all this, see [how to build credibility as a new syndicator](https://rodkhleif.com/how-to-build-credibility-as-a-new-syndicator/), and for the foundational first steps, see [first steps to becoming a multifamily syndicator](https://rodkhleif.com/what-are-the-first-steps-to-becoming-a-multifamily-syndicator/).
> **Rod Khleif:** “I have watched thousands of quiet, analytical people walk into this business convinced their personality is a problem. It is not. The problem is they confuse confidence with extroversion. Confidence in multifamily is the willingness to be the most prepared person in every room and to act on that preparation. Build the four rooms one at a time and the personality conversation disappears.”
**Want to dive deeper into syndication? Download Rod’s Free Guide to Multifamily Syndication!**[](https://rodkhleif.com/beginner-resources/15-6/)## How to Become a Confident Multifamily Investor FAQ
**Q: How do you become a confident multifamily investor?**
A: You build confidence room by room across the broker room, the investor room, the lender room, and the operator room. Underwrite five deals a week, send a biweekly investor email, run practice lender calls with a partner, and document one asset management decision per week. Confidence is the byproduct of preparation done in public over time.
**Q: How do you foster a growth mindset as a multifamily investor?**
A: Treat every broker rejection, every passed deal, and every tough LP question as data, not identity. Run a weekly review on what you got wrong and what you learned. Keep a written log of decisions and outcomes. The growth mindset is a maintenance practice, not a personality trait.
**Q: Do introverts make good multifamily investors?**
A: Yes, often the best. The most successful Warriors I have coached are analytical and quiet by default. Multifamily rewards preparation more than charisma. The investor room and the lender room are won by the most prepared person, and that is almost always the introvert who did the homework.
**Q: How long does it take to feel confident in the broker room?**
A: 60 to 90 days of consistent prep. Read the OM twice and the rent roll once before each call. Bring two specific submarket questions. Follow up the same day. After 10 calls run that way, brokers stop seeing you as a stranger and start sending you off market deals.
**Q: How do I handle an LP question I do not know the answer to?**
A: Pause. Say “I do not know, let me find out and come back to you tomorrow.” Then come back to them tomorrow with a clean answer. The honest pause is a confidence builder, not a confidence killer. The bluff is what loses the LP.
**Q: How do I get over imposter syndrome on my first deal?**
A: Imposter syndrome shrinks when you stop trying to prove you belong and start proving you are prepared. Build your team first (KP, co sponsor, mentor), document your underwriting methodology, send your investor cadence for six months before you raise. The structure carries the confidence the personality cannot.
**Q: What is the fastest way to build confidence as a new multifamily investor?**
A: Reps in the room you are weakest in. Score yourself one to ten on each of the four rooms. Pick the lowest score. Spend 30 days running the daily practice for that room until the score goes up. Then audit again. The lowest leverage move is general confidence work. The highest leverage move is targeted reps in your weakest room.
**Q: Do I need to be charismatic to raise capital?**
A: No. You need to be transparent, consistent, and prepared. LPs do not write checks because they like you. They write checks because they trust you to execute and communicate honestly. A quiet operator who sends a clean monthly update beats a charismatic one who goes dark between raises every time.
**Q: How do I know if I am ready for my first deal?**
A: Pass the three tests. Explain a deal to a smart non investor in two minutes. Stress test the pro forma at minus 200 basis points rent growth and plus 50 basis points exit cap and still pencil. Name three references who would vouch for you on an LP call. Pass all three and you are ready. Fail any one and the next 30 days close that gap.
**Q: What is the biggest confidence mistake new multifamily investors make?**
A: Confusing extroversion with confidence and trying to perform their way through it. The performance always cracks under follow up questions in the broker, lender, or operator rooms. The fix is to stop performing and start preparing. Confidence built on preparation does not crack.
## Ready to Take the Next Step?
If you want a partner bench, a mentor pool, and a deal flow network that compresses the four rooms into months instead of years, apply to the Warrior Program. It is widely regarded as the most successful multifamily mentorship program in the country, with 1,700 plus members who have collectively acquired over 260,000 units, and it is built so quiet, prepared operators get pulled into deals on day one.
[**Apply to the Warrior Program →**](https://rodkhleif.com/rod-khleif-warrior-program/)
Not ready for the Warrior Program yet? Start with the Multifamily Bootcamp. It is the fastest live walkthrough of the four rooms and the foundation everything else in Rod’s coaching is built on.
[](https://rodkhleif.com/bootcamp/ "Reserve your seat at Rod Khleif's Multifamily Bootcamp")[**Reserve your seat at the Multifamily Bootcamp →**](https://rodkhleif.com/bootcamp/)
*Disclaimer: This article was written by AI and reviewed by Rod and his team.*
**Categories:** Psychology of Success, Raising Capital, Syndication
---
### [Purchasing Commercial Property: Step by Step](https://rodkhleif.com/purchasing-commercial-property/)
**Published:** April 8, 2025
**Author:** Alex Khleif
**Content:**
Purchasing commercial property can be one of the most powerful strategies for building lifetime cashflow and creating generational wealth. But it’s not enough to just buy a building; you need to understand how to evaluate it, finance it, manage it, and most importantly, align it with your goals.
If you’ve ever asked yourself how to purchase commercial property or whether commercial real estate investing is right for you, you’re in the right place. I’ve helped thousands of new and experienced investors change their lives with commercial real estate investing.
In this guide, I’ll walk you step-by-step through what makes commercial realty investments so attractive, what to watch out for, and how to make sure you don’t miss crucial details that separate good deals from great ones.
Let’s dive in.
## **Understanding Commercial Real Estate**
Before we get into tactical, we’ve got to cover the basics. Most people skip this part and that’s a mistake. Commercial real estate is its own world, with its own language, systems, and risks. If you want to succeed, you need to understand the fundamentals.
### **What Is Commercial Real Estate?**
Commercial real estate (CRE) refers to properties that are used for business purposes and generate income. Unlike residential real estate, which is usually single-family homes or small multifamily properties, commercial properties include:
- Office buildings
- Retail spaces
- Industrial facilities
- Warehouses
- Medical centers
- Hotels
- Multifamily properties with 5 or more units
If you’re buying a commercial building, you’re stepping into the world of professional real estate investing. You’re acquiring a cash-flowing business.
### **Types of Commercial Property**
When purchasing commercial property, it’s important to understand the different asset classes:
- **Office**: These range from Class A trophy properties in downtown locations to suburban office parks.
- **Retail**: Shopping centers, strip malls, and standalone stores.
- **Industrial**: Warehouses, manufacturing facilities, and flex spaces.
- **Multifamily**: Apartment buildings with five or more units.
- **Hospitality**: Hotels, motels, resorts.
- **Special-Use**: Think gas stations, car washes, self-storage, medical offices.
Each asset class has different risk profiles, tenant expectations, and capital requirements. Multifamily is often considered a great entry point into commercial real estate investing for beginners because of its consistent demand and financing options.
### **How Commercial Differs from Residential Real Estate**
This is one of the most common questions I get: “Rod, how is commercial property investment different from residential?”
Commercial real estate is typically valued based on its income potential, not comps, or comparable properties.
Residential properties are usually valued by what similar homes sold for recently. But commercial property is valued by something called a cap rate. And if you don’t understand cap rates, you won’t understand what you’re buying. We’ll get into that later, but just know this: **commercial real estate is a business**, and should be treated like one.
Another key difference is that lenders evaluate deals based on the property’s ability to generate income, not just your personal credit.
## **Key Considerations Before Purchasing** Commercial Property
### **Why Invest in Commercial Property?**
Let’s talk about why commercial real estate investors love this game. Commercial real estate investment opportunities offer:
- **Scalability**: One commercial property can generate income from multiple tenants.
- **Leverage**: Banks are often more willing to lend on cash-flowing commercial real estate.
- **Tax Benefits**: Cost segregation, depreciation, and 1031 exchanges can dramatically reduce your tax burden.
- **Appreciation Potential**: Forced appreciation is possible by improving operations, raising rents, or repositioning the asset.
- **Cash Flow**: Commercial properties typically provide more stable and predictable cash flow than single-family rentals.
If you’re wondering whether commercial property investment is right for you, ask yourself: Do you want to scale your wealth faster and create freedom through passive income?
### **Location Analysis**
You’ve heard it before: location, location, location. But in commercial real estate buying, location isn’t just about neighborhoods, it’s about access, zoning, tenant demand, and future growth potential.
Here’s what to look for:
- **Foot traffic** for retail.
- **Accessibility and parking** for office and multifamily.
- **Proximity to major highways or rail** for industrial.
- **Job growth, population trends, and median income** for any commercial investment.
Tools like CoStar, LoopNet, and your local chamber of commerce can provide powerful data, but don’t underestimate the value of physically visiting markets. Walk the property. Talk to tenants. Meet with commercial property brokers. That’s where the gold is.
### **Financial Metrics to Evaluate**
Before you make any offer, understand the numbers. Key metrics include:
- **Net Operating Income (NOI)**: Gross income minus operating expenses.
- **Cap Rate**: NOI divided by purchase price. It’s a measure of yield.
- **Cash-on-Cash Return**: Annual cash flow divided by initial cash invested.
- **Debt Service Coverage Ratio (DSCR)**: Net operating income divided by annual debt payments.
Understanding how to evaluate these metrics—and when to prioritize each—is key to making smart, strategic decisions.
### **Market Trends and Real Estate Analysis**
Strong commercial real estate investing isn’t just about the property—it’s about the market. Make sure you’re looking at:
- Historical price trends
- Vacancy and absorption rates
- Rental rate growth
- New supply and construction activity
This is where a solid real estate market analysis comes in. Use both macro and hyper-local data. Don’t just rely on what a seller or broker tells you. You always need to dig deeper. If you want to learn how to start in commercial real estate, this research is essential. Without it, your first deal might be your last.
## **Risks and Challenges in Purchasing Commercial Property**
Investing in commercial real estate can create life-changing wealth, but not without risk. If you go in blind or skip steps, the downside can be just as powerful as the upside.
Here’s what you need to watch for:
### **Market Fluctuations**
Just like any investment, commercial real estate cycles through ups and downs.
Economic slowdowns, rising interest rates, or a drop in demand can dramatically impact:
- Occupancy rates
- Rental income
- Property valuations
- Refinancing options
The solution? Don’t over-leverage, and always run worst-case scenarios. Build reserves, stress test your deals, and track local and national economic indicators regularly.
**Bonus tip**: Follow data on employment, income trends, and industry growth in your market. These are often the first signs of what’s coming next.
### **Tenant Management Issues**
Unlike residential tenants, commercial tenants often negotiate longer, more complex leases. That’s great when you land a quality tenant—but a nightmare if they default.
If you’re not careful, tenant issues can result in:
- Unexpected vacancies
- Costly legal battles
- Delays in rent collection
- Damage to the property
Avoid this by vetting your tenants thoroughly and having clear, enforceable lease terms. Consider hiring a seasoned **[commercial property management](https://rodkhleif.com/how-to-hire-a-third-party-property-management-company/)** company if you’re new to the game.
When I started, I thought I could do everything myself. The truth? Having a solid team, especially a property manager who knows the asset class, can be the difference between stress and scale.
### **Legal Challenges and Zoning Laws**
Zoning changes, code compliance, or permitting delays can derail your timeline and cost you thousands.
Common legal challenges include:
- Misunderstanding permitted uses
- Unclear title or boundary issues
- Environmental concerns (especially in older or industrial buildings)
- ADA compliance problems
Make sure your due diligence includes a thorough **[commercial property due diligence](https://rodkhleif.com/7-core-questions-to-guide-your-due-diligence/)** process, and that your legal team understands both federal and local laws.
If you’re considering a commercial land investment, this is even more important. Land use regulations can vary dramatically by jurisdiction and may require public hearings or rezoning.
## **Resources for Commercial Real Estate Investors**
Now let’s talk about where to go for support, education, and deal flow. If you want to level up your game, use the same resources the pros do.
### **Finding Commercial Property Brokers**
A skilled broker will not only show you listings, but also find, vet and negotiate deals for and with you.
Look for:
- Experience in your target asset class (retail, multifamily, office, etc.)
- Market knowledge
- Broker network and pocket listings
- Access to local commercial real estate investment opportunities
Ask other commercial property investors in your area who they trust. Or tap into national networks like Marcus & Millichap, CBRE, and Colliers.
Working with the right broker early on can help you discover where to buy commercial real estate, often before the public ever sees it.
### **Recommended Reading and Online Courses**
Books and courses won’t replace experience, but they will compress your learning curve. Some go-to resources for investors in commercial real estate for beginners:
- *The Millionaire Real Estate Investor* by Gary Keller
- *Commercial Real Estate Investing for Dummies* by Peter Conti
- Rod Khleif’s own [Multifamily Bootcamp](https://rodkhleif.com/bootcamp/) and Warrior Program
- FNRP’s blog on [how to get started in commercial real estate](https://fnrpusa.com/blog/commercial-real-estate-investing/)
- FortuneBuilder’s guide on [buying a commercial building](https://www.fortunebuilders.com/p/buying-commercial-real-estate/)
Online platforms like [Udemy](https://www.udemy.com/) and Coursera also offer accessible, beginner-friendly overviews.
Remember: Knowledge is power, but execution is everything.
### **Networking with Other Investors**
This is the secret weapon.
Get around people who are actively investing in commercial property. Attend meetups, join masterminds, or plug into online forums. When you collaborate, your confidence—and your deal flow—both grow.
If you’re in the Warrior program, you’ve got a built-in network of high-performing investors. Don’t be afraid to lean on that community.
Your next partner, lender, or off-market deal could be one conversation away.
## **Final Thoughts on Purchasing Commercial Property**
If you’ve made it this far, you already know: commercial real estate investing isn’t just a transaction, it’s a transformation.
It transforms your mindset, your net worth, your impact.
But too many people get stuck overthinking the first step. They wait until everything is perfect. Perfection doesn’t build wealth, execution does.
Whether you’re buying a commercial building for your business or you’re a first-time investor looking to scale, success is about knowledge + action.
Start small. Learn fast. Surround yourself with people who are doing what you want to do. And take that first step.
Because once you understand how to purchase commercial property the right way it opens the door to massive opportunity.
## **Summary of Key Points**
- Commercial real estate includes office, retail, industrial, and multifamily assets. It differs from residential in valuation, financing, and operations.
- A “good deal” starts with clearly defined goals and a solid market analysis.
- Key metrics: cap rate, NOI, cash-on-cash return, DSCR.
- The buying process includes goal setting, financing, property search, due diligence, offer, close, and management.
- Be mindful of risks: tenant issues, legal hurdles, and economic cycles.
- Use brokers, books, and investor networks to compress your learning curve and grow faster.
## **Quick FAQ**
### **What is a good cap rate for commercial real estate?**
A [what makes a cap rate attractive](https://rodkhleif.com/what-is-a-good-cap-rate-for-multifamily/) depends on the asset type and location, but typically ranges between 5% and 10%. Lower cap rates indicate less risk and more competition (think Class A in hot markets), while higher cap rates often reflect value-add opportunities or secondary markets.
[\[**Check out our free cap rate calculator\]** ](https://rodkhleif.com/cap-rate-calculator/)
### **How do I get financing for commercial property?**
Lenders typically require a strong business plan, experience, and a down payment of 20–30%. Financing options include bank loans, SBA loans, bridge loans, and CMBS. Focus on the deal’s income and the debt coverage ratio.
\[**Check out our blog posts on [financing commercial property](https://rodkhleif.com/category/funding-deals-financing/)**\]
### **Where can I find commercial investment opportunities?**
Try [LoopNet](https://www.loopnet.com/), [Crexi](https://www.crexi.com/), and local brokers. But don’t overlook off-market strategies like direct-to-owner outreach and networking through investor groups.
\[**Want to know how to evaluate these deals?** Check out this podcast on *[The Art and Science of Mutifamily Underwriting](https://rodkhleif.com/podcasts/the-art-and-science-of-multifamily-underwriting/)*
### **Is commercial real estate a good investment?**
Yes, when done correctly. It can provide strong cash flow, tax benefits, equity growth, and the ability to scale fast. But it does require more education and strategy than residential.
If you’re ready to move forward, don’t do it alone. Join a community. Get a mentor. Or book a strategy call and let’s map out your next move.
## **Rod’s Final Though**
You’ve got the tools. You’ve got the roadmap. All that’s left is the action.
Commercial property investment is one of the most powerful vehicles to create legacy wealth, time freedom, and impact. I’ve seen people start with zero experience and go on to build multi-million dollar portfolios all because they committed.
So ask yourself:
What’s one step you can take today to move closer to your first—or next—commercial deal?
Then take it.
Because this isn’t about theory. It’s about transformation.
Let’s make it happen.
— Rod
**Categories:** Blog
---
### [How to Underwrite Senior Housing Deals](https://rodkhleif.com/how-to-underwrite-senior-housing-deals/)
**Published:** April 13, 2026
**Author:** Alex Khleif
**Content:**
> *If you buy senior housing the way you buy apartments, you will get humbled fast. In multifamily, you are underwriting a building. In senior housing, you are underwriting a business that happens to operate inside a building. The revenue is layered, the expenses are labor-heavy, and the operator is the asset. I have spent over 40 years in real estate, owned or managed more than 2,000 properties, and I am now actively acquiring senior housing because the demographic opportunity is undeniable. But I only move forward on deals where the numbers tell the truth and the operator can execute. This guide walks you through exactly how I analyze senior housing deals so you can do the same.* **— Rod Khleif**
Underwriting is where every real estate deal is won or lost. Get the analysis right and you buy a cash-flowing asset with built-in demographic tailwinds. Get it wrong and you own an expensive, operationally complex headache. In traditional multifamily, underwriting is relatively straightforward. You model rents, vacancy, expenses, and capital improvements against a purchase price. Senior housing adds several layers of complexity that most apartment investors have never encountered. You are not just analyzing a rent roll. You are analyzing a care business, a staffing operation, a sales engine, a regulatory compliance program, and a reputation-dependent service platform, all wrapped around a piece of real estate. This guide covers every component of senior housing underwriting from the ground up. Whether you are evaluating your first deal or refining your existing process, these frameworks will help you separate strong [opportunities](https://rodkhleif.com/senior-housing-investment-risks-and-opportunities/) from deals that look good on paper but fall apart in practice.## **Why Senior Housing Underwriting Is Different From Multifamily**
In a conventional apartment deal, the property itself is the primary driver of value. Renovate units, raise rents, reduce vacancy, cut waste. The building is the business. In senior housing, the operating platform is the primary driver of value. A beautiful 120-bed assisted living community with a weak operator, high staff turnover, and a broken sales process will bleed cash regardless of the real estate quality. A dated but well-run 60-bed community with a strong operator, stable staff, and consistent move-in velocity can generate premium returns. This distinction shapes everything about how you underwrite. Here is a simple comparison: **Underwriting Factor** **Multifamily** **Senior Housing** **Primary revenue source** Rent Rent + care fees + ancillary services **Expense driver** Maintenance, taxes, insurance Labor (50-65% of revenue) **Occupancy driver** Market rents vs. competition Sales process + reputation + referral relationships **Valuation approach** Cap rate on NOI Cap rate, price-per-bed, and operating business valuation **Operator importance** Moderate Critical — operator IS the asset **Regulatory exposure** Low High — state-specific licensing, inspections, staffing mandates **Payer mix** Tenant pays rent Private pay, LTC insurance, Medicaid waiver, VA benefits The bottom line is this: if you apply a standard multifamily underwriting template to a senior housing deal, you will miss the variables that actually determine whether the [investment](/how-to-invest-in-assisted-living-facilities/) succeeds or fails. Senior housing underwriting requires a purpose-built framework.## **Per-Resident-Day Revenue and Expense Analysis**
The Per-Resident-Day (PRD) metric is one of the most important tools in senior housing analysis. It normalizes revenue and expenses to a consistent, comparable unit that accounts for occupancy fluctuations and seasonal patterns.### **How PRD Works**
The calculation is simple. Take any revenue or expense line item for a given period and divide it by the total number of resident days in that period. A resident day equals one resident occupying one bed for one day. If you have a 100-bed community at 90% occupancy for a 30-day month, you have 2,700 resident days. PRD analysis lets you do several things that total-dollar analysis cannot. It allows you to compare performance across communities of different sizes. A 60-bed facility and a 120-bed facility can be directly compared on a PRD basis. It reveals whether revenue growth is coming from rate increases or occupancy gains. It isolates expense inefficiencies by department. And it makes trending over time far more meaningful because it strips out the noise of occupancy changes.### **Revenue PRD**
Break revenue into its component streams and calculate PRD for each. Typical revenue layers in assisted living include base room and board charges, tiered care-level fees based on resident acuity, ancillary service charges such as medication management and additional personal care, community fees or move-in fees amortized over average length of stay, and any Medicaid or insurance reimbursements. When you see revenue PRD trending up while occupancy is flat, the operator is likely raising rates or moving up the acuity scale. When revenue PRD is flat but total revenue is growing, occupancy is driving growth. Both are fine, but you need to know which lever is working and whether it is sustainable.### **Expense PRD**
Apply the same logic to expenses. The most important departments to analyze on a PRD basis are nursing and care labor, dietary and food service, housekeeping and laundry, activities and programming, administrative overhead, marketing and sales, and building maintenance. Labor will dominate. In most assisted living communities, total labor cost runs between 50% and 65% of revenue. Within that, nursing and care staff represent the largest single line. Dietary, housekeeping, and activities add meaningful cost. Administrative and marketing round out the picture. When expense PRD is rising faster than revenue PRD, margins are compressing. That is a red flag. When expense PRD is stable or declining while revenue PRD grows, you have operating leverage. That is the pattern you want to see.## **Payer Mix Analysis**
Payer mix describes where the money comes from. In senior housing, this is a critical variable that multifamily investors almost never encounter. The mix of private pay, long-term care insurance, Medicaid waiver programs, and VA benefits shapes revenue stability, growth potential, and risk profile.### **Private Pay**
Private pay residents fund their care from personal savings, retirement income, or family support. This is the most desirable payer source for investors because rates are set by the market, not by government reimbursement schedules. Private pay rates can be adjusted more freely, and collections are typically more reliable. Communities with 80% or higher private pay generally command premium valuations.### **Long-Term Care Insurance**
Some residents have long-term care insurance policies that cover a portion of assisted living costs. These can be a reliable revenue source, but policies vary widely in coverage amounts, duration, and qualifying criteria. Underwrite LTC insurance revenue conservatively, as benefits often have daily or lifetime caps and may not keep pace with rate increases.### **Medicaid Waiver Programs**
Medicaid waiver programs provide state-funded assistance for lower-income seniors who qualify. Reimbursement rates are set by the state and are almost always below private pay rates, often significantly so. A high Medicaid percentage compresses revenue per bed and can limit your ability to raise rates. However, in some states, Medicaid waiver programs are generous and reliable. CJ Yamada, a member of my Warrior program, operates 259 assisted living beds in Wisconsin where state subsidies cover 100% of resident income and have been growing 7 to 9% annually. The key is understanding the specific program in your state and underwriting its sustainability. As a general guideline, communities with more than 30 to 40% Medicaid exposure require extra scrutiny. You need to understand the state reimbursement trajectory, the political environment around Medicaid funding, and what happens to your P&L if rates are cut or frozen.### **VA Benefits**
The VA Aid and Attendance benefit provides eligible veterans and surviving spouses with monthly payments that can be used toward assisted living costs. This is a smaller payer source for most communities, but it can be meaningful in markets with high veteran populations. The benefit amounts are fixed by the VA and change annually. When analyzing any deal, request a detailed payer mix breakdown by resident and trend it over the trailing 12 to 24 months. A shifting payer mix can signal changing market conditions, operator strategy, or demographic shifts in the surrounding area. For a full overview of the risk and opportunity framework, see our guide on [**senior housing investment risks and opportunities**.](/senior-housing-investment-risks-and-opportunities/)# **Staffing Cost Modeling**
Staffing is the single largest expense in senior housing and the variable most likely to make or break your underwriting. If you get staffing wrong, everything else falls apart. Labor is not just a cost, it is the product. Residents and their families are paying for care, and care is delivered by people.### **Key Staffing Metrics to Underwrite**
Start with staffing ratios. In assisted living, typical caregiver-to-resident ratios range from 1:6 to 1:10 during day shifts and 1:10 to 1:20 at night, depending on acuity and state requirements. Memory care requires tighter ratios, often 1:5 or 1:6 around the clock. Know what your state mandates and what the competitive market expects. Then model total hours per resident day (HPRD). This metric tells you how many direct care hours each resident receives per day. For assisted living, 1.5 to 2.5 HPRD is a common range. For memory care, 2.5 to 3.5 or higher. Compare the facility’s actual HPRD against industry benchmarks and state requirements.### **The Real Cost of Turnover**
Staff turnover in senior housing is persistent. Industry-wide, caregiver turnover rates often exceed 50% annually. Every departure triggers recruiting costs, training costs, temporary coverage from more expensive agency or overtime labor, and a period of lower care quality that can affect resident satisfaction and referral flow. Estimate the fully loaded cost of a single caregiver turnover at $3,000 to $5,000 when you include recruiting, onboarding, training, and productivity loss during the ramp-up period. If a 100-bed community loses 15 caregivers per year, that is $45,000 to $75,000 in hidden cost that may not show up cleanly in the P&L.### **Agency Labor**
Agency labor, meaning temporary staff supplied by staffing agencies, is one of the clearest red flags in senior housing underwriting. Agency rates are typically 1.5 to 2.5 times the cost of in-house staff. A community that relies heavily on agency labor is signaling one or more problems: an inability to recruit, poor culture, inadequate pay, weak leadership, or a combination of all four. In your underwriting, quantify agency labor separately. What percentage of total labor hours comes from agency? What is the cost premium? What would the P&L look like if agency usage were reduced to a normal level, meaning under 5% of total hours? That delta is your operational [upside opportunity](/is-senior-housing-a-good-investment-in-2026/), but only if the incoming operator has a proven track record of building stable in-house teams.### **Building a Staffing Proforma**
A thorough staffing proforma should include every position by department: nursing and care, dietary, housekeeping, activities, administration, marketing, and maintenance. For each position, model the number of FTEs, hourly or salary rates, benefits cost as a percentage of wages (typically 15 to 25%), overtime assumptions, and agency labor assumptions. Build the model at different occupancy levels, typically 80%, 85%, 90%, and 95%, because staffing does not scale linearly. You need minimum coverage regardless of census, and incremental residents add labor cost at the margin.## **Move-In/Move-Out Velocity and Net Absorption**
Occupancy in senior housing is not static the way it often is in apartments. Residents move in and move out continuously, and the rate at which each happens determines whether your census is growing, stable, or declining.### **The Occupancy Waterfall**
Think of occupancy as a waterfall with five stages. At the top you have leads, which are the inquiries from families, referral sources, and online channels. Leads convert to tours, which are in-person or virtual visits to the community. Tours convert to deposits, which are commitments from families that have chosen your community. Deposits convert to move-ins, which are actual new residents. And then length of stay determines how long each resident remains, which directly affects your move-out rate. Each stage has a conversion rate, and each conversion rate is a lever the operator can pull. A strong sales operation might convert 40 to 50% of tours into move-ins. A weak one might convert 15 to 20%. That difference, applied across 50 or 100 tours per year, is the difference between a full community and a struggling one.### **Net Absorption**
Net absorption is simply move-ins minus move-outs for a given period. Positive net absorption means the community is filling up. Negative net absorption means it is losing residents faster than it replaces them. Flat net absorption means occupancy is stable. When underwriting, request monthly move-in and move-out data for at least the trailing 24 months. Look for patterns. Is there seasonality? Many markets see slower move-ins during holidays and summer. Is there a trend? Accelerating move-outs can signal care quality problems, while accelerating move-ins suggest the sales process is working. Model your projected occupancy month by month using realistic net absorption assumptions. Do not assume a straight-line lease-up from 80% to 95% in 12 months. Senior housing lease-up is typically 2 to 4 net new residents per month for a 100-bed community with a competent operator. Faster is possible but should be treated as upside, not base case.### **Length of Stay**
Average length of stay varies significantly by care type. Independent living residents may stay 3 to 5 years. Assisted living averages 18 to 30 months. Memory care is often 12 to 24 months. Shorter length of stay means higher turnover and a greater need for a consistent move-in engine to maintain census. Length of stay also affects revenue. Longer stays reduce move-in-related costs and provide more stable cash flow. Shorter stays require a more aggressive and effective marketing and sales operation. Understand the facility’s historical length of stay by care type and compare it to market and industry benchmarks.## **Revenue Layering: Base Rent, Care Levels, and Ancillary Services**
Senior housing revenue is not a single rent number. It is a layered structure that creates both complexity and opportunity. Understanding each layer is essential for accurate underwriting.### **Base Room and Board**
This is the starting rate every resident pays. It covers the room or apartment, meals, housekeeping, laundry, and basic community amenities. Base rates vary widely by market, community quality, and unit type. In assisted living, base rates might range from $3,500 to $7,000 or more per month depending on the market.### **Care-Level Fees**
Most assisted living communities tier their care pricing based on each resident’s individual needs. A resident who needs help with two activities of daily living might be in care level one. A resident who needs extensive assistance with bathing, dressing, medication management, and mobility might be in care level three or four. Each level adds a monthly surcharge on top of the base rate, often $500 to $2,000 or more per tier. Care-level revenue is one of the most powerful and often underappreciated levers in senior housing. As a community’s resident population ages in place, acuity naturally increases, and care-level revenue grows without needing to raise base rates. A community with a well-structured and accurately assessed care-level system can see 15 to 25% of total revenue come from care fees above base rent.### **Ancillary Services**
Additional revenue can come from services such as transportation, salon and beauty services, private caregiving beyond standard care plans, guest meals, and specialized programming. These are typically smaller revenue streams but contribute to margin and resident satisfaction.### **Community Fees**
Most communities charge a one-time community fee or move-in fee, typically equivalent to one month’s base rent. Some communities amortize this fee over the first several months. Others collect it upfront. In your underwriting, be careful not to double-count community fee revenue. It should be spread across the average length of stay or recognized in the period it is earned. For a deeper comparison of how revenue structures differ between assisted living and independent living, see our guide on [**assisted living vs independent living for investors**](/assisted-living-vs-independent-living/).## **Valuation Approaches: Cap Rate, Price-Per-Bed, and Operating Business**
Senior housing valuation is more nuanced than a simple NOI divided by cap rate. Multiple approaches are used, and experienced investors triangulate between them to confirm or challenge a purchase price.### **Cap Rate on Stabilized NOI**
This is the most familiar approach for real estate investors. Divide the stabilized net operating income by the purchase price to get an implied cap rate, or apply a market cap rate to projected NOI to estimate value. Senior housing cap rates vary widely. Stabilized, well-operated communities in strong markets might trade at 6 to 7.5% cap rates. Value-add or turnaround opportunities might be priced at 8 to 10% or higher on in-place NOI, with the buyer projecting a lower cap rate after stabilization. The critical warning here is that NOI in senior housing is far more volatile than in apartments. A staffing crisis, a reputation event, or a compliance issue can compress NOI rapidly. Use trailing-12 NOI as a reference point, but always underwrite to a forward-looking NOI that reflects your specific assumptions about the operator, the market, and the business plan.### **Price Per Bed**
Price per bed or price per unit is a useful sanity check. It tells you what you are paying for each revenue-generating position in the community. In assisted living, price per bed might range from $80,000 to $250,000 or more depending on the market, age, and condition of the asset. Compare against replacement cost, which in many markets now exceeds $250,000 to $400,000 per bed for new construction. If you are buying significantly below replacement cost, you have a built-in margin of safety, assuming the operations can be improved.### **Operating Business Valuation**
Because senior housing is a business as much as it is real estate, some investors also evaluate the operating entity separately. What is the value of the operator’s licenses, certifications, trained staff, referral relationships, reputation, and systems? In many deals, particularly acquisitions of owner-operated communities, you are buying both the real estate and the business. The operating business has value that extends beyond the bricks and mortar. In practice, sophisticated buyers use all three methods to frame their offer. If the cap rate looks attractive but the price per bed seems high relative to comparable sales, dig deeper. If the price per bed is below replacement cost but the trailing NOI does not support a reasonable cap rate, you need a clear business plan to bridge the gap.## **Conservative Underwriting Assumptions and Stress Testing**
Conservative underwriting is not about being pessimistic. It is about modeling reality and making sure the deal works even when things do not go perfectly. And in senior housing, things rarely go perfectly. Staffing challenges, unexpected move-outs, regulatory surprises, and reputation setbacks are part of the business.### **Occupancy Assumptions**
If the community is at 85% occupancy today, do not underwrite to 95% in year one unless you have a very specific, evidence-based plan to get there. A realistic lease-up pace for a stabilized operator entering a new community is 2 to 4 net new residents per month in a 100-bed community. For a turnaround with a severely depressed census, even 1 to 2 net new residents per month may be ambitious initially. Stress test by asking what the deal looks like if occupancy only reaches 88% instead of 93%. Can you still cover debt service? Can you still pay preferred returns? If the entire investment thesis depends on hitting 95% occupancy, the deal has too little margin for error.### **Revenue Growth**
Annual rate growth in senior housing has historically averaged 3 to 5%. Some markets are seeing higher growth right now due to supply constraints and demographic pressure. Underwrite 3% as your base case. Test at 0% growth. If the deal fails without rent increases, the risk is too high.### **Expense Growth**
Labor costs have been rising faster than general inflation. Underwrite wage growth at 3 to 5% annually. Food, insurance, and property taxes each have their own inflation drivers. Do not use a single blanket expense growth assumption. Model each major category individually.### **Capital Reserves**
Senior housing facilities require ongoing capital investment. Budget $750 to $1,500 per bed annually for routine capital expenditures, with additional reserves for larger projects like roof replacement, HVAC systems, unit refreshes, or common area renovations. A community that has deferred maintenance will need a larger upfront capital budget in your acquisition underwriting.### **Debt Service Coverage**
Target a minimum debt service coverage ratio (DSCR) of 1.25x on your base case projections. Many lenders will require this or higher. At 1.25x, you have 25% cushion between your NOI and your debt payments. In your stress test, make sure DSCR stays above 1.0x even in a downside scenario.## **Red Flags in Trailing-12 Financials**
Every senior housing deal starts with a review of the trailing-12 months of financial statements. Here is what to look for that signals problems beneath the surface.- Declining occupancy trend. A community that has been losing residents month after month is telling you something about care quality, reputation, sales effectiveness, or market conditions. Do not assume you can simply reverse the trend without understanding the cause.
- Spiking agency labor costs. A sudden increase in agency labor spending usually means the community lost key staff members and cannot fill positions. This often coincides with declining care quality and resident satisfaction.
- Revenue growth without occupancy growth. If revenue is rising but occupancy is flat or declining, the operator may be raising rates aggressively to compensate. This can work short-term but eventually accelerates move-outs as families find more competitively priced alternatives.
- Operating margin compression. If the gap between revenue and expenses is narrowing over the trailing 12, the operator is losing efficiency. This often reflects labor cost inflation outpacing revenue growth.
- Inconsistent or incomplete financial reporting. If the seller cannot provide clean, monthly financial statements with department-level detail, that is a warning. Good operators run tight books. Poor operators hide behind vague reporting.
- Deferred maintenance becoming visible. Rising maintenance expenses, emergency repairs, or capital calls that appear in the trailing financials suggest the property has been under-invested. This will become your capital expenditure burden at closing.
- High community fee dependence. If community fees (move-in fees) represent a disproportionately large share of total revenue, the community may be masking operating weakness. Community fees are one-time revenue. If occupancy turns, that revenue disappears.
- Regulatory citations or survey deficiencies. Request the community’s survey history from the state licensing agency. Repeated deficiencies in the same areas suggest systemic operational problems, not one-time oversights.
None of these red flags automatically kills a deal. But each one requires explanation, context, and a specific plan to address. The best deals often have some of these issues because that is what creates the price discount. The key is having an operator who has fixed these problems before and a business plan grounded in evidence, not hope. For a full breakdown of deal structures and operator selection, see our guide on [**how to invest in assisted living facilities**.](/how-to-invest-in-assisted-living-facilities/)## **Putting It All Together: The Senior Housing Underwriting Checklist**
Here is the framework I use to evaluate every senior housing opportunity. It covers the major categories you need to analyze before making an offer.### **1. Market and Demographics**
- Current and projected 75+ population in the primary market area
- Household income and home equity of the target demographic
- Existing supply and competitive set analysis
- Penetration rate and unmet demand
- New construction pipeline and barriers to entry
### **2. Operator Assessment**
- Track record across multiple communities
- Staff retention rates and turnover history
- Compliance and survey history
- Sales process and marketing systems
- Culture, leadership depth, and training programs
### **3. Financial Underwriting**
- Trailing-12 revenue by category with PRD analysis
- Trailing-12 expenses by department with PRD analysis
- Payer mix breakdown and trend
- Staffing proforma at multiple occupancy levels
- Move-in/move-out velocity and net absorption trends
- Revenue layering: base rent, care levels, ancillary, community fees
- Capital expenditure needs and reserves
### **4. Valuation and Deal Structure**
- Cap rate on trailing NOI and projected stabilized NOI
- Price per bed versus replacement cost
- Financing structure and DSCR at base and stress case
- Sensitivity analysis at 80%, 85%, 90%, and 95% occupancy
- Exit assumptions: hold period, exit cap rate, exit occupancy
### **5. Risk Assessment**
- Regulatory risk in the target state
- Labor market risk and staffing feasibility
- Competitive supply risk from new construction
- Reputation and online review profile
- Downside scenario: what happens if the plan takes 6 to 12 months longer than expected
## **Frequently Asked Questions- Senior Housing Underwriting**
### **How is senior housing underwriting different from multifamily underwriting?**
Multifamily underwriting focuses primarily on rents, vacancy, and property-level expenses. Senior housing underwriting adds layers of complexity including staffing cost modeling, payer mix analysis, care-level revenue, move-in and move-out velocity, regulatory compliance, and operator performance. You are underwriting a business wrapped in real estate, not just a building.### **What is Per-Resident-Day (PRD) analysis and why does it matter?**
Per-Resident-Day analysis normalizes revenue and expenses by dividing each line item by the total number of resident days in a period. It allows you to compare performance across communities of different sizes, isolate whether growth is coming from rates or occupancy, and identify departmental inefficiencies that total-dollar analysis might miss.### **What is a healthy payer mix for an assisted living community?**
Communities with 80% or more private pay revenue are generally considered healthiest from an investment standpoint. Private pay rates are market-driven and adjustable, while Medicaid waiver reimbursements are set by the state and often below market. That said, some states offer generous Medicaid programs that can make a higher Medicaid mix viable if the reimbursement trajectory is favorable.### **How much should I budget for staffing costs in senior housing?**
Total labor cost in assisted living typically runs between 50% and 65% of total revenue. Within that, nursing and care staff represent the largest category. Model your staffing proforma by position and department at multiple occupancy levels to understand how labor costs scale as census grows.### **What occupancy assumptions should I use when underwriting senior housing?**
Be realistic about lease-up pace. For a 100-bed community with a competent operator, plan for 2 to 4 net new residents per month. Do not assume straight-line lease-up to 95%. Stress test your deal at 85% and 88% occupancy to make sure it still works if the lease-up takes longer than planned.### **What cap rate should I expect for senior housing deals?**
Cap rates vary widely based on asset quality, market, operator, and risk profile. Stabilized, well-run communities in strong markets might trade at 6 to 7.5%. Value-add or turnaround opportunities might be priced at 8 to 10% or higher on in-place NOI. Always compare against replacement cost and price per bed as additional valuation benchmarks.### **What are the biggest red flags in senior housing trailing financials?**
Watch for declining occupancy trends, rising agency labor usage, operating margin compression, inconsistent financial reporting, high dependence on one-time community fees, and a pattern of regulatory citations. None of these automatically kills a deal, but each requires explanation and a plan to address.### **Can I underwrite senior housing as a passive investor?**
Yes, but your underwriting focus shifts from operating the deal to evaluating the sponsor. You still need to understand the metrics in this guide, the payer mix, the staffing model, the occupancy waterfall, the valuation framework, so you can evaluate whether the sponsor’s assumptions are realistic and conservative. Passive investing does not mean passive due diligence. *Disclaimer: This article was written with the help of AI and reviewed by Rod and his team.* Senior housing underwriting rewards the investor who does the work. The demographic tailwind is real, the supply constraints are real, and the opportunity is real. But the returns belong to investors who respect the complexity, build the right team, and underwrite with discipline. If you want to learn more about building lifetime cashflow through real estate investing, including senior housing, visit rodkhleif.com or text CRUSH to 72345.If you want a practitioner view, hear [Ryan Byrne on senior living real estate investing](https://rodkhleif.com/podcasts/senior-living-real-estate-investing-with-ryan-byrne/).
**Categories:** Senior Housing
---
### [How Goal Setting Accelerates Real Estate Success](https://rodkhleif.com/how-goal-setting-accelerates-real-estate-success/)
**Published:** April 23, 2026
**Author:** Alex Khleif
**Content:**
When I started in real estate at eighteen, I had no money. None. My mom was on welfare. We were immigrants. She bought her first house across the street from us with her babysitting money and told me she made twenty thousand dollars in her sleep from appreciation. That moment rewired my brain.
But rewiring was not enough. I needed a process. The process is what I am going to give you now, because most investors I meet are setting goals the wrong way around, and it is quietly costing them years.
## Table of Contents
- [Why Most Real Estate Investors Set Goals Backwards](#backwards)
- [The Lifetime Cashflow Goal Stack](#goal-stack)
- [The Writing Ritual That Changes Everything](#writing-ritual)
- [Visualization and Affirmations in Multifamily Investing](#visualization)
- [How to Reverse-Engineer Your Unit Count From Your Lifestyle Goals](#reverse-engineer)
- [Traditional SMART Goals vs The Lifetime Cashflow Goal Stack](#smart-vs-stack)
- [What Goal Setting Looks Like in the Warrior Community](#warrior)
- [Goal Setting for Real Estate Success FAQ](#faq)
## Why Most Real Estate Investors Set Goals Backwards
> Goal setting accelerates real estate success when you define the life you want first, the lifestyle that life requires second, and only then reverse-engineer the property portfolio that funds both. Most investors do the opposite. They pick a unit count or a cash-flow target, chase it for years, hit it, and realize the number never mattered. The number was borrowed.
I have coached thousands of investors in my Multifamily Bootcamp and my Warrior mentorship community. The pattern is almost always the same. Someone walks in with a portfolio target like “I want one hundred doors” or “I want ten thousand dollars a month in cash flow.” I ask them why. Silence, then a shrug, then some version of “because that is what a successful investor looks like.”
That is a borrowed goal. A borrowed goal cannot survive a bad quarter, a capital call, or a 2008-style reset. Your own goal can.
The fix is a three-layer stack. You set Life goals first. Lifestyle goals second. Portfolio goals last. Everything in this article is built on that order.
### Signs Your Goals Are Borrowed
If you are not sure whether your current goals are yours or borrowed, run them through this five-question filter. If you cannot answer yes to at least four of these, you are probably working someone else’s plan.
1. **Can you explain why the number matters in one sentence** without mentioning another investor, podcast, or book?
2. **Does hitting the number change how you spend a specific Tuesday?** Not a hypothetical Tuesday. A real one on your actual calendar next month.
3. **Does the number connect to a person who is not you?** A child, a spouse, a parent, a community, a cause.
4. **Would you still pursue the number if nobody on social media ever saw it?**
5. **Would you still pursue the number if the next recession arrived tomorrow?**
Borrowed goals almost always fail on question two or question four. They are numbers you picked to impress a version of yourself that was curated by other people. Written goals that pass all five questions are durable. They survive downturns because they were never about the downturn.
## The Lifetime Cashflow Goal Stack
This is the exact framework I teach in my [goal-setting workshop](https://rodkhleif.com/goal-setting-workshop/). I call it the Lifetime Cashflow Goal Stack because the point of the stack is cash flow that funds a life you actually want to live, not cash flow that becomes the life.
[](https://rodkhleif.com/goal-setting-workshop/)
[**Want a live walkthrough with worked examples from forty years of building portfolios around this stack? Join the free Goal-Setting Workshop →**](https://rodkhleif.com/goal-setting-workshop/)
[](https://rodkhleif.com/goal-setting-workshop/)
### Layer 1: Life Goals (The Why)
Life goals are the non-negotiables about the human you want to be and the people you want to serve. Family, faith, freedom, health, legacy, giving. These are the goals that do not care about your cap rate.
Write down five to seven Life goals. Keep them short. Examples: be present at every one of my daughter’s soccer games, fund fifty children through Tiny Hands Foundation every year, train for a half marathon in my fifties, pay off my parents’ house, retire my spouse from a job they tolerate. None of these require you to own a single apartment unit. But every one of them will shape the portfolio you need to build.
### Layer 2: Lifestyle Goals (The How)
Lifestyle goals are where and how you live. Time freedom, geographic flexibility, daily schedule, the work you say yes to, the work you say no to. This layer is where most investors have never done the math.
Ask yourself: what does a Tuesday look like in the life I want? How many hours do I work? Where am I living? What am I driving? What bills are automatic? What travel is in the calendar? How much passive monthly income does all of that actually cost?
Write a number at the bottom of that page. That number is the Lifestyle target. It is not arbitrary. It is the literal sum of the life you just described.
### Layer 3: Portfolio Goals (The What)
Only now do you touch unit counts, deal count, cash-on-cash returns, and exit windows. And you do not pick these from a podcast. You back-solve them from Layer 2.
This is the reverse of how almost every real estate education program teaches goal setting. Most tell you to pick a unit count first and then figure out why you want it. I am telling you to pick the life first, the lifestyle second, and let the portfolio fall out of the math. When you do it in this order, the portfolio number finally means something, and you stop abandoning goals that were never really yours.
## The Writing Ritual That Changes Everything
Writing goals down once a year is a ceremony. Writing them down twice a day is a practice.
Here is the ritual I have done for forty years, with very few exceptions:
1. Every morning, before email, before phone, I sit with a plain notebook and hand-write my top goals. By hand. Not typed. The physical motion matters because it routes the goal through a different part of your brain than passive reading.
2. I write them again at night, before bed. Same goals. Same notebook. The nighttime write is what your subconscious takes into sleep.
3. Once a week I review the full list and ask one question: is anything here borrowed? If yes, I cross it out.
There is nothing mystical about this. It is a repetition loop that keeps your goals in front of the part of you that makes decisions all day: what you say yes to, what you decline, what you stop tolerating, what you start pursuing. The underlying neuroscience is well documented. Research from [Mueller and Oppenheimer at Princeton and UCLA](https://www.psychologicalscience.org/news/releases/take-notes-by-hand-for-better-long-term-comprehension.html) found that writing by hand produces measurably stronger conceptual memory than typing, because the slower physical motion forces the brain to process and compress the idea rather than transcribe it. That is why typed goals in a Notes app do not survive a busy week. Handwritten goals do. Most people’s goals die in a drawer. Goals you write twice a day do not die in a drawer.
If you want the exact templates I use for this, they are inside my free [goal-setting workbook](https://rodkhleif.com/goal-setting-workbook/). Print it. Use it. Fill it out the way I do, not the way a self-help book does.
[](https://rodkhleif.com/goal-setting-workbook/)
## Visualization and Affirmations in Multifamily Investing
A lot of investors, especially the engineers and accountants I coach, hear the word visualization and roll their eyes. I understand. But visualization is not wishing. Visualization is mental rehearsal, and it is the same process top performers in surgery, military operations, and professional sports use before they ever perform the real thing.
Two practices that work, stripped of any woo:
- **Deal rehearsal.** Before a broker call, a lender conversation, or an investor pitch, close your eyes for ninety seconds and walk through the conversation from start to finish in the best-case version. Hear your own calm tone. Watch yourself ask the harder question and wait for the answer. When the real call starts, you are not doing it for the first time.
- **Outcome visualization.** Pick one Portfolio goal. Each morning, after you write your goals, spend two minutes picturing the day you hit it. Where are you standing? Who calls you first? What are you wearing? What does the email say? This is not manifestation. It is an anchor your brain reaches for when a hard day makes you want to quit.
Affirmations are the verbal version. Write three to five in the present tense. Read them aloud after you write your morning goals. Skeptical readers should test it for thirty days and then decide. That is the only fair experiment.
## How to Reverse-Engineer Your Unit Count From Your Lifestyle Goals
This is the math nobody teaches you. It is the bridge from Layer 2 to Layer 3 of the goal stack.
Pretend your Lifestyle goal is thirty thousand dollars a month in passive income. Here is how that becomes a concrete Portfolio goal.
**Step 1:** Decide what one door nets you per month after all expenses and reserves. A conservative national average for a well-underwritten B-class multifamily unit is two hundred dollars a month in net cash flow to the operator. Your market may vary. Use your own underwriting. The [National Multifamily Housing Council](https://www.nmhc.org/research-insight/quick-facts-figures/) publishes quarterly rent and occupancy data that is useful for sanity-checking your per-door assumptions.
**Step 2:** Divide the Lifestyle target by the per-door number. Thirty thousand divided by two hundred equals one hundred fifty units.
**Step 3:** Decide your timeline. If you want there in five years, your plan is roughly thirty units per year. If you want there in ten years, fifteen units per year. Both are realistic for an operator who actually does the work. Neither is realistic for someone who keeps setting goals in January and forgetting them by March.
**Step 4:** Decide your first-deal size. Your first deal should pull one-tenth to one-fifth of your total unit goal on the board in a single close if you go the syndication route. That is not optional math. That is how you compress a decade into five years. My [Multifamily Bootcamp](https://rodkhleif.com/bootcamp/) walks you through exactly how to structure that first deal without the capital you think you need.
This is a simplified example. Your actual underwriting should include vacancy, management, reserves, debt service, and a margin for the market cycle. But the structure of the math is the point: your unit count is an output, not an input.
### Three Worked Scenarios
Your Lifestyle number drives everything else. Here are three common Lifestyle targets I see among investors in my community, each reverse-engineered into a Portfolio plan. Use the one closest to your own number as a starting point and adjust from there.
**Scenario A: $15,000 per month (replace a mid-career W-2).** At two hundred dollars a door, that is seventy-five units. At a first deal of fifteen units, you are four closes from your number. At one close per year through a syndication-and-sponsor path, that is a four-year plan. At two closes per year, it is two years. Most Warriors targeting this number hit it inside thirty-six months.
**Scenario B: $30,000 per month (replace a senior executive income and fund two college educations).** At two hundred dollars a door, that is one hundred fifty units. At a first deal of thirty units, you are five closes from your number. At one close per year, five years. At two closes per year, two and a half years. This is the most common Warrior target and the most common number Jennifer Barner built around.
**Scenario C: $50,000 per month (build generational assets plus active philanthropy).** At two hundred dollars a door, that is two hundred fifty units. At a first deal of fifty units, five closes. At one close per year, five years. Investors targeting Scenario C usually structure as a sponsor on larger syndications earlier, because the fee and promote economics compound faster than pure unit accumulation.
Notice what changes across the three scenarios and what stays the same. The math structure does not change. The only variables are your Lifestyle number, your first-deal size, and your timeline. Everything else falls out.
### Reactive Goal Setting vs. Lifetime Cashflow Goal Stack
Area Reactive Goal Setter Lifetime Cashflow Goal Stack Starting pointUnit count or income target picked from a podcastLife goals around family, freedom, and legacy Review cadenceReviewed once at New Year’s, forgotten by MarchHand-written morning and night, reviewed weekly Purpose of cash flowMore cash flowThe specific lifestyle the investor wrote out Response to a bad quarterAbandons the goalAdjusts the timeline, not the goal Unit countInput, chosen firstOutput, back-solved from lifestyle Partner and deal filterAnything that moves the numberOnly deals that serve the life goals ## Traditional SMART Goals vs The Lifetime Cashflow Goal Stack
SMART goals, the framework most professionals learn first, are a sanity-check tool. They are useful inside Layer 3 of the stack, and they are dangerous if you try to use them as the whole method. Here is the difference in practice.
Dimension Traditional SMART Goals Lifetime Cashflow Goal Stack Origin1981 business management paperForty years of owning 2,000+ rentals and coaching Warriors controlling 260,000+ units Primary filterIs the goal specific, measurable, achievable, relevant, time-boundDoes the goal connect to a life and a lifestyle you actually want Starting pointThe goal itselfThe human behind the goal Risk of failureHitting a number that no longer mattersAdjusting timeline while the goal keeps mattering Best useQuality control on a single Portfolio goalEnd-to-end system for decade-long investing Revisit cadenceTypically annualDaily (write) + weekly (review) + quarterly (audit) Run every Layer 3 Portfolio goal through the SMART filter once you have defined it. Do not run your Life and Lifestyle goals through SMART. Those live above the spreadsheet.
## What Goal Setting Looks Like in the Warrior Community
My Warrior mentorship community controls over two hundred sixty thousand units collectively. I do not say that to brag. I say it because the through-line in every Warrior success story is written goals, reviewed daily, that were set in the order I just described.
Jennifer Barner came into the community with a Life goal: put four kids through college debt-free and be present while she did it. Her Lifestyle goal backed into the monthly passive income she needed to replace a demanding career. Her Portfolio goal, reverse-engineered from that number, was well above a thousand units. She is past that now, with all four kids in school, with her calendar her own. The goal was not one thousand units. The goal was her kids and her time. One thousand units was the receipt.
Anthony came in with almost no capital and closed a two-hundred-eighteen-unit first deal within his first twelve months in the community. His Lifestyle goal was specific: be done with his W-2 by a certain date. His Portfolio goal was the math that got him there. The first deal was not a miracle. It was what he wrote on a page every morning for a year.
Loren wrote his resignation date on a page sixty days after his first Multifamily Bootcamp. He hit that exact date, to the week, twelve months later. His goal never said “resign.” It said “walk into my boss’s office on X date and hand in paper.” Specific. Written. Every morning. Every night.
> **Rod Khleif:** “None of these people are more gifted than you. They just put their goals on paper in the right order, and then they read them twice a day until the world rearranged itself around the list.”
## Goal Setting for Real Estate Success FAQ
**Q: Why is goal setting important in real estate investing?**
A: Goal setting gives your investing a reason. Without a written goal, every deal looks the same and every bad quarter feels like proof you should quit. With written Life, Lifestyle, and Portfolio goals, you filter deals, partners, and setbacks through a purpose that is bigger than the current month, which is what lets you compound for decades instead of years.
**Q: What is the best goal setting method for real estate investors?**
A: The one I teach in my [goal-setting workshop](https://rodkhleif.com/goal-setting-workshop/): write Life goals first, Lifestyle goals second, Portfolio goals third. Review by hand, morning and night. Revisit weekly. The method works because it connects every unit you buy to a life that actually matters to you.
**Q: How often should I review my real estate investing goals?**
A: Twice a day at minimum. Write them by hand every morning before email and every night before bed. Do a full review once a week to cross out borrowed goals and sharpen the ones that remain. Once a quarter, compare the portfolio you are actually building to the lifestyle goals that define it.
**Q: Should I write my goals down every day?**
A: Yes, every day, by hand. Handwriting a goal routes it through parts of your brain that passive reading does not reach. The daily repetition is what keeps the goal loud enough to drive the small decisions that actually build a portfolio. Typed goals in a Notes app do not survive a busy week. Handwritten goals do.
**Q: What is the difference between a goal and a resolution in investing?**
A: A resolution is a wish with a deadline. A goal is a wish with a plan, a timeline, a measurable target, and a daily action attached to it. Resolutions live in January. Goals live on a page you read twice a day for ten years.
**Q: How do I set realistic unit count goals as a new investor?**
A: Do not set a unit count first. Set a Lifestyle goal in dollars per month, divide by your conservative per-door net cash flow, and the unit count falls out. Then pick a timeline based on how aggressively you want to scale. A new investor aiming for one hundred fifty units in five to ten years is realistic if the goals are written daily and the first deal is structured correctly.
**Q: Can visualization really help my real estate investing results?**
A: Yes, when you use it as mental rehearsal, not wishing. Top performers in surgery, the military, and professional sports rehearse outcomes before executing. Investors who rehearse a broker call, a lender meeting, or an investor pitch before walking in perform measurably better because the real event is no longer the first run-through.
**Q: How do SMART goals apply to multifamily real estate?**
A: SMART goals are a useful sanity check on any Portfolio goal. Specific unit count, measurable cash flow, achievable with the capital you have access to, relevant to your Lifestyle goal, and time-bound with a close date. Run every Layer 3 goal through the SMART filter. Do not run Life or Lifestyle goals through it. Those live above the spreadsheet.
**Q: What should I do when I miss a real estate investing goal?**
A: Adjust the timeline, not the goal. A missed deadline is data, not failure. Rewrite the goal with a new date, diagnose what broke, and correct the single habit that caused the miss. Investors who abandon goals after one miss never compound. Investors who reset the date stay in the game long enough to win it.
**Q: How did Rod Khleif set goals when he was starting with nothing?**
A: At eighteen, with no money and no network, I wrote my goals by hand every morning and every night. I watched my mother buy her first house with babysitting money and saw her make twenty thousand dollars in her sleep from appreciation. That rewired my expectations. The daily writing ritual kept those expectations loud enough to outlast every early failure, and it is the same ritual I have kept for forty years.
## Ready to Take the Next Step?
If you want a room full of investors, a step-by-step deal framework, and the goal-setting structure we just covered applied directly to your first multifamily deal, come to my [**Multifamily Bootcamp**](https://rodkhleif.com/bootcamp/). It is three days that has launched more first deals than any other program in the industry.
Prefer to start on your own? Download my free [**Lifetime Cashflow Academy ebook**](https://rodkhleif.com/lcfa-ebook/) and read the chapters on goal setting and deal structure this week.
*Disclaimer: This article was written by AI and reviewed by Rod and his team.*
When discipline meets clear goals, deals close; see how [Patrick Hayter closed 51 units in New York](https://rodkhleif.com/warrior-win-patrick-hayter-51-unit-ny/) and [Roberto Carabetta closed 58 units in Georgia](https://rodkhleif.com/warrior-win-roberto-carabetta-58-unit-ga/).
At scale, see [Ronal and Mary Jane Lou closing 204 units in Texas](https://rodkhleif.com/warrior-win-ronal-and-mary-jane-lou-204-units-tx/) and [Victor Collazo closing 92 units in Kansas](https://rodkhleif.com/warrior-win-victor-collazo-92-unit-ks/).
**Categories:** Blog, Multifamily Investing, Psychology of Success
**Tags:** goal setting, mindset, multifamily, real estate investing, SMART goals, visualization
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### [Letter of Intent: Structure, Best Practices & Free Template](https://rodkhleif.com/need-know-letter-intent/)
**Published:** May 12, 2026
**Author:** Rod Khleif
**Excerpt:** The other day, a member of our Multifamily Community Facebook Group had questions about when and how to use a letter of intent. This isn’t the first time I’ve had someone ask me about this topic, so today I’m sharing that information here on the blog.
**Content:**
I have written a letter of intent on every single multifamily deal I have ever pursued, and I am about to tell you exactly why a sloppy LOI is the fastest way to lose a deal you should have won. A letter of intent real estate buyers actually use is non binding by design, but it is the document that locks in the terms a seller agrees to before anyone spends a dollar on attorneys, environmental reports, or inspections. Skip it, rush it, or copy a free template off Google without thinking, and you will either lose the deal or sign yourself into terms you regret.
This guide walks you through the exact framework I have used to win deals against bigger, better funded buyers. You will get the LOI Lock In Stack, a free template, two comparison charts, ten worked examples, and the FAQ I wish I had when I was writing my first one.
## Table of Contents
- [Why Most Letters of Intent Get Rejected](#why-loi-rejected)
- [The LOI Lock In Stack: 5 Layers That Lock Your Deal](#loi-lock-in-stack)
- [Before You Send: The Pre Submission Ritual](#before-you-send)
- [How to Write an LOI Step by Step](#how-to-write-loi)
- [Three Worked LOI Scenarios by Deal Size](#three-scenarios)
- [Reactive LOI vs Lock In LOI](#reactive-vs-lockin)
- [Letter of Intent vs Purchase and Sale Agreement](#loi-vs-psa)
- [5 LOI Mistakes That Kill Deals](#loi-mistakes)
- [Warrior Proof: How My Students Use This](#warrior-proof)
- [Letter of Intent Real Estate FAQ](#loi-faq)
- [Ready to Take the Next Step?](#next-step)
## Why Most Letters of Intent Get Rejected
> A letter of intent in real estate gets rejected when it reads like a wish list instead of a credible offer. Sellers and brokers say no to vague price language, missing earnest money detail, soft due diligence windows, and any signal that the buyer cannot close. A strong LOI is short, specific, and signals capability on every line.
Brokers process dozens of letters of intent per month. They are not reading every word. They are scanning for the same five things every time: who you are, what you will pay, how fast you will move, what you need to verify, and whether you can actually close. Get any of those wrong and your offer gets stacked in the pile of letters that never get a callback.
The hardest part is most buyers never know why they were rejected. The broker does not write back to say your earnest money was too soft or your due diligence period was a week too long. You just stop hearing from them. That is the silent killer of bad letters of intent.
### Signs Your LOI Is Dead on Arrival
Run through this checklist before you send. If you cannot say yes to every item, your offer is going in the no pile.
- Does the LOI name a specific dollar price, not a range and not “market value”?
- Does it specify earnest money in dollars and the exact day it goes hard?
- Does it commit to a due diligence period of 30 to 45 days, not 60 plus?
- Does it name your debt source (lender, broker, bank) or cite cash as the source of funds?
- Does it include an exclusivity clause that protects you while you spend money?
- Does it have a 24 to 72 hour expiration that forces the seller to respond?
- Is the entire document under three pages, with no legal jargon a broker would not actually read?
## The LOI Lock In Stack: 5 Layers That Lock Your Deal
Every letter of intent real estate buyers send should follow the same five layer structure I teach inside the [Multifamily Bootcamp](https://rodkhleif.com/bootcamp/). I call it the LOI Lock In Stack because each layer locks in a different category of terms before any money changes hands.
[](https://rodkhleif.com/bootcamp/)
[**Want me to walk you through this framework live, with real deals and real numbers? Reserve your seat at the Multifamily Bootcamp →**](https://rodkhleif.com/bootcamp/)
### Layer 1: Identity
The first paragraph of any real estate letter of intent identifies four things: legal buyer entity, legal seller entity, the property address with parcel or APN, and a one sentence description of what is being purchased. This sounds obvious. Most LOIs still get it wrong because the buyer drops in a personal name when they should use the LLC, or they forget the parcel number on a multi parcel deal. When a broker reads “John Smith, individual” on a $10 million LOI, they assume you have not formed your entity yet and you are not close to ready to close. Use your LLC name, your manager signature line, and the parcel ID. Signal you are operational.
### Layer 2: Money
The money layer is where most letters of intent die. You need three numbers on the page, every time: purchase price as a specific dollar amount, earnest money deposit as a specific dollar amount, and the structure of how that EMD goes hard. On a $5 million value add deal, $50,000 to $75,000 in earnest money is competitive. Half of it going hard after 15 days of due diligence shows you are serious. Reference your financing source by name when you can. If you are working with a debt broker or a specific lender, name them. If you have a preapproval letter, attach it. The whole point is to remove every reason a seller can use to say you cannot close. If you are exploring [creative financing structures](https://rodkhleif.com/creative-financing-in-real-estate-go-beyond-investment-property-lending/), name them in the LOI rather than leaving them ambiguous.
### Layer 3: Time
The time layer is three windows: due diligence, closing, and exclusivity. Due diligence on a multifamily deal should be 30 to 45 days. Anything longer and sellers assume you are still trying to figure out if you want the deal. Anything shorter than 30 and you will not finish your inspections, environmentals, lender appraisal, and tenant file audit. Closing should be 30 to 60 days after due diligence ends. Exclusivity is the underrated one. You want at least 60 days of exclusivity where the seller cannot solicit or negotiate other offers. Without exclusivity, you are paying for inspections while the seller shops your number to other buyers. If a seller refuses exclusivity, that is a tell that they do not trust your ability to close.
### Layer 4: Risk
The risk layer covers the contingencies that protect you from closing on a deal that turns out to be different than what you were sold. The five risk clauses that belong in every multifamily LOI: financing contingency, inspection contingency, title contingency, lease and rent roll audit, and an assignment clause. The assignment clause is the one most beginners forget. It lets you assign the contract to a related entity at closing without renegotiating the deal. If you are syndicating, raising capital, or just forming your final ownership entity, you need that clause. Sellers will sometimes push back on assignment. [Negotiate it](https://rodkhleif.com/a-complete-guide-to-multifamily-real-estate-negotiating/). Do not give it up.
### Layer 5: Pressure
Every letter of intent needs a built in expiration. I write mine to expire 48 to 72 hours after delivery. Two reasons. First, it forces the seller and broker to engage now, not next week. Second, it signals you have other deals you are working and you are not going to sit on this one. Pair the expiration with a confidentiality clause. The seller and their broker agree not to share your number with other buyers. This is the cleanest, least confrontational way to keep your offer from becoming a stalking horse for a better one.
## Before You Send: The Pre Submission Ritual
Before any LOI leaves my desk, I run a 10 minute pre submission ritual. This is the part most investors skip and the part that has the highest leverage on whether the deal gets signed.
First, I model the deal at three rent scenarios: current rents, market rents, and stressed rents with vacancy 200 basis points higher than the broker reported. If the deal works at stressed rents, I know my offer price is defensible. According to the [National Multifamily Housing Council](https://www.nmhc.org/research-insight/research-notes/), multifamily values reset materially when rent growth flips negative, and the only protection against that is underwriting that already assumes it could happen.
Second, I confirm my debt source in writing. A 30 second email to my broker confirming term sheet ranges on the asset class, location, and deal size. This becomes the line in the LOI that says my financing is “with a relationship lender” or “via mortgage broker XYZ.” It is short. It is true. It removes one objection. The same discipline applies when you are [underwriting NOI on a value add deal](https://rodkhleif.com/the-5-best-ways-to-add-value-to-a-property-and-increase-the-noi/), where the seller’s pro forma never matches reality.
Third, I read the LOI out loud one time. Every time I have skipped this step I have shipped an LOI with a typo in the address or the wrong year on the closing date. Reading aloud catches things your eyes skip.
[](https://rodkhleif.com/wp-content/uploads/2020/03/Letter-of-Intent-LOI-2.pdf)
[**Click to download my free real estate letter of intent template and use it as the base for your next offer.**](https://rodkhleif.com/wp-content/uploads/2020/03/Letter-of-Intent-LOI-2.pdf)
Research from [Princeton University](https://www.princeton.edu/news/2014/04/24/whats-handwriting-not-typing-may-be-best-learning-and-memory) on cognitive processing shows that slow deliberate review of written work changes how the brain encodes the material. Reading your LOI slowly is not a vanity step. It is a memory and pattern matching step that catches errors faster than any spell checker.
## How to Write an LOI Step by Step
Here is the exact 7 step process I use to write a letter of intent for any real estate deal, from a $1.5 million first time multifamily purchase to a $50 million institutional value add. Follow this sequence and your LOI will land in the small pile that brokers actually call back on.
1. **Pull the broker’s offering memorandum.** Read the rent roll, T12, and broker assumptions. Note the asking price, cap rate, and any seller financing signal. This takes 30 minutes and gives you everything you need for the Identity and Money layers.
2. **Run your underwriting at three rent scenarios.** Current rents, market rents, and stressed rents. Find the price that delivers your minimum return at stressed rents. That is your ceiling.
3. **Set your purchase price 2 to 5 percent below your ceiling.** This gives you room to come up during negotiation and still hit your return targets. If the asking price is below your ceiling, you can pay full price and still win.
4. **Set your EMD at 1 to 2 percent of purchase price.** Half going hard 15 days after due diligence opens. On a $5 million deal, that is $50,000 to $100,000, with $25,000 to $50,000 hard at day 15.
5. **Set due diligence at 30 days, exclusivity at 60 days, close at 30 days after DD.** If you have already toured the asset and built a relationship with the broker, you can shorten DD to 21 days. Do not go below 21.
6. **Draft the document on one page if possible, two pages maximum.** Use the [free LOI template](https://rodkhleif.com/wp-content/uploads/2020/03/Letter-of-Intent-LOI-2.pdf) as your starting point. Every word should earn its place.
7. **Set a 48 to 72 hour expiration and send.** Email to the listing broker with a one sentence cover note: “Offer attached. Funded and ready to close. Please confirm receipt.” That is it.
### Three Worked LOI Scenarios by Deal Size
Here is how those seven steps play out across three different deal sizes. Match your scenario to where you are in your investing journey.
The first deal scenario at $1.5 million is the most common entry point. Small earnest money, longer due diligence, and a focus on getting reps. The value add scenario at $5 million is where most Warriors are operating. Bigger EMD, shorter DD, more aggressive exclusivity. The syndication scenario at $20 million plus is where you compete with institutional capital. Hard money on day 7 is no longer optional. If you cannot put $250,000 hard at day 7, you are not in the buyer pool for that asset.
## Reactive LOI vs Lock In LOI
The single biggest difference between letters of intent that win deals and the ones that get ignored is the framing. Most buyers write a reactive LOI: they ask for things, they wait, they hope. A Lock In LOI signals capability and commitment at every line. Here is the side by side.
Reactive LOI vs Lock In LOIWHY ROD’S FRAMEWORK GETS SIGNEDLayerReactive LOILock In LOIIdentity✗Buyer name only, no entity✓LLC entity, manager signature, parcel IDMoney✗“Subject to financing”✓EMD in dollars, lender named, hard dateTime✗60 to 90 day due diligence✓30 day DD, 60 day exclusivityRisk✗No assignment clause✓Assignment, lease audit, title clausesPressure✗No expiration, open ended✓72 hour expiration, confidentiality## Letter of Intent vs Purchase and Sale Agreement
This is the question that trips up almost every first time buyer. The LOI and the purchase and sale agreement are not the same document. They serve different purposes. Skip either one and you are exposed.
LOI vs Purchase and Sale AgreementWHY YOU NEED BOTHQuestionLetter of IntentPurchase and Sale AgreementLegally binding?✗Mostly non binding, except exclusivity✓Fully binding contractLength✗1 to 3 pages✓30 to 80 pagesWhen you sign it✗Before due diligence opens✓After LOI terms are acceptedCost to draft✗$0 to $500✓$3,000 to $15,000 in legal feesEarnest money required✗Named, not yet deposited✓Deposited within 1 to 3 days of signingThe short version: the LOI is the handshake. The PSA is the marriage. The LOI tells the seller what you intend to do. The PSA legally binds you to do it. You almost never skip from interest to PSA without an LOI in between, because nobody is paying lawyers $5,000 to draft a 60 page document before they know if you can even agree on price.
## 5 LOI Mistakes That Kill Deals
Over forty years of buying multifamily, I have seen every flavor of LOI mistake. These are the five that kill deals most consistently. Read them once and then run your draft against them before you send.
**Mistake 1: Asking for a 60 to 90 day due diligence window.** Sellers read this as a buyer who is not sure they want the deal. Cut it to 30 days. If you cannot finish your underwriting in 30 days, you should not be writing the LOI yet.
**Mistake 2: Leaving earnest money soft for the entire DD period.** An LOI that says “EMD refundable through closing” gives the seller no signal that you are committed. Hard at day 15 is the standard for any competitive deal.
**Mistake 3: Skipping the assignment clause.** If you are syndicating, you have to assign at closing. Forgetting this means renegotiating the entire deal three weeks before close. That kills more deals than any other single clause oversight.
**Mistake 4: Writing a vague price like “subject to final underwriting.”** Brokers will not bring soft numbers to their seller. Pick a number, write it down, and live with it. You can always negotiate after acceptance.
**Mistake 5: No expiration date.** An LOI without an expiration is an invitation for the seller to shop your number to other buyers. 48 to 72 hours is the right window. Anything longer and you give the seller leverage you did not need to give.
## Warrior Proof: How My Students Use This
I have watched students inside the [Warrior Program](https://rodkhleif.com/rod-khleif-warrior-program/) use this LOI framework to win deals against funds and family offices that should have outbid them. The difference is never the price. The difference is the framing. When a broker reads a Lock In LOI alongside three reactive LOIs from bigger buyers, the Lock In LOI signals that this buyer will actually close. Brokers care about closing more than they care about the highest price, because their commission is zero on a deal that falls apart.
One Warrior closed a 96 unit deal in Texas at $14.2 million using exactly the structure on this page. He was the third highest bidder. The two higher offers had 60 day due diligence windows and no assignment clauses. His Lock In LOI had a 30 day DD, hard money at day 15, named lender, and a 48 hour expiration. The broker called him within 6 hours of receiving the offer. The other two never got past the broker’s inbox.
> **Rod Khleif:** “The buyer who wins is almost never the one who pays the most. The buyer who wins is the one who signals the highest probability of closing. Your letter of intent is the only place you get to send that signal before anyone has met you in person.”
If you want to hear more stories like that, the [Lifetime Cashflow podcast](https://rodkhleif.com/lifetime-cashflow-podcast/) is full of Warriors walking through the exact deals they have closed using this approach. Frank Patalano, Anthony Metzger, and dozens of others have shared the LOI templates they use, the broker relationships they have built, and the negotiation moves they used to win deals against deeper pockets. Some operate as the [general partner](https://rodkhleif.com/what-is-a-general-partner-gp-in-real-estate/) on their first syndication and used this exact LOI structure to win their initial deal.
## Letter of Intent Real Estate FAQ
**Q: What does LOI stand for in real estate?**
A: LOI stands for Letter of Intent. It is a short document, usually one to three pages, that outlines the key terms of a proposed real estate purchase before the buyer and seller commit the time and money to a full purchase and sale agreement.
**Q: Is a letter of intent legally binding in real estate?**
A: A letter of intent in real estate is mostly non binding, but specific clauses inside it can be binding. Exclusivity, confidentiality, and any provision that requires action by a date are typically enforceable. The price, terms, and structure are non binding until the purchase and sale agreement is signed.
**Q: What is the difference between an LOI and an offer?**
A: An offer is a fully binding proposal to buy the property at stated terms. An LOI is a non binding framework that signals serious interest and outlines proposed terms. Most commercial and multifamily deals use an LOI first because it lets both sides negotiate the major points before paying for legal drafting.
**Q: How long is a letter of intent for real estate?**
A: A strong LOI is one to three pages. Anything longer reads like a draft contract and slows the negotiation. The whole point is to land the high level terms in a document the broker and seller will actually read.
**Q: What should I put in my real estate letter of intent?**
A: Every real estate LOI should include the five LOI Lock In Stack layers: identity (buyer and seller entities, property), money (price and earnest money), time (due diligence, closing, exclusivity), risk (financing, inspection, assignment), and pressure (expiration and confidentiality).
**Q: How much earnest money goes in an LOI?**
A: Earnest money on a multifamily LOI is typically 1 to 2 percent of the purchase price. On a $5 million deal, that is $50,000 to $100,000. Half of it going hard 15 days into due diligence is a strong competitive signal.
**Q: Can I write my own LOI without a lawyer?**
A: Yes. Most experienced multifamily buyers draft their own LOIs and only involve an attorney at the purchase and sale agreement stage. Use a clean template and have your attorney review before signing if the deal size is meaningful or the terms are non standard.
**Q: How long is a letter of intent valid?**
A: An LOI is valid for whatever expiration period you write into the document. Most strong LOIs include a 48 to 72 hour expiration that forces the seller to engage quickly. Once accepted, the parties typically move to purchase and sale agreement drafting within 7 to 14 days.
**Q: What is an exclusivity period in a letter of intent?**
A: Exclusivity is a binding clause where the seller agrees not to solicit, negotiate, or accept other offers for a stated period, typically 30 to 60 days. This is the protection that lets you spend money on due diligence without worrying that the seller is shopping your number.
**Q: Should I include a financing contingency in my LOI?**
A: Yes. A financing contingency lets you exit the deal without losing earnest money if your debt source falls through. Sellers expect it. The way to make your LOI competitive is to name your lender or broker by name, not to remove the contingency entirely.
## Ready to Take the Next Step?
Writing a letter of intent that wins deals is the first technical skill every multifamily investor needs. Reading about it is not the same as doing it. Inside my [Multifamily Bootcamp](https://rodkhleif.com/bootcamp/), I walk you through real deals, real LOIs that have won, and the negotiation moves that get them signed. It is the fastest way I know to turn this framework into deals you actually close.
[**Reserve your seat at the next Multifamily Bootcamp →**](https://rodkhleif.com/bootcamp/)
Not ready for the Bootcamp yet? Start with my free book on Lifetime Cashflow. It covers the mindset, the math, and the moves you need before you write your first LOI.
[**Download my free book How to Create Lifetime Cashflow Through Multifamily Properties →**](https://rodkhleif.com/lcfa-ebook/)
*Disclaimer: This article was written with the help of AI and reviewed by Rod and his team.*
**Categories:** Blog, Finding Deals, Multifamily Investing, Raising Capital, Real Estate
**Tags:** Commercial Real Estate, due diligence, earnest money, letter of intent, loi, multifamily acquisitions, purchase agreement
---
### [Lifetime Cash Flow Podcast Library: 60 Episodes by Topic](https://rodkhleif.com/lifetime-cash-flow-podcast-library/)
**Published:** May 24, 2026
**Author:** Rod Khleif
**Excerpt:** A living library of every Lifetime Cash Flow Podcast episode on rodkhleif.com, organized by topic so you can find the conversation you need.
**Content:**
The Lifetime Cash Flow Podcast is the home of Rod Khleif’s long running interviews with operators, syndicators, and investors who have built real wealth through multifamily and commercial real estate. This page is a living library of every Lifetime Cash Flow Podcast episode currently indexed on rodkhleif.com, organized by topic so you can find the conversation you need.
Each entry links straight to the episode page, where you can listen, read the show notes, and watch the video interview when available.
## Lifetime Cash Flow Podcast Topics
- [Financing and Capital (6)](#topic-financing)
- [Tax Strategies (5)](#topic-tax)
- [Syndication and Partnership (4)](#topic-syndication)
- [Asset Management and Operations (7)](#topic-asset_mgmt)
- [First Deals and Scaling Stories (7)](#topic-first_deals)
- [Mindset, Lessons, and Habits (7)](#topic-mindset)
- [Relationships, Networking, and Sales (4)](#topic-relationships)
- [Market, Economy, and Cycles (4)](#topic-market)
- [Senior Housing (3)](#topic-senior)
- [Specialty Asset Classes and Strategies (13)](#topic-specialty)
## Financing and Capital (6 Episodes)
- [Gabriel Hamel – How to Buy Multifamily with No Money Down](https://rodkhleif.com/podcasts/ep-417-gabriel-hamel-how-to-buy-multifamily-with-no-money-down/)
- [How to Start Strong in Multifamily Investing](https://rodkhleif.com/podcasts/ep-361-kyle-mitchell-how-to-start-strong-in-multifamily/)
- [Michael Blank – Raising Capital at Scale](https://rodkhleif.com/podcasts/ep-423-michael-blank-raising-capital-at-scale/)
- [Multifamily Insights, Deal Analysis and Debt Strategies](https://rodkhleif.com/podcasts/multifamily-insights-deal-analysis-and-debt-strategies/)
- [Pace Morby: How to Buy Multifamily with $0 Down](https://rodkhleif.com/podcasts/creative-financing-single-family-vs-multifamily-with-pace-morby-rod-khleif/)
- [Seller Financing in Multifamily Real Estate](https://rodkhleif.com/podcasts/exploring-seller-financing-in-multifamily-real-estate/)
## Tax Strategies (5 Episodes)
- [1031 Exchange for Tax Deferment in Multifamily Investing](https://rodkhleif.com/podcasts/1031-exchange-for-tax-deferment-in-multifamily-real-estate-investing/)
- [Cost Segregation for Real Estate Investors](https://rodkhleif.com/podcasts/cost-segregation-for-real-estate-investors/)
- [How The Top 1% Legally Pay $0 Capital Gains Tax On Real Estate](https://rodkhleif.com/podcasts/how-the-top-1-legally-pay-0-capital-gains-tax-on-real-estate/)
- [Real Estate Cost Segregation & Bonus Depreciation](https://rodkhleif.com/podcasts/real-estate-cost-segregation-bonus-depreciation/)
- [Successful Multifamily Tax Strategies](https://rodkhleif.com/podcasts/successful-multifamily-tax-strategies/)
## Syndication and Partnership (4 Episodes)
- [Multifamily Real Estate Deal Structures Explained](https://rodkhleif.com/podcasts/multifamily-real-estate-deal-structures-explained/)
- [Multifamily Syndication for Busy Professionals with Carrie Zatelli](https://rodkhleif.com/podcasts/multifamily-syndication-for-busy-professionals-with-carrie-zatelli/)
- [The Biggest Mistakes In Syndication](https://rodkhleif.com/podcasts/the-biggest-mistakes-in-syndication/)
- [Unlocking Multifamily Success Through Strategic Partnerships](https://rodkhleif.com/podcasts/ep-135-corey-peterson-and-jack-bosch-partnering-up/)
## Asset Management and Operations (7 Episodes)
- [Decreasing Expenses in Multifamily](https://rodkhleif.com/podcasts/ep-405-decreasing-expenses-in-multifamily-double-header/)
- [Distressed Multifamily Deals with Matt Teifke](https://rodkhleif.com/podcasts/distressed-multifamily-deals-with-matt-teifke/)
- [Ep #293: Clint Coons – Multifamily Asset Protection](https://rodkhleif.com/podcasts/ep-293-clint-coons-strategies-for-multifamily-asset-protection/)
- [How He Created $1.8M Value on Day One (Without Heavy Renos)](https://rodkhleif.com/podcasts/how-he-created-1-8m-value-on-day-one-without-heavy-renos/)
- [Multifamily Renovation and Rehab](https://rodkhleif.com/podcasts/multifamily-renovation-and-rehab/)
- [Small Multifamily Asset Management With Cody Journell](https://rodkhleif.com/podcasts/small-multifamily-asset-management-with-cody-journell/)
- [Value-Add Multifamily Investing with Derek Hogarty](https://rodkhleif.com/podcasts/the-single-decision-that-added-3-8-million-increase-in-value/)
## First Deals and Scaling Stories (7 Episodes)
- [Creative Foreclosure Financing & Multifamily Team Building](https://rodkhleif.com/podcasts/ep-207-glenn-gonzales-from-maintenance-man-to-4000-unit-owner/)
- [From Fix’n Flips To Multifamily Real Estate](https://rodkhleif.com/podcasts/from-fixn-flips-to-multifamily-real-estate/)
- [From House Hacking to Multifamily Success](https://rodkhleif.com/podcasts/from-house-hacking-to-multifamily-success/)
- [How She Scaled to 1,200+ Doors in Multifamily Real Estate](https://rodkhleif.com/podcasts/how-she-scaled-to-1200-doors-in-multifamily-real-estate/)
- [How To Get Your First Multifamily Deal With Zero Experience](https://rodkhleif.com/podcasts/how-to-get-your-first-multifamily-deal-with-zero-experience/)
- [JV Multifamily & Aluminum Wiring Lessons from Jon Potts](https://rodkhleif.com/podcasts/from-single-family-flips-to-multifamily-fortunes/)
- [Starting Multifamily From Nothing](https://rodkhleif.com/podcasts/starting-multifamily-from-nothing/)
## Mindset, Lessons, and Habits (7 Episodes)
- [Ep #129 – Author Dean Graziosi on Millionaire Success Habits](https://rodkhleif.com/podcasts/ep-129-dean-graziosi-author-millionaire-success-habits/)
- [From Almost Quitting Real Estate | LCFA Podcast](https://rodkhleif.com/podcasts/from-almost-quitting-real-estate-to-a-full-bank-account/)
- [Partner Alignment and Acquisition Fees in Multifamily](https://rodkhleif.com/podcasts/how-he-said-goodbye-to-the-9-to-5-in-just-5-years/)
- [Small Multifamily Investing for Beginners with Lina Belin](https://rodkhleif.com/podcasts/small-multifamily-investing-for-beginners-with-lina-belin/)
- [The Blueprint for a Billion-Dollar Mindset](https://rodkhleif.com/podcasts/the-blueprint-for-a-billion-dollar-mindset/)
- [Turning a Section 8 Nightmare into a Winning Property](https://rodkhleif.com/podcasts/turning-a-section-8-nightmare-into-a-winning-property/)
- [You Don’t Have To Know Everything To Get Started](https://rodkhleif.com/podcasts/you-dont-have-to-know-everything-to-get-started/)
## Relationships, Networking, and Sales (4 Episodes)
- [Brokering Relationships To Close The Deal](https://rodkhleif.com/podcasts/brokering-relationships-to-close-the-deal/)
- [From Cold Calling To Building A $350M+ Property Portfolio](https://rodkhleif.com/podcasts/from-cold-calling-to-building-a-350m-property-portfolio/)
- [The Art of Relationship Building in Real Estate](https://rodkhleif.com/podcasts/the-art-of-relationship-building-in-real-estate/)
- [The Fastest Way to Close More Real Estate Deals in 2025](https://rodkhleif.com/podcasts/the-fastest-way-to-close-more-real-estate-deals-in-2025/)
## Market, Economy, and Cycles (4 Episodes)
- [Ep #109: Paul Moore on Investing in Class B Apartments & Growing Markets](https://rodkhleif.com/podcasts/ep-109-paul-moore-founder-managing-director-wellings-capital-focuses-class-b-apartments-growing-markets/)
- [Ep #471 – Harry Dent: Why Multifamily Wins in a Market Crash](https://rodkhleif.com/podcasts/why-multifamily-is-the-best-investment-for-the-coming-crash/)
- [Prepare for Massive Real Estate Deals](https://rodkhleif.com/podcasts/massive-deals-are-coming/)
- [Real Estate Crisis: What the 2025 Economy Means for Investors](https://rodkhleif.com/podcasts/real-estate-crisis-what-the-2025-economy-means-for-investors/)
## Senior Housing (3 Episodes)
- [Senior Living Investing With Ashley & Carly Terradez](https://rodkhleif.com/podcasts/senior-living-investing-with-ashley-carly-terradez/)
- [Senior Living Real Estate Investing With Ryan Byrne](https://rodkhleif.com/podcasts/senior-living-real-estate-investing-with-ryan-byrne/)
- [Senior Living Value Add Investing with Josie & Kyle Wentworth](https://rodkhleif.com/podcasts/senior-living-value-add-investing-with-josie-kyle-wentworth/)
## Specialty Asset Classes and Strategies (13 Episodes)
- [Data-Driven Real Estate with Hardik Raval](https://rodkhleif.com/podcasts/data-driven-real-estate-with-hardik-raval/)
- [Ep #1,151: Mobile Home Park Investing Cashflow Strategies](https://rodkhleif.com/podcasts/mobile-home-parks-explained-the-cash-flow-strategy-you-need-to-know/)
- [Hotel to Multifamily Conversion Investing with Laurent Meyer](https://rodkhleif.com/podcasts/hotel-to-multifamily-conversion-investing-with-laurent-meyer/)
- [James Kandasamy: Author Passive Investing in Commercial RE](https://rodkhleif.com/podcasts/ep-315-james-kandasamy-author-of-passive-investing-in-commercial-real-estate/)
- [Jeremy Roll – Passive Investing for Cash Flow](https://rodkhleif.com/podcasts/ep-381-jeremy-roll-passive-investing-for-cash-flow/)
- [Mobile Home Park Value Add with Ray Fang](https://rodkhleif.com/podcasts/mobile-home-park-value-add-with-ray-fang/)
- [Multifamily Capital Raising Strategies With Nelson Diaz](https://rodkhleif.com/podcasts/he-raised-600k-for-his-first-deal-in-6-weeks/)
- [Real Estate Success Through Digital Marketing](https://rodkhleif.com/podcasts/real-estate-success-through-digital-marketing/)
- [Seller-Financed Self Storage with Karl Schlobohm](https://rodkhleif.com/podcasts/seller-financed-self-storage-with-karl-schlobohm/)
- [Short Term Rentals & Mixed Use Real Estate Strategies](https://rodkhleif.com/podcasts/short-term-rentals-mixed-use-real-estate-strategies/)
- [Short Term Rentals For Long Term Success](https://rodkhleif.com/podcasts/short-term-rentals-for-long-term-success/)
- [Single Family vs. Multifamily: Which one is better?](https://rodkhleif.com/podcasts/ep-159-mark-ferguson-single-family-vs-multifamily/)
- [Wealth creation with passive streams of income](https://rodkhleif.com/podcasts/wealth-creation-with-passive-streams-of-income/)
## Your Next Step
If these conversations have you ready to take action on your own multifamily journey, you have two starting points:
- [Join Rod’s free multifamily real estate bootcamp](https://rodkhleif.com/bootcamp/) to learn the playbook in a structured weekend format
- [Download the Lifetime Cash Flow free ebook](https://rodkhleif.com/lcfa-ebook/) for the foundational concepts you will hear referenced across these episodes
*Disclaimer: Stories shared on the Lifetime Cash Flow Podcast describe individual results that required time, capital, and risk. They are not typical or guaranteed outcomes. Always do your own due diligence before investing.*
**Categories:** Blog
---
### [Rod Khleif Warrior Wins: Closed Multifamily Deals Across the Country](https://rodkhleif.com/rod-khleif-warrior-wins-by-state/)
**Published:** May 17, 2026
**Author:** Rod Khleif
**Excerpt:** A living index of every Warrior success story published on rodkhleif.com, organized by state where the deal closed and by deal size. Each entry links to the Warrior’s full case study.
**Content:**
This page is a living index of some of the Warrior Wins from Rod Khleif’s multifamily Warrior Program. Not every closed deal by a Warrior Student is listed here. As of April 2026, the Warriors now control over 260,000 units. The deals listed here have been organized by the state where the deal happened. States with five or more Warrior Wins get their own section. Wins from smaller markets, or where the deal location is not yet on file, are grouped below by deal size so you can scan stories that match your own target.
Each entry links directly to that Warrior’s full case study with the property details, purchase price, value add plan, and a video interview when available.
[Click here to download all of the stats in one. ](https://rodkhleif.com/wp-content/uploads/2026/05/Rod-Khleif-Warrior-Program-Verified-Student-Deal-Case-Study-Tracker.xlsx)
## Contents
**By State (5 or more Warriors)**
- [Texas (23)](#state-tx)
- [Florida (23)](#state-fl)
- [North Carolina (14)](#state-nc)
- [Georgia (13)](#state-ga)
- [Ohio (9)](#state-oh)
- [Arkansas (7)](#state-ar)
- [South Carolina (6)](#state-sc)
- [Tennessee (5)](#state-tn)
- [California (5)](#state-ca)
- [Illinois (5)](#state-il)
- [Colorado (5)](#state-co)
**By Deal Size (Warriors in smaller markets and deals where location is not yet published)**
- [200+ Unit Deals (9)](#deal-whales)
- [100 to 199 Unit Deals (11)](#deal-big)
- [50 to 99 Unit Deals (20)](#deal-mid)
- [20 to 49 Unit Deals (16)](#deal-small)
- [Under 20 Unit Deals (25)](#deal-tiny)
## Warrior Wins by State
## Texas (23 Warriors)
- [Tyson Burtenshaw: 297 units](https://rodkhleif.com/warrior-wins-tyson-burtenshaw/)
- [Tom Mix Martini Petreca: 296 units](https://rodkhleif.com/warrior-wins-tom-mix-martini-petreca/)
- [Sing Joey Chan: 208 units](https://rodkhleif.com/warrior-wins-sing-joey-chan/)
- [Ronald and Mary Jane Lou: 204 units](https://rodkhleif.com/warrior-win-ronal-and-mary-jane-lou-204-units-tx/)
- [Atif Gul: 200 units](https://rodkhleif.com/warrior-wins-atif-gul/)
- [Larry Carroll: 133 units](https://rodkhleif.com/warrior-win-larry-carroll-133-unit-tx/)
- [Candice Crawford: 132 units](https://rodkhleif.com/warrior-wins-candice-crawford/)
- [Steeve Breton: 130 units](https://rodkhleif.com/warrior-wins-steeve-breton/)
- [Bharat Kona: 123 units](https://rodkhleif.com/warrior-wins-bharat-kona/)
- [Carrie Zatelli: 123 units](https://rodkhleif.com/warrior-wins-carrie-zatelli/)
- [Michael Davidov: 123 units](https://rodkhleif.com/warrior-wins-michael-davidov/)
- [Chase Craig: 104 units](https://rodkhleif.com/warrior-wins-chase-craig/)
- [Chris Miller: 104 units](https://rodkhleif.com/warrior-wins-chris-miller/)
- [Franklin Gonzalez: 101 units](https://rodkhleif.com/warrior-wins-franklin-gonzalez/)
- [Benjamin Cedarland: 72 units](https://rodkhleif.com/warrior-wins-benjamin-cedarland/)
- [Jordan Hollis: 63 units](https://rodkhleif.com/warrior-wins-jordan-hollis/)
- [Shawn Ricehouse:: 63 units](https://rodkhleif.com/warrior-wins-shawn-ricehouse-2/)
- [Yi Xu: 52 units](https://rodkhleif.com/warrior-wins-yi-xu/)
- [Steven Wright: 52 units](https://rodkhleif.com/warrior-wins-steven-wright/)
- [Loren Jacobs: 46 units](https://rodkhleif.com/warrior-wins-loren-jacobs/)
- [Shawn Ricehouse: 44 units](https://rodkhleif.com/warrior-wins-shawn-ricehouse/)
- [Crystal & Chris D’Agostino: 36 units](https://rodkhleif.com/warrior-win-crystal-chris-dagostino-36-unit-in-tx/)
- [Matt Martin: 7 units](https://rodkhleif.com/warrior-wins-matt-martin/)
## Florida (23 Warriors)
- [Georgy Marrero: 517 units](https://rodkhleif.com/warrior-wins-georgy-marrero/)
- [Brian Fay: 312 units](https://rodkhleif.com/warrior-wins-brian-fay/)
- [Tim Davis Closes $7.6M Multifamily Deal with Warrior Program: 118 units](https://rodkhleif.com/warrior-wins-tim-davis-2/)
- [Cain McNeil: 86 units](https://rodkhleif.com/warrior-wins-cain-mcneil/)
- [Joel Bolomboy: 59 units](https://rodkhleif.com/warrior-wins-joel-bolomby/)
- [Amar Nagireddy: 56 units](https://rodkhleif.com/warrior-wins-amar-nagireddy/)
- [Joel Bolomboy – #2: 56 units](https://rodkhleif.com/warrior-wins-joel-bolomboy-2/)
- [Joe and Lisa Ebanks: 48 units](https://rodkhleif.com/warrior-wins-joe-and-lisa-ebanks/)
- [Jesse Jenifer: 44 units](https://rodkhleif.com/warrior-win-jesse-jenifer-44-unit-fl/)
- [Daniel Campana: 42 units](https://rodkhleif.com/warrior-wins-adam-daniel-campana/)
- [Carolina Botero: 40 units](https://rodkhleif.com/warrior-wins-carolina-botero/)
- [Francesco Orselli: 40 units](https://rodkhleif.com/warrior-wins-francesco-orselli/)
- [Enrique Ortega: 35 units](https://rodkhleif.com/warrior-wins-enrique-ortega/)
- [Karl Schlobohm: 24 units](https://rodkhleif.com/warrior-wins-karl-schlobohm/)
- [Andrew Duclos: 24 units](https://rodkhleif.com/warrior-wins-andrew-duclos/)
- [Tim Davis’ Multifamily Deal: How He Made It Happen: 19 units](https://rodkhleif.com/warrior-wins-tim-davis/)
- [Mark Blass: 16 units](https://rodkhleif.com/warrior-wins-mark-blass/)
- [Mickey Braithwaite: 12 units](https://rodkhleif.com/warrior-wins-mickey-braithwaite/)
- [Jason Martins: 11 units](https://rodkhleif.com/warrior-wins-jason-martins/)
- [George Rodrique: 4 units](https://rodkhleif.com/warrior-wins-george-rodrique/)
- [Bonnie Schwam: 2 units](https://rodkhleif.com/warrior-wins-bonnie-schwam/)
- [Trevor and Shannon Sherman: 1 units](https://rodkhleif.com/warrior-wins-trevor-and-shannon-sherman/)
- [David Turner: Florida](https://rodkhleif.com/warrior-wins-david-turner/)
## North Carolina (14 Warriors)
- [Chris Freeman: 130 units](https://rodkhleif.com/warrior-wins-chris-freeman/)
- [William Edwards: 84 units](https://rodkhleif.com/warrior-wins-william-edwards/)
- [Travis: 64 units](https://rodkhleif.com/warrior-wins-travis/)
- [David Morgia’s: 64 units](https://rodkhleif.com/warrior-wins-david-morgia/)
- [Jefferson Gan: 42 units](https://rodkhleif.com/warrior-wins-jefferson-gan/)
- [Tarek Ahmed Eid and Roushel Eid: 41 units](https://rodkhleif.com/warrior-wins-tarek-ahmed-eid-and-roushel-eid/)
- [Barry Coppedge: 24 units](https://rodkhleif.com/warrior-wins-barry-coppedge/)
- [Edward Lowell: 16 units](https://rodkhleif.com/warrior-wins-edward-lowell-3/)
- [Edward Lowell – #2: 16 units](https://rodkhleif.com/warrior-wins-edward-lowell-2/)
- [Edward Lowell: 13 units](https://rodkhleif.com/warrior-wins-edward-lowell/)
- [Danny Sallis: 12 units](https://rodkhleif.com/warrior-wins-danny-sallis/)
- [Dinesh Nayak: 11 units](https://rodkhleif.com/warrior-wins-dinesh-nayak/)
- [Anchal Dwivedi: 11 units](https://rodkhleif.com/warrior-wins-anchal-dwivedi/)
- [Edward Lowell – #4: 7 units](https://rodkhleif.com/warrior-wins-edward-lowell-4/)
## Georgia (13 Warriors)
- [Juan Cruz: 176 units](https://rodkhleif.com/warrior-wins-juan-cruz/)
- [Alex Love Li: 174 units](https://rodkhleif.com/warrior-wins-alex-love-li/)
- [Marvin McGuire: 160 units](https://rodkhleif.com/warrior-wins-marvin-mcguire/)
- [Oliver Fernandez: 152 units](https://rodkhleif.com/warrior-wins-oliver-fernandez/)
- [Jonathan Long: 106 units](https://rodkhleif.com/warrior-wins-jonathan-long/)
- [Michael and Regina Lucero: 104 units](https://rodkhleif.com/warrior-wins-michael-and-regina-lucera/)
- [Roberto Carabetta: 58 units](https://rodkhleif.com/warrior-win-roberto-carabetta-58-unit-ga/)
- [Mandy McAllister: 53 units](https://rodkhleif.com/warrior-wins-mandy-mcallister/)
- [Jon Sidoti: 42 units](https://rodkhleif.com/warrior-wins-jon-sidoti/)
- [Karl Schlobohm’s: 27 units](https://rodkhleif.com/warrior-wins-karl-schlobohm-2/)
- [Ryan Dworak: 21 units](https://rodkhleif.com/warrior-wins-ryan-dworak/)
- [Diana Ji: 18 units](https://rodkhleif.com/warrior-wins-diana-ji/)
- [Andrew Dressel: 18 units](https://rodkhleif.com/warrior-wins-andrew-dressel/)
## Ohio (9 Warriors)
- [Chat Sarmiento-Steinwald: 101 units](https://rodkhleif.com/warrior-wins-chat-sarmiento-steinwwald/)
- [Matt Iverson: 94 units](https://rodkhleif.com/warrior-wins-matt-iverson/)
- [Sanjay Patel: 76 units](https://rodkhleif.com/warrior-wins-sanjay-patel/)
- [Phil Klima: 72 units](https://rodkhleif.com/warrior-wins-phil-klima/)
- [Scott Jacobson: 66 units](https://rodkhleif.com/warrior-wins-scott-jacobson/)
- [Aaron Novotney: 53 units](https://rodkhleif.com/warrior-win-aaron-novotney-53-unit-in-oh/)
- [Duy Nguyen: 48 units](https://rodkhleif.com/warrior-wins-duy-nguyen/)
- [Rasool Mutawakkil: 42 units](https://rodkhleif.com/warrior-wins-rasool-mutawakkil/)
- [George & Elizabeth Tavares: 31 units](https://rodkhleif.com/warrior-wins-george-elizabeth-tavares/)
## Arkansas (7 Warriors)
- [Chris Moyer Secures Another Deal: 92 units](https://rodkhleif.com/warrior-wins-chris-moyer-3/)
- [Chris Moyer Grows to: 76 units](https://rodkhleif.com/warrior-wins-chris-moyer-4/)
- [Larry Murray: 54 units](https://rodkhleif.com/warrior-wins-larry-murray/)
- [Trey Powell: 42 units](https://rodkhleif.com/warrior-wins-trey-powell/)
- [Jermaine Xavier: 34 units](https://rodkhleif.com/warrior-wins-jermaine-xavier/)
- [Chris Moyer’s: 34 units](https://rodkhleif.com/warrior-wins-chris-moyer/)
- [Chris Moyer: 12 units](https://rodkhleif.com/warrior-wins-chris-moyer-5/)
## South Carolina (6 Warriors)
- [Kanwaljit Dhunna: 136 units](https://rodkhleif.com/warrior-wins-kanwaljit-dhunna/)
- [Hilary Graves: 108 units](https://rodkhleif.com/warrior-wins-hilary-graves/)
- [John letters: 104 units](https://rodkhleif.com/warrior-wins-john-letters/)
- [Michael Lewis: 72 units](https://rodkhleif.com/warrior-wins-michael-lewis/)
- [Alex Zahn: 66 units](https://rodkhleif.com/warrior-wins-alex-zahn/)
- [Ian Schmidt: 40 units](https://rodkhleif.com/warrior-wins-ian-schmidt/)
## Tennessee (5 Warriors)
- [Sumanth Banda: 83 units](https://rodkhleif.com/warrior-wins-sumanth-banda/)
- [Eric Lindsey: 78 units](https://rodkhleif.com/warrior-wins-eric-lindsey/)
- [Baran Menguloglu: 12 units](https://rodkhleif.com/warrior-wins-baran-menguloglu/)
- [Christian Onalfo: 8 units](https://rodkhleif.com/warrior-wins-christian-onalfo/)
- [James Hughes: 8 units](https://rodkhleif.com/warrior-wins-james-hughes/)
## California (5 Warriors)
- [Drew Doran: 174 units](https://rodkhleif.com/warrior-wins-drew-doran/)
- [Grace Gonzalez: 101 units](https://rodkhleif.com/warrior-wins-grace-gonzalez/)
- [Bethany Smith: 36 units](https://rodkhleif.com/warrior-wins-bethany-smith/)
- [Rodrigo Valdez Jr: 12 units](https://rodkhleif.com/warrior-wins-rodrigo-valdez-jr/)
- [Drew Doran: 12 units](https://rodkhleif.com/warrior-wins-drew-doran-2/)
## Illinois (5 Warriors)
- [Parag Dave: 278 units](https://rodkhleif.com/warrior-wins-parag-dave/)
- [Brian Kochendorfer’s: 45 units](https://rodkhleif.com/warrior-wins-brian-kochendorfer-2/)
- [Brian Kochendorfer: 31 units](https://rodkhleif.com/warrior-wins-brian-kochendorfer/)
- [Jason Markowicz: 16 units](https://rodkhleif.com/warrior-wins-jason-markowicz/)
- [Robert Shedden: 6 units](https://rodkhleif.com/warrior-wins-robert-shedden/)
## Colorado (5 Warriors)
- [Levi Weber: 57 units](https://rodkhleif.com/warrior-wins-levi-weber-2/)
- [Levi Weber’s: 13 units](https://rodkhleif.com/warrior-wins-levi-weber/)
- [Josh Norell: 10 units](https://rodkhleif.com/warrior-wins-josh-norell/)
- [Hemant Pawar: 7 units](https://rodkhleif.com/warrior-wins-hemant-pawar/)
- [Charlie Peters’: 6 units](https://rodkhleif.com/warrior-wins-charlie-peters-2/)
## Warrior Wins by Deal Size
## 200+ Unit Deals (9 Warriors)
- [Alejandro Chardon Land Development Project: 1000 units in Arizona](https://rodkhleif.com/warrior-win-alejandro-chardon-land-development-project-az/)
- [Hector Arteaga and Michelle Eggleton: 564 units](https://rodkhleif.com/warrior-wins-hector-arteaga-and-michelle-eggleton/)
- [Tien Truong: 422 units](https://rodkhleif.com/warrior-wins-tien-truong/)
- [Rob Nickester: 419 units](https://rodkhleif.com/warrior-wins-rob-nickester/)
- [Lee Fjord: 272 units in Missouri](https://rodkhleif.com/warrior-wins-lee-fjord/)
- [The Valentino’s: 236 units in New York](https://rodkhleif.com/warrior-wins-chris-corinne-valentino/)
- [Powell Chee: 212 units](https://rodkhleif.com/warrior-wins-powell-chee/)
- [Josh Whitinger: 207 units](https://rodkhleif.com/warrior-wins-josh-whitinger/)
- [Greg Chew: 203 units](https://rodkhleif.com/warrior-wins-greg-chew/)
## 100 to 199 Unit Deals (11 Warriors)
- [Daniel Charles: 186 units](https://rodkhleif.com/warrior-wins-daniel-charles/)
- [David Morgia’s: 186 units](https://rodkhleif.com/warrior-wins-david-morgia-2/)
- [Adam Beckstedt: 174 units](https://rodkhleif.com/warrior-wins-adam-beckstedt/)
- [Jonathan Wells: 162 units](https://rodkhleif.com/warrior-wins-jonathan-wells/)
- [Brandon Hicks: 152 units](https://rodkhleif.com/warrior-wins-brandon-hicks/)
- [Cody Wiseman: 126 units in Wisconsin](https://rodkhleif.com/warrior-wins-cody-wiseman/)
- [Jay & Tana Boersma: 124 units in Oklahoma](https://rodkhleif.com/warrior-win-jay-tana-boersma-124-unit-ok/)
- [Tim Fergestad: 124 units in Wisconsin](https://rodkhleif.com/warrior-wins-tim-fergestad/)
- [Shawn Ricehouse:: 120 units](https://rodkhleif.com/warrior-wins-shawn-ricehouse-3/)
- [Colby Bowers: 114 units](https://rodkhleif.com/warrior-wins-colby-bowers/)
- [Brian Kochendorfer’s: 100 units in Indiana](https://rodkhleif.com/warrior-wins-brian-kochendorfer-3/)
## 50 to 99 Unit Deals (20 Warriors)
- [Frank Patalano: 98 units in New Mexico](https://rodkhleif.com/warrior-wins-frank-patalano/)
- [Victor Collazo: 92 units in Kansas](https://rodkhleif.com/warrior-win-victor-collazo-92-unit-ks/)
- [Tim Severson: 92 units](https://rodkhleif.com/warrior-wins-tim-severson/)
- [Charlie Peters’: 88 units in Alabama](https://rodkhleif.com/warrior-wins-charlie-peters/)
- [Jon Potts: 84 units in Pennsylvania](https://rodkhleif.com/warrior-wins-jon-potts/)
- [AJ Simeone: 84 units](https://rodkhleif.com/warrior-wins-aj-simeone/)
- [Daniel Velez: 84 units in Pennsylvania](https://rodkhleif.com/warrior-wins-daniel-velez/)
- [Trina Piceno: 82 units in Virginia](https://rodkhleif.com/warrior-wins-trina-piceno/)
- [Eric Upchurch: 80 units in Indiana](https://rodkhleif.com/warrior-wins/)
- [Marvin Micthell: 76 units in Missouri](https://rodkhleif.com/warrior-wins-marvin-micthell/)
- [Paul Hassebroek: 73 units](https://rodkhleif.com/warrior-wins-paul-hassebroek/)
- [Charlie Peters’: 72 units in Minnesota](https://rodkhleif.com/warrior-wins-charlie-peters-3/)
- [Brian Corr and Jay Boersma: 72 units](https://rodkhleif.com/warrior-wins-brian-corr-and-jay-boersma/)
- [Chris Moyer’s 60 Bowling Lanes in Wichita: 60 units in Kansas](https://rodkhleif.com/warrior-wins-chris-moyer-2/)
- [Danny Sallis: 57 units](https://rodkhleif.com/warrior-wins-danny-sallis-2/)
- [Steve Ronan: 57 units](https://rodkhleif.com/warrior-wins-steve-ronan/)
- [Max Shah: 56 units in Indiana](https://rodkhleif.com/warrior-wins-max-shah/)
- [Alekhya Mukherji: 52 units](https://rodkhleif.com/warrior-wins-alekhya-mukherji/)
- [Eric Williams: 52 units](https://rodkhleif.com/warrior-wins-eric-williams/)
- [Patrick Hayter: 51 units in New York](https://rodkhleif.com/warrior-win-patrick-hayter-51-unit-ny/)
## 20 to 49 Unit Deals (16 Warriors)
- [Jordan Hinz: 48 units in Minnesota](https://rodkhleif.com/warrior-wins-jordan-hinz/)
- [Frank Lettiere: 45 units](https://rodkhleif.com/warrior-wins-frank-lettiere/)
- [Ed Modzel: 40 units](https://rodkhleif.com/warrior-wins-ed-modzel/)
- [Eyal Ohana: 36 units](https://rodkhleif.com/warrior-wins-eyal-ohana/)
- [Kevin Easterly: 32 units](https://rodkhleif.com/warrior-wins-kevin-easterly/)
- [Bobby & Desiree D’Alessio: 31 units](https://rodkhleif.com/warrior-wins-bobby-desiree-dalessio/)
- [Max Moala: 31 units](https://rodkhleif.com/warrior-wins-max-moala/)
- [Neil Coffee: 28 units in New York](https://rodkhleif.com/warrior-wins-neil-coffee/)
- [Ray Hightower: 28 units in Arizona](https://rodkhleif.com/warrior-wins-ray-hightower/)
- [Marquice T. D. Hobbs: 27 units](https://rodkhleif.com/warrior-wins-marquice-t-d-hobbs/)
- [Nathaniel and Valerie Kolwyck: 26 units](https://rodkhleif.com/warrior-wins-nathaniel-and-valerie-kolwyck/)
- [Javier and Yessenia Gonzalez: 24 units](https://rodkhleif.com/warrior-wins-javier-and-yessenia-gonzalez/)
- [Cindy and Damion Gaynor-Harper: 24 units](https://rodkhleif.com/warrior-wins-cindy-and-damion-gaynor-harper/)
- [Chris & Chelsey Grant: 24 units in Arizona](https://rodkhleif.com/warrior-wins-chris-chelsey-grant/)
- [Sean Cullen: 20 units](https://rodkhleif.com/warrior-wins-sean-cullen/)
- [Brent Bardales: 20 units](https://rodkhleif.com/warrior-wins-brent-bardales/)
## Under 20 Unit Deals (25 Warriors)
- [Troy Trecroce: 17 units](https://rodkhleif.com/warrior-wins-troy-trecroce/)
- [Jorjio Hopkins: 17 units in Wisconsin](https://rodkhleif.com/warrior-wins-jorjio-hopkins/)
- [Michael Bailey: 16 units](https://rodkhleif.com/warrior-wins-michael-bailey/)
- [Jens Nielson: 16 units in New Mexico](https://rodkhleif.com/warrior-wins-jens-nielson/)
- [David Iglewicz: 15 units in Pennsylvania](https://rodkhleif.com/warrior-wins-david-iglewicz/)
- [Albert Sidhom: 14 units in Louisiana](https://rodkhleif.com/warrior-wins-albert-sidhom/)
- [Joe Weldon: 12 units in Iowa](https://rodkhleif.com/warrior-wins-joe-weldon/)
- [Lizzy Neutz: 12 units in Kentucky](https://rodkhleif.com/warrior-wins-lizzy-neutz/)
- [Jonas Gustafsson: 12 units in Kentucky](https://rodkhleif.com/warrior-wins-jonas-gustafsson/)
- [Michael Mannino: 11 units in Michigan](https://rodkhleif.com/warrior-wins-michael-mannino-ii/)
- [Hector Hernandez: 11 units](https://rodkhleif.com/warrior-wins-hector-hernandez/)
- [Tomas and Nilsa Valenzuela: 10 units in Oklahoma](https://rodkhleif.com/warrior-wins-tomas-and-nilsa-valenzuela/)
- [Chris Hernandez: 10 units in Michigan](https://rodkhleif.com/warrior-wins-chris-hernandez/)
- [William Yoder: 9 units in Kentucky](https://rodkhleif.com/warrior-wins-william-yoder/)
- [Anthony & Candace Coffey: 8 units in Missouri](https://rodkhleif.com/warrior-wins-anthony-candace-coffey/)
- [Natasha Jameson-Randolph: 6 units](https://rodkhleif.com/warrior-wins-natasha-jameson-randolph/)
- [Doris Ng: 6 units in Wisconsin](https://rodkhleif.com/warrior-wins-doris-ng/)
- [Eric and Lisa Doud: 6 units in Virginia](https://rodkhleif.com/warrior-wins-eric-and-lisa-doud/)
- [Matt Spangenberg: 6 units in Pennsylvania](https://rodkhleif.com/warrior-wins-matt-spangenberg/)
- [Jonathan Russell: 4 units in Missouri](https://rodkhleif.com/warrior-wins-jonathan-russell/)
- [Bridget Smith-Osbourne: 4 units](https://rodkhleif.com/warrior-wins-bridget-smith-osbourne/)
- [Dave Snehal: 2 units](https://rodkhleif.com/warrior-wins-dave-snehal/)
- [Benedict Joanis: 2 units in New Jersey](https://rodkhleif.com/warrior-wins-benedict-joanis/)
- [Monica Duhart: 2 units in Indiana](https://rodkhleif.com/warrior-wins-monica-duhart/)
- [Jeffrey Pitzer: 2 units in Washington](https://rodkhleif.com/warrior-wins-jeffrey-pitzer/)
## Your Next Step
These Warriors all started where you are right now. Most of them did not have a background in multifamily real estate when they joined. What they did have was a willingness to learn the playbook, build relationships, and take action on a real deal.
If their stories resonate with you, you have two starting points:
- [Join Rod’s free multifamily real estate bootcamp](https://rodkhleif.com/bootcamp/) to see whether this strategy fits your situation
- [Download the Lifetime Cash Flow free ebook](https://rodkhleif.com/lcfa-ebook/) for the foundational concepts
*Disclaimer: Results are not typical. The Warriors shown here have participated in Rod’s training and coaching programs. Their results required time, effort, and risk that is inherent to real estate investing.*
**Categories:** Blog
---
### [A Complete Guide to Multifamily Real Estate Negotiating](https://rodkhleif.com/a-complete-guide-to-multifamily-real-estate-negotiating/)
**Published:** April 28, 2026
**Author:** Rod Khleif
**Excerpt:** Master multifamily real estate negotiating with the 7 Lever Negotiation Stack: Pre LOI Intelligence, Anchor LOI, Seller Read, Broker Trust, DD Retrade, Walk Power, Close Cadence.
**Content:**
I lost 800 single family rentals in the 2008 crash. Every vacancy was a 100% vacancy. The bank took the keys. I rebuilt in multifamily and learned that the single biggest variable on every deal is not the spreadsheet. It is the negotiation. The investor who learns multifamily real esatate negotiating well does not just save money on one property. They compound that edge across every deal for the rest of their career. This guide is the playbook I wish I had during my first ten multifamily acquisitions. It is the same framework my Warrior students apply to land deals on properties everyone else walks away from. If you only read one negotiating guide this year, make it this one.
## Table of Contents
- [Why Most Multifamily Buyers Negotiate Backwards](#why-most-buyers-negotiate-backwards)
- [The 7 Lever Negotiation Stack](#7-lever-negotiation-stack)
- [The Pre Negotiation Ritual](#pre-negotiation-ritual)
- [How to Reverse Engineer Any Multifamily Negotiation](#how-to-reverse-engineer)
- [Three Worked Negotiation Scenarios](#three-worked-scenarios)
- [Reactive Negotiator vs. The 7 Lever Stack](#reactive-vs-stack)
- [Asking Price Method vs. Anchor LOI Method](#asking-price-vs-anchor-loi)
- [Warriors Who Mastered Multifamily Negotiating](#warrior-stories)
- [Multifamily Real Estate Negotiating FAQ](#multifamily-negotiating-faq)
- [Ready to Take the Next Step?](#ready-to-take-the-next-step)
## Why Most Multifamily Buyers Negotiate Backwards
> Most multifamily buyers walk into negotiations starting from the seller’s number. That is backwards. Strong multifamily negotiating starts with seller motivation, your walk away price, and a written anchor that frames the deal before the seller frames you. Price follows process. The investors who get the best terms are not the loudest in the room. They are the most prepared.
The reason most investors lose at the negotiating table is not because they lack tactics. It is because they sit down without leverage. They saw a deal on a marketing flyer, fell in love, and let the broker walk them into a number that protects the seller’s dream and ignores their own returns. By the time the offer goes out, the buyer is already chasing. The seller is already winning. Multifamily real estate negotiating is not a single moment at the closing table. It is a system that starts the day you decide to look at a market and ends only when the wire hits. Inside that system, every conversation, every email, every retrade is a leverage point you either use or surrender. There is no neutral. ### Signs You Are Negotiating From Weakness
Before you spend another hour analyzing deals, run yourself through this short checklist. If three or more of these describe your last negotiation, the problem is not the market. It is your operating system. - You wrote your first offer at or near the asking price because the broker said it was “tight.”
- You did not have a written walk away number before you sent the LOI.
- You learned the seller’s motivation after you went under contract, not before.
- You let the broker drive the calendar and never set milestones of your own.
- Your due diligence retrade was a feeling, not a documented dollar amount tied to invoices, bids, or estoppels.
- You felt emotionally attached to the deal before you knew if it cleared your minimum yield.
- You said yes to the seller’s PSA template without redlining a single material clause.
Every one of those is a learnable fix. The framework below is built around fixing all seven at once. ## The 7 Lever Negotiation Stack
The 7 Lever Negotiation Stack is the operating system my Warrior students use to win on price, terms, and timing across every multifamily deal type. Want a guided walk through with worked examples? Join the next free [Multifamily Bootcamp](https://rodkhleif.com/bootcamp/). [](https://rodkhleif.com/bootcamp/)
[**Want a live walkthrough with worked deal math? Join the free Multifamily Bootcamp →**](https://rodkhleif.com/bootcamp/)
Each lever stacks on the one before it. You cannot skip ahead and expect the result to hold. The order is the framework. Follow it on every deal and the same patterns start showing up in your inbox: more accepted LOIs, larger DD credits, faster closes, calmer brokers. ### Lever 1: Pre LOI Intelligence
Before you write a single number, you need three pieces of intelligence: who the seller is, why they are selling, and what the comparable market is doing. Most buyers skip all three. They ask the broker for the OM, run the numbers, and send an offer that fits the broker’s whisper price. That is how you get outbid by 4% on a deal you did not even want. Pull the deed history. Find the original purchase price and date. If the seller bought at the top of 2021 and the [multifamily cap rate](https://rodkhleif.com/what-is-a-good-cap-rate-for-multifamily/) has expanded by 100 basis points since, they are likely sitting on negative equity and they need either a price miracle or a creative structure. That is your opening. If the seller has owned for 12 years and the loan is fully amortized, their pain is different. Now they care about taxes, 1031 timing, and continuity for their on site team. Each motivation maps to a different lever later in the stack. ### Lever 2: The Anchor LOI
The asking price is an anchor the seller threw at the market. If you let it set the conversation, every dollar of your “negotiation” is just clawing back from a number you did not choose. The Anchor LOI flips that. Your letter of intent becomes the new center of gravity. Brokers and sellers respond to the freshest, most credible anchor on the table. If yours is well organized, written professionally, and includes specific terms, it becomes the document everyone references for the next 14 days. I cover the exact LOI structure that anchors the deal in [Everything You Need to Know About Letters of Intent](https://rodkhleif.com/need-know-letter-intent/). The biggest miss I see in beginner LOIs is treating the document like a quote. It is not a quote. It is a written argument for why your number, your timeline, and your earnest money structure is the best risk adjusted offer in the room. ### Lever 3: The Seller Read
By the time you submit the LOI, you should already know whether the seller is selling because of partnership disputes, looming refinance risk, tax events, or estate planning. Each of those motivations changes which terms you flex on. A partnership dispute seller cares about speed and certainty of close. A refinance risk seller cares about price floor. An estate seller cares about narrative and continuity. Match the lever to the motivation. The single biggest unlock in the seller read is asking the broker, on the phone, “What does the seller need this transaction to accomplish?” Most beginner buyers never ask that question because they assume the broker will not answer. Brokers answer it more often than you would believe. They want the deal to close. Your job is to give them a buyer they can sell internally to the seller. ### Lever 4: Broker Trust Currency
Brokers are not your adversary. They are an oxygen source for your future deal flow. The Warrior who treats every broker call like a long term relationship investment ends up with off market deals showing up in their inbox 18 months later. The Warrior who treats brokers like obstacles ends up underwriting public LoopNet listings forever. The currency you are building with brokers is reliability. If you say you will close in 45 days, you close in 45 days. If you say your earnest money goes hard on day 21, it goes hard on day 21. If you say you are not going to retrade unless something material shows up in DD, you do not retrade unless something material shows up. One credible close is worth a hundred LOIs from a buyer with no reputation. ### Lever 5: The DD Retrade
A retrade is not a tactic. It is a reckoning with reality. Inspections, third party reports, lender reports, and tenant estoppels surface real numbers that the seller has often ignored or hidden. The retrade is the moment those numbers turn into either a price reduction, a credit at closing, or a structural change in the deal. The investors who botch retrades treat them as bluffs. The investors who win at retrades treat them as math. The structure that always works: tie every retrade dollar to a documented finding. A sewer scope that shows $80,000 of cast iron repipe equals an $80,000 credit, not a $40,000 split. A roof report that shows two years of remaining life on a 20 year roof equals a clearly priced reserve. The math is the negotiation. If your retrade is a feeling, you will lose. If your retrade is a stack of bids and reports, you will not. ### Lever 6: Walk Power
Walk power is the willingness to lose this deal to win the next ten. The investors with the strongest walk power are not the ones with the most capital. They are the ones with the clearest written walk number. Before you submit any LOI, you write down the highest price, the lowest cap rate, the latest close date, and the deepest earnest money you will accept. If the deal moves outside any of those guardrails, you walk. Not threaten to walk. Walk. The market knows the difference. Walk power compounds. Sellers and brokers feel it in the first phone call. The investor who has walked from real deals before is the investor whose final offer becomes the final number. The investor who has never walked is the investor every seller squeezes for the last 2%. ### Lever 7: Close Cadence
The deal is not done at the PSA. It is done at the wire. Between PSA and wire is where buyers lose deals they thought they had. They miss a financing milestone. They blow a survey deadline. They let the seller’s attorney drive the calendar. Close Cadence is the discipline of running a written closing tracker with deadlines you set, and missing none of them. The cadence you want: weekly written status updates to the seller’s attorney, the title company, and your lender. A shared closing checklist with green, yellow, and red markers. Pre wire dry runs three days before closing. The seller never asks you “where are we?” because they already know. By the time the wire goes out, you have built so much trust that off market repeat business becomes inevitable. ## The Pre Negotiation Ritual
The best multifamily negotiators I know all run the same ritual the night before a major call or LOI submission. They write the deal narrative by hand. They write down their walk number. They write the seller’s likely walk number. They write the three things the broker most wants from the buyer. They write the one thing they will not concede. The act of putting it on paper sharpens decision making the next morning the same way handwriting sharpens recall in any other domain. [Princeton research on handwritten notes](https://www.psychologicalscience.org/news/releases/take-notes-by-hand-for-better-long-term-comprehension.html) showed that students who took notes by hand outperformed those who typed when tested on conceptual recall. Multifamily as an asset class is also bigger and deeper than most beginners realize. The [National Multifamily Housing Council](https://www.weareapartments.org/research-insight/) reports that the apartment industry contributes more than $3.4 trillion to the U.S. economy annually. That is the size of the table you are sitting at when you negotiate a 100 unit deal. Sellers do not act random. They act according to the macro forces inside that ecosystem. Knowing which force is moving them is half the battle. The ritual usually takes 30 minutes. It saves hundreds of thousands of dollars across a career. [](https://rodkhleif.com/lcfa-ebook/)
[**Download the free Lifetime Cashflow eBook for the full multifamily playbook →**](https://rodkhleif.com/lcfa-ebook/)
## How to Reverse Engineer Any Multifamily Negotiation
Reverse engineering a negotiation means starting from the only number that matters to you, the yield on cost or cash on cash you must hit, and working backwards through every term in the deal until you arrive at the maximum price you can pay. Most buyers do this in reverse. They start at the asking price and try to make their model fit. The result is overpaying. The five step reverse engineering process is the spine of the 7 Lever Stack in execution mode: 1. **Set the yield floor.** Pick the lowest cash on cash and the lowest yield on cost you will accept for the asset class and risk profile. Write them down. They are not negotiable. Everything else is.
2. **Pull the comp set.** Get the trailing 12 month sales comps within a 3 mile radius and the trailing rent comps for your unit mix. Build a defensible underwriting before you talk to the broker. Compare your numbers to the OM. Whichever has more discipline wins the framing.
3. **Solve for max price.** Plug your yield floor and your underwriting into the model. Solve backwards for the maximum price that produces your minimum yield. That is your ceiling. Subtract 5% to 8% to set your initial Anchor LOI price.
4. **Map terms to motivation.** Take the seller’s motivation from your Pre LOI Intelligence and choose which two terms in the LOI you flex on to make the price stick. Earnest money structure, due diligence period, hard money date, financing contingency, closing date.
5. **Pre commit to walk triggers.** Write down the three things that will cause you to walk away. A retrade refusal above $X. A seller financing condition that breaches your IRR floor. A timing miss on lender approval. Walking is a feature, not a failure.
If any of those five inputs feels fuzzy on your next deal, that is the lever to sharpen first. ### Three Worked Negotiation Scenarios
The math gets clearer with worked deals. Here are three scenarios at 50, 100, and 200 unit scales, each showing the lever applied and the dollars unlocked. 
The 50 unit Class C deal closed at $4.0M against a $4.5M ask. The lever was the DD Retrade. A roof inspection showed three buildings had 18 months of life left. A sewer scope flagged two cast iron lines. The credit was $500,000, fully documented with bids. The seller accepted because the alternative was relisting and paying broker fees for another 90 days. The 100 unit Class B deal closed at $11.2M against a $12.0M ask. The lever was the Anchor LOI. The buyer’s offer was the third one received but the only one that proposed seller financing on a $2.0M second at 5%, which was a full 200 basis points below the buyer’s senior rate. The seller netted more total cash flow over five years from the structure than from a higher cash price. The 200 unit syndication closed at $26.0M against a $28.0M ask. The lever was Pre LOI Intelligence. A deed search revealed the seller had bought at $24.0M in 2019 with a maturing CMBS loan. The buyer ran the seller’s likely refinance scenario and saw that paying off the CMBS, recasting at current rates, and holding for another five years produced a worse outcome than selling at $26.0M today. The buyer brought that math to the broker. The seller agreed inside 72 hours. None of these were aggressive bluffs. They were the math, applied with discipline. ## Reactive Negotiator vs. The 7 Lever Stack
The contrast between an unstructured, reactive negotiation and a 7 Lever Stack negotiation is enormous. Same deal, same seller, same broker. The buyer’s operating system changes the outcome by 5% to 12% on price and even more on terms. Reactive Negotiator vs. 7 Lever Stack Same Deal. Different Operating System. Stage Reactive Negotiator 7 Lever Stack Before LOI ✗Reads OM, runs numbers, sends offer near asking. ✓Pulls deed, finds motivation, knows seller before sending the LOI. LOI Framing ✗Lets the asking price set the anchor. ✓Submits a written Anchor LOI that becomes the new center of gravity. Broker Relationship ✗Treats broker as gatekeeper. Sends 1 LOI then disappears. ✓Builds long term broker trust. One credible close earns 5 future off market looks. Due Diligence ✗Retrades on a feeling, asks for a round number. ✓Retrades to documented bids, reports, and estoppels. Math wins. Walk Power ✗Has never walked. Seller knows it. Squeezes for the last 2%. ✓Walks when the deal breaches the written number. Final offer becomes final. Outcome ✗Pays full ask. Loses 50 to 200 bps of yield. Quiet deal flow. ✓Wins on price and terms. Compounds reputation. More off market deals. ## Asking Price Method vs. Anchor LOI Method
The most expensive mistake a multifamily buyer can make is letting the asking price set the conversation. This second comparison shows the same negotiation in two parallel universes: one where the buyer accepts the asking price as the anchor, and one where the buyer submits an Anchor LOI that resets the frame. Asking Price Anchor vs. Anchor LOI Whoever Sets the Anchor Wins the Frame. Phase Asking Price Method Anchor LOI Method Reference Number ✗Seller’s listing price. ✓Your underwritten max minus 5 to 8%. Document Strength ✗1 page email offer. ✓3 to 4 page LOI with terms, timeline, financing, EM schedule. Counter Offer Pattern ✗Seller counters at ask. You inch up. ✓Seller counters between your number and the ask. You meet in the middle. Term Flexibility ✗Single lever (price). No room to trade. ✓5+ levers (price, EM, DD period, financing, close date). Typical Outcome ✗Pays 98 to 102% of ask, weak terms. ✓Closes at 88 to 95% of ask, strong terms. ## Warriors Who Mastered Multifamily Negotiating
The 7 Lever Stack is not theory. It is built on what my Warrior Program students do on real deals every month. [Anthony Metzger](https://rodkhleif.com/podcasts/from-teaching-grade-school-to-raising-millions/) went from a teaching career to closing his first multifamily syndication by leaning hard on Pre LOI Intelligence and Walk Power. He underwrote dozens of deals and walked from many before the right one came. When it did, he negotiated terms most first time syndicators never get because he had the discipline of the stack. Frank Patalano, another Warrior, used Broker Trust Currency to turn what looked like a single deal in his New England market into a steady stream of off market opportunities. He kept his word on every closing. Brokers started calling him first. That is what Lever 4 looks like in practice. Zach Haptonstall scaled past 4,000 units by combining the Anchor LOI lever with relentless DD Retrade discipline. Every dollar of every credit was tied to a documented finding. Watch the Full Interview
Anthony Metzger walks through how he went from teaching grade school to raising millions for multifamily, and the negotiation discipline that got him there.
> **Rod Khleif:** “Negotiation is not about beating the other side. It is about understanding what they actually need and structuring a deal where everybody wins. That is how you close deals nobody else can close, and build a reputation that brings the next ten to your inbox without effort.”
The pattern across every Warrior who scales past their first three deals is the same. They internalize the stack. They run it on every deal. They never freelance their way through a negotiation again. For more practitioner case studies, listen to the [Lifetime Cashflow Podcast](https://rodkhleif.com/lifetime-cashflow-podcast/) archive. Episodes like the one with FBI hostage negotiator [Chris Voss](https://rodkhleif.com/podcasts/ep-259-chris-voss-author-of-never-split-the-difference-former-fbi-hostage-negotiator/) deepen the seller psychology lever in particular. ## Multifamily Real Estate Negotiating FAQ
**Q: What is the most important skill in multifamily real estate negotiating?** A: Walk power. The willingness to walk away from any deal that breaches your written walk number is what separates investors who get great terms from investors who overpay. Tactics matter. Walk power matters more. **Q: How do you start negotiating a multifamily deal?** A: Start with Pre LOI Intelligence. Pull the deed history, identify the seller’s motivation, and underwrite the deal to your yield floor before you write any offer. Most buyers skip this and lose 5 to 12% of the negotiation before they even pick up the phone. **Q: What is an LOI in multifamily real estate?** A: An LOI is a letter of intent. It is a non binding written offer that lays out price, earnest money, due diligence period, financing terms, and target close date. A strong Anchor LOI becomes the new center of gravity for the negotiation. A weak LOI gets ignored. **Q: How much below asking can you offer on a multifamily property?** A: It depends entirely on the seller’s motivation and your underwriting. In stable cap rate environments expect to close at 88 to 95% of ask if you run the 7 Lever Stack. In distressed cycles or with off market sellers, 80 to 88% is realistic. Never start at a number that is not anchored to your underwriting. **Q: What is a retrade in multifamily real estate?** A: A retrade is a price or term adjustment requested after due diligence surfaces a real issue. The right way to retrade is to tie every dollar to a documented finding: bids, third party reports, estoppels, lender memos. The wrong way is to retrade on a feeling. Sellers always know which is which. **Q: How do you negotiate with a multifamily real estate broker?** A: Treat the broker as a long term ally. Their incentive is closing deals, and a buyer who closes on time is more valuable to them than a buyer with a higher offer who flakes. Build trust by closing exactly when you say you will. One credible close earns you 5 future off market looks. **Q: When should you walk away from a multifamily negotiation?** A: When the deal breaches your written walk number on price, terms, or timing. The walk number gets written down before the LOI is sent. Once the deal moves outside it, you walk. Threatening to walk is not walking. Real walk power compounds. **Q: How do you negotiate seller financing on a multifamily deal?** A: Map it to seller motivation. Sellers who care about price floor or tax timing often respond well to a seller carry second behind your senior debt. Offer a structure where the seller gets more total cash flow over five years from the carry than from a higher cash price. Run their numbers, not just yours. **Q: What is the Anchor LOI method?** A: The Anchor LOI method is the practice of submitting a written, professional letter of intent that becomes the new reference point for the negotiation. Instead of letting the asking price anchor the conversation, your LOI does. It includes price, earnest money structure, due diligence period, financing assumptions, and target close date. **Q: Can you negotiate multifamily real estate with no experience?** A: Yes. The 7 Lever Stack works on your first deal as well as your fiftieth. Reputation is built one credible close at a time. Show up prepared, anchor the deal, build broker trust, and walk when you have to. The market does not require you to have done it before. It requires you to do it well now. ## Ready to Take the Next Step?
The 7 Lever Negotiation Stack is one of the core tools we work through inside the Multifamily Bootcamp. If you are still on your first three deals, this is the place to install the framework with worked examples and real underwriting. [**Join the next Multifamily Bootcamp →**](https://rodkhleif.com/bootcamp/)
Not ready for the live event yet? Start with the free ebook. It is the foundation that the bootcamp builds on, and the daily reference my Warriors keep open inside their underwriting workflow. [**Download the free Lifetime Cashflow eBook →**](https://rodkhleif.com/lcfa-ebook/)
*Disclaimer: This article was written by AI and reviewed by Rod and his team.* **Related reading:** [Multifamily vs Commercial Real Estate: Which One Should You Invest In?](https://rodkhleif.com/multifamily-vs-commercial-property-which-one-should-you-invest-in-techbullion/)
Real Warriors run these negotiation tactics regularly; see how [Patrick Hayter closed 51 units in New York](https://rodkhleif.com/warrior-win-patrick-hayter-51-unit-ny/) and [Jesse and Jenifer closed 44 units in Florida](https://rodkhleif.com/warrior-win-jesse-jenifer-44-unit-fl/).
More examples on the bigger end include [Larry Carroll closing 133 units in Texas](https://rodkhleif.com/warrior-win-larry-carroll-133-unit-tx/) and [Roberto Carabetta closing 58 units in Georgia](https://rodkhleif.com/warrior-win-roberto-carabetta-58-unit-ga/).
**Categories:** Blog, Real Estate
---
### [Top 10 Biggest Multifamily Investing Mistakes: 2025](https://rodkhleif.com/the-10-biggest-mistakes-new-multifamily-investors-make/)
**Published:** August 29, 2025
**Author:** Rod Khleif
**Excerpt:** In my 40 years as a real estate investor, educator and coach, I’ve seen just about every mistake you can make in this business. I’ve even made a few of them myself.
**Content:**
## Top 10 Biggest Multifamily Investing Mistakes: 2025
Zig Ziglar once said:
“Some of us learn from other people’s mistakes, and the rest of us have to be other people.”
The truth? Making mistakes when investing in real estate can be expensive. The good news is, you don’t have to repeat them.
Over my 40+ years as a multifamily investor, educator, and coach, I’ve seen just about every mistake in the book (and yes, I’ve made some myself). The good news is, if you learn from others, you can shortcut decades of pain and jump right into success. So if you’re asking yourself how to avoid apartment investing mistakes, then you’ve come to the right article.
In this post, I’ll walk you through the 10 biggest mistakes to avoid when you start your multifamily investing journey.
## 1. Going It Alone
Multifamily investing is not a solo sport.
You need a team:
- Brokers to find properties
- Lenders to finance deals
- Real estate attorneys to protect you in contracts
- Property managers to run day-to-day operations
- [Mentor](https://rodkhleif.com/how-to-vet-a-multifamily-real-estate-mentor/)s to help you avoid landmines
Try to go at it alone, and you’re setting yourself up for costly mistakes.
**👉 Action Step: Start building your investing team before you purchase your first multifamily property.**
## 2. Waiting Too Long to Raise Capital
So many new multifamily investors think: *“I’ll find a deal first, then raise the money.”* Wrong.
By the time you chase down partners or investors, the deal is gone.
**👉 Action Step: Build relationships with investors, lenders, and potential partners now before you need them. When the right property shows up, you’ll be ready to move fast.**
## 3. Moving Too Slow
Fear kills deals. Many new investors hesitate, second-guess themselves, or drown in analysis paralysis.
**👉 Action Step: Define your investment criteria (location, number of units, returns, risk tolerance). When a deal matches, move. Don’t wait for “perfect.” In real estate, done beats perfect every time.**
## 4. Moving Too Fast
On the flip side, rushing is just as dangerous. Skipping due diligence, ignoring property inspections, or trusting the seller’s numbers can cost you tens of thousands.
**👉 Action Step: Learn to move with cheetah speed; fast but not reckless. Move quickly on the opportunity, but slow down for the underwriting and inspections.**
## **5. Buying the Wrong Property**
One of the most common mistakes I see is new investors chasing shiny objects. A flashy listing, a “too-good-to-be-true” off-market deal, or a seller promising big profits can attract beginners. They take the first “good deal” they find. But they forget to ask the most important question: **Does this property fit my strategy?**
Here’s the danger:
- You may end up with a property that’s the wrong size or class for your experience level.
- You may buy into a market that doesn’t support your growth goals.
- You may get stuck managing a property that eats more time, money, and energy than it ever gives back.
I’ve seen new investors buy C-class properties in tough areas. They really wanted a Class B property in a growing market. Others chase luxury deals that look sexy on paper but don’t cash flow.
👉 **Action Step: Define your buy box *before* you shop. Ask yourself:**
- **Am I focused on my local market, or am I open to investing out of state?**
- **Do I want stabilized assets with predictable income, or value-add deals with renovation upside?**
- **Am I looking for workforce housing, Class B, or Class A properties?**
When you know your lane, you’ll recognize the right deal immediately and avoid the wrong ones that can sink you.
## **6. Trying to Predict the Future**
New investors often bring a single-family mindset into multifamily. They think, *“I’ll buy low and sell high once the market appreciates.”* That’s speculation, not investing.
Multifamily real estate is an income-producing business first and foremost. Rents pay the bills. Cash flow provides stability. Appreciation happens, but it’s a byproduct of strong operations and market fundamentals and not a guarantee.
When you gamble on appreciation, you set yourself up for disappointment. Economic cycles shift, interest rates rise, and local markets soften. If you’re banking on selling high five years from now, you’re not investing, you’re guessing.
**👉 Action Step: Focus on properties that cash flow today. Appreciation is the icing on the cake, not the cake itself. Buy deals where the numbers work now, even if rent growth stalls or cap rates expand. If appreciation comes, fantastic! You’ve just multiplied your returns. But never build your business plan on hope.**
## **7. Gambling on Cash Flow**
Another rookie trap is buying negative cash flow properties with the belief that “it’ll turn around later.” This is dangerous thinking. Unless you have deep pockets, one unexpected expense can wipe you out.
Here’s why: multifamily expenses add up faster than you think. It’s not just your mortgage payment—you’ve got:
- **Property taxes** (which often rise after purchase)
- **Insurance premiums** (especially in today’s market)
- **Utilities and maintenance** (both predictable and unexpected)
- **CapEx reserves** (big-ticket items like roofs, HVAC, and plumbing)
- **Management fees**
If you ignore these in your spreadsheets and assume future rent growth will “fix it,” you’re gambling, not investing.
**👉 Action Step: Buy properties that make financial sense from day one. Run conservative underwriting with realistic vacancy, expense, and rent assumptions. Future upside is a bonus, but never hinge your success on it.**
Smart investors know: cash flow is freedom. It gives you staying power, it covers you during downturns, and it builds long-term wealth.
## 8. Ignoring the Law
Every state, county, and city has landlord-tenant laws. Ignoring them or worse, not knowing them, can land you in court and destroy your returns.
**👉 Action Step: Educate yourself or lean on an experienced attorney. Ignorance is not a defense.**
## 9. Hiring the Wrong Property Manager
I’ve personally made this mistake and survived, but new investors often don’t. The wrong manager will bleed you dry with poor tenant screening, missed maintenance, and bad reporting.
**👉 Action Step: Vet managers like your financial life depends on it, because it does. Ask for references, review systems, and trust your gut.**
## 10. Not Reading Leases
Too many rookies assume existing leases are “fine.” Then they discover sweetheart deals, free parking, or concessions that crush their NOI.
👉 Action Step: Review every lease with your attorney or manager. Don’t inherit someone else’s mistakes.
## Final Thoughts: Success Leaves Clues
Here’s the truth: every one of these multifamily investing mistakes is 100% avoidable.
If you surround yourself with the right people, take time to learn the business, and take massive action, you’ll sidestep the traps that take down most beginners.
👉 Don’t dabble. Decide.
👉 Don’t speculate. Cash flow.
👉 Don’t go it alone. Build your team.
That’s how you dominate in multifamily investing.
## **❓ Frequently Asked Questions About Multifamily Investing Mistakes**
### **What are the most common mistakes new multifamily investors make?**
The biggest mistakes new real estate investors make are: - Trying to do everything alone.
- Waiting too long to get funding.
- Moving too slowly or too quickly.
- Buying the wrong property.
- Betting on future cash flow.
- Ignoring landlord-tenant laws.
- Hiring the wrong property manager.
- Not reading leases carefully.
Each one can cost you thousands, but they’re all 100% avoidable if you learn the business and surround yourself with the right team.
### **How can I avoid mistakes in multifamily real estate investing?**
The key is education and preparation. Define your investment criteria, build your team, raise money before chasing deals, and always focus on cash flow first. Pair that with a mentor or coach who’s already been where you want to go, and you’ll collapse time frames and sidestep the landmines that take out most beginners.
### **Is multifamily real estate investing still a good strategy in 2025?**
Absolutely. Multifamily is one of the strongest asset classes in real estate investing. Even in shifting economies, apartments provide consistent demand, steady income, and strong appreciation opportunities. In 2025, with higher interest rates and evolving markets, the investors who know how to find deals, raise capital, and manage properties are positioned for massive success.
### **Do I need a mentor or coach to succeed in apartment investing?**
You *can* figure it out alone but it’s the long, expensive road. A good coach or mentor accelerates your learning, helps you avoid costly mistakes, and holds you accountable. In fact, I credit much of my success to the mentors I had along the way. If you want to go faster and further, find someone who’s already walked the path.
### **What’s the first step for new multifamily investors?**
Start with education. Learn how to underwrite deals, raise capital, and build relationships with brokers, lenders, and property managers. From there, set clear goals and take consistent action. Attending a multifamily seminar/webinar or joining a structured coaching program can give you the proven blueprint to confidently take your first deal down.
## Ready to Go Deeper?
🔥 Join me at the next [Multifamily Bootcamp](/bootcamp/) and learn how to find, fund, and close your first (or next) deal.
Or if you’re ready to truly scale, check out my coaching program where we help new and seasoned investors avoid these mistakes, build passive income, and achieve true financial freedom.
For the broader playbook, see our [10 step quick start to multifamily investing](https://rodkhleif.com/10-step-quick-start-multifamily-investing/).
Real Warriors who learned these lessons in practice include [Aaron Novotney with his 53 unit Ohio deal](https://rodkhleif.com/warrior-win-aaron-novotney-53-unit-in-oh/) and [Patrick Hayter with his 51 unit New York deal](https://rodkhleif.com/warrior-win-patrick-hayter-51-unit-ny/).
**Categories:** Blog, Property Management
**Tags:** apartment investing, business structures, Driving Force, investor mistakes, landlord, motivation, multifamily, multifamily investment, multifamily property investing, multifamily real estate, NOI, real estate, real estate investing, real estate podcast, Rod Khleif, seller financing
---
### [Is Senior Housing a Good Investment in 2026?](https://rodkhleif.com/is-senior-housing-a-good-investment-in-2026/)
**Published:** December 23, 2025
**Author:** Alex Khleif
**Content:**
> I see senior housing as a compelling investment opportunity that combines strong cash flow with genuine social impact. Senior housing properties generate higher rents and more stable occupancy than traditional apartment buildings because demand is driven by demographics. Here’s what’s exciting me about senior housing: the aging population creates structural demand that will only grow for the next 20 years. Most investors overlook senior housing because they don’t understand the regulations or operational requirements, but that ignorance creates opportunity. Let me share why I’m personally investing in senior housing and why you should evaluate it for your portfolio. – Rod Khleif
If you’ve been watching senior housing and thinking, “Is 2026 the year to lean in?” you’re not alone. More investors are looking at senior living because the demand story is getting louder, and the sector has been working through a multi-year reset that created both pain and opportunity. But let me be clear: senior housing isn’t “multifamily with gray hair.” This is operational real estate. If you buy it like a simple cap-rate play, it will humble you fast. If you buy it like a business wrapped in real estate it can be one of the most compelling risk-adjusted plays going into 2026. > **Bottom line:** Senior housing can be a great investment in 2026, but only for investors who respect the operational complexity, underwrite staffing and occupancy correctly, and either have an operator (or partner with one) who has done it before.
## What “Senior Housing” Actually Means (And Why It Matters)
Most people use “senior housing” as a catch-all term. In reality, it’s a spectrum. And your risk, your upside, and your management requirements change dramatically depending on which segment you’re in. ### Active Adult (55+)
This is typically lifestyle-focused housing with age restrictions and minimal (or no) care component. Operationally, it’s closer to conventional multifamily. The big drivers are amenities, location, and resident experience. ### Independent Living (IL)
[Independent living](https://rodkhleif.com/assisted-living-vs-independent-living/) is for seniors who want convenience, community, and often meals/activities, but don’t need hands-on daily care. It’s more operational than apartments because you’re selling a lifestyle and delivering services, but it’s generally less clinical than assisted living or memory care. ### Assisted Living (AL)
Assisted living adds a care component: help with daily activities, medication management, mobility, and more. This is where staffing, compliance, reputation, and leadership start to make or break your NOI. ### Memory Care (MC)
Memory care is specialized housing and programming for residents with Alzheimer’s and other forms of dementia. It can be high-demand and high-margin when executed well, but it’s also higher acuity, higher liability, and absolutely not a space for “we’ll figure it out” operators. If you’re newer to the sector, the simplest way to avoid getting in over your head is to match your strategy to your operational bandwidth. In other words: don’t buy a memory care turnaround unless you have a memory care operator who has already solved that exact problem. ## Why Senior Housing Is Getting More Attention Going Into 2026
Senior housing has a powerful long-term tailwind: demographics. As the largest age cohort in U.S. history moves deeper into the age bands where senior living becomes more relevant, demand expands. That part is not complicated. What *is* complicated is timing and execution. The last several years have tested operators through staffing disruptions, expense volatility, and occupancy softness. The upside of that kind of cycle is that it tends to separate strong operators from weak ones—and it can create pricing dislocations you don’t get in “easy mode.” Heading into 2026, the sector is drawing attention for three reasons: - **Demand pressure is building** as the population ages into the years where services and community matter more.
- **New supply has been more constrained** than people assume, especially relative to the demand curve in many markets.
- **Operations have been normalizing** for good operators who tightened systems, stabilized teams, and rebuilt occupancy.
Rising demand, uneven supply, and improving operations is exactly where opportunity tends to live. But you still have to buy right. ## The Real “Investment Thesis” in 2026: You’re Buying Operations
In apartments, a mediocre operator can still survive in a rising market. In senior housing, mediocre operations show up fast: lower move-ins, higher turnover, bad reviews, staffing gaps, and margin compression. So if you’re evaluating senior housing for 2026, your thesis should not be “cap rates are attractive.” Your thesis should be: “This property can be operated better than it is today, and the path to improvement is clear, measurable, and proven.” That means you underwrite things most multifamily investors ignore: - **Move-in engine:** lead sources, tour-to-move-in conversion, and sales process discipline.
- **Retention:** resident experience, family communication, and service consistency.
- **Staffing stability:** turnover, training, leadership depth, and scheduling systems.
- **Reputation:** reviews, response systems, and community trust.
- **Compliance:** documentation, policies, audits, and regulatory hygiene.
When those are strong, the real estate performs. When they’re weak, the building becomes a very expensive stress test. ## The Biggest Risks to Underwrite in 2026
Senior housing can absolutely outperform—yet the downside can be real if you treat it like a simple rental business. Here are the risks you should take seriously before you ever wire a dollar. ### 1) Labor can make or break the deal
Labor is typically the biggest expense line item, especially in AL and MC. A small change in staffing cost or turnover can move your NOI more than your rent growth assumptions. If the business plan depends on “we’ll reduce labor” without a concrete operating playbook, that’s not a plan—that’s hope. ### 2) Liability and insurance can surprise you
Higher-acuity communities come with higher liability exposure. You need to understand claim history, policies, incident reporting, and training systems. Insurance isn’t just a number—it’s a reflection of operational discipline. ### 3) Reputation risk is real (and fast)
In senior housing, you’re not only selling to residents—you’re selling to adult children and referral partners who do research. Negative reputation can stall occupancy, and stalled occupancy can snowball staffing challenges. ### 4) “Deferred operations” is as dangerous as deferred maintenance
Some properties are physically fine but operationally broken: weak leadership, sloppy documentation, poor staff culture, inconsistent care delivery, and zero sales system. Fixing that can be possible, but it requires the right operator and realistic timelines. ## What a “Good” Senior Housing Investment Looks Like in 2026
Here’s a practical framework I like. It keeps you out of trouble and forces clarity. ### Strong deals typically have:
- **Clear demand drivers** in the immediate trade area (not just “the state is growing”).
- **Limited competitive new supply** in the same care level and price point.
- **A defined operational upside** (sales process, staffing systems, reputation repair, programming).
- **Leadership on-site** that can execute day-to-day, not just “corporate oversight.”
- **An operator with proof** they’ve stabilized this exact segment (IL vs AL vs MC matters).
### Deals that look cheap for a reason often have:
- Chronic staff turnover and agency dependence with no leadership bench.
- Recurring compliance issues or poor documentation habits.
- Weak online reviews and no reputation recovery strategy.
- A business plan that relies on aggressive rent growth while ignoring operations.
If the only reason the deal works is your spreadsheet, it doesn’t work. ## Three Smart Ways to Invest in Senior Housing in 2026
You don’t have to build an operating company to participate in the upside. Choose the lane that matches your experience, time, and risk tolerance. ### 1) Passive investing (LP) with an experienced sponsor/operator
This is often the cleanest way to get exposure without carrying operational responsibility. The key is sponsor selection. You want a team that has operated through volatility and can show stabilized performance—not just projections. ### 2) Joint venture with a proven operator
You help source capital and deals, and the operator runs day-to-day execution. This model is common in senior housing for a reason. It aligns strengths and reduces the odds of “learning on live ammo.” ### 3) Build your own platform
This is the highest upside and highest complexity. If you go this route, treat it like building a real business: hiring, training, SOPs, compliance systems, sales systems, culture, and leadership development. The building is only part of the equation. ## A 2026 Underwriting Checklist (Use This Before You Fall in Love With a Deal)
If you’re looking at a senior housing opportunity, don’t just ask for T-12s. Ask questions that reveal operational truth. - **Occupancy:** What has occupancy done over the last 24 months, and why?
- **Sales engine:** Where do leads come from? What’s tour-to-move-in conversion?
- **Retention:** What’s the monthly move-out profile? What are the top reasons families leave?
- **Labor:** Turnover by department, wage trends, overtime frequency, agency usage.
- **Leadership:** Who is the Executive Director? How long have they been there? What’s the bench?
- **Reputation:** What do reviews say repeatedly—and what’s the response system?
- **Compliance:** Any violations, patterns, or documentation weaknesses?
- **Capex:** What’s truly required vs. optional? What impacts marketability and conversions?
- **Downside stress test:** What happens if occupancy drops 5% and labor rises 5%?
Senior housing rewards disciplined underwriting. It punishes assumptions. ## Common Mistakes Investors Make in Senior Housing
If you want to avoid the most expensive lessons, watch out for these traps. - **Buying “turnaround” without turnaround leadership.** Fixing operations requires on-site strength, not just good intentions.
- **[Underwriting](https://rodkhleif.com/how-to-underwrite-senior-housing-deals/) rent growth and ignoring conversion.** Move-ins and staffing stability often matter more than pricing power.
- **Assuming reputation will improve on its own.** It won’t. It takes systems, speed, and consistency.
- **Treating care levels like they’re interchangeable.** IL is not AL. AL is not MC. Different staffing, different risk.
## So, Is Senior Housing a Good Investment in 2026?
Yes, senior housing can be an excellent investment in 2026, especially in markets where demand is growing, supply is manageable, and operations can be improved with a clear plan. The demographic tailwind is real, and strong operators are proving that stabilized performance is absolutely achievable. But it’s not a beginner game unless you approach it the smart way: partner with an operator, invest passively with a proven team, or build the operational platform before you scale. ## FAQ- Is Senior Housing a Good Investment in 2026?
### Is senior housing a good investment in 2026?
Senior housing is a great investment if you understand that you’re buying a business wrapped in real estate. The demand story is strong, but the returns are earned through execution: occupancy, staffing stability, resident experience, and reputation. If you invest passively with a reliable company, it can be a good chance in 2026. Working with an experienced team can also help. If you’re trying to “learn operations on the fly,” it can also be a very expensive lesson. ### What’s the biggest difference between senior housing and multifamily?
Multifamily is primarily a real estate management business. Senior housing is an operating business. In assisted living and memory care, your NOI can swing significantly based on staffing, turnover, agency reliance, resident acuity, and compliance processes. You can’t just repaint, raise rents, and call it a value-add. You need systems and leadership. ### Which senior housing segment is “best” for investors?
There isn’t one “best” because what works for you will relate to your risk tolerance and operational bandwidth. Active adult and independent living focus more on lifestyle than clinical care. This can make operations easier to manage. Assisted living and memory care can do well when managed properly. However, they often need better operators, staff, and compliance. ### Is memory care too risky for a first-time investor?
Memory care isn’t automatically too risky, but it’s rarely a good place to start without an experienced operator. It’s higher acuity, higher liability, more staffing intensity, and more reputation sensitivity. If your entry point is passive investing with a proven memory care operator, that can be a smart way to learn the space. If your plan is “we’ll figure it out,” don’t do it. ### Is senior housing recession-proof?
Need-based demand can make senior housing more resilient than purely discretionary housing, but “recession-proof” is a dangerous word. Families still make financial decisions, staffing costs don’t politely decline, and local competition still matters. Strong operators with solid culture and consistent sales processes tend to weather downturns far better than weaker operators. ### What drives returns the most in senior housing?
In most communities, occupancy and labor efficiency are the two biggest levers. You can increase rates, but if your move-in engine is broken or your staffing model is unstable, you’ll feel it immediately in margins. Retention matters too. ### How do you underwrite occupancy in senior housing?
Don’t just look at “current occupancy.” Look at trends, velocity, and conversion. You want to know: where leads come from, tour volume, tour-to-move-in conversion, average time to move-in, and the top reasons prospects don’t choose the community. In other words, you’re underwriting a sales pipeline, not just a rent roll. ### What does “value-add” mean in senior housing?
Value-add often looks like operational improvement more than construction. That can include fixing the lead funnel, improving conversion, training staff, reducing agency labor, strengthening resident programming, stabilizing leadership, improving reviews, tightening vendor contracts, and modernizing unit interiors where it impacts marketability. Physical capex matters, but operational capex is often the real engine. ### What’s the #1 mistake investors make in senior housing?
They buy a community like it’s an apartment building. They underwrite rent growth and ignore operations. The best senior housing deals are rarely “spreadsheet miracles.” They’re execution plays with clear operational fixes that have been proven before by the operator running the show. ### How do you evaluate the operator (sponsor) before investing in Senior Housing?
I want to see evidence of repeatable performance: stabilized communities, clear metrics, transparent reporting, and a leadership team that has handled staffing cycles and tough markets. Ask how they recruit and retain staff, how they drive move-ins, what systems they use for training and compliance, and what they do when occupancy stalls. Great operators have a playbook—and they can explain it. ### What should I ask for during due diligence when investing in Senior Housing?
Beyond financials, you want operational truth. Ask for occupancy history, move-in/move-out logs, staffing schedules, turnover by department, overtime reports, agency labor usage, incident reports, compliance history, marketing performance, and reputation management processes. Also request vendor contracts, insurance history, and any survey/inspection results that reveal operational discipline. ### How is senior housing financed compared to apartments?
It varies by segment and deal profile. Lenders typically care more about operating history and stabilization, and underwriting can be more conservative when occupancy is low or operations are volatile. Strong operators and stabilized properties generally attract better terms. The key is to stress test debt because small operating swings can change coverage quickly. ### What cap rate should I expect in senior housing?
Cap rates are not one-size-fits-all here. They vary by care level, location, quality, operational health, and perceived risk. The bigger point: don’t anchor to a cap rate and ignore the business. A “cheap” cap rate can be a trap if operations are broken. Underwrite the operator and the path to stabilization first, then price the risk. *This article was written with the help of AI and reviewed by Rod and his team. Always consult a licesnsed professional.* For a closer look at where this asset class can go wrong and where it shines, see the [senior housing investment risks and opportunities](https://rodkhleif.com/senior-housing-investment-risks-and-opportunities/) in detail.
**Categories:** Senior Housing
**Tags:** assisted living, independent living, memory care, real estate investing, senior housing, senior housing investing
---
### [How to Invest in Assisted Living Facilities](https://rodkhleif.com/how-to-invest-in-assisted-living-facilities/)
**Published:** November 22, 2025
**Author:** Alex Khleif
**Content:**
> I recognize assisted living facilities as an emerging opportunity for investors comfortable with specialized operations and higher returns. Assisted living properties provide housing and care services, which means higher rents and lower tenant turnover than standard multifamily. Here’s the reality: assisted living requires understanding regulatory compliance and specialized property management, but that complexity creates competitive advantage. Most investors skip assisted living because it seems complicated, but the higher returns justify learning the system. Let me walk you through how to evaluate and acquire assisted living facilities that generate exceptional returns. – Rod Khleif
Assisted living sits at the intersection of real estate and healthcare, which is exactly why investors are paying so much attention to it. You get the hard-asset benefits of real estate plus recurring, needs-based demand driven by an aging population. At the same time, it is more complex than a typical apartment deal, so you cannot wing it and hope for the best. If you understand how assisted living facilities operate, how the returns are created, and how to structure the right team around you, this niche can become a powerful pillar of your portfolio. In this guide, we will explain how to invest in assisted living facilities step-by-step. We will balance opportunity with risk and reality.
## What Is an Assisted Living Facility, Exactly?
Assisted living facilities (ALFs) provide housing plus support services for seniors who need help with daily activities but do not require full-time nursing care. Residents typically receive help with things like bathing, dressing, medication reminders, meals, housekeeping, and transportation. The environment is more residential and social than clinical, which is a key part of the value proposition.
From an investment standpoint, an assisted living facility is both an income-producing property and an operating business. Your revenue comes not just from rent but also from care fees and sometimes additional services. Because of this, the quality of your operator and staff can matter even more than the building itself.
## Why Investors Are Looking at Assisted Living
Demographics are the main tailwind behind assisted living. The population of adults over 75 is growing quickly, and many markets are already feeling the pressure for more high-quality, professionally run facilities. Unlike trendy asset classes that depend on fads, aging is not going out of style.
Assisted living is also a needs-based asset, which can offer insulation from economic cycles. People may delay a vacation or a luxury purchase in a downturn, but when a loved one cannot safely live alone, families have to act. For investors who know how to invest in assisted living facilities the right way, this combination of demographic demand and mission-driven service can be extremely compelling.
## Ways to Invest in Assisted Living Facilities
Before you dive into a specific deal, decide what level of involvement and control you want. There is a big spectrum between “I run the entire facility” and “I just collect distributions as a [passive investor](https://rodkhleif.com/podcasts/ep-381-jeremy-roll-passive-investing-for-cash-flow/).”
### **Common ways to invest include:**
- **Direct ownership and operation**
You buy or develop the facility and also run the operating company that provides care and services. This can offer the highest upside but also carries the most complexity, liability, and day-to-day work.
- **Own the real estate and lease to an operator**
You control the property and lease it on a long-term basis to a specialized assisted living operator. Your income comes primarily from rent, and you are more of a landlord than a healthcare provider.
- **Passive investments in syndications or funds**
You invest as a [limited partner](https://rodkhleif.com/gp-vs-lp-what-you-need-to-know/) (LP) into a deal sponsored by an experienced senior-housing operator or private equity group. They handle acquisitions, operations, and exits while you receive preferred returns and profit splits.
- **Public or private REITs focused on senior housing**
You buy shares in a REIT that owns a portfolio of assisted living and related assets. This is the easiest entry point with the least control and the most liquidity.
There is no one “right” structure for everyone. The key is to align the structure with your time, expertise, risk tolerance, and return expectations.
## How Assisted Living Differs From Traditional Multifamily
If you come from the apartment world, assisted living will feel both familiar and completely different. The building may look like a specialized multifamily property, but underneath that you are running a highly regulated, people-intensive service business.
In a typical multifamily deal, your main variables are rent, occupancy, expenses, and capital improvements. In an assisted living facility, you are also managing care staffing, medical oversight, licensing and inspections, food service, activities programming, and family communication. Revenue is multi-layered, expenses are more operationally heavy, and reputation and quality of care directly affect occupancy and pricing power.
Because of this complexity, operator quality is everything. You can rescue a mediocre apartment building with solid management and a good renovation plan. In assisted living, a weak operator can sink even a beautiful facility with strong demographics.
## Step 1: Decide If You Want to Be Active or Passive
The first decision in learning how to invest in assisted living facilities is whether you want to be hands-on or hands-off. This is not a niche where you improvise your way through operations without experience.
If you are active, you might be acquiring or developing properties, hiring staff, handling licensing, and working closely with families and regulators. This path can be financially rewarding but demands significant time, emotional energy, and operational skill. It often suits people with healthcare, hospitality, or property management backgrounds who are ready to build a serious business.
If you are passive, you will focus on evaluating sponsors and deals rather than running the facility. You are betting on the operator’s track record and alignment, not your own management ability. For many investors, especially those already busy with careers or other assets, this is the most practical way to gain exposure to assisted living.
## Step 2: Choose the Right Markets
Market selection is a big piece of the puzzle. You are looking not only at population and income levels, but specifically at senior demographics and care infrastructure. The wrong market can turn even a well-run facility into a struggle.
Key things to analyze include:
- Current and projected population aged 75+
- Household incomes and home equity levels of likely resident families
- Existing supply of assisted living and memory care in the area
- Occupancy and pricing trends at competing facilities
- Local attitudes toward senior housing development (zoning and NIMBY issues)
Strong markets typically have growing senior populations, limited oversupply, and enough affluence to support private-pay rates. Because assisted living often relies heavily on private pay, your payer mix and ability to fill at target rates are directly tied to the surrounding community.
## Step 3: Understand Licensing and Regulations
Assisted living is more heavily regulated than apartments, and the rules vary by state and sometimes by municipality. These regulations cover staffing ratios, training requirements, medication management, resident rights, safety standards, and more. Ignoring this side of the business can create major legal and financial risk.
As an investor, you do not need to memorize every regulation, but you do need to respect that this is a healthcare-adjacent business. Work with experienced senior housing attorneys, compliance consultants, and operators who know your state’s requirements. Always remember that nothing in this blog is legal advice or a substitute for engaging proper professionals.
## Step 4: Build the Right Team
Assisted living is absolutely a team sport. Trying to do everything yourself is one of the fastest ways to burn out and blow up an otherwise solid opportunity.
### A strong team usually includes:
- An experienced assisted living operator with a real track record
- A healthcare or senior housing attorney familiar with licensing and contracts
- A CPA who understands senior housing and cost allocations
- A lender comfortable with assisted living, SBA, HUD, or specialty senior housing loans
- Insurance specialists who can cover professional liability, property, and operations
- For development deals, an architect and contractor with relevant experience
Your role as an investor or sponsor is often to coordinate this team, align incentives, and ensure there is transparency and accountability. In assisted living, the team is a huge part of the asset.
## Step 5: Learn How to Underwrite Assisted Living Deals
[Underwriting](https://rodkhleif.com/how-to-underwrite-senior-housing-deals/) an assisted living facility is different from analyzing apartments. You are underwriting both the real estate and the operating business, and the business side tends to dominate the P&L.
### Key underwriting factors in Assisted Living include:
- Occupancy and stabilized occupancy assumptions
- Average monthly rent and care fees per resident
- Revenue per occupied bed or per unit
- Staffing levels and labor costs, including overtime and benefits
- Food, utilities, activities, and other operating expenses
- Historical operating margin and NOI trends
- Future capital needs for upgrades, code compliance, and repositioning
You should also analyze the payer mix (private pay, long-term care insurance, Medicaid waiver programs, etc.) and how stable those revenue sources are. Conservative underwriting assumes bumps along the way, not a perfectly smooth lease-up and zero staffing issues.
## Step 6: Understand Financing Options
Financing assisted living is different from financing a simple rental house or small apartment. Lenders see this as a specialized asset, and they will scrutinize both the property and operator.
### Common financing paths for Assisted Living include:
- SBA loans for smaller owner-operator projects
- Conventional bank loans with lenders who understand senior housing
- HUD and agency programs for qualifying facilities
- Bridge loans for heavy value-add or turnaround projects
Your financing terms will depend a lot on the operator’s strength. They will also depend on the facility’s past performance if it is already running. Your overall business plan will play a big role too. Higher leverage can amplify returns but also magnifies risk, especially if operations stumble.
## Step 7: Plan for Operations and Asset Management
Once the deal closes, the real work begins. In assisted living, ongoing operations are where value is created or destroyed. You cannot treat this as a “set it and forget it” asset and expect consistent results.
### Important operational KPIs include:
- Occupancy and move-in / move-out velocity
- Resident acuity levels and care plan mix
- Labor hours and overtime relative to census
- Staff turnover and satisfaction
- Resident and family satisfaction scores and reviews
- Incident rates, survey results, and regulatory compliance
As an active owner or GP, you should be reviewing financials and operational reports on a regular cadence. As a passive investor, expect clear reports and communication from your sponsor. This helps you track performance.
## Common Mistakes to Avoid When Investing in Assisted Living
Knowing how to invest in assisted living facilities also means knowing what not to do. Avoiding a few big mistakes can save you enormous headaches.
### Common pitfalls assisted living investors make include:
- Underestimating the importance of the operator and focusing only on the real estate
- Assuming you can run assisted living like a standard multifamily property
- Overpaying based on pro forma numbers without digging into actual historical performance
- Ignoring staffing challenges and labor market realities in your chosen area
- Relying on aggressive lease-up, refi, or exit assumptions to make the numbers work
The best investors take a conservative stance on projections and an aggressive stance on due diligence and the quality of their partners.
## Is Assisted Living the Right Fit for You?
Assisted living can provide good returns and support from growing demographics. It also offers the joy of helping seniors and their families. At the same time, it demands a deeper understanding of operations, regulation, and team building than many traditional real estate assets. It is not “easy money,” and anyone who sells it that way is not being honest.
If you want to learn how to invest in assisted living facilities, this asset can greatly boost your portfolio. Begin by defining your role, study some real deals and meet operators and sponsors who work in this field daily.
## **FAQ: How to Invest in Assisted Living Facilities**
### What does it mean to invest in an assisted living facility?
Investing in an assisted living facility means putting capital into a property and business that provides housing and support services for seniors. Your return comes from a combination of rent, care fees, and sometimes additional services paid by residents or their families. Depending on the structure, you might own and operate the facility, own the real estate and lease it to an operator, or invest passively in a syndication or fund.
### Why are assisted living facilities attractive to investors?
Assisted living benefits from powerful demographic trends, particularly the growth of the 75+ population. Demand is driven by need, not luxury, which can make it more resilient during economic downturns. When you invest well—especially with a strong operator—assisted living can offer solid cash flow, upside from operations, and long-term appreciation of the real estate.
### How is investing in assisted living different from investing in regular multifamily?
In multifamily, you are mainly investing in housing and rent, with relatively straightforward operations. In assisted living, you are investing in both real estate and a care-focused operating business that includes staffing, healthcare-related services, meals, and compliance. This creates more complexity and risk, but also more potential revenue streams and stronger differentiation if you execute well.
### What are the main ways to invest in assisted living facilities?
You can invest actively by owning and operating a facility yourself, or by owning the building and leasing it to a professional operator. You can also invest passively as a limited partner in a syndication or private fund that specializes in senior housing. For maximum liquidity and minimal involvement, you can buy shares of senior housing–focused REITs, which spread your capital across many facilities.
### How much money do I need to start investing in assisted living?
The capital requirement varies widely depending on the strategy. Direct ownership or development usually requires substantial equity (often six or seven figures) plus access to financing and reserves for operations. Passive investments in syndications or funds often start at lower minimums, commonly $50,000-$100,000, while REITs let you start with much smaller amounts, similar to buying any other stock.
### What returns can I expect from assisted living investments?
Returns depend on the deal, the operator, and the business plan, but assisted living facilities often target higher returns than standard multifamily because of the added complexity. Investors may see a combination of preferred returns, ongoing cash flow, and profit splits at refinance or sale. As always, projections are not guarantees, so you should evaluate conservative underwriting, operator track record, and market fundamentals before relying on any return number.
### What are the biggest risks when investing in assisted living?
The main [risks](https://rodkhleif.com/senior-housing-investment-risks-and-opportunities/) include operational risk, regulatory risk, and staffing challenges. Poor management can lead to low occupancy, high staff turnover, compliance issues, and reputational damage, all of which hurt cash flow and property value. Because assisted living touches healthcare and vulnerable populations, you must pay close attention to licensing, safety, and quality of care when assessing any investment.
### How do I evaluate an assisted living operator or sponsor?
Look at their track record, team, and transparency. Ask how many facilities they have managed, what historical occupancy and margins look like, and how they handled challenges like staffing shortages or regulatory surveys. You also want to see clear reporting, conservative projections, and strong alignment of interests, for example, meaningful co-investment from the operator and fees that make sense for the work being done.
### How important is market selection in assisted living investing?
Market selection is critical because assisted living demand is driven by local demographics and income. You want markets with a growing senior population, enough affluence to support private-pay rates, and limited oversupply of competing facilities. Analyze the number and quality of existing operators, current occupancy levels, and whether new projects are being built that could increase competition.
### Should I invest actively or passively in assisted living?
If you have relevant experience (healthcare, senior housing, operations, or property management) and want to build a business, an active role may make sense, but it comes with significant responsibility. If you prefer to keep your time free and leverage someone else’s expertise, passive investing through syndications, funds, or REITs is usually a better fit. The right path depends on your skills, risk tolerance, and how involved you want to be in day-to-day operations.
*Disclaimer: This article was written with the help of AI and reviewed by Rod and his team. Always consult a licensed professional.*
**Categories:** Blog, Senior Housing
---
### [Senior Housing Investment Risks and Opportunities](https://rodkhleif.com/senior-housing-investment-risks-and-opportunities/)
**Published:** March 3, 2026
**Author:** Alex Khleif
**Content:**
The senior housing sector represents one of the most compelling opportunities in commercial real estate today. Here’s a staggering statistic: 10,000 Baby Boomers turn 65 every day. Combined with rising life expectancy, the demand for quality senior living facilities has never been stronger.
But here’s the reality, like any investment, [senior housing](https://rodkhleif.com/is-senior-housing-a-good-investment-in-2026/) comes with its own unique set of risks and opportunities that you must understand before committing capital.
In this comprehensive guide, we’ll explore the landscape of senior housing investments. You’ll discover both the potential rewards and the challenges you’ll need to navigate to build a successful portfolio in this growing sector.
## Understanding the Senior Housing Market
### What Types of Senior Housing Exist?
Senior housing encompasses a diverse range of property types designed to meet the varying needs of older adults. Unlike traditional multifamily properties, these facilities often provide services beyond just housing, creating additional revenue streams but also operational complexities.
The primary categories include:
- Independent living communities
- Assisted living facilities
- Memory care units
- Continuing care retirement communities (CCRCs)
- Skilled nursing facilities
Each serves a different segment of the senior population and carries distinct investment characteristics.
### The Demographic Wave
The demographic tailwinds driving this sector are undeniable. By 2030, all Baby Boomers will be over age 65, representing approximately 21% of the U.S. population.
This silver tsunami creates sustained demand that’s largely recession-resistant. Why? Because people require housing and care regardless of economic conditions.
Here’s another key factor: the 85-and-older population is projected to more than double by 2040.
## Key Opportunities in Senior Housing Investment
### Strong and Predictable Demand
The aging of America creates a powerful demographic trend that will continue for decades.
Unlike other real estate sectors that depend on economic cycles or migration patterns, senior housing benefits from an inevitable aging process. The 85-and-older population, which most heavily utilizes senior housing, is projected to more than double by 2040.
This demand is further amplified by changing family structures. With smaller family sizes and geographic dispersion, fewer adult children are able to care for aging parents at home. The result? Increasing need for professional senior living facilities.
### Multiple Revenue Streams
Here’s where senior housing gets interesting financially.
These properties generate income not just from rent but from ancillary services including:
- Dining programs
- Housekeeping
- Transportation
- Activities
- Personal care services
These additional revenue streams can significantly boost returns and provide cushion during economic downturns.
**The numbers are compelling:** In assisted living and memory care facilities, monthly fees often range from $4,000 to $8,000 or more per resident. That’s substantially higher than conventional apartment rents. This pricing power, driven by the value of services provided, creates attractive cash flow potential.
### Recession Resistance
Senior housing has historically demonstrated resilience during economic downturns. The need for care doesn’t diminish during recessions. Many residents have fixed income sources like Social Security, pensions, and retirement savings that aren’t as vulnerable to employment cycles.
**Real-world proof:** During the 2008-2009 financial crisis, senior housing occupancy rates declined far less than conventional apartments. Even better, recovery was faster.
This stability makes the sector attractive for investors seeking consistent returns.
### Value-Add Opportunities
Many existing senior housing facilities were built decades ago and no longer meet modern expectations for amenities and design.
**The opportunity:** Savvy investors can acquire older properties at favorable prices, implement renovations and operational improvements, and command premium rents.
Additionally, the senior housing sector is still relatively fragmented, with many mom-and-pop operators. This creates opportunities for professional management teams to acquire properties and implement institutional-quality operations to drive value.
### Tax Benefits and Depreciation
Like other commercial real estate, senior housing investments offer significant tax advantages through depreciation. The shorter depreciable life of equipment and furnishings in senior housing can accelerate depreciation benefits compared to conventional real estate.
Additionally, many investors can benefit from cost segregation studies that identify components of the property that can be depreciated over shorter timeframes, enhancing cash flow in early years.
## Significant Risks to Consider
### Regulatory and Licensing Complexity
Senior housing facilities, particularly those offering health-related services, face extensive regulation at federal, state, and local levels.
Licensing requirements vary by state and can be complex to navigate. The stakes are high—violations can result in fines, loss of licenses, or even closure.
**What you need to comply with:**
- Healthcare regulations
- Building codes specific to senior facilities
- Americans with Disabilities Act requirements
- Fair housing laws
This regulatory burden requires specialized expertise and creates barriers to entry. Here’s the double-edged sword: it’s both a challenge AND a competitive advantage once you master it.
### Operational Intensity
Unlike conventional multifamily properties, senior housing facilities are operationally intensive businesses. They require:
- 24/7 staffing
- Meal preparation
- Activities programming
- Healthcare services (in many cases)
Management quality is critical and can make or break an investment.
**The biggest challenge:** Labor represents the largest operating expense; often 50-60% of revenue. Attracting and retaining qualified caregivers in a competitive labor market is an ongoing challenge that directly impacts both service quality and profitability.
### Reimbursement and Insurance Challenges
Some senior housing models, particularly skilled nursing facilities, rely heavily on Medicare and Medicaid reimbursements.
**The risk:** These reimbursement rates are subject to political changes and may not keep pace with rising operating costs. You must understand the payment mix and reimbursement landscape before investing.
Additionally, liability insurance for senior housing can be expensive, particularly for facilities providing healthcare services. Insurance costs have risen significantly in recent years, impacting margins.
### Capital Intensity and Deferred Maintenance
Senior housing facilities require ongoing capital investment to remain competitive.
Unlike conventional apartments where cosmetic updates may suffice, senior housing often requires specialized equipment, safety systems, and medical-grade finishes.
**Watch out for deferred maintenance.** It can be particularly problematic in older facilities, as outdated systems may not meet current code requirements. Buyers must conduct thorough due diligence to assess true capital needs.
### Market Saturation in Some Areas
While national demographics are favorable, some local markets have experienced overbuilding in recent years. Markets with aggressive new construction can face occupancy pressure and compressed pricing power.
**The bottom line:** Careful market analysis is essential to avoid oversupplied areas.
The COVID-19 pandemic also led to some markets experiencing temporary oversupply. Move-in rates slowed while new construction continued. Understanding local supply-demand dynamics is critical.
### Reputation and Event Risk
Senior housing facilities face unique reputation risks that can’t be ignored.
A single negative event—such as a COVID outbreak, allegation of abuse, or serious accident—can damage a facility’s reputation and impact occupancy for years. Unlike conventional real estate where such events are rare, the nature of caring for vulnerable populations creates ongoing exposure.
**The modern challenge:** Social media and online reviews have amplified this risk. Negative publicity can spread quickly and deter potential residents and their families.
## Investment Structures and Entry Points
Investors can access senior housing through several structures, each with different risk-return profiles and capital requirements.
### Direct Property Ownership
Direct property ownership offers the highest potential returns but requires significant capital, operational expertise, and hands-on management. This approach is best suited for experienced investors or those partnering with specialized operators.
### REITs (Real Estate Investment Trusts)
REITs provide liquid exposure to diversified senior housing portfolios with professional management. Public REITs like Welltower, Ventas, and Sabra offer accessibility to smaller investors but with lower return potential and market volatility.
### Private Equity Funds and Syndications
These allow investors to participate in institutional-quality deals with lower minimum investments than direct ownership. These structures typically involve a sponsor who sources deals and manages operations, while passive investors provide equity capital.
### Ground-Up Development
Ground-up development offers the opportunity to create purpose-built facilities meeting current market demands. However, it carries construction risk, entitlement uncertainty, and longer timelines to cash flow. Development is generally suited for experienced investors with strong local market knowledge.
## Key Success Factors
Success in senior housing investment requires attention to several critical factors that differentiate this sector from conventional real estate.
### Location Matters, But Differently
Location remains paramount, but the criteria differ from traditional multifamily.
**What matters most:**
- Proximity to medical facilities
- Visibility and accessibility for family visits
- Neighborhood safety
- Pleasant surroundings
**What doesn’t matter:**
- School districts
- Nightlife
- Urban amenities
The best locations balance convenience with pleasant surroundings.
### Management Quality Is Everything
Management quality is arguably more important in senior housing than any other real estate sector. The business is operationally complex and relationship-driven.
Partnering with experienced operators who have demonstrated track records in senior housing is essential for investors without direct operating experience.
### Understand Your Local Market
Understanding the local competitive landscape requires analyzing not just existing facilities but also:
- Pipeline of new construction
- Demographic trends specific to the senior population
- Income levels of the target market
Senior housing feasibility studies should go deeper than conventional market studies.
### Service Quality Drives Results
Facilities with strong reputations for care quality, engaging activities, and good food can command premium pricing and maintain high occupancy even in competitive markets.
Investing in staff training and resident satisfaction pays dividends.
### Capitalize Appropriately
Appropriate capitalization is critical given the operational complexity and capital requirements. Investors should maintain adequate reserves for:
- Unexpected expenses
- Capital improvements
- The time required to stabilize occupancy in new acquisitions or developments
## Due Diligence Essentials
Thorough due diligence is critical when acquiring senior housing assets. Beyond standard real estate analysis, you must examine operational and regulatory factors.
### 1. Review Regulatory Compliance
Review all licenses, permits, and regulatory compliance history. Request survey results from health departments and deficiency reports. Understand any outstanding violations and remediation plans.
Engage legal counsel familiar with senior housing regulations.
### 2. Analyze Operational Financials
Dig deep into the numbers:
- Revenue by source (private pay vs. insurance/government reimbursement)
- Occupancy trends
- Turnover rates
- Staffing levels
Compare performance to industry benchmarks to identify potential red flags or upside opportunities.
### 3. Assess Physical Condition
Go beyond standard property inspections. Engage consultants familiar with senior housing to evaluate:
- Life safety systems
- Specialized equipment
- Compliance with accessibility and healthcare facility codes
Budget adequately for deferred maintenance.
### 4. Understand the Resident Profile
Analyze the resident mix including:
- Acuity levels
- Average length of stay
- Payment sources
- Demographics
Higher acuity can mean higher revenues but also higher costs and risks. Review contracts and fee structures to understand pricing power and escalation clauses.
### 5. Evaluate the Competition
Visit competing facilities. Review online reputations. Understand market positioning.
Ask yourself: What differentiates the property? Is there a sustainable competitive advantage?
## Market Trends Shaping the Future
Several trends are reshaping the senior housing landscape and creating both opportunities and challenges for investors.
### Aging in Place Preference
The preference for aging in place is driving demand for home and community-based services. This creates opportunities for investors in independent living and assisted living that allow seniors to remain in less institutional settings.
Properties that feel like hospitality rather than healthcare are gaining market share.
### Technology Integration
Technology integration is becoming essential:
- Electronic health records
- Staff communication systems
- Resident engagement platforms
- Smart home features
Properties that embrace technology can improve care quality while potentially reducing labor costs.
### Wellness and Lifestyle Focus
Wellness and lifestyle amenities are increasingly important, particularly for younger Baby Boomers entering senior housing.
What’s becoming standard:
- Fitness centers
- Continuing education
- Social programming
- Restaurant-quality dining
### Healthcare Partnerships
Partnerships between senior housing operators and healthcare providers are growing. These integrated care models improve outcomes and potentially reduce costs.
Properties positioned to participate in these partnerships may have competitive advantages.
### The Labor Challenge
The labor shortage affecting all industries is particularly acute in senior housing.
Properties and operators that differentiate themselves as employers through competitive compensation, good culture, and career development opportunities will have operational advantages.
## The Bottom Line
Senior housing investment offers compelling opportunities driven by powerful demographic trends and the potential for strong, stable returns. The sector provides recession-resistant cash flow, multiple revenue streams, and the satisfaction of providing essential services to a growing population.
**But let’s be clear:** This is not a passive investment. Success requires careful navigation of regulatory complexity, operational intensity, and market-specific risks. Partnering with experienced operators is essential for most investors.
### Is Senior Housing Right for You?
If you’re willing to do the work—understanding the sector, conducting thorough due diligence, and partnering with quality operators—senior housing can be a cornerstone of a diversified real estate portfolio.
The demographic trends are undeniable. Investors who position themselves thoughtfully can benefit from decades of sustained demand.
### One Final Point
Approach senior housing not just as real estate, but as an operating business that happens to be housed in real estate. Those who respect this distinction and invest accordingly will be best positioned for success.
The opportunity is real. The question is: Are you ready to seize it?
## Frequently Asked Questions: Senior Housing Investment Risks & Opportunities
### What is the minimum investment for senior housing properties?
The minimum investment varies significantly based on the investment structure. Direct property ownership typically requires several million dollars, as even small assisted living facilities can cost $5-15 million. However, syndications and private funds often have minimums ranging from $50,000 to $250,000, making the asset class accessible to accredited investors. REITs can be purchased with the cost of a single share, sometimes under $100, offering the lowest entry point but also the least control and different risk-return characteristics.
### How does senior housing perform during economic recessions?
Senior housing has historically demonstrated greater resilience during recessions compared to conventional real estate sectors. The need for senior care doesn’t diminish during economic downturns, and many residents rely on fixed income sources like Social Security and pensions that are less vulnerable to unemployment cycles. During the 2008-2009 recession, senior housing occupancy declined less than conventional apartments and recovered more quickly. However, independent living communities serving more affluent seniors can be somewhat more vulnerable than assisted living or memory care, as discretionary move-ins may be delayed during economic uncertainty.
### What is the difference between assisted living and independent living?
Independent living communities serve active seniors who don’t require daily assistance but want to downsize from home maintenance and enjoy community amenities and social opportunities. These properties are similar to conventional apartments but with age-restricted occupancy and additional services like dining, activities, and transportation. Assisted living facilities provide housing plus personal care services for residents who need help with activities of daily living such as bathing, dressing, medication management, and mobility. Assisted living commands significantly higher monthly fees, typically $4,000-$7,000 or more compared to $2,000-$4,000 for independent living, but requires more staff and operational complexity.
### What are the typical occupancy rates for senior housing facilities?
Occupancy rates vary by property type and market conditions, but stabilized, well-operated senior housing facilities typically achieve 85-95% occupancy. Assisted living and memory care facilities often run at 88-92% occupancy when stabilized. Independent living communities may range from 90-95%. Skilled nursing facilities typically operate at 80-90% occupancy. It’s important to note that achieving stabilized occupancy can take 24-36 months or longer for new developments or recently acquired properties undergoing repositioning. Occupancy below 80% generally indicates operational or market challenges that require attention.
### How important is location for senior housing investments?
Location is critical but the criteria differ from conventional real estate. Proximity to quality healthcare facilities is paramount, as residents and their families prioritize access to doctors and hospitals. Visibility and ease of access matter for family visits. Neighborhood safety and pleasant surroundings are important for quality of life. However, factors important for conventional multifamily like school districts, nightlife, or employment centers are largely irrelevant. The ideal location balances convenience with a peaceful environment. Additionally, the income demographics of the surrounding area must support the pricing model, particularly for private-pay facilities. Markets with strong population growth in the 75+ age group and higher median incomes for seniors are preferable.
### What are the biggest operational challenges in senior housing?
Labor is consistently the biggest operational challenge, representing 50-60% of operating expenses. Attracting and retaining qualified caregivers in a competitive market while managing labor costs is an ongoing balancing act. Regulatory compliance is another major challenge, as senior housing faces extensive oversight at federal, state, and local levels, with violations potentially resulting in fines or license loss. Managing reputation and resident satisfaction requires constant attention, as negative reviews or incidents can damage occupancy for years. Additionally, dealing with the emotional aspects of serving vulnerable populations, including end-of-life care and family dynamics, requires specialized skills and creates stress for staff.
### How do I evaluate a senior housing operator or management company?
Start by examining track record and experience, specifically in senior housing rather than just general real estate. Request performance data from their portfolio including occupancy rates, turnover, and financial performance compared to industry benchmarks. Check regulatory compliance history by requesting survey results and deficiency reports from health departments across their properties. Visit existing facilities unannounced to observe operations, staff interactions, cleanliness, and resident satisfaction. Speak with current and former employees on platforms like Glassdoor to understand culture and staff treatment. Review the operator’s financial strength and capitalization, as undercapitalized operators may cut corners on staffing or maintenance. Finally, assess their philosophy and values around resident care, as cultural fit matters when partnering on what is ultimately a service business.
### What returns can I expect from senior housing investments?
Expected returns vary significantly based on investment structure, property type, market, and risk profile. Stabilized, core senior housing assets in strong markets might generate 6-9% cash-on-cash returns with total returns including appreciation of 10-14%. Value-add opportunities involving repositioning or operational improvements can target 12-18% total returns but carry higher risk. Development projects may target 15-20%+ returns but involve substantial risk and longer timelines. These figures are general ranges, and actual returns depend on execution, market timing, and numerous other factors. Senior housing typically offers slightly higher returns than conventional multifamily given the operational complexity and regulatory requirements, but less than opportunistic or development-oriented strategies in other sectors.
### How has COVID-19 impacted senior housing investments?
COVID-19 created significant short-term challenges for senior housing, particularly in early 2020, as occupancy declined due to both increased mortality among residents and decreased move-ins from families hesitant to place loved ones during the pandemic. Skilled nursing facilities were hit hardest, while independent living proved most resilient. However, the sector has largely recovered, with occupancy returning to pre-pandemic levels in most markets by 2023-2024. The pandemic accelerated several positive trends including increased private pay preference over government-reimbursed facilities, greater emphasis on infection control and technology, and industry consolidation as weaker operators exited the market. Long-term fundamentals remain strong, and many investors view the pandemic as having created buying opportunities rather than changing the sector’s trajectory.
### Are senior housing investments suitable for first-time real estate investors?
Senior housing is generally not recommended as a first investment for those new to real estate. The operational complexity, regulatory requirements, and specialized knowledge needed make it challenging for beginners. First-time investors are typically better served starting with conventional residential or commercial real estate to build foundational skills in property analysis, financing, and management. However, senior housing can be appropriate for newer investors who partner with experienced operators through syndications or funds, where the sponsor handles operations and compliance while the investor provides capital. This passive approach allows learning the sector while experienced professionals manage the complexity. Investors should ensure they understand the risks and have adequate liquidity, as senior housing can be less liquid than other real estate types.
*Disclaimer: This article was written with the help of AI and reviewed by Rod and his team.* Once you understand the risks, the next step is process; see [how to underwrite senior housing deals](https://rodkhleif.com/how-to-underwrite-senior-housing-deals/) with confidence.
For an investor view of the space, hear Ryan Byrne on [senior living real estate investing](https://rodkhleif.com/podcasts/senior-living-real-estate-investing-with-ryan-byrne/) on the Lifetime Cash Flow podcast.
**Categories:** Blog, Senior Housing
---
### [The DC Affordable Housing Crisis](https://rodkhleif.com/dc-affordable-housing-debacle/)
**Published:** February 11, 2025
**Author:** Graciela
**Content:**
# **How Eviction Moratoriums Are Crushing Affordable Housing in Washington, DC**
The saying *“No good deed goes unpunished”* is proving true in the Washington, DC affordable housing market, where eviction moratorium policies implemented during the COVID-19 pandemic are continuing to disrupt landlords, tenants, and developers. While these policies were intended to prevent mass evictions, they have led to landlords struggling to collect rent, a stalled real estate market, and rental properties on the verge of foreclosure. ## **The Washington, DC Affordable Housing Crisis**
Washington, DC is facing a shortage of affordable housing, with 14% of residents currently living in city-supported housing. Officials acknowledge that more units are needed, but the market is in crisis. - 25% of Washington DC tenants are behind on rent, creating a major financial burden on landlords.
- Over $100 million in back rent is owed to property owners, pushing many toward bankruptcy.
- Deferred maintenance is leading to deteriorating living conditions, as landlords lack funds to keep properties safe and livable.
Housing costs keep going up, but property owners cannot collect monthly rent. This leaves them without cash flow to pay for mortgage payments, maintenance, or property management costs. ## **Landlords Face Lengthy Eviction Timelines**
Strict DC laws have made it incredibly difficult for landlords to evict non-paying tenants, creating a ripple effect throughout the multifamily housing market. - Evictions now take over a year to process, leading to months of lost income.
- Investors are avoiding the DC market, fearing legal obstacles and slow eviction processes.
- Affordable housing projects have stalled, as developers hesitate to build in an unstable market.
Many landlords have tried to sell their properties. However, buyer confidence has dropped. This is due to many tenants not paying rent and uncertainty about collecting rent. With no buyers willing to take these risks, the market for affordable housing in Washington, D.C. has almost stopped. ## **The Risk of Foreclosures and Loss of Affordable Housing**
One of the biggest concerns is the rising foreclosure rates among affordable housing providers. If landlords default on loans and lose their properties, their affordable housing covenants will likely be lost as well. This would reduce the already limited supply of low-cost housing, further exacerbating the housing crisis in the United States capital. In an effort to prevent widespread foreclosures, the mayor recently diverted funds originally allocated for new affordable housing projects to bail out struggling properties. - While this temporary fix may help some landlords, it exhausts [resources](https://rodkhleif.com/what-are-the-best-resources-for-learning-apartment-syndication/) that were intended to increase the supply of affordable housing.
- Developers are pulling out of DC’s housing market, meaning fewer new projects will be built in the coming years.
## **The Consequences of Government Intervention**
This crisis is a clear example of how government intervention can backfire, leading to unintended consequences that hurt the people it was designed to protect. - Rent control policies have made it hard for landlords to raise rents. This limits their ability to invest and cover rising costs.
- Security deposit restrictions and tenant protections have made it harder for landlords to screen tenants, increasing risks for property owners.
- The Department of Housing and Urban Development (HUD) has raised concerns about how these policies are discouraging investment in affordable housing across the United States.
The free market relies on cash flow to function, and when landlords cannot collect rent, the entire system collapses. These policies have not created more housing. Instead, they have pushed rental properties toward foreclosure. This has reduced the number of available units. It has also driven developers away from the market. ## **The Need for Fair Eviction Laws**
While tenant protections are important, rental housing must operate within a sustainable financial model. Landlords must be able to collect rent, and the court system needs to provide fair and efficient resolutions for evictions. Policies that make it impossible for landlords to enforce lease agreements create an unstable real estate market, driving away investors and developers. Cities that want to expand affordable housing must balance tenant protections with landlord rights, or risk losing much, needed investment and creating even greater shortages of affordable units. ## **Final Thoughts**
Washington, DC’s affordable housing crisis is a direct consequence of prolonged eviction moratoriums, rent control policies, and restrictive tenant laws. - 25% of tenants are delinquent on rent, leaving landlords with no cash flow.
- Over $100 million in back rent is owed, creating a financial crisis for property owners.
- Foreclosures are rising, putting affordable housing at risk.
- Developers are leaving the market, halting new housing projects.
Without policy changes that support both landlords and tenants, the shortage of affordable housing will only worsen, leaving low-income residents with even fewer options. For real estate investors, this crisis serves as a warning to carefully evaluate rental laws before entering a market. A landlord-friendly environment is crucial for ensuring profitability, protecting assets, and maintaining a sustainable rental housing system. For real estate investors, having the right guidance is crucial. **Rod Khleif**, a seasoned multifamily investor, entrepreneur, and educator, has helped thousands of investors build profitable real estate portfolios while avoiding costly pitfalls. If you’re looking to scale your investments, protect your assets, and thrive in any market cycle, check out Rod’s top rated [Podcast](https://rodkhleif.com/lifetime-cashflow-podcast/), [coaching program](https://rodkhleif.com/rod-khleif-warrior-program/), and free resources to stay ahead in today’s evolving real estate landscape. Whatever the policy headwinds, your own progress depends on relationships; here are [12 tips for successful networking](https://rodkhleif.com/12-tips-for-successful-networking/).
**Categories:** Blog, Real Estate
---
### [How to Start Investing in Real Estate with Limited Capital: New York Weekly](https://rodkhleif.com/how-to-start-investing-in-real-estate-with-limited-capital-new-york-weekly/)
**Published:** January 21, 2024
**Author:** Matt Rohde
**Content:**
When it comes to real estate investment with limited capital, there are several strategies. Some examples include seller financing, joint ventures, and real estate syndications that empower investors with smaller budgets.
Rod Khleif is shown as a key figure who can provide investors with the knowledge and mentorship needed in the multifamily real estate market. His expertise is positioned as valuable for those ready to start investing. Find out more by reading the article [here](https://nyweekly.com/business/how-to-start-investing-in-real-estate-with-limited-capital/).
For a wider overview of where to start, see this [beginners guide to the multifamily investing landscape](https://rodkhleif.com/navigating-the-multifamily-investing-landscape-a-guide-for-beginners-inscmagazine/).
Affordability politics matter too; read about [the DC affordable housing crisis](https://rodkhleif.com/dc-affordable-housing-debacle/) as a case study in policy outrunning market reality.
**Categories:** Blog, Featured, Real Estate
**Tags:** investing in real estate
---
### [5 Keys to Commercial Real Estate Success](https://rodkhleif.com/authority-magazine-rod-khleif-5-things-you-need-to-create-a-highly-successful-career-in-the-commercial-real-estate-industry-today-authority-magazine/)
**Published:** August 30, 2025
**Author:** Matt Rohde
**Content:**
Commercial real estate (CRE) has always been a field where discipline, strategy, and relationships create lasting wealth. But in 2025, the industry is moving faster than ever. Technology is reshaping underwriting, capital is flowing differently than in past cycles, and investor expectations are higher.
To build a long-term career in commercial real estate (CRE), you need to adapt. This applies whether you are an investor, broker, lender, or asset manager. The strategies from 10 or even 5 years ago won’t work anymore.
Success today requires a blend of analytical rigor and people skills, adaptability and focus, technology and timeless fundamentals.
With years of experience in real estate and coaching many investors, here are 5 keys to success in CRE for 2025. These tips are for analytical, career-focused professionals who want to succeed.
### Key 1: Master the Numbers (and the Story Behind Them)
In CRE, numbers don’t lie, but they also don’t tell the whole story unless you know how to interpret them.
Every successful investor or professional must master the core financial skills of the business:
- Underwriting and financial modeling: Net Operating Income (NOI), cap rates, IRR, equity multiples, debt service coverage ratios, sensitivity analysis.
- Market analysis: Supply/demand trends, absorption rates, construction pipelines, demographic shifts.
- Scenario testing: Stress-testing deals at higher vacancy, lower rent growth, or higher interest rates.
But here’s the difference in 2025: data is everywhere. AI tools, PropTech platforms, and real-time market dashboards mean you need to do more than just crunch numbers. You must analyze and interpret them faster than ever.
The analytical edge comes not just from building a financial model, but from being able to ask:
- What assumptions are baked into this deal?
- What risks are hidden in the fine print?
- What’s the narrative that explains these numbers to lenders or investors?
**👉 Action Step: Develop both sides of your financial brain. Hone your Excel and modeling skills, but also practice telling the “story of the deal.” An investment memo that combines airtight analysis with a compelling narrative is what wins partners and capital in 2025.**
### Key 2: Build Durable Relationships (Proximity Is Power)
Commercial real estate is still a relationship-driven business. Technology might streamline processes, but deals still get done between people who trust each other.
In 2025, building durable relationships means more than swapping business cards at conferences. It’s about strategically cultivating three types of networks:
1. Brokers & Deal Finders: The gatekeepers of opportunity. They’ll bring you deals if they believe you’re a closer.
2. Capital Partners & Lenders: The people who fuel your growth. In today’s higher-rate environment, terms are everything. Strong relationships unlock flexibility.
3. Mentors & Peer Groups: The voices that keep you sharp. In an industry full of moving parts, accountability and perspective are priceless.
This is where accountability groups (a trend gaining traction among serious investors in 2025) play a role. Small groups of professionals meeting regularly to underwrite deals together, share broker connections, or role-play investor pitches create a competitive advantage. They collapse time frames and help you see blind spots you’d miss on your own.
**👉 Action Step: Audit your current network. Are you spending time with people who open doors, challenge your thinking, and expand your deal flow? If not, prioritize building those connections. Proximity truly is power in CRE.**
### Key 3: Embrace Technology Without Losing Judgment
The last five years have seen an explosion of PropTech and AI tools that are reshaping CRE. Platforms like [CoStar](https://costar.com), [Crexi](https://crexi.com), RealPage, and new AI tools help investors check markets and properties quickly. They can do this in hours instead of weeks.
In 2025, here’s what winning professionals are doing:
- Using AI-driven underwriting models to test hundreds of scenarios instantly.
- Leveraging machine learning to forecast tenant default risk or submarket absorption rates.
- Employing virtual tours and drone mapping for property inspections.
- Automating investor reporting through digital dashboards.
But here’s the caution: technology is a tool, not a replacement for judgment. AI can spit out a valuation or recommendation—but if you don’t understand the assumptions, you’re flying blind.
The investors who will dominate this decade are the ones who marry data-driven tools with street-level wisdom. They use tech to move faster, but they still pick up the phone to talk to property managers, walk the neighborhood, and stress-test assumptions with human insight.
**👉 Action Step: Stay current with the latest CRE tech platforms, but never outsource your judgment. Treat AI and data platforms as copilots, not captains.**
### Key 4: Develop a Long-Term, Cycle-Proof Strategy
The CRE market is cyclical. Interest rates rise and fall, capital flows in and out, property values expand and contract. The investors who thrive are those who develop cycle-proof strategies.
Here’s what that looks like in 2025:
- Focus on cash flow first. Appreciation is great, but predictable income keeps you alive during downturns.
- Stress-test your deals. What happens if interest rates rise another 100 basis points? What if your market’s rent growth slows?
- Diversify intelligently. Don’t scatter your focus, but don’t put all your eggs in one basket either. For example: a multifamily operator might add self-storage or medical office to balance exposure.
- CapEx planning. In a world of rising construction costs, having reserves for roofs, HVACs, and renovations separates survivors from casualties.
Most importantly: don’t chase deals that only work in perfect market conditions. Build a strategy that makes sense in upcycles and downcycles.
**👉 Action Step: Write down your investment philosophy. What property types, markets, and deal profiles fit your long-term goals? What risks will you never take? Having clarity on your strategy keeps you disciplined when the market gets noisy.**
### Key 5: Commit to Continuous Learning and Leadership
The final key isn’t about deals, it’s about you.
CRE is an ever-evolving field. Regulations change. Financing structures shift. Investor expectations grow. If you’re not learning, you’re falling behind.
But here’s the deeper truth: success in CRE is just as much about mindset as it is knowledge. Whether you lead a team, raise money, or manage a property, people look to you for confidence and guidance.
In 2025, the professionals who rise to the top are those who:
- Stay current on market trends, economic shifts, and regulatory updates.
- Invest in mindset and leadership development—not just technical skills.
- Share knowledge with others, positioning themselves as thought leaders in their space.
- Hold themselves accountable with mentors, masterminds, and structured programs.
One of the most overlooked advantages in CRE is coaching. Athletes have coaches. Executives have coaches. Top investors have coaches. Why? Because accountability and outside perspective accelerate growth.
**👉 Action Step: Commit to continuous improvement. Read, attend seminars, join masterminds, find mentors. Then apply what you learn by leading others, whether that’s your team, your investors, or your peers.**
## Final Thoughts: Success Leaves Clues
Commercial real estate in 2025 isn’t easier than it was five or ten years ago, but it’s richer with opportunity. The investors and professionals who thrive will be those who:
1. Master the numbers and the story.
2. Build durable, strategic relationships.
3. Leverage technology without outsourcing judgment.
4. Develop long-term, cycle-proof strategies.
5. Commit to continuous learning and leadership.
The truth is, none of these keys are complicated. But few people actually apply them with consistency.
If you want to accelerate your CRE career, remember this: don’t dabble, decide. Decide to master your craft, to surround yourself with the right people, and to lead with discipline and vision.
Because when you do, you won’t just build a successful career, you’ll build lasting impact and freedom.
### **Frequently Asked Questions About CRE Career Success**
**What skills are most important for a CRE career in 2025?
The most important skills are financial analysis, underwriting, technology adoption, relationship building, and leadership. In 2025, successful professionals also need to interpret data quickly and tell the story behind the numbers.
**How do I start a successful career in commercial real estate?
Start by mastering the fundamentals: underwriting, market analysis, and deal evaluation. From there, build a strong network of brokers, lenders, and mentors. Joining a bootcamp or coaching program can accelerate your success.
**Is commercial real estate a good career in 2025?
Yes, CRE remains one of the strongest career paths for wealth building in 2025. Despite interest rate challenges, investors who focus on cash flow, conservative underwriting, and long-term strategy are positioned to thrive.
**How can technology improve my CRE career?
AI and PropTech platforms speed up underwriting, improve investor reporting, and provide real-time market data. But the best CRE professionals combine these tools with judgment, local knowledge, and strong relationships.
**Why is mentorship important in CRE?
Mentorship accelerates learning, helps you avoid costly mistakes, and holds you accountable. Many successful CRE professionals credit coaches and accountability groups with collapsing their learning curve.
## Ready to Level Up?
🔥 Ready to level up your CRE career in 2025? Join us at the next [Multifamily Bootcamp](/bootcamp) where we dive deep into underwriting, capital raising, and deal execution. Or explore our [mentorship program](/rod-khleif-warrior-program/) to surround yourself with the right team, accountability, and proven systems.
For practical tactics on starting small, see [how to start investing in real estate with limited capital](https://rodkhleif.com/how-to-start-investing-in-real-estate-with-limited-capital-new-york-weekly/).
For a wider survey of the space, this [beginners guide to the multifamily investing landscape](https://rodkhleif.com/navigating-the-multifamily-investing-landscape-a-guide-for-beginners-inscmagazine/) is a good companion read.
**Categories:** Blog, Featured
**Tags:** Commercial Real Estate
---
### [12 Tips For Successful Multifamily Networking](https://rodkhleif.com/12-tips-for-successful-networking/)
**Published:** August 23, 2025
**Author:** Rod Khleif
**Excerpt:** Some people say the key to success in real estate investing is location, location, location! That’s true, but I tend to think it’s also network, network, network!
**Content:**
## **12 Multifamily Networking Tips to Scale Faster & Build Lifetime Cash Flow**
**(+ Free Networking Checklist)
If you ask most people what matters most in real estate, they’ll say: *location, location, location.
But I’m here to tell you—if you’re playing the long game in multifamily investing, it’s really about:
**network, network, network.
Your success in this business will come down to one thing: **who you know, and who knows you.
Multifamily is not a solo sport. It’s a relationship game.
You need sellers, brokers, partners, property managers, lenders, investors, and mentors.
You need a tribe that stretches you, supports you, and celebrates your wins.
And if the word “networking” makes you cringe, I hear you.
I used to be shy. But you don’t have to be loud, you just have to be *intentional*.
Below are 12 real, practical, high-ROI networking tips. These are designed to help you expand your circle, build trust with credibility, and **attract capital, deals, and partnerships that change your life.
👇 Plus, don’t forget to grab the [free networking checklist](#) at the bottom.
### **1. Go Where the Right People Are**
Skip the generic events. Prioritize meetups, [mastermind](https://rodkhleif.com/best-real-estate-masterminds-and-bootcamps-2025-edition/)s, and conferences focused specifically on multifamily or real estate investing. Your local REIA is a great place to start. No group nearby? Start one.
### **2. Master Your Elevator Pitch**
Be able to clearly explain:
- Who you are
- What you do
- What you’re looking for
Keep it under 30 seconds. This isn’t Shark Tank—it’s about clarity, not performance.
### **3. Play the Long Game**
Don’t show up trying to sell or pitch. The best partnerships I’ve had started with trust, not transactions. Think like a farmer—plant seeds now that grow into opportunities later.
### **4. Lead with Value**
Every relationship starts with service.
- New to the area? Recommend a great lunch spot.
- Someone’s struggling with capital? Share your investor deck.
- You’re a spreadsheet whiz? Offer to help underwrite.
Value doesn’t have to be big—it just has to be *relevant*.
### **5. It’s About Depth, Not Volume**
10 surface-level introductions won’t beat one meaningful conversation.
Set a goal to walk away with 3-5 quality connections you can follow up with.
### **6. Collect Business Cards (Don’t Just Hand Yours Out)**
Here’s a power move: Focus on getting their contact info instead of giving yours away. That way, *you* control the follow-up.
### **7. Prepare in Advance**
If there’s an attendee list or Facebook group, do your homework. Know who you want to meet. Research what they do.
A little prep shows massive respect.
### **8. Use an Icebreaker**
My go-to line?
**“Hi, I don’t think we’ve met, I’m Rod Khleif.”
Simple, confident, and direct. Rehearse a few lines you’re comfortable with, and you’ll never get stuck.
### **9. Clean Up Your Online Presence**
Yes, people *will* Google you.
Make sure your LinkedIn is updated, and your Instagram or Facebook show the kind of investor you want to attract.
### **10. Make People Feel Good**
People won’t always remember what you said. They’ll remember how you made them feel.
Ask about their deals. Listen more than you speak. And smile! It matters.
### **11. Be a Connector**
Think about how you can bridge people to opportunity.
- Know someone raising capital? Introduce them to a passive investor.
- Know a solid property manager? Send their info to someone struggling with operations.
Being the connector makes you unforgettable.
### **12. Follow Up Like a Pro**
Networking isn’t what happens *at* the event—it’s what happens *after.
Send a follow-up email within 48 hours. Personalize it. Propose a next step, even if it’s just hopping on a quick call.
---
### **Bonus Resource: Free Networking Checklist**
Want a simple checklist that helps you prep before the event, connect like a pro during, and follow up with ease?
[👉 Download the Multifamily Networking Checklist Here](#)
---
## **Final Thoughts from Rod Khleif**
You’ve heard me say this before: **Your network equals your net worth.
You can’t build a thriving multifamily syndication business in a vacuum.
You need people. You need partnerships. You need to be in the room.
So stretch your comfort zone. Get around like-minded achievers.
Start building the connections that will change your trajectory forever.
Because remember:
You’re just **one relationship away** from your next deal, your next partner, or your next breakthrough.
## **FAQ: Multifamily Networking**
**Q: What’s the best event for new multifamily investors to attend?
A: Your local REIA is a great start. Also consider Rod Khleif’s [Multifamily Bootcamp](https://rodkhleif.com/multifamily-bootcamp/) or national conferences like Best Ever or MFIN.
**Q: How do I follow up after a networking event?
A: Send a personalized email or message within 48 hours. Reference your conversation, and offer to connect further by phone or Zoom.
**Q: What should I say in my elevator pitch?
A: Include your name, what market you invest in, your role (e.g., operator, capital raiser), and what you’re currently looking for (e.g., deals, partners, investors).
**Q: Can introverts still be effective networkers?
A: Absolutely. Focus on listening, asking thoughtful questions, and building fewer, but deeper, connections. It’s about authenticity, not volume.
*Disclaimer: This article was written with the help of AI and reviewed and edited by Rod and his team.* Networking opens doors; structured learning walks you through them; see [the best resources for learning apartment syndication](https://rodkhleif.com/what-are-the-best-resources-for-learning-apartment-syndication/).
**Categories:** Blog, Finding Deals
**Tags:** apartment investing, business structures, Driving Force, landlord, motivation, multifamily, multifamily investment, multifamily property investing, multifamily real estate, real estate, real estate investing, real estate podcast, Rod Khleif, seller financing, tax law
---
### [How to Recession-Proof Your Multi-Family Portfolio](https://rodkhleif.com/how-to-recession-proof-your-multi-family-portfolio/)
**Published:** May 10, 2026
**Author:** Rod Khleif
**Excerpt:** Build a multifamily portfolio that survives downturns. The Six-Layer Recession-Resilience Stack: underwriting, capital structure, asset class, diversification, operations, and cycle patience.
**Content:**
Recession-proofing a multifamily portfolio is not about predicting the next downturn. It is about building a portfolio that can absorb one and keep delivering cash flow when other investors are forced to sell. The investors who do this well do not get lucky. They follow a consistent set of rules around underwriting, debt, asset class, geography, operations, and hold period. This guide walks you through the Six-Layer Recession-Resilience Stack I teach inside the [Multifamily Bootcamp](https://rodkhleif.com/bootcamp/), then covers the practical playbook for timing, locations, property management, and tax strategies that protect cash flow through a cycle. By the end you will have a clear checklist you can run any deal in your pipeline through right now.
## What You Will Learn in This Guide
- [What Recession-Proofing Actually Means](#what-it-means)
- [The Six-Layer Recession-Resilience Stack](#stack)
- [Timing the Market Without Trying to Time the Bottom](#timing)
- [Reading the Supply Landscape](#supply)
- [Risk Management and Contingency Planning](#risk-management)
- [Recession-Resilient Locations](#locations)
- [Adaptive Property Management Practices](#operations)
- [Tax Strategies That Protect Cash Flow](#tax)
- [Recession-Proof Multifamily FAQ](#faq)
- [Ready to Take the Next Step?](#next-step)
## What Recession-Proofing Actually Means
> Recession-proofing a multifamily portfolio means structuring each deal so it can survive a 10 to 20 percent dip in rents, a 15 to 30 percent dip in valuation, and a temporary spike in vacancy without forcing a sale. The levers are conservative underwriting, long fixed-rate debt with reserves, workforce-housing asset class focus, geographic and tenant diversification, tight operations, and a long hold period that lets you ride the cycle instead of being forced out of it.
No multifamily portfolio is truly recession-proof. The honest goal is recession-resilient. A resilient portfolio still loses some value on paper in a downturn, but it never forces you to be a distressed seller. That is the entire difference between investors who compound through cycles and investors who blow up in them. ## The Six-Layer Recession-Resilience Stack
Every recession-resilient deal I have ever underwritten checks all six of these boxes. Treat this as a screening framework before you commit capital, not a checklist you complete after the fact. 
### Layer 1: Conservative Underwriting
This is where 80 percent of recession failure starts. Underwrite to current rents, not pro forma. Assume 2 to 3 percent rent growth, not 5 percent. Assume expenses grow faster than rents. Stress test for an exit [cap rate](https://rodkhleif.com/what-is-a-good-cap-rate-for-multifamily/) 75 to 150 basis points higher than your in-place cap. If the deal still works at those numbers, it is a real deal. If it only works on the optimistic case, it is a story. ### Layer 2: Capital Structure
Long fixed-rate debt is the single most important recession defense. Short-term floating rate bridge debt is what wiped out a generation of value-add operators in the 2023 to 2024 rate shock. Target 7 to 10 year fixed-rate Fannie or Freddie agency debt where you can. Keep loan-to-value at 65 to 70 percent or below. Maintain 6 to 12 months of operating reserves in cash, not in your back pocket. ### Layer 3: Asset Class Focus
Class B and Class B-minus workforce housing is the most recession-resilient asset class in multifamily. Renters in this segment do not have the option to buy a home, and they typically cannot trade down to a cheaper rental in the same market because there is not enough product below them. When luxury renters trade down in a downturn, they trade down into your Class B asset. ### Layer 4: Geographic and Tenant Diversification
Do not concentrate everything in one MSA, even if it is a great MSA. Spread across multiple markets and submarkets. Within each property, target a renter base diversified by employer industry so a single major employer leaving town does not crater your occupancy. ### Layer 5: Operating Cushion
Tight operations create real cushion. Keep economic occupancy at 93 percent or above. Manage expense growth aggressively. Focus on tenant retention so you are not constantly absorbing turn costs. A property running at 96 percent collected occupancy with 35 percent expense ratio has a completely different recession profile than one running at 89 percent with 48 percent expenses. ### Layer 6: Cycle Patience
Plan a 7 to 10 year hold from day one. Build a partnership and capital stack designed around that hold. Investors who can wait out a downturn rarely become distressed sellers. Investors who took 3 year bridge debt to flip the asset are the ones who give up the equity when the cycle turns against them. ## Timing the Market Without Trying to Time the Bottom
The investors who lose money trying to time the perfect bottom are far more common than the ones who actually catch it. Cycle timing in real estate is about reading direction, not calling the exact low. There are four signals I watch closely: - **Cap rate expansion.** Cap rates rise when buyers demand more yield for risk. Tracking this against historical local norms tells you whether you are paying premium or discount.
- **Transaction volume.** Sharp drops in transactions signal price discovery is broken. Wait for volume to come back before pressing aggressively.
- **Rent growth deceleration.** Slowing rent growth in your target markets is an early indicator of cyclical fatigue.
- **Distress in the existing operator base.** Forced sales create the best buys of a cycle. When motivated sellers show up, deploy capital.
You do not need to call the bottom. You need to buy more aggressively when these signals turn favorable, and slow down when they turn against you. That is enough to outperform 80 percent of operators over a full cycle. ## Reading the Supply Landscape
Supply matters as much as demand in multifamily, and it is often easier to forecast because construction lead times are long. A market with limited new supply in the pipeline is structurally easier to operate in, regardless of where you are in the cycle. ### The Role of Supply in Multifamily Investing
Supply directly determines pricing power. When new units are flooding into a market, you are competing with stabilized property managers offering 1 to 2 months free on new leases. Your renewals are pressured down. When supply is limited, you have natural pricing power even in soft demand conditions. ### The Impact of Supply on Multifamily Performance
According to the [National Multifamily Housing Council](https://www.nmhc.org/research-insight/), markets that absorbed more new supply than their long-term average in the 2022 to 2024 cycle posted negative rent growth for 12 to 18 months. Markets that absorbed less than their average kept positive rent growth even in the worst quarters. Same national economy, dramatically different operator outcomes. ### The Importance of Limited Supply
Underwrite the next 24 to 36 months of pipeline supply in your target submarket before you commit. Pull permit data, talk to brokers, and check construction starts. If pipeline supply exceeds 4 to 5 percent of existing inventory in your submarket, lower your offer or move to a different market. ## Risk Management and Contingency Planning
The investors who survive cycles plan for the downside before they plan for the upside. Here is the working playbook. ### Thorough Portfolio Analysis
Run a recession stress test on every deal in your existing portfolio every six months. Model what happens at 90 percent occupancy, at 85 percent occupancy, at a 10 percent rent decline. Identify which properties survive each scenario and which ones do not. Take action on the ones that do not now, while you can. ### Negotiating Favorable Financing Terms
Beyond locking in long fixed-rate debt, negotiate flexibility. Pre-pay flexibility, interest-only periods, supplemental loan options, and supportive sponsor relationships are worth more in a downturn than slightly better headline rates in good times. Read the prepayment penalty carefully on every loan. ### Agile Investment Strategy
Build optionality into your strategy. Markets shift faster than business plans. Be willing to extend a hold, refinance instead of selling, or change the value-add scope mid-stream. Operators who treat their original underwriting as gospel underperform operators who adapt as data comes in. ### Continuous Education and Networking
Most operators who blow up in a recession had stopped learning years before. Stay close to active operators, attend events like the [Multifamily Bootcamp](https://rodkhleif.com/bootcamp/), listen to the [Lifetime Cash Flow podcast](https://rodkhleif.com/lifetime-cashflow-podcast/), and keep raising your underwriting standard each year. ## Recession-Resilient Locations
Not all markets respond to recessions the same way. The most resilient submarkets share three traits. ### Income Levels and Affordability
Target markets where median household income comfortably supports your rent comp set. Rent-to-income ratios above 35 percent in a market are a leading indicator of softness in a recession. Below 30 percent is healthier. Workforce-housing properties priced at 25 to 30 percent of local median income hold up well through cycles. ### Historical Performance
Pull a 20 year history of rent growth and occupancy in any market you are considering. Markets that held positive rent growth or single-digit occupancy declines through 2008 to 2010 are the ones to lean into. ### Local Government Policies
Read the local rent regulation environment carefully. Markets with active rent control proposals or unfavorable landlord-tenant legislation add real recession risk because your ability to reset rents is limited when you need it most. ## Adaptive Property Management Practices
Operations is where the recession-resilience stack pays off month over month. Three habits separate operators who outperform in a downturn from those who tread water. ### Tenant-Centric Approach
Retention is the cheapest source of NOI. Every turn costs 1 to 2 months of rent in lost income, painting, cleaning, and leasing commissions. Build a culture of resident satisfaction, respond to maintenance requests inside 24 hours, host community events, and treat renewal as your primary marketing engine. A property running at 65 percent retention versus 50 percent retention has dramatically different recession economics. ### Technology Integration
Modern multifamily operating tech (online rent payment, smart locks, AI-driven leasing tools, expense automation) compounds margin month after month. The properties running these tools in 2026 have 100 to 200 basis points of expense advantage over properties relying on old workflows. That advantage matters most in a downturn. ### Proactive Maintenance Strategies
A preventative maintenance program costs more upfront and saves a multiple of that in capex emergencies. Roofs, HVAC, plumbing, and elevators on a planned replacement schedule are dramatically cheaper than reactive repairs. The properties that run hot through a downturn are the ones whose capex budgets surprise the operator. ## Tax Strategies That Protect Cash Flow
Tax efficiency is part of recession-resilience because every dollar of tax saved is a dollar of cash flow you keep. Three strategies do most of the work. ### Maximize Depreciation Deductions
Run a cost segregation study on every acquisition above $2 million. A cost seg accelerates depreciation into the early years of ownership where it shelters the most income. The IRS allows this and it is one of the most underused legitimate tax tools available to multifamily owners. ### Take Advantage of 1031 Exchanges
When you do sell into a stronger market, structure the exit as a 1031 exchange into a larger property or a Delaware Statutory Trust if you want to step back from active operation. This defers gain indefinitely and preserves more capital for redeployment. My detailed playbook on this lives in my [free book How to Create Lifetime Cash Flow Through Multifamily Properties](https://rodkhleif.com/lcfa-ebook/). ### Hold Reserves in Tax-Advantaged Wrappers
Where possible, hold operating and capex reserves in tax-advantaged structures (self-directed IRA, qualified opportunity zone vehicles where appropriate). The compounded benefit over a 10 year hold is substantial and adds a meaningful margin of safety in recession. ## Recession-Proof Multifamily FAQ
**Q: How do I recession-proof my multifamily portfolio?** A: Build every deal around six layers: conservative underwriting, long fixed-rate debt with reserves, Class B workforce housing focus, geographic and tenant diversification, tight operations with high retention, and a long hold period. Each layer alone helps. All six together is what creates a portfolio that survives a downturn. **Q: Is multifamily real estate recession-proof?** A: No real estate is fully recession-proof. Multifamily, specifically Class B workforce housing, is one of the most recession-resilient asset classes because housing demand is essentially nondiscretionary. Renters who can no longer afford luxury units trade down into your properties. **Q: What kind of debt should I use to recession-proof my portfolio?** A: Long fixed-rate agency debt (Fannie Mae or Freddie Mac), typically 7 to 10 year terms, at 65 to 70 percent loan-to-value or below. Avoid short-term floating rate bridge debt unless you have a clear exit plan and large reserves. **Q: What is the best multifamily asset class for a recession?** A: Class B and Class B-minus workforce housing in markets with limited new supply and median renter incomes that comfortably support the rent comp set. This segment captures trade-down demand in a downturn instead of losing it. **Q: How much cash reserve should I keep per property?** A: Six to twelve months of operating expenses in cash reserves, separate from your business plan capex budget. Lenders often require lower minimums. The investors who survive downturns keep more, not less. **Q: How do I know if a market is recession-resilient?** A: Look at median household income relative to local rents, 20 year history of rent growth and occupancy through downturns, supply pipeline as a percent of inventory, and the regulatory environment. Markets with healthy income-to-rent ratios, limited supply, and stable landlord-tenant policy are more resilient. **Q: Should I sell properties before a recession?** A: Generally no, if you built the portfolio correctly. Selling into uncertainty often means accepting cap rate expansion against you. The right move is usually to hold, manage tightly, and keep enough reserve to weather the cycle. **Q: How do tax strategies help with recession-proofing?** A: Cost segregation studies, 1031 exchanges, and tax-advantaged reserves all increase the after-tax cash flow your portfolio retains. More retained cash equals more recession cushion. These strategies are legal, IRS-approved, and underused by most operators. **Q: How long should I plan to hold a recession-resilient property?** A: Seven to ten years minimum. Long holds smooth cycle volatility and give time for value-add execution and supply absorption. Investors planning three year flips are the ones most exposed to recession losses. **Q: What is the biggest mistake operators make trying to recession-proof?** A: Using short-term bridge debt on value-add deals with aggressive rent assumptions. When rates spike or rents stall, that combination forces sales at the worst possible time. The 2023 to 2024 cycle wiped out a generation of operators making exactly this mistake. ## Ready to Take the Next Step?
If you want to build a real recession-resilience stack into your portfolio, the fastest path is to come to the next [**Multifamily Bootcamp**](https://rodkhleif.com/bootcamp/). You will work through the underwriting templates, debt structures, and operating playbook with active operators in the room. If you are not ready for an in-person event yet, start with my free book [**How to Create Lifetime Cash Flow Through Multifamily Properties**](https://rodkhleif.com/lcfa-ebook/). It is the same playbook I use myself and teach in the Warrior Program. You can also explore the [Lifetime Cash Flow podcast](https://rodkhleif.com/lifetime-cashflow-podcast/) for hours of interviews with operators who built recession-resilient portfolios in real time. *Disclaimer: This article was written with the help of AI and reviewed by Rod and his team.***Related reading:** [Multifamily vs Commercial Real Estate: Which One Should You Invest In?](https://rodkhleif.com/multifamily-vs-commercial-property-which-one-should-you-invest-in-techbullion/)
One leading indicator worth watching is [multifamily mortgage delinquency](https://rodkhleif.com/multifamily-mortgage-delinquency/) data.
Rate moves directly drive your downside scenarios, so pair this with our take on [Fed rate vs cap rate dynamics](https://rodkhleif.com/fed-rate-vs-cap-rates/).
**Categories:** Blog, Real Estate
---
### [How to Develop Resilience as a Real Estate Entrepreneur](https://rodkhleif.com/how-to-develop-resilience-as-a-real-estate-entrepreneur/)
**Published:** April 22, 2026
**Author:** Alex Khleif
**Content:**
I want to tell you what almost happened to me, because I think it is closer to your life than you realize. I was working eighty hour weeks, building a real estate empire, making more money than I ever imagined growing up poor in Denver, and I was miserable. Then 2008 came and took most of it away. The lesson I learned in the years that followed is the one I am going to give you now, because resilience is not something you find after you get knocked down. It is something you build before the knock comes.
> **Short answer:** Developing resilience as a real estate entrepreneur means installing five specific habits before you need them. Anchor your purpose in something bigger than money. Surround yourself with peers who hold you accountable. Build cash reserves and skills that survive any market. Train your mindset daily through goal setting and visualization. Protect a daily minimum commitment you keep no matter what happens.
## What’s in this guide
- [What Resilience Actually Means for a Real Estate Investor](#what-resilience-means)
- [The $50 Million Lesson: What 2008 Taught Me About Bouncing Back](#fifty-million-lesson)
- [The 5-Pillar Resilience Stack](#five-pillar-stack)
- [How to Build Resilience Before You Need It](#build-before-you-need-it)
- [Signs You Are Building False Resilience](#false-resilience)
- [Real Estate Entrepreneurs Who Rebuilt After Major Losses](#who-rebuilt)
- [Reactive vs. Resilient in a Downturn](#reactive-vs-resilient)
- [How to Develop Resilience as a Real Estate Entrepreneur FAQ](#faq)
## What Resilience Actually Means for a Real Estate Investor
Resilience in real estate is not a feeling. It is a set of trained behaviors that let you make clear decisions when your portfolio, your bank account, or your ego takes a hit. A resilient investor does not avoid losses. A resilient investor absorbs them, learns from them, and keeps moving. The difference between the investors who disappear after a downturn and the ones who come back bigger is rarely talent. It is almost always the infrastructure they built during the good years. Most people confuse resilience with toughness. Toughness is a personality trait. Resilience is a system. You can have the grittiest personality on earth and still get wiped out if your system has no reserves, no mentors, no written goals, and no daily practice. I know that because I had the personality. What I did not have in 2008 was the system. ## The $50 Million Lesson: What 2008 Taught Me About Bouncing Back
By 2006 I owned over 800 single family homes. I thought I was untouchable. I had the cars, the house, the lifestyle, and I was working nonstop to protect all of it. When the market cracked in 2008, my portfolio collapsed with it. I lost about $50 million. I watched everything I had built evaporate in a matter of months, and I was not sure I would recover. What hurt the most was not the money. It was the realization that I had no idea what I was building any of it for. I had been running so hard that I had forgotten to ask why I was running at all. My identity was fused to the portfolio, and when the portfolio went, so did my sense of who I was. I took a long hard look at my decisions, and a few things became obvious. I had made aggressive assumptions on too many deals. I had no meaningful cash reserves. I was operating alone, with no peer group challenging my thinking. My goals were financial only, which meant when the finances disappeared, I had nothing left to anchor to. And my daily habits were built around execution, not around the mindset and physical health I would need in a crisis. Rebuilding started with accepting a hard truth. The problem was not the market. The market does what it does. The problem was that I had never built the infrastructure that would let me survive a market I could not control. So I built it. That infrastructure is what I am going to walk you through now, because I do not want you to learn it the way I did. For a deeper look at the specific mental traps that caught me, read [How to Overcome Fear When Starting Out in Real Estate](https://rodkhleif.com/how-to-overcome-fear-when-starting-out-in-real-estate/). Fear and resilience are two sides of the same coin. You cannot build one without understanding the other. ## The 5 Pillar Resilience Stack
[](https://rodkhleif.com/how-to-develop-resilience-as-a-real-estate-entrepreneur/screenshot-2026-04-22-at-11-04-33-pm/) After rebuilding, I codified what I had learned into a framework I now teach every student who comes through my programs. I call it the **5-Pillar Resilience Stack** because each pillar supports the others. Remove any one of them and the structure weakens. Install all five and you can absorb almost anything the market throws at you. ### Pillar 1: Anchor (Your Why)
Your anchor is the reason you are doing this, written down, reviewed every single day. It cannot be a financial number. Financial numbers are great motivators in good times and useless anchors in bad ones. When you lose money, “I want to hit $10 million net worth” gives you nothing to stand on. What gives you something to stand on is a purpose that survives a balance sheet. For me, the anchor is the Tiny Hands Foundation, which I started decades ago to give backpacks full of supplies and holiday gifts to children who would otherwise go without. When I lost the money in 2008, the Foundation did not stop. The kids still needed supplies. That responsibility gave me a reason to get out of bed when my own ego gave me none. Your anchor might be your kids, your parents, a cause, a faith, a legacy you want to leave. Whatever it is, write it down today and read it tomorrow. ### Pillar 2: Account (Your People)
You cannot build resilience alone. I tried, and it almost finished me. After 2008 I rebuilt my network deliberately. I surrounded myself with operators who were doing bigger deals, coaches who would tell me the truth, and peers who had lived through the same cycle. When you have people who have already walked the path, a setback stops being a mystery. It becomes a pattern someone else has already survived. This is why my Warrior community now controls over 260,000 apartment units together. The number is not the point. The point is that every Warrior has an account of peers they can call at two in the morning when a deal is falling apart. That account does not exist by accident. You have to build it before you need it. For more on how to vet and build that peer group, the piece I wrote on [how to find mentorship for multifamily real estate](https://rodkhleif.com/how-do-you-find-mentorship-for-multifamily-real-estate/) walks through the exact process. ### Pillar 3: Assets (Cash and Skills)
Resilience runs on reserves. Cash is the obvious one. My rule of thumb for Warriors is six months of personal living expenses and six months of debt service on every property you own, held in an account you do not touch. That number is not aspirational. It is the floor. If you do not have it, you are one vacancy or one broken boiler away from making decisions out of desperation, and desperate decisions are how portfolios die. The less obvious reserve is skills. In a bad market, the best investors do not just have money. They have the ability to underwrite a deal quickly, to raise capital from investors they already trust, to renegotiate with lenders, and to manage a turnaround. If the only skill you have is buying when the market is up, you have no skill at all. Skills are durable assets. Build them deliberately, and they will still be yours when the money is gone. ### Pillar 4: Attitude (Trainable Mental Habits)
Your mindset is a muscle. Train it and it gets stronger. Ignore it and it atrophies. The three practices I do every single day without exception are goal setting, visualization, and affirmations. I write my major goals by hand every morning and every night. I visualize the outcome of my most important deal or conversation for the day. I speak affirmations out loud because the words you say to yourself shape the decisions you make. This sounds soft to some people, which is fine. What is not soft is the data. Every elite performer I have ever interviewed on my podcast, and every one of my top Warrior Program students, runs some version of this practice. If you want to go deeper on this, my [goal setting workshop](https://rodkhleif.com/goal-setting-workshop/) walks through the exact method I use. The podcast episode [The Blueprint for a Billion Dollar Mindset](https://rodkhleif.com/podcasts/the-blueprint-for-a-billion-dollar-mindset/) is another place to start. The point is not that you need to adopt my exact routine. The point is that your attitude will not train itself, and in a crisis, the investor with a trained mind beats the investor with a better deal every single time. ### Pillar 5: Action (The Daily Minimum)
The last pillar is the smallest and the most important. It is the minimum amount of intentional work you commit to doing every day regardless of the market, your mood, or your results. For me it is four things. Thirty minutes of physical training. Ten minutes of goal writing and visualization. One networking action, which could be a call, a text, or an introduction. One hour of deliberate education, which could be reading, listening, or analyzing a deal. On my worst days after 2008, those four things were the only things I did. On my best days, they were the first four things I did. The point of a daily minimum is that it decouples your consistency from your circumstances. You do not need to feel motivated. You just need to hit the minimum. Over months and years, that minimum compounds into a business that most of your peers cannot match, because most of them are still waiting to feel ready. ## How to Build Resilience Before You Need It
Reading about the 5-Pillar Resilience Stack is not the same as installing it. Here is how to install it on a realistic schedule. **This week:** Write your anchor on a physical piece of paper and put it where you will see it every morning. One sentence is enough. Do not overthink it. **This month:** Identify three peers or one mentor who will hold you accountable, and schedule a recurring conversation with them. Also open a reserve account, even if you start with a small deposit, and set up an automatic weekly transfer. The account matters more than the opening balance. **This quarter:** Commit to the daily minimum. Pick your four actions, write them down, and track completion every day on a calendar you can see. A missed day is not a crisis. A missed week is a signal your system is broken and needs adjustment. **This year:** Pick one skill you do not currently have and develop it to the point of competence. Underwriting is the highest leverage choice for most investors. Capital raising is a close second. The goal is to add one durable asset to your reserves every twelve months. If you want a structured environment to do this in, the [multifamily bootcamp](https://rodkhleif.com/bootcamp/) is built around exactly this sequence. It is also where most of my longest running Warriors started. ## Signs You Are Building False Resilience (and What to Do Instead)
Not all resilience is real resilience. Some of what looks like toughness is actually a fragile mask that breaks the moment real pressure hits. Watch for these signs, because they are the ones I missed in myself before 2008. **Toxic positivity.** If you cannot acknowledge that something is going badly, you cannot fix it. Resilience is not pretending the deal is fine. It is telling the truth early and adjusting. The correction is to find one person you can be fully honest with about your real numbers and your real fears. **Hustle as identity.** Working harder is not the same as working smarter. If your answer to every setback is more hours, you are burning through the one reserve you can never replace, which is your health and time with the people you love. The correction is to protect your daily minimum and refuse to trade it for more hustle. **Isolation.** If you are making every major decision alone, you are one blind spot away from a catastrophic mistake. The correction is to build your account of peers before you need them, not during the moment you need them. **Portfolio as ego.** If your sense of self rises and falls with your balance sheet, every downturn is going to feel like a personal attack. The correction is to anchor your identity to something that survives a market cycle. Your purpose, your family, your faith, your service. Something real. ## Real Estate Entrepreneurs Who Rebuilt After Major Losses
I am not the only example of this framework at work. The Warriors I am proudest of are the ones who installed the 5-Pillar Resilience Stack and then tested it in real conditions. **Jennifer Barner** came through the early programs, built her portfolio to more than 1,200 units, and put all four of her kids through college debt free. She has told me more than once that the thing that kept her going through the hard moments was not the deals. It was the anchor and the account. She had a written purpose and she had people. **Anthony** closed a 218-unit deal as his first deal with no money and no prior real estate experience. That was not a lucky break. That was the 5-Pillar Stack in action. He built his skills, he built his network, he trained his attitude, and he hit his daily minimum long before he had the deal in front of him. When the opportunity came, he was ready. **Loren** came through the bootcamp, built his skills, and inside twelve months he handed in his resignation from his corporate job. His resilience was tested every single week he kept showing up to the early mornings while still holding down the day job. He did not wait for conditions to be perfect. He built the infrastructure and then the conditions changed. None of these outcomes are typical. They are possible. The difference between possible and impossible is almost always infrastructure. You can read more student outcomes in [our Warrior Program reviews](https://rodkhleif.com/reviews/warrior-program/), and you can grab the free version of my book at [How to Create Lifetime Cash Flow Through Multifamily Properties](https://rodkhleif.com/lcfa-ebook/) if you want the full playbook. ## Reactive vs. Resilient in a Downturn
Here is how a reactive investor behaves in a downturn compared to an investor who has installed the 5-Pillar Stack. Save this table. Review it every quarter. Behavior Reactive Investor Resilient Investor Cash management Spends reserves to cover mistakes Keeps reserves intact, restructures spending Deal review Stops looking at deals out of fear Doubles deal review volume to find distressed opportunities Network behavior Pulls away, embarrassed by losses Calls peers and mentors within 72 hours Goal setting Abandons goals, labels them unrealistic Rewrites goals based on new conditions, keeps writing daily Mindset Dwells on losses, repeats the story Acknowledges losses once, extracts the lesson, moves on Daily routine Routine collapses under emotional weight Protects the daily minimum, uses it as an anchor ## How to Develop Resilience as a Real Estate Entrepreneur FAQ
**Q: How long does it take to develop resilience as a real estate entrepreneur?** A: You can install the basic infrastructure in 90 days by committing to the 5-Pillar Resilience Stack and hitting your daily minimum consistently. True resilience, the kind that holds up under real pressure, comes from testing that infrastructure over one or two market cycles. Start now, not when you need it. **Q: Can resilience be learned or is it something you are born with?** A: Resilience is almost entirely learned. Personality traits like grit and optimism help, but the investors who come back from major losses are the ones who built systems, not the ones who had the right temperament. I was plenty tough in 2008 and it did not save me. The system saved me the second time around. **Q: What is the single best resilience habit for a new investor?** A: A written anchor you review every single morning. If you do nothing else, do this. A written purpose gives every other habit something to serve. Without it, the other four pillars have nothing to hold up. **Q: How do I bounce back from a failed real estate deal?** A: Take 72 hours to acknowledge the loss honestly, then extract three specific lessons you can apply to the next deal. Call two peers or a mentor within that window, because isolation is what turns a setback into a spiral. Do not change your long term goals. Change your short term tactics. **Q: What daily practices build resilience in real estate investing?** A: Physical training, goal writing, visualization, one intentional networking action, and one hour of deliberate education. I call this the Daily 4 and it is the Action pillar of the 5-Pillar Resilience Stack. Consistency beats intensity in every category. **Q: Is resilience more important than skill in multifamily investing?** A: They are inseparable. Skill without resilience fails the moment a deal goes sideways. Resilience without skill keeps you going but does not produce results. You need both, and resilience is the easier one to build first. **Q: How do I stay motivated during a real estate downturn?** A: Motivation is the wrong target. Commitment is the right one. Motivation comes and goes with the market. Commitment is the decision to keep hitting your daily minimum regardless of how you feel. If you need motivation, call a peer or reread your anchor. If you need commitment, go hit your daily minimum right now. **Q: What should I do in the first 72 hours after a big loss?** A: Tell the truth to yourself and to one trusted peer. Do not make any major financial decisions. Write out what happened, what you would do differently, and what you still control. Protect your daily minimum, even a scaled down version. Most damage after a loss happens in the first week, from panic reactions, not from the loss itself. **Q: How does mindset affect real estate investment outcomes?** A: Mindset determines which deals you see, which ones you underwrite, and how you respond when one of them goes wrong. Two investors can look at the same property and reach opposite conclusions based on their internal state. The investor with a trained attitude makes cleaner decisions in both bull and bear markets. That compounds over twenty years into a completely different portfolio. **Q: How can a mentor help me build resilience faster?** A: A good mentor compresses years of trial and error into a few conversations. They have already survived the mistakes you are about to make, and they can pattern match your situation to outcomes they have seen before. The right mentor shortens your learning curve, reinforces your anchor, and gives you an account of peers you would not otherwise access. Mentorship is the single highest leverage resilience investment you can make. ## Ready to Build Your Resilience System?
The 5-Pillar Resilience Stack works the same way compound interest works. Small consistent inputs over months and years turn into infrastructure that most of your peers never build. The hardest part is starting before you feel ready. If you want a structured environment to install the Stack alongside the tactical skills of multifamily investing, my [multifamily bootcamp](https://rodkhleif.com/bootcamp/) is the fastest way to get both in one place. You will leave with a framework, a community of peers, and a plan. And if you have not read it yet, my book is free here: [How to Create Lifetime Cash Flow Through Multifamily Properties](https://rodkhleif.com/lcfa-ebook/). *Disclaimer: This article was written by AI and reviewed by Rod and his team.* Sometimes resilience means walking away; read about the time [we lost a $65M deal in Savannah](https://rodkhleif.com/we-lost-a-deal/) and what the team did next.
On the operational side, discipline shows up in places like rigorous [tenant screening](https://rodkhleif.com/the-importance-of-tenant-screening-in-multifamily-real-estate/) that protects you from problem tenants.
**Categories:** Psychology of Success, Real Estate
---
### [The Syndication Business](https://rodkhleif.com/the-syndication-business/)
**Published:** July 3, 2025
**Author:** Alex Khleif
**Content:**
Syndication is the fastest way I’ve found to scale a real estate empire, and I’ve syndicated numerous multifamily properties to prove it. A real estate syndication lets you pool capital from other investors to buy apartment buildings collectively, which means you control way larger properties than you could alone. Here’s the truth: instead of being the owner-operator struggling with tenant calls, you become the deal sponsor who manages professionals. Most investors never consider sponsoring syndications because they think it’s complicated, but I’ve streamlined the process into a repeatable system. Let me show you how to structure, market, and manage syndications. If you’ve ever wondered, “What does syndicate mean in business?” you’re about to discover one of the most powerful wealth-building tools available to investors today. Syndication isn’t just a buzzword. It’s a proven model that allows entrepreneurs, operators, and passive investors to work together and scale faster than they ever could alone. Whether you’re looking to launch a real estate syndicate, join a syndicate fund, or simply understand what syndicate investing is all about, this post will walk you through the fundamentals and show you how the syndication business can change your life. ## What Does Syndicate Mean?
In the simplest terms, a syndicate is a group of individuals or organizations that join forces to pursue a common financial goal. In the world of business and real estate, it usually means pooling resources, capital, expertise, or both, to fund and operate an investment project. This is the heart of the syndication business: collective action for mutual gain. Want to learn more? Check out our blog titled [“What is Apartment Building Syndication?”](https://rodkhleif.com/what-is-apartment-building-syndication/)## Syndication Example: Real Estate Done Right
Let’s say you find a 100-unit apartment building that costs $10 million. You don’t have $10 million, and you don’t want to take on all the risk yourself. So you create a syndicate. You raise $3 million from investors to cover the down payment and closing costs. The rest is financed through a commercial loan. You, the general partner, manage the deal and execute the business plan, while your limited partners provide the capital. This real estate syndication example shows exactly how smart investors use the syndication model to acquire assets far bigger than they could on their own. ## What Is Syndicate Investing?
Syndicate investing refers to participating in a group investment led by a sponsor or operator. Passive investors contribute capital to a specific deal or fund, often in exchange for equity, profit share, or preferred returns. In return, they gain access to institutional-quality investments, professional management, and the chance to earn passive income without the day-to-day work. You might hear this called a syndicate fund when multiple deals are grouped together into one diversified portfolio. ## Syndicate Capital vs. Syndicate Equity
When you’re raising money for a syndicate business, you’re dealing with two primary forms of financial participation: - Syndicate capital is the total amount of money raised from investors. It includes both debt and equity components depending on how the deal is structured.
- Syndicate equity is the portion of ownership that investors receive in exchange for their capital contributions. Limited partners (LPs) usually receive equity in proportion to their investment.
Understanding how to structure and protect syndicate equity is key to long-term investor trust and success. ## What Are Syndicate Finance Models?
Syndicate finance refers to the way deals are structured to include multiple sources of funding and shared risk. In a real estate or business context, syndicate finance often blends: - Investor equity
- Bank or private debt
- Preferred returns
- Carried interest or profit-sharing
The sponsor typically earns an asset management fee, acquisition fee, and a share of profits after LPs are paid. It’s a win-win when done right. ## Why the Syndication Business Works
The syndication business thrives because it gives everyone a clear role: - Sponsors/GPs source and operate the deal.
- Passive investors/LPs provide capital.
- Everyone shares in the upside.
It allows you to raise syndicate capital without giving away total control. It helps passive investors gain access to wealth-building deals without needing to manage tenants or chase contractors. In short, syndication aligns incentives and multiplies opportunity. ## How to Succeed in a Syndicate Business
Here’s what I’ve learned after years of running a successful syndication business: 1. Build Trust: People invest in you before they invest in the deal.
2. Communicate Clearly: Use straightforward documents, honest projections, and regular updates.
3. Know Your Numbers: Underwrite conservatively and plan for the unexpected.
4. Protect the Downside: Focus on cash flow, reserves, and conservative leverage.
5. Stay Compliant: Work with securities attorneys and stay within SEC guidelines.
## Is a Syndication Business Right for You?
If you want to scale your impact, raise capital ethically, and build lifetime cash flow, then launching or joining a syndication business could be the vehicle that gets you there. Whether you’re active or passive, the syndicate model is built to grow wealth through collaboration, transparency, and smart financial engineering. [](https://rodkhleif.com/guide-to-multifamily-syndications/) Want to learn how to launch your own real estate syndicate? Download my free guide, “[The Complete Guide to Multifamily Syndication,](https://rodkhleif.com/guide-to-multifamily-syndications/)” and let’s build something incredible together. Stay focused. Stay committed. And take massive action. Smart syndicators lean on [the 1031 exchange](https://rodkhleif.com/using-the-1031-exchange-to-maximize-tax-benefits-in-real-estate-investing/) to compound returns across deals.
This work also takes a mental game; see [how to develop resilience as a real estate entrepreneur](https://rodkhleif.com/how-to-develop-resilience-as-a-real-estate-entrepreneur/) for what keeps you in the seat through downturns.
**Categories:** Blog, Syndication
---
### [Multifamily Mortgage Delinquencies & Market Trends](https://rodkhleif.com/multifamily-mortgage-delinquency/)
**Published:** April 7, 2026
**Author:** Graciela
**Content:**
The headlines are real: multifamily mortgage delinquency rates are rising. They have reached levels that seemed unthinkable just three years ago. If you invest in apartment buildings, or are planning to, you need to understand what is actually happening, why it is happening, and most importantly, what it means for your strategy going forward.
Let me be direct. This is not a crisis for well-positioned investors. It is a stress event concentrated in specific loan types, deal vintages, and markets. The investors getting hurt are the ones who overleveraged in 2021 and 2022. They bet on floating-rate debt without stress testing. Or they bought in overbuilt Sun Belt markets without enough reserves. The investors who underwrote conservatively and structured their deals soundly are largely fine.
Here is what the data actually shows, and what you should do with it.
## **Where Multifamily Delinquency Rates Stand in 2026**
The most widely tracked measure of multifamily loan stress is the CMBS (Commercial Mortgage-Backed Securities) delinquency rate published monthly by Trepp. As of March 2026, the multifamily CMBS delinquency rate reached 7.15%, surpassing its previous high set in October 2025. That is a 171 basis point increase year-over-year from 5.44% in March 2025, and nearly triple the levels seen in early 2024.
For context, that 7.15% rate applies specifically to CMBS-financed multifamily loans. Delinquency rates vary significantly by lender type:
**Loan Type****Approximate Delinquency Rate (Q1 2026)****Key Characteristic**Multifamily CMBS7.15% (March 2026)Highest stress, concentrated in 2021-22 bridge loan vintagesAgency (Fannie/Freddie)Well below 1%Strict underwriting standards, strongest loan performanceBank portfolio loansElevated but below CMBSVaries by lender, relationship-drivenLife insurance company loansNear historic lowsConservative LTVs, long-term fixed rate borrowersOffice CMBS (for comparison)11.71% (March 2026)Highest stress sector across all CRE
The CMBS segment is the most visible and most stressed because it contains a high concentration of bridge loans originated in 2021 and 2022 at floating rates and aggressive valuations. Many of those loans are now at or past their maturity dates, and borrowers cannot refinance at current rates without significant capital injections. The MBA reports that performing matured balloons, loans past maturity but still current on interest, now represent over 1.5% of CMBS loans outstanding. If those were included in the delinquency count, the overall CMBS rate would be closer to 9%.
**Key Distinction**Multifamily CMBS delinquency at 7.15% sounds alarming. Agency multifamily delinquency (Fannie Mae and Freddie Mac) remains well below 1%. This is not a sector-wide collapse. It is a CMBS-specific, vintage-specific stress event, concentrated in deals originated in 2021 and 2022 with floating rate bridge financing.
## **What Is Actually Driving the Stress**
Understanding the root causes matters because it tells you whether this is a structural problem with multifamily or a cyclical one with specific deal structures. The evidence strongly points to the latter.
### **1. The Bridge Loan Maturity Wall**
From 2020 through 2022, a massive volume of bridge loans were originated on multifamily assets at floating rates, typically at aggressive entry valuations reflecting compressed [cap rate](https://rodkhleif.com/fed-rate-vs-cap-rates/)s and aggressive rent growth assumptions. These loans had two to three year terms with extension options. By 2024 and 2025, those loans began maturing en masse.
The refinancing math broke down for many of them. A property purchased at a 4.5% cap rate with 70% LTV floating rate debt at 3.5% in 2021 now faces a refinancing environment with rates at 6% to 7% and, in many Sun Belt markets, cap rates that have expanded to 5.5% to 6.5%. The result: the property value has declined, the loan balance has not, and the DSCR at current rates may be well below the 1.25x threshold lenders require. See our guide to [what a good cap rate means in 2026](https://rodkhleif.com/what-is-a-good-cap-rate-for-multifamily/) for more on how cap rate expansion translates directly into reduced property values.
### **2. Overbuilding in Sun Belt Markets**
From 2022 through 2025, developers delivered a historically unprecedented volume of new apartment supply, particularly in Sun Belt markets. Developers completed more than 700,000 units in 2024 alone, the highest level in 38 years. Austin, Phoenix, Denver, Tampa, Dallas, and Nashville absorbed the largest waves of new supply.
The result in those markets: vacancy rates rose sharply, rent growth turned negative, and properties underperformed relative to the projections embedded in their original underwriting. Austin saw rents fall 5% year over year. Phoenix fell nearly 3%. Denver and Tampa were similarly challenged. Properties in those markets that were underwritten to aggressive rent growth assumptions simply did not perform.
### **3. Higher Operating Expenses**
Insurance costs, property taxes, and labor all increased significantly since 2021. Many investors underestimated the combined drag of these expense increases on [Net Operating Income](https://rodkhleif.com/a-complete-guide-noi-in-real-estate-in-2025/). A property that modeled a 42% expense ratio at acquisition may now be running at 50% or higher, directly compressing NOI and DSCR. This is especially acute in Sun Belt states where insurance premiums have risen 20% to 40% in some markets due to climate risk repricing.
### **4. Interest Rate Shock on Floating Rate Debt**
Investors with floating rate bridge debt went from 4% to 5% all-in rates in 2021 to 7% to 9% by mid-2023. Rate caps, which were supposed to protect against this scenario, expired in many cases and became prohibitively expensive to renew. For properties with thin coverage ratios, that rate shock was the difference between cash flow and default. Our guide to [recourse vs. non-recourse financing](https://rodkhleif.com/recourse-vs-non-recourse-multifamily-financing-whats-the-difference/) covers the risk implications of each structure, including what happens when things go wrong.
## **Which Markets and Assets Are Most at Risk**
Not all multifamily markets are experiencing equal stress. The picture is sharply bifurcated.
### **High-Stress Markets (Sun Belt, High Supply)**
These markets are working through oversupply and have the highest concentration of stressed CMBS loans:
- Austin: 13.7% vacancy rate, rents down 5% year over year, sharpest declines in the country
- Phoenix: vacancy near 15% in some submarkets, rents down approximately 3%
- Denver: rents down 3.6% year over year, vacancy elevated
- Tampa: rents down 2.9%, significant new supply still being absorbed
- Dallas and San Antonio: vacancy elevated above 15% in some submarkets
In these markets, Class A properties with aggressive underwriting and floating rate debt are the most exposed. Class B workforce housing in strong infill locations has held up considerably better.
### **Lower-Stress Markets (Northeast, Midwest, Supply-Constrained)**
A very different story is playing out in markets with limited new construction and strong employment bases:
- Chicago: 3.6% rent growth year over year, among the strongest nationally
- New York City: 3.3% rent growth, tight supply, strong demand
- Minneapolis and Kansas City: 2.5% to 2.7% rent growth
- San Francisco: occupancy improving, rents recovering
- Northeast markets broadly: 4% to 5% annual rent growth projected for 2026
The structural lesson is the one every experienced multifamily investor already knows: buy in markets with supply constraints, strong employment, and demographic tailwinds. Markets where it is difficult or expensive to build new supply are where the fundamentals hold in downturns.
## **The Broader Market Picture in 2026**
Understanding delinquency trends requires seeing them in the context of the broader multifamily market, which has genuine structural strengths even amid the CMBS stress.
### **Supply Is Peaking and Falling**
The 2024 delivery peak of over 700,000 units is not repeating. Multifamily starts dropped more than 40% between 2023 and 2025 and are expected to continue declining. The construction pipeline is thinning rapidly. In markets like Austin, deliveries are projected to fall 47% in 2026. Denver supply is expected to be cut by more than half. Phoenix faces a 40% reduction.
This matters enormously for forward-looking investors. The oversupply that drove vacancy higher and rent growth negative is a temporary condition. As deliveries fall and absorption continues, the supply-demand balance improves. Marcus and Millichap projects that national vacancy has already peaked and will gradually decline throughout 2026.
### **Demand Fundamentals Remain Structurally Strong**
The long-term demand case for rental housing is intact and arguably stronger than ever:
- Homeownership affordability reached historic lows. The monthly mortgage payment on a median-priced home is approximately $1,200 higher than average apartment rent. Only 28% of U.S. households currently qualify for a mortgage on a median-priced home, according to Freddie Mac.
- Renter households are at record highs nationally, with 519,000 units absorbed in 2025, the third-best absorption year of the past decade.
- National occupancy held at 94.5% nationally as of early 2026 despite record deliveries, a testament to the underlying demand.
- Income growth outpaced rent growth in 2025 for the first time in several years, improving affordability fundamentals and rent collection rates.
### **Rent Growth Is Beginning to Stabilize**
After five consecutive months of rent declines, national average asking rents turned positive in early 2026, rising to $1,741 monthly. The recovery is uneven: Midwest and coastal markets are posting 2% to 3.5% annual growth, while Sun Belt markets continue to work through oversupply. As the pipeline thins, CBRE and others project positive rent growth to return to high-supply markets in late 2026 and into 2027.
### **Investment Volume Is Recovering**
Apartment transaction volume reached $165.5 billion in 2025, up 9.4% year over year and above the 15-year annual average of $155 billion. Institutional and private investors are returning to the market, drawn by the combination of reduced asset prices and improving fundamentals. Assets are trading 20% to 30% below their 2022 peak valuations while replacement costs have risen nearly 39% since 2020, creating what many investors view as a compelling entry window.
## **What This Means for Investors: How to Navigate the Current Environment**
Periods of stress in one segment of the market are often the best buying opportunities in another. Here is how to think about the current environment as an active investor. For a full framework on evaluating deals in any market condition, use our [free multifamily deal analyzer](https://rodkhleif.com/deal-underwriting-tool/) and read our [complete underwriting guide](https://rodkhleif.com/multifamily-underwriting-guide/).
### **Avoid These Traps**
- Floating rate bridge debt without a clear and verified refinancing path.
- Deals in high-supply Sun Belt submarkets underwritten to aggressive rent growth assumptions
- Thin DSCR at acquisition. If the deal only works at 1.20x DSCR with rates at 6%, it fails at 6.5%. Underwrite to at least 1.30x to 1.35x in today’s environment.
- Sellers retrading on cap rate. Make sure you are buying at a cap rate that reflects current market conditions, not 2021 peak pricing.
- Ignoring operating expense trends. Insurance, taxes, and management costs have all increased materially. Rebuild expenses from scratch using current data, not the seller’s T-12 from two years ago. See our [due diligence guide](https://rodkhleif.com/a-comprehensive-guide-to-multifamily-due-diligence/) for what to verify before closing.
### **Prioritize These Strategies**
- Agency or fixed-rate financing on stabilized assets. Agency debt (Fannie Mae and Freddie Mac) continues to perform near zero delinquency because of conservative underwriting standards. If your deal qualifies, use it. Read our full [multifamily financing guide](https://rodkhleif.com/multifamily-financing-complete-guide/) for a complete comparison of loan types.
- Value-add acquisitions in supply-constrained markets. The strongest opportunity in the current cycle is acquiring properties below replacement cost in markets with limited new supply. The gap between acquisition cost and replacement cost is at 12-year highs in many markets. See how to evaluate a genuine [value-add opportunity](https://rodkhleif.com/value-add-opportunity-what-does-it-mean-and-should-i-consider-it/) before committing to a deal.
- Class B and workforce housing in strong employment markets. These assets have demonstrated the most consistent occupancy performance through the current cycle. They attract a broad renter base and are less exposed to lease-up competition from new luxury deliveries.
- Conservative capital stack structuring. Keep LTV at 65% to 70% on acquisitions. Maintain meaningful cash reserves post-closing. Understand every layer of your [capital stack](https://rodkhleif.com/financing-your-deal-understanding-the-capital-stack/) and how it performs under stress.
- Northeast and Midwest market focus. Chicago, New York, Minneapolis, Kansas City, Philadelphia, and Columbus are all posting positive rent growth with limited competitive supply. These markets are not as exciting on the way up, but they protect capital on the way down.
### **Distressed Opportunity Buying**
A subset of current delinquency stress represents genuine buying opportunity. Motivated sellers, lenders disposing of REO assets, and borrowers facing maturity defaults are creating acquisition opportunities at prices not seen since 2012. Assets in fundamentally sound locations with fixable operational issues or capital structure problems can be acquired well below replacement cost. The [BRRRR strategy applied to multifamily](https://rodkhleif.com/brrrr-method-for-multifamily-investors/) is particularly well-suited to this environment: acquire a distressed asset, stabilize it, and refinance into permanent agency debt once performance is established.
## **How to Underwrite for the Current Environment**
The most important protection against delinquency as a borrower is conservative underwriting at acquisition. Here are the specific benchmarks that matter most right now. Our detailed [step-by-step underwriting guide](https://rodkhleif.com/multifamily-underwriting-guide/) covers each of these in depth.
**Metric****Current Recommendation****Why It Matters Now**DSCR at acquisition1.30x to 1.35x minimumProvides buffer if rates rise or NOI underperformsLTV65% to 70% maximumReduces refinancing risk if values soften furtherExit cap rate assumptionEntry cap plus 0.5% to 1.0%Conservative exit prevents overpaying on entryExpense ratio (Class B)48% to 55% of EGIAccounts for insurance and tax increasesVacancy assumption8% to 10% in high-supply marketsReflects current conditions, not 2022 peakRent growth (Year 1)0% to 1% in Sun Belt, 2% to 3% in constrained marketsMatches current market realityReserves per unit per year$500 to $750 minimumHigher given aging stock and deferred maintenance trendsRate cap (if floating)Fully budgeted at current market ratesRate caps expired on many 2021 bridge loans
Before every acquisition, run a downside scenario. What does the deal look like if vacancy is 5 percentage points higher than your base case? What if rents are flat for two years? What if you need to refinance in a 7.5% rate environment? If the deal cannot survive those conditions, you are taking on more risk than the returns justify. Use the [free cap rate calculator](https://rodkhleif.com/cap-rate-calculator/) to quickly stress test valuations across different NOI and cap rate assumptions.
## **The Opportunity Hidden in the Stress**
I have been investing in real estate for over 40 years and through multiple downturns. Every period of elevated stress contains the seeds of the next great buying opportunity. The pattern is consistent: stress concentrates in the most aggressively structured deals, creates forced sellers and motivated lenders, and sets up entry points for well-capitalized buyers with long-term conviction.
The current multifamily environment fits that pattern precisely. The CMBS delinquency stress is real and concentrated in 2021 to 2022 bridge loan vintages. The operators who bought right, financed conservatively, and maintained adequate reserves are not in the headlines. They are operating their assets, collecting rent, and in many cases positioning to acquire from the distressed sellers now emerging.
The structural case for multifamily is unchanged and arguably stronger than pre-2020:
- Homeownership is less [affordable](https://rodkhleif.com/most-affordable-rental-markets/) than at any point in modern history, keeping millions of households in the rental market
- New supply is contracting sharply, setting up a supply-demand rebalancing that should drive vacancy lower and rent growth higher through 2027 and 2028
- Apartment investment volume returned above the 15-year average in 2025, confirming that institutional and private capital continues to view multifamily as the most resilient commercial real estate asset class
- Asset prices are 20% to 30% below 2022 peaks while replacement costs are 39% higher, creating a fundamental value gap that rewards buyers who can underwrite accurately
What matters now is discipline: buying in the right markets, with the right financing structure, at the right price. That starts with education and accurate deal analysis.
## **Final Thoughts From Rod Khleif**
I want to be honest with you about what this data means. Multifamily mortgage stress is real. The CMBS delinquency rate at 7.15% is not something to dismiss. Investors are losing properties they bought with optimistic underwriting and aggressive financing structures. That is a serious outcome for those individuals.
But this stress does not change the long-term fundamentals of multifamily investing. It confirms them. The investors who are struggling today are the ones who violated the principles that have always separated lasting success from costly mistakes: conservative underwriting, adequate reserves, sensible leverage, and honest due diligence.
If you are building a multifamily portfolio, or want to start, the current environment is an invitation to do it right. [Download my free book](https://rodkhleif.com/lcfa-ebook/) on creating lifetime cash flow through multifamily, join my next [Multifamily Bootcamp](https://rodkhleif.com/bootcamp/), or apply for the [Warrior mentorship program](https://rodkhleif.com/rod-khleif-coaching-program/) where we work through live deals, real underwriting, and the exact frameworks that protect you in any market cycle.
**Categories:** Blog, Real Estate
**Tags:** multifamily investing, multifamily real estate, Real Estate Course, real estate syndication
---
### [Multifamily Deal Analysis: We Lost a $65M Deal in Savannah](https://rodkhleif.com/we-lost-a-deal/)
**Published:** January 14, 2025
**Author:** Graciela
**Content:**
## **The $65M Savannah Deal That Got Away: Lessons in Multifamily Deal Analysis and Conservative Investing**
When it comes to multifamily deal analysis, staying disciplined in underwriting and risk assessment is crucial for long-term success. While we actively pursue opportunities in Savannah, Georgia, one recent deal slipped through our fingers—but not for lack of effort. During our acquisition pipeline meeting, our team identified a 372-unit portfolio with a $65 million whisper price. The deal had strong potential, but after in-depth underwriting, due diligence, and financial modeling, we determined it wasn’t worth the risk. This breakdown of the multifamily deal analysis will show why we walked away, the underwriting assumptions we made, and what investors should always look for when evaluating opportunities. ## **Multifamily Deal Analysis**
We’ve talked about how much we like Savannah, Georgia, and we’ve been actively pursuing deals in the area. One recently slipped through our fingers, and we thought you might like to hear about it. Our acquisition team brought this opportunity to our attention during our standing pipeline meeting, mentioning that the “whisper price” was $65 million. These meetings always begin with a visual review of the property. We check the location, nearby amenities, and crime levels. We also evaluate the building’s appearance. Finally, we look at unit sizes, bedroom types, and washer/dryer hookups. If the property passes the initial review, we move forward with underwriting. ## **Property Overview**
The deal included 372 units across three properties. This offered some savings, but not as much as if they were all in one place. The buildings were built in the late 1980s to early 1990s. They had $38.5 million in fixed debt. The interest rate was 2.71%, and there are seven years left on the loan. During due diligence, we identified several capital expenditure (CAPEX) concerns: - All buildings needed new roofs, a significant cost given their 30+ year age.
- 16 units were in the process of being rebuilt after a fire, adding complexity to the deal.
- While most apartments had been renovated, 30-50% still needed additional work.
- Given these factors, we budgeted $6 million for CAPEX.
## **Underwriting the Deal**
We reached out to an independent local property manager to review T-12 expenses and recommend an achievable budget. Meanwhile, we secured insurance quotes, which came in between $1,450 and $1,650 per door, and requested an estimate of future property taxes from the city, landing at $1,600 per door. For rent growth projections, Costar estimated 3-5% annually for the next five years. We incorporated this data into our model and made the following key adjustments: - Increased expenses by 8% to account for inflation and potential operational inefficiencies.
- Factored in a 7.7% interest rate on additional financing beyond the assumable debt.
- Modeled an exit cap rate of 5.0%, slightly above Costar’s projection of 4.8% in five years.
When buyers get excited about a deal, there’s a temptation to be overly optimistic. Our experience has taught us that erring on the side of caution produces better risk-adjusted returns. ## **Competitive Bid Process**
The first key date in any deal is the initial offer deadline. We were told that 25 groups were reviewing the deal and likely to submit offers. The highest bids would advance to “best and final”, where the seller squeezes buyers for every last dollar. We settled on an offer of $58 million, a number we believed would deliver solid returns with minimal risk. ### **You Can See the Returns That Our Model Delivers**
 At the best and final breakpoint (yellow) and at $62 million, the most probable accepted price, our model produced the following internal rate of return (IRR) estimates: - **$58M offer: Solid IRR with low risk**
- **$62M offer: 12.5% IRR, likely not attractive to investors**
Clearly, the eventual buyer, if they plan to market this deal to investors, won’t attract capital with a 12.5% IRR. To make the deal look better, they will likely market an IRR in the 15-17% range. The only way to reach those numbers is to assume higher revenue growth and lower expenses—assumptions we weren’t comfortable making. Investors should always ask syndicators: - **What assumptions were used to achieve these projected returns?**
- **Are revenue growth and exit pricing realistic?**
- **How do operating expenses compare to market norms?**
Higher **projected returns always come with higher risk**, and we prefer to stay disciplined in our underwriting. ## **Why We Walked Away**
Our close rate on deals is very low, and that’s by design. We’re okay missing out on deals because we prioritize capital preservation and risk-adjusted returns over just adding properties to our portfolio. - **We won’t overpay based on aggressive projections.**
- **We only acquire deals that align with our conservative investment approach.**
- **We ensure every acquisition meets our strict underwriting principles.**
**Savannah remains a market we like**, and we will continue evaluating opportunities. **But not at the expense of responsible investing.**## **Final Thoughts**
The Savannah deal illustrates why conservative underwriting matters. It’s easy to get caught up in bidding wars and market hype, but overpaying for deals rarely ends well. - **25% of tenants are delinquent on rent**, making rent growth projections risky.
- **Over $100 million in back rent is owed**, affecting landlord cash flow.
- **Foreclosures in the market are rising**, creating additional uncertainty.
- **Developers and investors are becoming cautious**, making future liquidity uncertain.
If the right deal comes along, we’ll **move quickly**, but we will **never stretch our numbers to make a deal work**. For investors, this serves as a reminder to carefully evaluate underwriting assumptions, question projections, and prioritize downside protection.
Macro pressure shows up in the data; one signal worth tracking is [multifamily mortgage delinquency](https://rodkhleif.com/multifamily-mortgage-delinquency/).
Recovering from a loss like this is its own discipline; here is [how to develop resilience as a real estate entrepreneur](https://rodkhleif.com/how-to-develop-resilience-as-a-real-estate-entrepreneur/).
**Categories:** Blog, Real Estate
**Tags:** multifamily investing, multifamily real estate, Real Estate Course
---
### [Most Affordable Rental Markets in 2025](https://rodkhleif.com/most-affordable-rental-markets/)
**Published:** June 10, 2025
**Author:** Graciela
**Content:**
In today’s U.S. housing market, renters face relentless pressure from rising home prices and higher costs of living, even though new supply of rental units has finally caught up in some regions. As of April 2025, the [national median asking rent price](https://www.realtor.com/research/april-2025-rent/?utm_source=chatgpt.com) stood at $1,699. This has shown a slight $5 uptick month-over-month but down 1.7 percent year-over-year from last spring . Meanwhile, the [national rental vacancy rate](https://www.census.gov/housing/hvs/current/index.html?utm_source=chatgpt.com) climbed to 7.1 percent in Q1 2025, its highest level since 2018, offering a rare window of relief for affordable housing seekers .
In this deep dive, we will look at five metro areas where housing costs are lowest for renters. We will examine each real estate market’s vacancy rates, rent trends over the years, and cost-of-living factors. By the end of this article you should have a better idea of the best markets to buy real estate in 2025.
[](https://www.realtor.com/research/april-2025-rent/?utm_source=chatgpt.com)## **Why Does Affordability in Rental Units Matter?
Understanding affordable rental markets isn’t just about finding a cheap apartment. It’s a strategic lens for investors and renters alike to balance cash flow, risk, and long-term growth in the broader real estate market:
- **Lower Barrier to Entry** for investors means acquisition prices better align with achievable cap rates in stable metros.
- **Reduced Tenant Turnover** occurs when rents stay in line with wages, minimizing vacancy costs and demolition of rental income.
- **Resilience Against Higher Costs** as inflation and energy expenses rise, metros with modest housing costs offer more predictable long-term performance.
- **Value-Add Opportunities** abound in markets where basic rents are low but employment growth remains strong. This makes targeted renovations and premium upgrades lucrative.
## **Top 5 Affordable Rental Markets
### **1. Oklahoma City, OK
- **Median Rent:** $994 (April 2025)
- **Rent-to-Income Ratio:** Roughly 16.7 percent of median renter income
- **Vacancy Rate:** Approximately 8.6 percent (South region average)
- **Why It’s Affordable:** A diversified local economy anchored by energy, aerospace, and healthcare keeps job growth steady while construction of new rental units outpaces demand. Cost-of-living in OKC remains 15 percent below the national average, cushioning residents against higher costs elsewhere. [Source.](https://www.census.gov/housing/hvs/files/currenthvspress.pdf?utm_source=chatgpt.com)
### 2. Austin, TX – Round Rock ,TX – San Marcos, TX
- **Median Rent:** $1,470 (April 2025)
- **Rent-to-Income Ratio:** About 17.2 percent
- **Vacancy Rate:** Roughly 8.6 percent (South region average)
- **Why It’s Affordable:** Despite its reputation as a tech hub, aggressive permitting of multifamily developments has tempered rent growth. The metro’s sustained inflow of remote workers and startups delivers long term tenant demand and steady home price appreciation. Home prices are projected to rise 3.7 percent this year without the extreme rent spikes seen in other tech markets. [Source](https://www.census.gov/housing/hvs/files/currenthvspress.pdf).
### **3. Columbus, OH
- **Median Rent:** $1,210 (April 2025)
- **Rent-to-Income Ratio:** Around 18.0 percent
- **Vacancy Rate:** Approximately 7.6 percent (Midwest region average)
- **Why It’s Affordable:** With Ohio State University as its anchor and a growing finance sector, Columbus has a great combination of stable rental unit absorption with modest home price gains. The year-over-year home-price growth has been 3.4 percent. This plus a strong tenant base and sensible zoning create a dependable pipeline of new inventory without overheating. [Source](https://www.census.gov/housing/hvs/files/currenthvspress.pdf).
### **4. Raleigh, NC – Cary, NC
- **Median Rent:** $1,489 (April 2025)
- **Rent-to-Income Ratio:** Roughly 18.2 percent
- **Vacancy Rate:** 9.0 percent, one of the highest among growth metros
- **Why It’s Affordable:** Known as the ‘Research Triangle,’ its booming life-science and tech employment drives demand, yet recent multifamily completions have lifted vacancy rates. That supply surge gives renters leverage and investors a chance to add value through interior upgrades and amenity enhancements. [Source](https://www.realtor.com/research/top-rental-market-college-graduates-2025/).
### **5. Minneapolis, MN -Bloomington, WI
- **Median Rent:** $1,497 (April 2025)
- **Rent-to-Income Ratio:** Approximately 18.5 percent
- **Vacancy Rate:** About 7.6 percent (Midwest region average)
- **Why It’s Affordable:** A diversified economy spanning healthcare, retail, and manufacturing shields the Twin Cities from ‘boom-bust cycles.’ Vacancy rates have ticked up as new units come online, softening rent growth year over year. [Zillow’s rent index](https://www.zillow.com/home-values/102001/united-states/) shows a 3.4 percent increase nationally but flat to modest gains here .
## **Deep Dive Into Key Metrics
To evaluate any metro’s fundamentals, focus on these core indicators:
1. ### **Year-Over-Year Rent Trends
Nationally, median asking rent has eased 1.7 percent year-over-year even as it remains 20.8 percent above pre-pandemic 2019 levels . This cooldown signals an inflection point in the rental real estate market, where affordability is beginning to return.
2. ### **Vacancy Rates
A national rental vacancy rate of 7.1 percent in Q1 2025 marks the highest vacancy since mid-2018 . Regionally, the South leads with an 8.6 percent vacancy, followed by the Midwest at 7.6 percent, the West at 5.9 percent, and the Northeast at 5.1 percent . Higher vacancy rates often give tenants more power to negotiate. This leads to slower rent growth, which is important in affordable housing markets.
3. ### **Home Prices & Cost of Living Dynamics
Home prices are forecast to rise 3.7 percent in 2025, while shelter costs in the consumer price index continue to climb despite rent pressures moderating . In metros where home-price growth outpaces rent hikes, investors can pursue 1031 exchange strategies to roll gains into larger assets without sacrificing yield.
4. ### **Supply of Rental Units
New multifamily completions have surged, especially in Sun Belt metros. Zillow projects multifamily rent growth of just 1.6 percent over 2025, a signal that higher supply is finally reining in rents .
## **Investment Strategies for Affordable Markets
Finding value in affordable metros demands rigorous due diligence and a multifaceted approach:
- **Stress Test Your Projections:** Model scenarios with occupancy dips of 5 percent, expense inflation of 10 percent, and cap-rate expansion of 50 basis points.
- **Conservative Leverage:** Aim for loan-to-value ratios no higher than 65 percent on stabilized assets and 75 percent on value-add plays to preserve cash flow during downturns.
- **Capitalize on Tax Advantages:** Use cost segregation to front-load depreciation and shield cash flow, and plan 1031 exchanges for seamless portfolio growth.
- **Execute Value-Add Initiatives:** Focus on basic interior renovations, like modernizing kitchens and bathrooms, or improving common areas to justify rent bumps in affordable housing stock.
- **Align Hold Period With Cycles:** A 5-7 year hold balances equity growth from cap-rate compression against cyclical risk. Track vacancy rates and home-price momentum to time any refinance or sale.
### **Key Takeaways About Best Housing Markets to Buy Real Estate**
1. **Identify Target Metro Areas** using tools like the Realtor.com Rental Report and Zillow’s Observed Rent Index to pinpoint metros with low rent-to-income ratios.
2. **[Underwrite](https://rodkhleif.com/commercial-real-estate-underwriting-tool/) Deals Weekly** to sharpen your market sense. Evaluate at least two properties each week, factoring in local vacancy data and cost of living indexes.
3. **Build Local Relationships** with brokers, property managers, and municipal planners to uncover off-market opportunities where rental units trade below replacement cost.
4. **Leverage Technology** such as market analytics platforms for real-time tracking of home-price changes, rental listings, and vacancy trends.
5. **[Raise Capital](https://rodkhleif.com/free-raising-capital-masterclass/) Strategically** by illustrating how your chosen metro’s affordability metrics translate into stable long-term returns and resilient cash flow for investors.
Center your strategy on metros where rent remains a manageable share of income. This will help you not only tap into affordable housing demand but also unlock sustainable equity growth. Make sure you underwrite conservatively, stay alert to vacancy rate shifts, and align your exit strategy with broader housing market cycles.
Ultimately, the most affordable rental markets in 2025 aren’t about the ones with the lowest rents, they’re the resilient metros where rental units, vacancy rates, and home prices meet to deliver long-term opportunities for both investors and tenants alike.
*Disclaimer: This article was created with the assistance of AI and reviewed by Rod Khleif and his team to ensure accuracy and relevance.*Affordable markets are a core part of the playbook for [how to recession proof your multifamily portfolio](https://rodkhleif.com/how-to-recession-proof-your-multi-family-portfolio/).
Even in strong markets, deals can fall apart fast; read about the time [we lost a $65M deal in Savannah](https://rodkhleif.com/we-lost-a-deal/) as a sobering reminder.
**Categories:** Blog, Finding Deals, Real Estate
---
### [The Importance of Tenant Screening in Real Estate](https://rodkhleif.com/the-importance-of-tenant-screening-in-multifamily-real-estate/)
**Published:** November 26, 2025
**Author:** Matt Rohde
**Content:**
Ask any experienced landlord or multifamily operator what keeps them up at night, and you’ll hear the same thing over and over: tenants can make or break a property. The right residents pay on time, respect the community, and stick around for years. The wrong residents drain your time, your money, and your sanity. Tenant screening is about risk management, asset protection, and brand protection all rolled into one. No matter if you own one rental house or a 200-unit complex, a good screening process is very valuable.
## Why Tenant Screening Matters So Much
Tenant screening is the process of evaluating prospective renters to decide whether they’re a good fit for your property and your community. At a surface level, it’s about credit scores and background checks. At a deeper level, it’s about protecting cash flow, your asset, and the resident experience.
When you cut corners on screening, problems rarely show up on Day 1. They show up months later as late payments, noise complaints, property damage, and surprise vacancies. When you tighten up tenant screening in real estate, you dramatically reduce those headaches and stabilize your investment.
## The Hidden Costs of Skipping Proper Screening
It’s easy to see screening as a “friction point” that slows lease-ups, especially when you’re staring at vacant units. But the real cost usually comes from moving too fast, not from slowing down to screen well.
**Poor screening can lead to:**
- **Delinquency and bad debt**
One chronically late or non-paying tenant can wipe out months of profit, especially when you factor in court costs and legal fees.
- **Property damage and higher CapEx**
Residents who don’t respect the unit or common areas create more wear and tear, more turns, and more unexpected capital expenses.
- **Higher turnover and vacancy**
Problem tenants drive away good tenants, which means more move-outs, more marketing costs, and lost rent.
- **Legal and compliance risk**
Failing to follow a consistent, compliant screening process can open the door to Fair Housing complaints and legal exposure.
When you add those factors up, the “cheap” decision to relax standards usually ends up being the most expensive one you can make.
## How Tenant Screening Protects Your Cash Flow
Cash flow is the lifeblood of any rental property. Tenant screening in real estate is one of the most direct levers you have to keep it healthy and predictable.
**A strong screening process improves cash flow in three big ways:**
1. **More on-time payments**
By verifying income, employment, and rental history, you tilt your resident base toward people who have a track record of paying on time.
2. **Lower bad debt and eviction rates**
Screening applicants is important. It helps you find people without serious issues. For example, look for those who haven’t had repeated evictions or failed to pay rent. This can save you from expensive legal problems and reduce turnover.
3. **Longer average tenancy**
Residents who are financially stable and a good fit for the community tend to stay longer, which lowers your turnover and make-ready costs.
You can’t eliminate all risk, but you can stack the odds in your favor with consistent tenant screening in real estate.
## The Core Elements of an Effective Tenant Screening Process
The best screening systems are simple, consistent, and documented. You don’t need 100 criteria; you need the right ones, applied the same way every time.
**Most strong tenant screening processes include:**
- **Clear, written rental criteria:** Income requirements, credit standards, rental history expectations, occupancy limits, and any disqualifying factors, written in plain language and applied consistently.
- **Identity verification:** Confirming that the applicant is who they say they are with a valid government-issued ID.
- **Income and employment verification:** Pay stubs, W-2s, offer letters, or bank statements to confirm that the applicant can reasonably afford the rent.
- **Credit check:** Looking not just at the score, but at on-time payments, major delinquencies, collections, or recent bankruptcies.
- **Rental history and landlord references:** Reach out to previous landlords. Check payment history, lease issues, and the unit’s condition when moving out.
- **Background check:** Screening for serious criminal history where allowed by law and in line with your written criteria.
The goal is not to judge people, but to assess risk consistently so you can protect your property and your residents.
## Balancing Risk Management With Fairness and Compliance
Tenant screening in real estate is about what you check and how you check it. Even the best standards can create issues. This happens when they are applied inconsistently. It can also occur if they discriminate against protected groups.
**A few best practices:**
- **Use the same criteria for every applicant**
Avoid “gut feel” decisions. If you require 3x rent in income, apply that standard to everyone.
- **Follow Fair Housing laws**
Federal, state, and local laws may restrict how you use certain information, like criminal history. Know the rules in your market and follow them carefully.
- **Be transparent in your criteria**
Providing written criteria up front helps applicants self-select and reduces confusion or accusations of unfair treatment.
- **Document your decisions**
Keep records of applications, screening reports, and decision notes so you can show that your process is consistent and non-discriminatory.
This is not legal advice, and you should always consult qualified counsel in your jurisdiction. But as an operator, you want your screening process to be both effective and defensible.
## Tenant Screening and the Resident Experience
It’s easy to see screening as something you do to protect yourself. But a strong tenant screening process also protects your good residents, which directly impacts your brand and your bottom line.
Good residents want to live in communities where:
- Neighbors pay on time and don’t cause constant drama.
- Common areas are respected and maintained.
- Safety and security are taken seriously by ownership.
When you treat tenant screening in real estate as a way to curate a stable, respectful community, your residents feel safer and more valued. That leads to higher satisfaction, better reviews, more renewals, and more referrals so the benefits compound over time.
## Red Flags to Watch For During Tenant Screening
While every market and property is different, certain patterns should always prompt a closer look. A red flag doesn’t automatically mean “deny,” but it does mean “slow down and verify.”
**Common red flags include:**
- **Inconsistent or unverifiable income**
Pay stubs that don’t match the job description, unverifiable employers, or no clear proof of income.
- **Gaps or contradictions in rental history**
Missing landlord information, unexplained moves, or stories that don’t line up with references.
- **Repeated late payments or prior evictions**
One rough patch years ago may not be disqualifying, but a pattern of non-payment is a major risk.
- **Reluctance to authorize screenings**
Applicants who push back on background or credit checks, or who refuse to provide required documentation.
- **Hostility or dishonesty during the process**
How someone behaves during screening often predicts how they’ll behave as a resident.
The goal is not to judge people’s past. Instead, it is to see if their behavior matches your duty to your property and neighbors.
## Using Technology to Streamline Tenant Screening
The good news: you don’t have to reinvent the wheel. Today there are many tools that make tenant screening in real estate faster, more accurate, and more consistent.
**Smart operators use:**
- Online applications that collect complete, legible information and require applicants to acknowledge your criteria.
- Integrated screening platforms that pull credit, background, and eviction history in one place.
- Automated decision frameworks where basic criteria (income, credit thresholds, etc.) are scored against your standards.
- Digital document collection for pay stubs, IDs, and rental verification forms.
Technology does not replace judgment. However, it does make the process more consistent. It also reduces manual errors. This allows your team to focus on more important conversations.
## Tenant Screening for Multifamily vs Single-Family Rentals
Tenant screening in real estate uses the same basic principles for all types of properties. However, the context is a bit different for multifamily and single-family homes.
**In multifamily, you’re thinking about:**
- Community dynamics and how a new resident will fit into a shared environment.
- Consistency across dozens or hundreds of applicants.
- Protecting the resident experience at scale.
**In single-family rentals, you may:**
- Place more weight on a resident’s ability to care for a standalone home and yard.
- Recognize that turnover is often more expensive per unit, so long-term stability is especially important.
In both cases, the core questions are the same: Can this resident afford the unit? Will they respect the space and the community? Are they likely to be a stable, positive presence?
## Building Your Tenant Screening Policy: A Simple Framework
If you don’t have a formal screening policy yet, you don’t need something elaborate to get started. You just need a clear, written framework you can refine over time.
**A simple starting point:**
1. **Define your minimum criteria**
Income multiple (2.5x–3x rent, for example), credit standards, rental history expectations, and any absolute disqualifiers allowed in your jurisdiction.
2. **Create a step-by-step checklist**
Application received → ID verified → income verified → credit and background run → rental history checked → decision documented.
3. **Train your team**
Make sure everyone involved in leasing understands the criteria, the process, and what they can and cannot say under Fair Housing rules.
4. **Review and adjust periodically**
Track delinquency, evictions, and turnover. If you’re seeing more issues than you like, tighten criteria or add additional verification steps.
Your goal is to turn tenant screening in real estate from a “gut call” into a repeatable system that protects you and your residents.
## The Bottom Line: Screening Is an Investment, Not an Obstacle
When you’re trying to fill vacancies, tenant screening can feel like a speed bump. In reality, it’s more like a guardrail that keeps you from veering off the road into expensive problems.
The importance of tenant screening in real estate comes down to this:
- It protects your cash flow by reducing bad debt and costly turnarounds.
- It protects your asset by cutting down on damage and chaos.
- It protects your brand and residents by shaping a stable, respectful community.
If you see screening as a smart investment instead of just a task, you will create a portfolio. This portfolio will be more profitable, more predictable, and much less stressful to manage.
## **FAQ: Tenant Screening in Real Estate**
### What is tenant screening in real estate?
Tenant screening in real estate means checking rental applicants. This helps you decide if they are a good fit for your property and community. It typically includes checking identity, income, credit history, rental history, and background so you can assess risk before signing a lease.
### Why is tenant screening so important for landlords and investors?
Tenant screening is critical because your residents directly impact cash flow, property condition, and reputation. Strong screening reduces late payments, evictions, property damage, and turnover, which means more predictable income and a more stable community.
### What happens if I don’t screen tenants properly?
Skipping or rushing tenant screening can lead to chronic delinquency, costly evictions, and higher repair bills. It can also create conflict in the community, causing good tenants to move out and driving up vacancy and marketing costs.
### What should be included in a solid tenant screening process?
A solid tenant screening process usually includes: clear written criteria, ID verification, income and employment verification, credit checks, rental history verification, and a background check (where allowed). The key is to apply these steps consistently to every applicant.
### How do I screen tenants step by step?
To screen tenants effectively:
1. Share your written criteria upfront (income multiple, credit standards, rental history, occupancy limits).
2. Collect a complete application with ID, employer info, income docs, and rental history.
3. Verify identity using a valid government-issued ID.
4. Verify income and employment with pay stubs, W-2s, offers, or bank statements (and call the employer if needed).
5. Run a credit check to review score, payment patterns, collections, and major derogatories.
6. Run a background/eviction check where allowed by law, following your written criteria.
7. Contact prior landlords to confirm payment history, lease violations, and condition at move-out.
8. Compare the results to your criteria, document the decision, and communicate approval or denial in a consistent, professional way.
### How does tenant screening protect my cash flow?
Tenant screening in real estate helps you select residents who can reasonably afford the rent and have a history of paying on time. This leads to fewer missed payments, fewer evictions, and longer tenancies. All of this helps keep your cash flow steady and your expenses low.
### How do I stay compliant with Fair Housing laws when screening tenants?
To stay compliant, use the same written criteria for every applicant and avoid decisions based on any protected class (race, religion, family status, etc.). You should also understand federal, state, and local rules around how you can use credit, criminal, and rental history data and document your decisions in case they’re ever questioned. Always consult qualified legal counsel for guidance in your market.
### What are common red flags to watch for during tenant screening?
Common red flags include unverifiable income, large gaps or inconsistencies in rental history, repeated evictions or chronic late payments, and reluctance to authorize credit or background checks. Hostile or dishonest behavior during the application process can also signal problems later on.
### Does tenant screening look different for multifamily vs. single-family rentals?
The core principles are the same, but the context is slightly different. In multifamily, you’re more focused on community fit and consistency across many units, while in single-family rentals you may place extra weight on long-term stability and care of the home and yard. In both cases, you’re still asking: can they pay, and will they respect the property and neighbors?
### Can technology help streamline tenant screening?
Yes. Online applications, integrated screening platforms, and digital document collection can make tenant screening in real estate faster and more consistent. These tools help standardize your process, reduce manual errors, and free up your team to focus on higher-value conversations with qualified applicants.
### How do I create a tenant screening policy for my properties?
Start by defining clear minimum criteria for income, credit, rental history, and disqualifying factors allowed in your jurisdiction. Turn that into a step-by-step checklist for your team to follow for each applicant. This includes application, verification, reports, decision, and documentation. Review your results periodically and tighten or adjust your criteria based on real-world outcomes.
Strong screening protects revenue; here are [ten ways to increase revenue in an apartment investment](https://rodkhleif.com/ten-ways-to-increase-revenue-in-an-apartment-investment/) once your operational basics are in place.
Scaling these practices across many properties is the heart of [the syndication business](https://rodkhleif.com/the-syndication-business/).
**Categories:** Blog, Property Management, Real Estate
---
### [How to Use a 1031 Exchange in Real Estate Investing](https://rodkhleif.com/using-the-1031-exchange-to-maximize-tax-benefits-in-real-estate-investing/)
**Published:** January 12, 2026
**Author:** Matt Rohde
**Content:**
A 1031 exchange can be one of the most useful tax-planning tools in real estate investing because it can let you defer capital gains taxes when you sell an investment property and reinvest into another qualifying property. The tradeoff is complexity: you have strict deadlines, strict handling of funds, and specific rules about what qualifies. Miss one step and you can blow the deferral. This 2026 guide covers how 1031 exchanges actually work in practice, the rules that matter most, and the question investors keep asking: can you 1031 into a real estate fund?
## What a 1031 exchange is
A 1031 exchange (often called a like-kind exchange) generally allows you to defer recognition of gain when you exchange real property held for investment or business use for other like-kind real property held for investment or business use. The IRS has a plain-language overview here: https://www.irs.gov/businesses/small-businesses-self-employed/like-kind-exchanges-real-estate-tax-tips It is usually tax deferral, not tax forgiveness. The deferred gain is embedded into the basis of the replacement property and may be recognized later if you sell without doing another exchange. Many long-term investors use 1031 exchanges to keep more capital compounding and to reposition portfolios over time. ## What qualifies in 2026: investment real estate, not personal use
To qualify, both the relinquished property (the one you sell) and the replacement property (the one you buy) must be held for investment or business use. Personal-use property (like a primary residence) does not qualify. For real estate, like-kind is broad: it is generally real property for real property, as long as it is held for investment or business purposes. The IRS summary of core rules and timing is in FS-08-18: https://www.irs.gov/pub/irs-news/fs-08-18.pdf In the real world, that means investors commonly exchange between different types of real property: single-family rentals into multifamily, multifamily into retail, land into industrial, and so on, assuming the hold intent and facts support investment use. ## The two deadlines that drive everything
Most failed exchanges fail because the calendar was underestimated. - 45 calendar days to identify replacement property(ies) after the sale of the relinquished property
- 180 calendar days to receive (close on) the replacement property (or by the tax return due date, including extensions, whichever is earlier)
Those timing requirements are summarized in FS-08-18 and reinforced in the Form 8824 instructions. FS-08-18: https://www.irs.gov/pub/irs-news/fs-08-18.pdf and Instructions for Form 8824: https://www.irs.gov/pub/irs-pdf/i8824.pdf ## Identification rules: how you “name” replacement properties
Within the 45-day identification window, you must identify replacement property in writing. In practice, most investors follow one of these common identification rules described in IRS guidance: - Three-property rule: identify up to three properties, regardless of value
- 200% rule: identify any number of properties as long as total value does not exceed 200% of the relinquished property’s value
- 95% rule: identify beyond those limits if you acquire at least 95% of the total value identified
These rules exist so an exchange cannot be used as an open-ended “option” on unlimited properties while still deferring tax. If you are unsure how to draft a compliant identification, ask your qualified intermediary and tax advisor before day 45, not on day 44. ## Why the qualified intermediary matters
In a standard deferred exchange, you generally cannot touch the sale proceeds. If you take receipt of funds (even briefly), you can trigger constructive receipt and disqualify the exchange. A qualified intermediary (QI) is typically used to hold the sale proceeds and facilitate the exchange steps so you do not receive the funds directly. The IRS discusses qualified intermediaries in its 1031 guidance and educational materials: https://www.irs.gov/pub/irs-news/fs-08-18.pdf Practical 2026 tip: choose your QI before you close your sale. Do not wait until the week of closing, because the exchange paperwork and settlement instructions need to be correct from the start. ## A practical step-by-step workflow
Here is a realistic workflow that keeps investors out of trouble: 1) Decide early if the sale will be a 1031 exchange and confirm the property qualifies as investment/business real estate. 2) Select your qualified intermediary before closing the sale. Coordinate settlement instructions so proceeds go to the QI, not to you. 3) Close the sale of the relinquished property. 4) Identify replacement property(ies) in writing by day 45. 5) Underwrite and conduct due diligence fast and conservatively. In 2026, lenders, insurers, and tax reassessments can change the economics quickly. Verify what is real, not what is projected. 6) Close on the replacement property by day 180. Make sure closing docs match the exchange structure and that the QI is involved appropriately. 7) Report the exchange on your tax return (commonly using Form 8824) and retain documentation. Form 8824 is here: https://www.irs.gov/pub/irs-pdf/f8824.pdf ## How to avoid tax “boot” (the part that surprises people)
If you want full tax deferral, many investors aim to follow these general principles: - Reinvest all net proceeds into the replacement property(ies)
- Buy replacement property of equal or greater value than what you sold
- Replace debt (or contribute equivalent cash) if the replacement financing is lower
If you receive cash back, reduce debt without replacing it, or receive non-like-kind property, that can create taxable boot. This is where strong coordination between your CPA, lender, closing agent, and QI matters. ## Can you 1031 into a real estate fund?
This is one of the most common questions investors ask: can you 1031 into a real estate fund? Most of the time, not directly. Many “real estate funds” sell interests in an entity (an LLC or partnership). Partnership interests are generally excluded from Section 1031 treatment, and most fund interests are treated as securities or entity interests rather than direct ownership of real property. The IRS fact sheet summarizing the framework and common exclusions is FS-08-18: https://www.irs.gov/pub/irs-news/fs-08-18.pdf That said, investors sometimes mean “fund” in a looser way: they want diversification and professional management instead of buying a single property. In that context, there are structures that can feel fund-like but are designed so the investor is acquiring an interest that is treated as real property for 1031 purposes. The most common example is a Delaware Statutory Trust (DST). IRS Revenue Ruling 2004-86 is often cited in DST-related discussions because it addresses tax treatment of certain DST arrangements in a way that can support 1031 exchange use when structured properly. Rev. Rul. 2004-86: https://www.irs.gov/pub/irs-drop/rr-04-86.pdf Some investors also explore tenant-in-common (TIC) structures. A TIC interest is considered a qualifying real property interest based on how it is set up and managed. This is not a DIY decision. If your goal is “1031 into a real estate fund,” you should ask your advisors to confirm what you are buying: a qualifying real property interest, or an entity interest that does not qualify. If you want a deeper walkthrough tailored to investors, Rod’s [1031 exchange FAQ](https://rodkhleif.com/1031-exchange-faq-everything-investors-need-to-know/) covers the basics and common pitfalls in plain English. ## Can you 1031 into a REIT?
Generally, a 1031 exchange is for real property, not for REIT shares, because shares are securities rather than like-kind real property. Some investors discuss longer-term planning strategies involving a later Section 721 exchange (often called an UPREIT strategy), but that is not the same as a 1031 exchange and it changes what you own and how you exit. Treat any “1031 to REIT” path as advanced planning that requires specialized tax and legal advice. ## Reverse exchanges: when you need to buy first
If you find the right replacement property before you sell your current property, you may be able to use a reverse exchange. The IRS provided a safe harbor framework in Revenue Procedure 2000-37: https://www.irs.gov/pub/irs-drop/rp-00-37.pdf Reverse exchanges can be useful in competitive markets, but they are more complex, usually more expensive, and require tight coordination among your QI, counsel, lender, and closing team. ## 2026 reality check: due diligence matters more than the tax strategy
It is easy to get so focused on completing the exchange that you rush the replacement property. That is how investors defer taxes and buy a problem. In 2026, a careful approach is essential. First, check income and collections. Next, verify expenses, especially for insurance and taxes. Then, confirm capital expenditure needs with real bids. Finally, assess debt terms realistically. If you are investing in multifamily properties, strong buying fundamentals are more important than a perfect tax strategy. If you’re buying apartments as your replacement property, Rod’s [complete guide to buying an apartment building](https://rodkhleif.com/buying-an-apartment-building-complete-guide/) is a solid companion resource for the operational and underwriting side of the decision. ## Common mistakes that break exchanges
- Setting up the exchange after closing the sale (too late)
- Missing the 45-day identification deadline
- Identifying properties improperly or too vaguely
- Receiving funds directly (constructive receipt)
- Buying a non-qualifying asset (common when people try to 1031 into a “fund”)
- Failing to close within 180 days due to financing, title, or inspection delays
For a plain-English example of how deferral can keep more capital working, Rod’s article on [how a 1031 exchange can save you thousands](https://rodkhleif.com/how-a-1031-exchange-can-save-you-thousands/) helps frame the practical upside. ## Final Thoughts
A 1031 exchange can be a powerful portfolio tool because it can keep more capital compounding and allow you to reposition holdings without an immediate tax hit. The way to use it effectively in 2026 is process discipline: decide early, use a qualified intermediary, respect the 45-day and 180-day deadlines, avoid boot surprises, and do conservative due diligence on the replacement property. And if you are asking “can you 1031 into a real estate fund,” remember the key distinction: most funds sell entity interests that do not qualify, but certain structures that feel fund-like may be designed to provide a qualifying real property interest when structured and vetted correctly with professional advice. *Disclaimer: This article is for educational purposes only and is not tax, legal, or investment advice. Consult qualified professionals for guidance on your specific situation. This article was written with the help of AI and reviewed by Rod and his team.* ## **FAQ: How to Use a 1031 Exchange in Real Estate Investing (2026)**
**Can I do a 1031 exchange on my primary residence?
Usually no. A 1031 exchange is generally for real property held for investment or business use. Primary residences typically don’t qualify.
**What is the 45-day rule in a 1031 exchange?
After you sell your relinquished property, you generally have 45 calendar days to identify your replacement property(ies) in writing. Missing this deadline can disqualify the exchange.
**What is the 180-day rule in a 1031 exchange?
You generally have 180 calendar days from the sale of the relinquished property to close on the replacement property (or by your tax return due date including extensions, whichever is earlier).
**How many replacement properties can I identify?
Most investors use the three-property rule (up to three properties regardless of value) or the 200% rule (any number of properties as long as total value is no more than 200% of what you sold). There’s also a 95% rule for specific situations.
**Do I need a qualified intermediary (QI)?
In most standard deferred exchanges, yes. A QI helps prevent you from taking receipt of the sale proceeds, which can disqualify the exchange.
**What does “like-kind” mean for real estate in 2026?
For real property, like-kind is broad. It generally means exchanging investment/business real property for other investment/business real property, even if the property types differ (for example, rental house into multifamily), as long as the intent and use qualify.
**What is “boot,” and how do I avoid it?
Boot is value you receive that isn’t like-kind real estate (often cash back or debt reduction that isn’t replaced). Boot can be taxable. Many investors aim to reinvest all proceeds and purchase equal-or-greater value while replacing debt (or adding cash) to minimize boot.
**Can you 1031 into a real estate fund?
Most of the time, not directly, because many “funds” sell partnership or LLC interests, which generally don’t qualify for 1031 treatment. Some fund-like options (often structured as DSTs or certain TIC arrangements) may qualify if they are treated as real property interests, but this is highly structure-dependent and should be confirmed with tax/legal professionals.
**Can I 1031 into a REIT?
Generally no. REIT shares are securities, not like-kind real property for 1031 purposes. Some investors explore other strategies (like a later 721/UPREIT approach), but that is different from a 1031 exchange and requires specialized advice.
**What is a reverse 1031 exchange?
A reverse exchange is when you acquire the replacement property before selling the relinquished property. It can help when a great opportunity shows up first, but it’s more complex and usually more expensive to execute.
**What are the biggest mistakes investors make with 1031 exchanges?
Waiting too long to set up the exchange, missing the 45-day identification deadline, receiving funds directly, identifying properties incorrectly, assuming a “fund” qualifies without verifying structure, and failing to close within the 180-day deadline.
**What should I do first if I’m considering a 1031 exchange in 2026?
Decide early, choose your qualified intermediary before closing, confirm your replacement plan, and line up your CPA/attorney so you can move quickly within the deadlines while still doing real due diligence.
Most serious investors eventually pair tax strategy with scale; here is what [the syndication business](https://rodkhleif.com/the-syndication-business/) actually looks like.
On the operational side, see [ten ways to increase revenue in an apartment investment](https://rodkhleif.com/ten-ways-to-increase-revenue-in-an-apartment-investment/) for the income side of the equation.
**Categories:** Blog, Real Estate
**Tags:** multifamily investing, multifamily real estate, Real Estate Course
---
### [Ten Ways to Increase Revenue in an Apartment Investment](https://rodkhleif.com/ten-ways-to-increase-revenue-in-an-apartment-investment/)
**Published:** November 19, 2025
**Author:** Rod Khleif
**Excerpt:** There are numerous methods and ways to increase revenue at an apartment complex.
**Content:**
When you buy an apartment building, you’re buying a stream of income. The more you increase revenue in an apartment investment, the more freedom you create for yourself and your family.
Most people think “raise the rents” and stop there. That’s one lever, but it’s far from the only one. The best operators use multiple levers at once to increase revenue in an apartment investment without turning tenants against them or wrecking occupancy.
Let’s walk through ten proven, practical ways to increase apartment revenue and turn a good deal into a great one.
## 1. Raise Rents Strategically to Market (Not Emotionally)
Yes, we’re starting with the obvious, but you’d be shocked how many owners are hundreds of dollars below market because they’re afraid to make changes. The key is to raise rents in a strategic, data-driven, tenant-respectful way, not by guessing or suddenly slapping on huge increases.
- Pull fresh rent comps from similar properties in your submarket (same unit size, amenities, vintage).
- Identify units that are the furthest below market and prioritize them at renewal or turn.
- Use phased rent increases (for example, $75-$100 now, another $50 after an upgrade) instead of shocking tenants with a massive jump.
- Pair increases with visible improvements, paint, hallway updates, better lighting, security cameras, or minor unit upgrades, so residents feel the value, not just the cost.
Your goal is simple: close the gap to market while maintaining strong occupancy and goodwill. Done correctly, this alone can significantly increase revenue in your apartment investment.
## 2. Reduce Vacancy and Turn Time
Raising rent is pointless if units sit empty. Vacancy and slow turns are silent killers of apartment revenue. Every day a unit sits unleased is pure lost income.
To attack vacancy and turn time:
- Start marketing as soon as you receive notice to vacate. Don’t wait until the keys are in your hand.
- Use high-quality photos, a simple website or listing page, and syndicate to the major rental platforms.
- Offer easy online applications and tours (including self-guided or video tours when appropriate).
- Have a tight turn process: clear checklists for maintenance, cleaning, and inspections so units are ready fast.
- Implement resident retention strategies like renewal incentives or small loyalty perks.
A well-run building focuses as much on speed of turns and renewals as it does on rent levels. The combination dramatically increases effective revenue.
## 3. Add Pet Rent and Pet Fees (Without Becoming a Zoo)
Pet owners are often your stickiest, most grateful residents—and most are used to paying for the privilege. If your property allows pets but you’re not charging appropriately, you’re leaving money on the table.
Ideas to increase revenue:
- Charge a monthly pet rent per pet.
- Use a non-refundable pet fee on move-in instead of (or in addition to) a refundable deposit.
- Offer “pet-friendly” amenities like waste stations, small dog areas, or pet-washing stations to justify premiums.
You still want clear policies, weight/breed restrictions as needed, and strong enforcement of pet rules, but done well, pet income can become a predictable and meaningful piece of your apartment revenue.
## 4. Implement Utility Bill-Back (RUBS) and Efficiency Upgrades
If you’re still paying 100% of utilities on a “classic” all-bills-paid setup, you’re absorbing costs you don’t need to. A smart way to increase revenue in an apartment investment (while creating fairness) is to implement a RUBS (Ratio Utility Billing System) or a similar bill-back model where residents pay for their fair share of utilities.
Combine this with:
- Installing low-flow faucets and shower heads, efficient toilets, and LED lighting.
- Sub metering where feasible (water, gas, or electric) for even more accurate billing.
- Educating tenants on conservation and showing them how lower usage saves *them* money too.
Utility bill-back programs don’t just reduce expenses, they effectively shift part of the utility burden to residents, which increases NOI and the value of the property.
## 5. Upgrade Units for Value-Add Rent Premiums
One of the most powerful ways to increase revenue is to create a higher-quality product that justifies higher rents. This is the classic value-add play and it still works when done intelligently.
Consider:
- Replacing old carpet with durable LVP (luxury vinyl plank) flooring.
- Updating cabinet fronts and hardware instead of full replacements to save cost.
- Swapping outdated fixtures and lighting for modern, energy-efficient ones.
- Installing in-unit washers/dryers where plumbing and space allow (huge premium in many markets).
- Adding simple design touches like accent walls, modern backsplashes, or new countertops.
The key is to track your renovation cost vs. rent premium. If you can spend $5,000 on an upgrade and get $100+ more per month in rent, that’s a strong return and a big boost to property value.
## 6. Monetize Parking, Storage, and Common Areas
Your building is more than just units. You can often increase apartment revenue by turning “empty” or underutilized spaces into cash flow.
Options include:
- Reserved or covered parking spaces at a monthly premium.
- Paid garages or carports where feasible.
- Storage lockers or small storage rooms rented monthly.
- Bike storage, scooter parking, or equipment storage.
- Laundry rooms with card or app-based machines that you own or revenue-share with a vendor.
Walk your property with fresh eyes and ask: *What else could be providing utility and income to residents instead of just sitting there?
## 7. Offer Premium Services and “Convenience” Upsells
People pay for convenience. You don’t need to turn your building into a resort, but a few targeted premium services can increase revenue in an apartment investment with minimal effort.
These might include:
- High-speed bulk internet sold to residents at a markup.
- Smart-home upgrades (smart locks, thermostats) with a small monthly tech fee.
- Package lockers or concierge-style package handling with a modest service fee.
- Short-term furnished units (if allowed) aimed at traveling nurses, corporate renters, or digital nomads.
The goal isn’t to nickel-and-dime residents; the goal is to offer real value that they’re genuinely happy to pay a little extra for.
## 8. Tighten Collections, Late Fees, and Bad Debt Control
You can’t increase revenue if you never actually collect what’s owed. Sloppy collections and weak policies quietly drain NOI.
To tighten this up:
- Implement clear due dates, late fees, and grace periods—and enforce them consistently.
- Require online payments to make it easier for residents to pay on time.
- Work with a strong property manager or collections process to minimize long-standing balances.
- Use solid, fair [tenant screening](https://rodkhleif.com/the-importance-of-tenant-screening-in-multifamily-real-estate/) so you’re placing people who are likely to pay on time and care for the property.
Improving collections doesn’t feel as glamorous as upgrading a kitchen, but it’s one of the fastest ways to increase effective income and stabilize your apartment investment.
## 9. Rebrand, Reposition, and Improve Your Resident Profile
Sometimes the biggest revenue jump doesn’t come from changing the building—it comes from changing the kind of resident you attract. Repositioning can help you move from “C minus chaos” to “solid C+/B- workforce housing” or higher.
- Improve curb appeal with landscaping, signage, paint, and lighting so your property feels safer and more attractive.
- Clean up the tenant base over time by enforcing rules and don’t renew problem residents.
- Improve online reviews and reputation with better service and proactive communication.
- Update marketing materials to speak to your ideal resident (nurses, young professionals, families, etc.).
When you successfully reposition, you can often command higher rents, reduce delinquency, and create a community where good residents want to stay long-term.
## 10. Treat Asset Management Like a Daily Discipline, Not a Yearly Check-In
The best operators don’t “set and forget” their assets. They treat asset management like a daily discipline—constantly looking for ways to increase revenue in an apartment investment and protect what they’ve already built.
- Review rent rolls and delinquency regularly for patterns.
- Watch traffic, applications, and closing ratios to see if marketing is working.
- Adjust pricing dynamically based on demand, seasonality, and occupancy.
- Meet consistently with your property manager to discuss KPIs, challenges, and opportunities.
- Run “what if” scenarios: What if we add pet rent? What if we renovate 10 more units this quarter? What if we introduce RUBS?
Small adjustments, made consistently, can quietly add thousands to NOI and hundreds of thousands to property value over time.
## Putting It All Together: Build a Revenue Plan for Your Apartment Investment
Don’t try to do all ten things at once. Instead:
1. Audit your current property: Where are you undercharging? Where are you leaking revenue?
2. Choose 3–4 high-impact strategies to roll out over the next 6–12 months (for example: bring rents to market, launch RUBS, add pet rent, and introduce reserved parking).
3. Track your numbers before and after each change so you see exactly how much each strategy increases revenue and NOI.
4. Communicate clearly with residents, especially when you’re introducing new fees or changes—pair them with visible improvements and genuine service.
When you approach it this way, increasing revenue in an apartment investment stops being a random guess and becomes a deliberate, repeatable system you can use on every deal you touch.
Here you go—FAQ centered on the focus keyword “increase revenue in an apartment investment.”
## FAQ: Increasing Revenue in an Apartment Investment
### What’s the fastest way to increase revenue in an apartment investment?
The fastest way to increase revenue in an apartment investment is usually a combination of bringing rents closer to market and reducing vacancy/turn time. Tightening up turns, marketing units proactively, and implementing modest, data-backed rent increases often moves the needle faster than big renovation projects.
### How do I know if my rents are below market?
Start by pulling rent comps from similar properties in your submarket: same unit size, vintage, amenities, and general condition. If your average rent is 5–20% below comparable properties—and you still have decent demand—you likely have room to increase revenue in your apartment investment by moving toward market while watching occupancy and renewal rates.
### Can I increase revenue without losing good tenants?
Yes. You can increase revenue in an apartment investment without pushing out your best residents by:
- Using phased rent increases instead of one giant jump
- Pairing increases with visible improvements (lighting, security, cosmetic upgrades)
- Communicating early and clearly about changes
- Offering small renewal perks or options (like choosing between paint colors or minor upgrades)
When tenants see value and feel respected, they’re much more willing to accept higher rents.
### What value-add improvements give the best return?
High-ROI upgrades tend to be:
- LVP flooring instead of carpet
- Modern lighting and fixtures
- Refreshed cabinet fronts and hardware
- In-unit laundry where possible
- Simple kitchen/bath cosmetic upgrades (backsplash, counters, mirrors)
These improvements often support strong rent premiums and help you increase revenue in an apartment investment without blowing the renovation budget.
### How can utilities help me increase apartment revenue?
Utilities are a major lever. You can:
- Implement RUBS (Ratio Utility Billing System) or similar bill-back program where allowed
- Install low-flow fixtures and LED lighting to lower overall usage
- Submeter individual units when it’s cost-effective
This combination reduces your expenses and shifts part of the utility burden fairly to residents, effectively increasing NOI and total revenue.
### What ancillary income streams should I consider?
To increase revenue in an apartment investment beyond base rent, look at:
- Paid reserved or covered parking
- Garages and storage lockers
- Pet rent and pet fees
- Upgraded laundry (card/app-based machines)
- Bulk internet with markup
- Smart-home or “tech package” fees
Every additional $10–$50 per month per unit in ancillary income can create a big jump in property value.
### How important is tenant screening for revenue?
Very. Poor screening leads to higher delinquency, more damage, and frequent turnover, all of which crush revenue. Strong screening—consistent criteria, income and rental history verification, and clear expectations—helps you keep paying, stable residents, which supports higher rents, lower bad debt, and a healthier apartment investment overall.
### Can I increase revenue in a stabilized property, or only in heavy value-add deals?
You can absolutely increase revenue in a “stabilized” property. Even in a clean, well-run building, you can:
- Fine-tune rents to market
- Add or optimize RUBS
- Introduce new ancillary income streams
- Improve collections and late-fee policies
- Reposition slightly to attract a better resident profile
Small improvements layered together can meaningfully increase revenue in an apartment investment that’s already performing “okay.”
### How do I track whether my revenue strategies are working?
Set up a simple monthly dashboard that includes:
- Physical vs. economic occupancy
- Average rental income per unit and per square foot
- Delinquency percentage and bad debt
- Turn time and number of down units
- Utility recovery percentage
- Ancillary income per unit
- Renewal vs. move-out rate
If these numbers trend in the right direction, your strategies to increase apartment revenue are working. If not, you adjust.
### How long does it take to see results from revenue improvements?
Some changes are almost immediate (pet rent, reserved parking, late-fee enforcement). Others, like repositioning, unit upgrades, and RUBS rollouts, may take 6-18 months to fully show up in your NOI. The key is to keep increasing revenue in your apartment investment through small, consistent improvements rather than waiting for one giant home-run move.
### What’s the biggest mistake owners make when trying to increase revenue?
The biggest mistake is going straight to steep rent hikes without a plan, data, or added value, often leading to angry tenants and higher vacancy. A smarter approach is to layer multiple levers (rents, utilities, ancillary income, collections, and repositioning) and monitor your metrics so you grow revenue and protect the community at the same time.
*Disclaimer: This article was written with the help of AI and reviewed by Rod and his team.*
When you eventually sell or refinance, lean on [the 1031 exchange](https://rodkhleif.com/using-the-1031-exchange-to-maximize-tax-benefits-in-real-estate-investing/) to keep more of those returns inside your portfolio.
**Categories:** Blog, Property Management, Real Estate
**Tags:** apartment investing, business structures, Driving Force, investing, investor mistakes, landlord, motivation, multifamily, multifamily investment, multifamily property investing, multifamily real estate, non-recourse loan, real estate, real estate investing, real estate podcast, Rod Khleif
---
### [Multifamily Financing: The Complete Investor Guide](https://rodkhleif.com/multifamily-financing-complete-guide/)
**Published:** April 6, 2026
**Author:** Alex Khleif
**Content:**
Multifamily financing is where most apartment deals are won or lost. It happens in the capital structure, not in talks or due diligence. Get it wrong and a perfectly good deal becomes a liability. Get it right and you can control multimillion-dollar assets with a fraction of the purchase price.
I’ve personally owned and managed over 2,000 properties across more than 40 years of investing. I’ve used almost every financing structure covered in this guide and I’ve watched investors win and lose money based on how well they understood their options.
This guide consolidates everything in one place: FHA loans, agency financing, bridge loans, the capital stack, and syndication equity. For a quick reference overview you can download and keep, grab our [free Multifamily Financing resource](https://rodkhleif.com/financing-your-multifamily-purchase/).
## **Why Multifamily Financing Works Differently**
Residential and multifamily financing are two different games. Understanding which rules apply determines how you structure every deal.
Properties of 1-4 units use residential financing. At 5 or more units, you enter commercial territory and commercial lenders underwrite the [property’s Net Operating Income](https://rodkhleif.com/a-complete-guide-noi-in-real-estate-in-2025/), not primarily your personal finances. This one difference changes everything:
- Loan approval is based primarily on NOI and Debt Service Coverage Ratio (DSCR), not your W2
- Down payments are typically 20% to 30% for commercial vs. 3.5% to 5% for FHA residential
- Your personal financial strength still matters : net worth and liquidity but the property carries the loan
- Non recourse structures are available, limiting your personal exposure. See our complete [recourse vs. non recourse guide](https://rodkhleif.com/recourse-vs-non-recourse-multifamily-financing-whats-the-difference/) for the full breakdown.
> **Rod’s Take**
>
> The moment you understand that commercial lenders lend based on what the building earns : not what you earn : your whole approach to deal structuring changes. Now your job becomes finding properties with strong or improvable income.
## **Part 1: Residential Financing for 2 to 4 Unit Properties**
### **FHA Loans : The Beginner’s On-Ramp**
For investors buying a 2 to 4 unit property and willing to live in one unit, [FHA multifamily loans](https://rodkhleif.com/fha-loans-multifamily-real-estate-investors/) are the most accessible entry point available. Backed by the Federal Housing Administration and HUD, these loans offer terms conventional investment loans can’t match.
- Down payment as low as 3.5% (580+ credit score)
- 30-year fixed rates for payment stability
- Lower rates than conventional investment property loans
- Seller can contribute up to 6% toward closing costs
- Owner-occupancy required: you must live in one unit for at least 12 months
This is the house hacking strategy and it’s one of the most powerful on ramps into multifamily. Your tenants offset the mortgage, often dramatically reducing or eliminating your housing cost. For the full case for starting here, read [why your first home should be a multifamily property](https://rodkhleif.com/6-reasons-make-first-home-multifamily-property/). And when you’re ready to find the right lender, see our guide to [finding an FHA multifamily lender](https://rodkhleif.com/how-to-find-an-fha-multifamily-lender/).
### **Conventional Residential Loans (1-4 Units, Non-Owner-Occupied)**
For investors who don’t want to live in the property, conventional financing through Fannie Mae or Freddie Mac is available for 2 to 4 unit investment properties:
- Down payment: 15% to 25% depending on lender and loan size
- Credit score: 620 minimum, better rates at 740+
- No owner occupancy requirement
- Debt-to-income (DTI) limits apply based on your personal income
Once you’re ready to scale beyond 4 units, everything changes. See our complete guide to [buying an apartment building](https://rodkhleif.com/buying-an-apartment-building-complete-guide/) for what the process looks like at 5 or more units.
## **Part 2: Commercial Financing for 5 or More Unit Properties**
At 5 or more units you’re in commercial lending territory. Commercial lenders underwrite the property’s income first. Your loan amount is determined by DSCR (minimum 1.20x to 1.25x) and LTV (typically 65% to 75%). For the full lender perspective, read our guide to [how a lender underwrites a multifamily loan](https://rodkhleif.com/get-your-deal-approved-understanding-how-a-lender-underwrites-a-multifamily-loan-request/).
### **Agency Loans: Fannie Mae and Freddie Mac**
Agency financing is the gold standard for stabilized multifamily. Fannie Mae and Freddie Mac purchase mortgages from approved lenders, enabling consistent, favorable terms at scale.
- Non recourse: personal assets protected from property underperformance (with standard fraud carve-outs)
- 30-year amortization, even on 5 to 10 year fixed terms
- Lowest available rates in multifamily : typically the benchmark other loan types are priced against
- LTV up to 75% to 80% on stabilized, well occupied assets
- Available for properties as small as 5 units through small balance programs
Agency loans require 90%+ occupancy for 90 days prior to closing. For [value add deals](https://rodkhleif.com/value-add-opportunity-what-does-it-mean-and-should-i-consider-it/) that aren’t yet stabilized, bridge financing is required first.
#### **Fannie Mae vs. Freddie Mac at a glance:**
[](https://rodkhleif.com/multifamily-financing-complete-guide/screenshot-2026-04-06-at-11-28-43-pm/)
### **HUD/FHA Programs for 5 or More Units**
Separate from residential FHA, HUD operates commercial multifamily programs for 5 or more unit properties through MAP approved lenders. These offer the most favorable terms in the market but at the cost of complexity and timeline. Learn more in our [FHA multifamily loan guide](https://rodkhleif.com/fha-loans-multifamily-real-estate-investors/).
- HUD 223(f): Purchase or refinance of existing stabilized properties. Up to 35-year fully amortizing, non recourse loans, LTV up to 83.3%
- HUD 221(d)(4): New construction or substantial rehabilitation. Up to 40-year terms, non recourse
- HUD 223(a)(7): Streamlined refinance of existing HUD-insured loans
HUD loans offer the longest terms and highest LTVs available but require 6 to 12 months to close and significant ongoing compliance. Best for long term hold strategies on stabilized assets.
### **Commercial Bank and Portfolio Loans**
Community banks, regional banks, and credit unions offer multifamily loans held in their own portfolio : not sold to the GSEs. More flexible underwriting, but typically shorter terms.
- Recourse or non recourse depending on lender and deal size
- Loan terms: 3-10 years with 20-25 year amortization
- LTV: 65% to 75%
- Relationship-driven : your track record with the lender matters
- Faster closing than agency or HUD
- More flexibility for transitional assets or non-standard properties
Portfolio lenders are often the best option for your first commercial deal or for properties that don’t yet meet agency stabilization standards. Build relationships with 2 to 3 local commercial lenders before you need them.
### **CMBS Loans (Commercial Mortgage-Backed Securities)**
CMBS loans are packaged into securities and sold to institutional investors. They offer competitive rates and high proceeds but come with significant structural inflexibility.
- Non recourse with standard carve-outs
- Fixed rates, typically 5 to 10 year terms, 30-year amortization
- Limited flexibility post-close : modifications, partial releases, or early payoff can be complex and expensive
- Best suited for stabilized institutional-quality assets with a clear hold to maturity plan
## **Part 3: Bridge Loans for Value Add Deals**
Bridge loans are short term, higher rate financing designed for [value add acquisitions](https://rodkhleif.com/value-add-opportunity-what-does-it-mean-and-should-i-consider-it/) for properties that aren’t yet stabilized enough for agency financing. If you’re buying to renovate and reposition, a bridge loan is typically your starting point.
- Term: 12 to 36 months with extension options
- Rate: typically 1% to 3% above agency rates (floating)
- LTV: 65% to 80% of as-is value
- Non recourse available from institutional bridge lenders
- Interest-only during the term to maximize cash flow during renovation
- Future funding draws for approved capital improvements in some programs
Bridge financing is intentionally temporary. The goal: acquire the property, execute the [value add business plan](https://rodkhleif.com/value-add-opportunity-what-does-it-mean-and-should-i-consider-it/), stabilize at 90%+ occupancy, then refinance into permanent agency debt. This progression is the foundation of the BRRRR strategy applied to multifamily for a full breakdown, see our [BRRRR method for multifamily guide](https://rodkhleif.com/brrrr-method-for-multifamily-investors/).
**Bridge vs. Agency: When to Use Each**Bridge: property below 90% occupancy, renovation planned, rents significantly below market, operational issues to resolve.
Agency: property stabilized at 90%+ occupancy for 90+ days, rents at or near market, clean verifiable financials, longer-term hold intended.
## **Part 4: The Capital Stack Explained**
The capital stack is the layered structure of debt and equity used to finance a multifamily acquisition. Every layer has a different risk profile, return expectation, and priority of repayment. For the complete breakdown with worked examples, read our [capital stack guide](https://rodkhleif.com/financing-your-deal-understanding-the-capital-stack/). Here’s the framework:
[](https://rodkhleif.com/multifamily-financing-complete-guide/screenshot-2026-04-06-at-11-30-31-pm/)
### **Senior Debt**
The largest component : secured by a first lien on the property. If the deal fails, the senior lender is paid first. This security justifies the lowest cost in the stack. Most multifamily acquisitions are funded 60% to 75% by senior debt via the loan types covered above.
### **Mezzanine Debt**
Sits between senior debt and equity. Secured by the borrower’s ownership interest in the holding entity rather than the property directly. Mezzanine fills the gap when senior debt doesn’t cover enough of the purchase price.
- Higher cost than senior debt due to subordinate position
- Lender can take over ownership interest if borrower defaults
- Common in larger institutional transactions : less typical below $10M deals
### **Preferred Equity**
Sits above common equity in priority. Preferred equity investors receive a fixed return (typically 8% to 12%) before any profits flow to common equity investors. Unlike debt, there’s no set maturity date : though most structures include redemption provisions after a defined period.
- Used when senior loan plus mezzanine don’t fully cover capital requirements
- Common in syndications as an alternative to mezzanine when a second mortgage isn’t feasible
### **Common Equity (GP and LP Shares)**
The riskiest position but the highest upside. Common equity investors are paid last in any distribution or liquidation. In a [multifamily syndication](https://rodkhleif.com/what-is-multifamily-syndication-a-complete-guide/), common equity is split between General Partners (GPs) who operate the deal and Limited Partners (LPs) who invest capital passively.
## **Part 5: Syndication Equity : How Investors Pool Capital**
Syndication is how multifamily investors close deals larger than their personal capital allows and how passive investors access institutional real estate without operational involvement. For the complete framework, download the [free Guide to Multifamily Syndications](https://rodkhleif.com/guide-to-multifamily-syndications/) (220 pages, free).
### **GP and LP Roles**
**General Partner (GP):** Finds the deal, arranges financing, manages due diligence and execution, oversees asset management. Contributes expertise and often 5% to 10% equity co investment.
**Limited Partners (LPs):** Passive capital investors. Contribute the majority of the equity. Receive a preferred return before profits are shared with the GP.
### **Common Return Structures in Syndications**
- **Preferred Return:** LPs receive a fixed annual return (typically 6% to 8%) on invested capital before the GP earns any profit share.
- **Equity Split:** After preferred return, profits split between GP and LPs typically 70/30 or 80/20 in favor of LPs.
- **Waterfall:** Multi tier structure where the GP’s share increases as LPs hit higher return thresholds.
- **GP Fees:** Acquisition fees (1% to 2% of purchase price), asset management fees (1% to 2% of EGI annually), disposition fees (0.5% to 1% at sale).
### **SEC Compliance: 506(b) vs. 506(c)**
Syndications are securities offerings regulated by the SEC. Most operators use one of two Regulation D exemptions:
- **506(b):** Up to 35 non accredited (but sophisticated) investors plus unlimited accredited investors. No general solicitation. Pre existing relationship with investors required.
- **506(c):** Unlimited accredited investors only. Public advertising and general solicitation allowed. Investor accreditation must be verified.
Always work with a qualified securities attorney when structuring a syndication. The legal structure protects both you and your investors.
**Free Resource**Download the [free Multifamily Financing Overview](https://rodkhleif.com/financing-your-multifamily-purchase/) a concise reference covering the capital stack, loan types, and key financing terms. Keep it on hand when evaluating deals or meeting with lenders.
## **Part 6: Recourse vs. Non Recourse Financing**
One of the most important structural decisions in multifamily financing. For the full comparison with worked examples, read our guide to [recourse vs. non recourse multifamily financing](https://rodkhleif.com/recourse-vs-non-recourse-multifamily-financing-whats-the-difference/).
**Factor****Recourse****Non Recourse**If you default…Lender can pursue personal assetsLender limited to the property onlyTypical loan typeCommunity bank, portfolio loanAgency, CMBS, institutional bridgeDeal sizeSmaller ($500K-$5M)Larger ($2M+)Borrower experience req.Lower : accessible for beginnersHigher : track record neededBest forFirst deals, local lendersScale, syndicators, investor capitalNon recourse loans still include “bad boy” carve-outs that restore personal liability for fraud, intentional misrepresentation, or environmental violations. Non recourse protects you from market risk : not from misconduct.
## **Part 7: Qualifying for Commercial Multifamily Financing**
Commercial lenders evaluate borrowers on four dimensions. Before approaching a lender, prepare accordingly. A current, complete [personal financial statement](https://rodkhleif.com/understanding-the-personal-financial-statement/) is your financial handshake and lenders use it to verify net worth, liquidity, and existing obligations.
### **1. Net Worth**
Most commercial lenders require net worth equal to or greater than the loan amount. A $3M loan requires $3M in net worth. For first-time commercial borrowers who don’t yet qualify individually, sponsors : experienced investors who co sign : can fulfill this requirement in exchange for a portion of the GP equity.
### **2. Liquidity**
Post-closing liquidity: most lenders require liquid reserves equal to 10% of the loan amount after your equity contribution. On a $3M loan, you need $300,000 remaining in liquid assets. Liquid means cash or publicly traded securities : not real estate equity.
### **3. Experience**
Agency and institutional lenders prefer borrowers with a track record of multifamily ownership. If you lack experience, partner with someone who has it. Experience requirements can be satisfied by your team, not just you individually : this is one of the primary advantages of working within a mentorship community.
### **4. The Property’s Performance**
Commercial lenders ultimately lend on the property. If the [NOI](https://rodkhleif.com/a-complete-guide-noi-in-real-estate-in-2025/) supports a 1.25x+ DSCR at your requested loan amount and LTV, strong deals can overcome borrower qualification gaps. Use our [free multifamily deal analyzer](https://rodkhleif.com/deal-underwriting-tool/) to verify NOI and DSCR before approaching any lender.
## **Financing Strategy by Deal Stage: Quick Reference**
**Deal Stage****Best Financing****Typical LTV****Key Requirement**House hack (2 to 4 units)FHA residential96.5%Owner-occupancy 12 monthsSmall MF, stabilized (5-30 units)Portfolio / community bank65% to 75%90% occupancy, clean T-12Stabilized 30+ unitsAgency (Fannie/Freddie)75% to 80%90%+ occupancy for 90+ daysValue add acquisitionBridge loan65% to 75% as-isClear business plan, equity cushionLong-term institutional holdHUD 223(f)Up to 83.3%Stabilized, 35-yr amortizationLarge syndicated dealAgency + LP equityVariesSEC-compliant PPM, track recordCapital recycling (BRRRR)Bridge then agency refiVaries by stageStabilized NOI at refinance## **Creative Financing: No-Money-Down Structures**
Not every acquisition requires a large personal down payment. For a comprehensive breakdown of strategies that minimize personal capital, see our guide to [how to buy a multifamily property with no money](https://rodkhleif.com/how-to-buy-a-multifamily-property-with-no-money/).
- **Seller Financing:** The seller acts as the bank. Negotiate terms directly, eliminate traditional lender requirements. Best for motivated sellers with significant equity.
- **Subject To:** Take ownership while the seller’s existing loan stays in their name. Requires careful legal structure.
- **Assumable Loans:** Take over the seller’s existing FHA, VA, or commercial loan potentially at a below market rate. Powerful in today’s higher rate environment.
- **Joint Ventures:** Partner with someone who has capital or experience you lack. One party brings the deal, one brings the money.
- **Private Money Lenders:** Individual lenders at higher rates with less bureaucracy. Useful for acquisitions that don’t qualify for traditional financing or to move quickly.
## **Financing Readiness Checklist**
Before approaching any commercial lender or investor, prepare these items:
1. **Personal Financial Statement:** Current and complete. See the [personal financial statement guide](https://rodkhleif.com/understanding-the-personal-financial-statement/) for what to include.
2. Schedule of Real Estate Owned (SREO): every property, value, debt, equity, and income
3. Trailing 12-month (T-12) income and expense statement for the subject property
4. Current rent roll with unit-by-unit rents, lease terms, and occupancy
5. Prior 2 to 3 years of tax returns (personal and business entities)
6. Bank statements (2 to 3 months, all accounts)
7. **Property underwriting model:** Complete NOI, DSCR, and return analysis. Use the [free deal analyzer](https://rodkhleif.com/deal-underwriting-tool/).
8. **Letter of Intent (LOI):** Know what to include in a strong [multifamily LOI](https://rodkhleif.com/need-know-letter-intent/) before submitting an offer.
9. Executive summary: 1 to 2 page overview of the deal, your background, and the business plan
10. Phase I environmental report (if available)
**All Financing Resources in One Place**Free Financing Overview: [rodkhleif.com/financing-your-multifamily-purchase/](https://rodkhleif.com/financing-your-multifamily-purchase/)Capital Stack Deep Dive: [Full guide](https://rodkhleif.com/financing-your-deal-understanding-the-capital-stack/)FHA Loans for Investors: [Full guide](https://rodkhleif.com/fha-loans-multifamily-real-estate-investors/)Recourse vs. Non Recourse: [Full comparison](https://rodkhleif.com/recourse-vs-non-recourse-multifamily-financing-whats-the-difference/)Free Deal Analyzer: [Run the numbers](https://rodkhleif.com/deal-underwriting-tool/)Multifamily Underwriting Guide: [Evaluate any deal](https://rodkhleif.com/multifamily-underwriting-guide/)Free Syndication Guide (220 pages): [Download now](https://rodkhleif.com/guide-to-multifamily-syndications/)
## **Frequently Asked Questions: Multifamily Financing**
### **1. What credit score do I need to get a multifamily loan?**
For [FHA residential loans](https://rodkhleif.com/fha-loans-multifamily-real-estate-investors/) (2 to 4 units, owner occupied): 580 minimum, though most lenders prefer 620+. For conventional investment loans: 620 minimum, significantly better rates at 740+. For commercial loans (5 or more units): most lenders want 680+, and agency programs typically require 680-700+. In commercial underwriting, your credit score is one factor among many and the property’s NOI and your net worth are weighted equally or more heavily.
### **2. How much do I need to put down on an apartment building?**
It depends entirely on the strategy and loan type. FHA owner occupied (2 to 4 units): 3.5% down. Conventional investment property (2 to 4 units): 15% to 25%. Commercial portfolio loan (5 or more units): 20% to 35%. Agency financing (stabilized 5 or more units): 20% to 25%. Bridge loans: 25% to 35%. In a [syndicated deal](https://rodkhleif.com/what-is-multifamily-syndication-a-complete-guide/), the GP’s personal down payment may be just 5% to 10%, with the balance raised from LP investors.
### **3. What is DSCR and why does every lender focus on it?**
DSCR (Debt Service Coverage Ratio) measures the property’s [NOI](https://rodkhleif.com/a-complete-guide-noi-in-real-estate-in-2025/) relative to its annual debt payments. A 1.25x DSCR means the property earns 25% more than needed to service the loan. Most commercial lenders require a minimum 1.20x to 1.25x DSCR. If your underwritten NOI doesn’t produce sufficient DSCR at the target loan amount, either your purchase price needs to come down or your value add plan must deliver stronger income. Use the [free deal analyzer](https://rodkhleif.com/deal-underwriting-tool/) to test your DSCR on any deal before approaching a lender.
### **4. What’s the difference between a bridge loan and agency financing?**
Bridge loans are short term (12 to 36 months), higher rate financing for [value add acquisitions](https://rodkhleif.com/value-add-opportunity-what-does-it-mean-and-should-i-consider-it/) that aren’t yet stabilized. They allow you to acquire, renovate, and stabilize a property. Agency financing (Fannie Mae, Freddie Mac) is long term, lower rate permanent financing for stabilized properties at 90%+ occupancy. The typical progression: acquire with bridge, execute the business plan, stabilize, then refinance into agency. This is also the core of the [BRRRR method applied to multifamily](https://rodkhleif.com/brrrr-method-for-multifamily-investors/).
### **5. Can I get non recourse financing as a first-time commercial borrower?**
Possibly but it’s challenging. Non recourse agency and institutional lenders want to see a track record. Options for first timers include: partnering with an experienced [sponsor](https://rodkhleif.com/understanding-the-personal-financial-statement/) who satisfies the experience and net worth requirements; starting with a recourse portfolio loan and building toward agency on your next deal; or participating in a joint venture led by an experienced operator to build your track record. Experience requirements can be satisfied by your team, not just you individually.
### **6. How does HUD 223(f) differ from standard FHA multifamily loans?**
They are completely different programs. Residential FHA loans (2 to 4 units) are consumer mortgage products for owner occupants with 3.5% down. HUD 223(f) is a commercial multifamily program for 5 or more unit properties, offering up to 83.3% LTV, 35-year fully amortizing non recourse financing, and among the lowest long term rates available but with 6 to 12 month closing timelines and ongoing compliance requirements. Find a qualified [MAP approved HUD lender](https://rodkhleif.com/how-to-find-an-fha-multifamily-lender/) if you’re pursuing this path.
### **7. What is preferred equity and when is it used in a deal?**
Preferred equity sits between debt and common equity in the [capital stack](https://rodkhleif.com/financing-your-deal-understanding-the-capital-stack/). Preferred equity investors receive a fixed return (typically 8% to 12%) before any profits flow to common equity (GPs and LPs). It’s used when senior debt doesn’t cover enough of the capital requirement and mezzanine debt isn’t available or practical. In syndications, some GPs raise a tranche of LP equity structured as preferred equity to provide investors priority distributions.
### **8. What does the lender actually need from me to approve a commercial loan?**
The four primary factors are: (1) the property’s NOI and DSCR, (2) your net worth and liquidity via a current [personal financial statement](https://rodkhleif.com/understanding-the-personal-financial-statement/), (3) your track record of managing income properties, and (4) the quality of the market and asset. For a full breakdown of what the lender reviews and how to prepare your package for approval, see our guide on [how a lender underwrites a multifamily loan](https://rodkhleif.com/get-your-deal-approved-understanding-how-a-lender-underwrites-a-multifamily-loan-request/).
### **9. Can I use a self-directed IRA or 401(k) to invest in multifamily?**
Yes. Self-directed IRAs (SDIRAs) can invest in real estate : including multifamily properties and syndications : through a custodian that permits alternative assets. Passively investing as an LP in a syndication through an SDIRA is common and relatively straightforward. Active involvement as a GP can trigger Unrelated Business Taxable Income (UBTI) and may complicate the tax treatment. Always work with a CPA experienced in real estate before deploying retirement funds into any deal.
### **10. What’s the best first step if I’ve never financed a multifamily deal before?**
Start with the fundamentals: understand [how commercial underwriting works](https://rodkhleif.com/multifamily-underwriting-guide/), what drives [NOI](https://rodkhleif.com/a-complete-guide-noi-in-real-estate-in-2025/), and how the [capital stack](https://rodkhleif.com/financing-your-deal-understanding-the-capital-stack/) is structured. Then download the [free Multifamily Financing Overview](https://rodkhleif.com/financing-your-multifamily-purchase/) and build relationships with 2 to 3 local commercial lenders before you have a deal. Get your [personal financial statement](https://rodkhleif.com/understanding-the-personal-financial-statement/) in order and run the numbers on live deals using the [free deal analyzer](https://rodkhleif.com/deal-underwriting-tool/). The clearer your financial picture and the stronger your deal analysis, the more confident your first lender conversation will be.
## **Ready to Finance Your First (or Next) Multifamily Deal?**
Financing is learnable. Every experienced multifamily investor started without a track record, without lender relationships, and without certainty about which structure fit their strategy. What separated the ones who succeeded was education, preparation, and consistent action.
Start here: download the [free Multifamily Financing Overview](https://rodkhleif.com/financing-your-multifamily-purchase/) a concise reference you can keep on hand for every deal. When you’re ready to go deeper on deal analysis, underwriting, and structuring your first acquisition, join me at the next [Multifamily Bootcamp](https://rodkhleif.com/bootcamp/) or grab Rod’s [free best-selling book](https://rodkhleif.com/lcfa-ebook/): How to Create Lifetime Cash Flow Through Multifamily Properties.
**Categories:** Multifamily Investing, Raising Capital, Real Estate
---
### [How to Buy a Multifamily Property with No Money](https://rodkhleif.com/how-to-buy-a-multifamily-property-with-no-money/)
**Published:** March 29, 2026
**Author:** Alex Khleif
**Content:**
No money down multifamily investing is real, I’ve done it, and I’ve taught thousands of my students to do it too. Here’s the truth: it’s not magic or loopholes. It’s knowing how to structure deals using subject-to purchases, lease options, seller financing, or partnerships. These options let you control properties without large down payments. Most people think no-money-down investing is impossible because their banker told them so. But your banker has a reason to keep you dependent on conventional loans. Let me show you the legal structures and negotiation tactics that make zero-down multifamily deals actually happen. When people ask me how to buy a multifamily property with no money, they often think I will say it cannot be done.They expect me to say it is impossible. But here’s the truth: I’ve done it. I’ve taught thousands of students to do it. In 2026, there are more ways than ever to buy multifamily properties without using your own cash. The key is not magic or loopholes. It is knowing multifamily real estate runs on leverage, relationships, and value creation. It is not just cash in the bank. Let me show you exactly how to buy a multifamily property with no money down and start building serious wealth. ## The Mindset Shift: Why No Money Down Is Possible
Before we dive into how to buy a multifamily property with no money, know this key truth.Real estate is the only asset class where you can buy million-dollar properties without millions in the bank. Why? Because multifamily properties generate income. Banks, private lenders, and partners care more about the property’s ability to produce cash flow than they care about how much money you personally have. This income-producing characteristic is what makes it possible to buy multifamily properties with little to no money down. I’ve seen single mothers, recent college graduates, and people who were broke just years ago build multimillion-dollar portfolios by mastering these strategies. If they can do it, so can you. ## Strategy 1: Seller Financing: The Most Powerful Tool
When learning how to buy a multifamily property with no money, seller financing should be your first strategy to master. This is where the property owner becomes your bank, allowing you to buy their property with little or no down payment. ### **How Seller Financing Works**
Instead of getting a traditional mortgage, you negotiate directly with the seller to carry the financing. They transfer the deed to you, and you make monthly payments to them instead of a bank. The beauty of this approach is that everything is negotiable—the down payment, interest rate, payment terms, and amortization schedule. I’ve structured deals where sellers accepted no down payment. They understood the value I brought: professional management, property improvements, and reliable monthly income. This income was better than what they could get by selling and reinvesting the money. ### **Finding Motivated Sellers**
The key to using seller financing when buying multifamily properties with no money is finding motivated sellers. Look for: Owners who are burned out from managing their properties and want steady, passive income. Elderly owners who want to avoid capital gains taxes through installment sales. Out-of-state owners tired of managing properties from a distance. Owners facing personal situations like divorce, health issues, or business problems. These sellers often care more about solving their problem than maximizing their cash at closing. When you present seller financing as a solution that gives them tax benefits, steady income, and eliminates management headaches, they become much more flexible on down payment requirements. Small multifamily properties (2-30 units) owned by “mom and pop” landlords are particularly good candidates for seller financing. [Learn my 10-step system for finding and closing these deals](https://rodkhleif.com/10-steps-to-your-first-small-multifamily/). ### **Structuring the Deal**
When you negotiate buying a multifamily property with no money, use seller financing. Structure the deal to highlight the seller’s benefits. Offer a fair price, a competitive interest rate (often higher than what they’d get from bonds or CDs), and demonstrate your capability to manage the property successfully. I’ve closed deals with 0% down by showing sellers my track record, my management plan, and how I would improve the property’s value. Some sellers even funded initial improvements because they understood it would protect their collateral. ## Strategy 2: Partner with Capital Partners
One of the most effective ways to learn how to buy a multifamily property with no money is to partner with people who have capital but lack your time, knowledge, or deal-sourcing abilities. ### **The Value You Bring**
You don’t need money when you bring other valuable assets to the table. These include finding and analyzing deals, negotiating purchase terms, managing the property or overseeing professional management, handling renovations and value-add strategies, and dealing with tenants and day-to-day operations. Many investors keep money in low-yield investments. They want better returns from multifamily real estate. But they lack the time or expertise to make it happen. That’s where you come in. ### **Structuring Partnership Deals**
When partnering to buy multifamily properties with no money, common structures include: **Equity Split Partnership:** The money partner provides 100% of the down payment and gets a preferred return (typically 6-10% annually) plus a percentage of equity (often 50-70%). You get the remaining equity percentage for finding, managing, and improving the property. **Promote Structure:** The money partner gets their capital back first, plus a preferred return. Then profits split according to predetermined percentages. You might get 20-30% of profits despite putting in zero cash. **Sweat Equity:** You earn equity ownership by contributing labor, management, and expertise instead of cash. This is especially effective when the property needs significant improvements. I’ve used partnership structures to acquire properties worth millions while contributing zero dollars. The key is clearly defining roles, responsibilities, and profit splits upfront in a written partnership agreement. For a deeper dive into partnership strategies, check out [this podcast episode where I interview Gabriel Hamel about buying multifamily with no money down; ](https://rodkhleif.com/podcasts/ep-417-gabriel-hamel-how-to-buy-multifamily-with-no-money-down/)he shares exactly how he structured his first deals without capital. ## Strategy 3: The BRRRR Method for Multifamily
The BRRRR method means Buy, Rehab, Rent, Refinance, and Repeat.It is a strong way to buy a multifamily property with no money. It works best when you pair it with other methods. ### **How BRRRR Works for Multifamily**
You find a distressed multifamily property selling below market value. Partner with someone who provides the purchase and rehab funds (or use seller financing or hard money). Improve the property to increase its value and rental income. Refinance based on the new, higher value. Pull out most or all of the invested capital. Repeat the process with another property. The beauty of BRRRR is that after refinancing, you can often return 100% of your partner’s money while retaining ownership. This allows you to build a portfolio without needing money for each successive deal. ### **Making BRRRR Work with Zero Down**
Combine BRRRR with partnerships or hard money lenders who fund 100% of purchase and rehab costs. Find properties where the after-repair value (ARV) is significantly higher than total acquisition and improvement costs. When you refinance at 75% of the new value, you can return all invested capital while keeping the property. I’ve used this strategy to buy over a dozen properties in one year. I did it without using my own money. The key is finding properties with significant value-add potential and building relationships with capital partners who understand the strategy. ## Strategy 4: Assume Existing Financing
Learning how to buy a multifamily property with no money often means getting creative with existing loans. Many multifamily properties have assumable financing that can dramatically reduce or eliminate your down payment requirements. ### **Assumable Loans**
Some government-backed loans (FHA, VA) and some commercial loans are assumable. This means you can take over the seller’s existing loan. If the seller has a lot of equity and is motivated, you could structure a deal to assume their loan. You may need little or no cash down, especially if the seller finances the equity portion. ### **Subject-To Financing**
In a subject-to transaction, you take ownership of the property “subject to” the existing mortgage. The loan stays in the seller’s name, but you control the property and make the payments. This strategy requires careful legal structuring but can allow you to buy multifamily properties with no money down. I’ve closed deals where I assumed an existing loan and negotiated seller financing for the equity, resulting in zero cash out of pocket. This works particularly well when sellers are motivated to move quickly or avoid foreclosure. ## Strategy 5: Syndication and Raising Capital
If you’re wondering how to buy a multifamily property with no money when dealing with larger apartment complexes, syndication might be your answer. ### **How Syndication Works**
As the syndicator (general partner), you find the deal, negotiate terms, arrange financing, and manage the investment. You raise capital from passive investors (limited partners) who fund the down payment and reserves. You typically receive 20-30% of equity and profits despite contributing little or no cash. ### **Building Your Syndication**
To successfully syndicate and buy multifamily properties with no money: Build a track record with smaller deals first, even if you’re partnering. Create a professional business plan and investor presentation. Network extensively to build relationships with potential investors. Demonstrate expertise through education, mentorship, and market knowledge. Start with friends, family, and colleagues before approaching sophisticated investors. Many successful syndicators started with zero capital and built empires by becoming skilled at raising and deploying other people’s money. The key is proving you can find good deals and execute successfully. ## Strategy 6: Hard Money and Private Lenders
Hard money lenders and private lenders are key when learning how to buy a multifamily property with no money. They are especially helpful for value-add opportunities. ### **Hard Money Fundamentals**
Hard money lenders focus on the property’s value and deal quality, not your personal finances. They often lend 90-100% of purchase price for strong deals. Terms are shorter (1-3 years) with higher interest rates (8-15%). Perfect for properties you plan to improve and refinance quickly. ### **Using Hard Money with Zero Down**
Find a property priced significantly below market value. Get a hard money loan covering 100% of purchase and some or all of rehab costs. Partner with someone to cover any gap between the loan and total project cost, or negotiate seller financing for that portion. Complete improvements and refinance into permanent financing. Return hard money and partner funds, keeping the property. I’ve used hard money to close deals in days when traditional financing would take months, allowing me to acquire properties my competitors couldn’t move fast enough to get. ## Strategy 7: Lease Options and Master Leases
Another creative approach to how to buy a multifamily property with no money involves controlling properties without initially buying them. **Lease Option Strategy** You negotiate a lease with an option to purchase at a predetermined price. Control and manage the property during the lease period. Improve operations and increase value. Exercise your option to buy when you’ve built equity and can refinance or attract investors. This strategy gives you time to prove your ability to increase the property’s value while controlling it with minimal upfront capital. **Master Lease Approach** In a master lease, you lease the entire property from the owner with the right to sublease units. You keep the difference between what you collect in rent and what you pay the owner. Build up capital and track record before eventually purchasing. Both strategies allow you to demonstrate value creation and generate income before needing to complete the purchase. ## Strategy 8: Wholesaling to Build Capital
While this isn’t directly how to buy a multifamily property with no money, wholesaling can quickly generate the capital you need for future deals. ### **How Multifamily Wholesaling Works**
Find distressed or undervalued multifamily properties. Get them under contract with an assignable purchase agreement. Find a cash buyer willing to pay more than your contract price. Assign the contract for a fee (typically $5,000-$50,000+ depending on deal size). Use wholesale profits to build relationships with cash buyers who might partner on future deals, create capital for earnest money deposits on your own deals, fund your education and deal-sourcing activities, or establish credibility in your market. I know investors who wholesaled for 6-12 months to build both capital and relationships, then transitioned to buying and holding properties using partnerships. ## Strategy 9: Use Retirement Funds
Your retirement account might be the key to how to buy a multifamily property with no money out of pocket from your personal accounts. ### **Self-Directed IRA Investing**
Set up a self-directed IRA that can invest in real estate. Use IRA funds for down payments on multifamily properties. Combine with partners who also use their retirement funds. Property is owned by the IRA, and income/appreciation flows back to the account tax-deferred or tax-free. This strategy lets you invest in multifamily properties using money you couldn’t otherwise access without penalties. ## Strategy 10: Government Programs and Grants
Several government programs can help you buy multifamily properties with little or no money down: **FHA Multifamily Loans:** While typically requiring 3.5-10% down, you can sometimes use seller concessions or grants to cover this. FHA 221(d)(4) loans for new construction or substantial rehab can offer attractive terms. If you’re buying a 2-4 unit property and willing to live in one unit, [FHA loans can be your entry point with as little as 3.5% down](https://rodkhleif.com/fha-loans-multifamily-real-estate-investors/). Many investors house-hack their way into multifamily investing using this strategy. **HUD Programs:** Various HUD programs provide financing for affordable housing multifamily properties. Some offer below-market rates and flexible down payment requirements. **Local Housing Authority Programs:** Many cities and states offer programs to encourage affordable housing development. These might include grants, low-interest loans, or down payment assistance. Research programs in your target market that might help you buy multifamily properties with minimal cash investment. ## Critical Success Factors
Now that you know multiple strategies for how to buy a multifamily property with no money, understand these critical success factors: ### **Build Your Knowledge**
Invest heavily in education before investing money (yours or others’). Learn underwriting, property management, market analysis, and deal structuring. The more knowledgeable you are, the more confident partners and sellers will be in trusting you with their capital or property. Start with [Rod’s free beginner resources](https://rodkhleif.com/beginner-resources/) including his best-selling book “How to Create Lifetime Cash Flow Through Multifamily Properties”—it’s the foundation thousands of investors used to close their first deals. ### **Develop Your Network**
Relationships are currency in real estate. Connect with real estate agents, brokers, lenders, contractors, property managers, other investors, and potential partners. Many no-money-down deals happen through relationships, not marketing. ### **Create Value, Not Just Deals**
Focus on deals where you can genuinely create value through better management, physical improvements, expense reduction, or income optimization. This makes it easier to attract partners and convince sellers to offer flexible terms. ### **Demonstrate Track Record**
Even if you’re starting from zero, find ways to build credibility. Manage properties for others, partner on smaller deals first, complete real estate education programs, or share your market research and analysis. ### **Be Transparent and Ethical**
When using other people’s money or seller financing, always be completely honest about your experience, the risks involved, and your plans for the property. Building a reputation for integrity is essential for long-term success. ## Common Mistakes to Avoid
As you learn how to buy a multifamily property with no money, avoid these pitfalls: **Overleveraging:** Just because you can buy with no money down doesn’t mean you should. Ensure the property cash flows adequately to cover debt service and reserves. **Ignoring Due Diligence:** Never skip thorough property inspection, financial analysis, and market research just because you’re not using your own money. Bad deals are still bad deals regardless of whose money is at risk. **Poor Partnership Agreements:** Always get partnership terms in writing with clear definitions of roles, responsibilities, profit splits, and exit strategies. **Unrealistic Promises:** Don’t overpromise returns to partners or oversell your abilities. Under-promise and over-deliver. **Neglecting Reserves:** Having no money in the deal doesn’t mean having no reserves. Always maintain adequate cash reserves for vacancies, repairs, and unexpected expenses. ## Your Action Plan
Here’s how to buy a multifamily property with no money, starting today: ### **Month 1-2: Foundation Building**
Educate yourself on multifamily investing, underwriting, and management. Start analyzing deals in your target market (even if you’re not ready to buy). Join local real estate investment groups and begin networking. Identify your value proposition—what you bring beyond money. ### **Month 3-4: Relationship Development**
Connect with real estate agents and brokers in your market. Meet with potential capital partners (friends, family, colleagues). Find a mentor or join a mastermind group. Build relationships with property managers and contractors. ### **Month 5-6: Deal Sourcing**
Make offers on properties using seller financing or partnership structures. Start analyzing at least 10 deals per week. Develop your pitch for partners and sellers. Create a professional business plan and analysis template. ### **Month 6-12: Deal Execution**
Close your first multifamily property using one or more of these strategies. Execute your business plan flawlessly to build credibility. Continue networking and building relationships. Start looking for your next deal. ## The Bottom Line
Learning how to buy a multifamily property with no money isn’t about tricks or shortcuts—it’s about understanding that real estate runs on value creation, not just cash. You can absolutely build a substantial multifamily portfolio without using your own money by leveraging partnerships, seller financing, creative deal structures, and relationship capital. I started with nothing and built a portfolio worth hundreds of millions using these exact strategies. Thousands of my students have done the same. The opportunity is there, you just need the knowledge, courage, and persistence to pursue it. The question isn’t whether you can buy multifamily properties with no money. The question is: what’s stopping you from starting today? Stop waiting for the perfect time or the perfect amount of capital. Start building relationships, analyzing deals, and taking action. Your first multifamily property is closer than you think, and it might not require a single dollar of your own money. Now get out there and make it happen. I’ll see you at the top. ---
**Ready to master the strategies for buying multifamily properties with no money down?** Learn the exact systems successful investors use at [MultifamilyBootcamp.com](https://multifamilybootcamp.com/)## **FAQ: How to Buy a Multifamily Property with No Money**
### **Q1: Is it really possible to buy a multifamily property with no money down?**
Yes, and it happens more often than most people realize. The key distinction is that “no money down” does not mean the deal requires no capital. It means none of that capital has to come from your personal bank account. The strategies that make this work include seller financing, equity partnerships, syndication, hard money combined with a refinance, and loan assumptions. Multifamily is unique among asset classes because lenders and partners care more about what the property produces than what you personally own. That income generating quality is what opens the door to creative financing. I have done it myself and I have watched thousands of students close their first deals using other people’s money before they ever had serious capital of their own. ### **Q2: What is seller financing and how does it work for multifamily deals?**
Seller financing is when the property owner agrees to act as the lender instead of a bank. You negotiate directly with the seller on the purchase price, interest rate, monthly payment, and loan term. The seller transfers the deed to you and you make monthly payments to them. Everything is negotiable, which is what makes this strategy so powerful. Down payments can range from a small percentage all the way to zero depending on how motivated the seller is and what value you bring to the table. The best candidates are owners who are burned out from managing properties, want to avoid a large capital gains tax bill, or need steady retirement income. Small multifamily properties owned by long term mom and pop landlords are ideal targets. For a step by step approach to finding these deals, see our guide on [how to find and close small multifamily deals](https://rodkhleif.com/10-steps-to-your-first-small-multifamily/). ### **Q3: How do equity partnerships work when you have no money?**
An equity partnership is when you bring the deal and the operator skill while your partner brings the capital. Your partner funds the down payment and reserves. In exchange they receive a preferred return on their investment, typically 6 to 10 percent annually, plus a percentage of the equity upside when the property is refinanced or sold. You receive the remaining equity for finding the deal, managing the asset, and executing the business plan. Common splits run 70 percent to the capital partner and 30 percent to the operator, though this varies based on deal quality and relationship. The single most important thing you bring to a partnership is a good deal. If the numbers are strong and your underwriting is credible, capital partners are far easier to find than most beginners expect. To understand how to [analyze deals before bringing them to partners](https://rodkhleif.com/finding-analyzing-multifamily-deals-like-a-pro/), start by mastering the core metrics every deal requires. ### **Q4: What is the BRRRR method and can it work for multifamily with no money?**
BRRRR stands for Buy, Rehab, Rent, Refinance, Repeat. You acquire a distressed multifamily property below market value, improve it to increase its value and rental income, then refinance based on the new appraised value. If you structured the deal correctly, the refinance pulls out most or all of the capital used to purchase and renovate it. That capital goes back to your partner or lender, and you retain ownership of the property with none of your original money still in the deal. To make BRRRR work with no money of your own, combine it with a capital partner or hard money lender who funds 100 percent of the acquisition and rehab costs. The math only works when the after repair value is significantly higher than your total cost basis, so finding the right distressed asset is the critical step. I used this strategy to acquire over a dozen properties in a single year without using any of my own capital. ### **Q5: What is syndication and how does it let you buy multifamily with no money?**
Syndication is a structure where you raise equity capital from a group of passive investors to fund a deal you find and operate. As the general partner, you source the property, arrange financing, manage the business plan, and handle investor reporting. Your investors, called limited partners, contribute the equity needed for the down payment and reserves. They receive a preferred return plus a share of profits. You receive a portion of equity and profits, typically 20 to 30 percent, despite contributing little or no personal capital. Syndication is how the largest multifamily deals get done, and it scales without limit once you have a track record. Before you raise a dollar from investors you need to understand SEC compliance requirements. For a complete introduction to how this structure works, read our [free guide to multifamily syndication](https://rodkhleif.com/what-is-multifamily-syndication-a-complete-guide/). ### **Q6: Can I use an [FHA loan](https://rodkhleif.com/how-to-find-an-fha-multifamily-lender/) to buy a multifamily property with almost no money?**
Yes, for properties with 2 to 4 units. If you are willing to live in one unit for at least 12 months, an [FHA loan allows you to purchase with as little as 3.5 percent down](https://rodkhleif.com/fha-loans-multifamily-real-estate-investors/) and a credit score of 580 or higher. On a $400,000 fourplex that means roughly $14,000 down compared to $80,000 to $100,000 on a conventional investment loan. You can also use gift funds from a family member and request seller concessions of up to 6 percent toward closing costs, which can bring your total out of pocket cost down further. After 12 months you can move out and rent all units, turning the property into a fully passive investment. This is one of the most overlooked entry points into multifamily investing for people who do not yet have large amounts of capital. ### **Q7: What is a subject to deal and how does it work?**
A subject to transaction means you take ownership of the property while the existing mortgage stays in the seller’s name. You control the asset and make the payments but the loan does not transfer to you. This works best when a seller needs to exit quickly, is behind on payments, or is facing foreclosure. Because you are taking over an existing loan rather than getting a new one, the down payment requirement can be dramatically reduced or eliminated entirely. Subject to deals require careful legal structuring and a real estate attorney experienced with this approach. They also carry risk if the lender invokes a due on sale clause, which is a standard provision in most mortgages allowing the lender to demand full repayment when ownership transfers. Used correctly by experienced investors with proper legal guidance, this strategy can allow you to control properties with minimal upfront capital. ### **Q8: Do I need any money at all to get started in multifamily investing?**
You need some money, but far less than most people assume. Even no money down deals have transaction costs including earnest money deposits, due diligence fees, inspections, legal fees, and sometimes the cost of an appraisal. For smaller deals these can run $5,000 to $15,000. The strategies in this guide are designed to eliminate or dramatically reduce the down payment and equity requirement, not every cost associated with closing a deal. The most realistic starting point for someone with very limited capital is to spend 6 to 12 months building relationships, analyzing deals, and learning to underwrite before making offers. Start with [Rod’s free beginner resources](https://rodkhleif.com/beginner-resources/) to build the foundation. When you bring a genuinely strong deal to partners or sellers, the capital conversation becomes much easier. ### **Q9: How do I find motivated sellers willing to offer creative financing?**
Motivated sellers are not found on the MLS. They are found through direct outreach. The most effective channels are direct mail campaigns aimed at owners who have held properties for 10 or more years. Use phone calls for owners with code violations or unpaid taxes. Network with local real estate attorneys and CPAs who help owners during life changes. Build relationships with multifamily brokers who understand their sellers’ situations. The conversations that lead to seller financing or other creative terms almost always start with the question: what problem are you trying to solve? Once you understand the seller’s real motivation, you can structure a deal that solves their problem.Their motivation might be tax deferral.They might want to avoid management headaches.Or they might need steady income. This can also reduce your need for a large down payment. ### **Q10: What are the biggest mistakes beginners make when trying to buy multifamily with no money?**
The most common mistake is leading with the financing structure before building credibility. Sellers and partners need to trust you before they hand you a property or write a check. Showing up to a seller conversation with no track record and immediately asking for zero down financing rarely works. Build your knowledge first, learn to [underwrite deals properly](https://rodkhleif.com/how-to-underwrite-a-multifamily-deal-step-by-step-the-complete-guide/), and develop relationships before you need them. The second biggest mistake is pursuing low quality deals just because they are accessible. A no money down deal on a bad property in a weak market is still a bad deal. The third mistake is skipping proper legal documentation on creative structures. Partnerships, seller financing, and subject to transactions all require written agreements prepared by a qualified attorney. The deal that feels like a handshake agreement is the one most likely to end in a dispute. *Disclaimer: This article was written with the help of AI and reviewed by Rod and his team.* **Related reading:** For a complete overview of structures beyond conventional bank loans, including seller financing, master lease, sub-to, private money, JV, and syndication, read [creative financing in real estate](https://rodkhleif.com/creative-financing-in-real-estate-go-beyond-investment-property-lending/).
For a related angle on starting small, see [why your first home should be a multifamily property](https://rodkhleif.com/6-reasons-make-first-home-multifamily-property/).
**Categories:** Blog, Multifamily Investing, Raising Capital, Real Estate
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### [When to Buy and Sell Multifamily Real Estate (2026)](https://rodkhleif.com/multifamily-real-estate-market-timing-when-to-buy-and-sell-for-maximum-profit/)
**Published:** February 13, 2026
**Author:** Matt Rohde
**Content:**
Multifamily real estate continues to be one of the most powerful wealth-building vehicles available to investors in 2026. Properties with five or more units deliver predictable monthly cash flow from multiple rent-paying tenants andsubstantial long-term appreciation. But here’s the truth that separates winners from everyone else: success is about knowing exactly when to make your move and when to buy and sell multifamily real estate.
Strategic market timing can mean the difference between average returns and generational wealth.
## Understanding Multifamily Real Estate Market Cycles
Real estate moves in predictable cycles. Your ability to identify where we are in the cycle directly impacts your returns.
### The Expansion Phase: When Markets Heat Up
During expansion, demand surges, driving prices and occupancy rates higher. Strong economic growth, robust job creation, and favorable interest rates fuel this momentum.
**Key characteristics of the expansion phase:**
- Rising property prices and valuations
- Increasing occupancy rates
- Strong rental income growth
- High investor confidence
- Favorable financing conditions
Acquiring properties during expansion positions you for capital appreciation and solid rental income.
### The Peak Phase: Recognizing the Top
The peak marks the cycle’s highest point. Valuations max out, sentiment turns extremely bullish, and everyone wants in.
**Warning signs you’re at or near the peak:**
- Maximum valuations and compressed cap rates
- Extremely bullish investor sentiment
- Slowing economic growth
- Rising interest rates
- Intense competition for every deal
This is when sophisticated investors take profits, capturing maximum appreciation before the inevitable correction.
### The Contraction Phase: Hidden Opportunities Emerge
Demand cools off. Prices and occupancy rates decline as economic headwinds strengthen. Here’s what most investors miss: contraction phases create some of the best buying opportunities in [multifamily real estate investing](https://rodkhleif.com/multifamily-real-estate-investing/). You can acquire quality properties at discounted valuations, positioning yourself for exceptional gains during recovery.
### The Trough Phase: Where Fortunes Are Made
This is the bottom. Prices and occupancy hit their lowest points during economic stagnation. If you have capital reserves and a long-term horizon, the trough offers prime opportunities for strategic acquisitions. This is where real wealth gets built by investors willing to act when others are paralyzed by fear.
## Critical Market Indicators to Watch in 2026
Understanding these signals helps you anticipate market shifts and position your portfolio for maximum profitability.
### Employment Growth and Job Market Trends
Employment trends are the foundation of multifamily demand. When local job markets thrive, rental demand stays strong and supports high occupancy and rent growth.
**Industries driving job creation in 2026:**
- Technology and artificial intelligence
- Healthcare and biotechnology
- Renewable energy and sustainability
- Advanced manufacturing
- Professional services
Look for markets where major employers are expanding or relocating. These shifts signal where housing demand will strengthen.
### Federal Reserve Policy and Interest Rate Environment
Interest rates directly affect your cost of capital and deal economics. The Fed’s monetary policy signals where rates are headed and how financing costs will impact your investments.
**What to monitor:**
- Federal Reserve meeting announcements
- Inflation targets and CPI data
- Rate adjustment timelines
- Treasury yield movements
- Mortgage rate trends
Lower rates create favorable buying and refinancing conditions. Higher rates signal opportunities to negotiate better prices as competition decreases.
### Economic Indicators and Market Fundamentals
GDP growth, consumer spending, and inflation data provide essential insights about market direction.
When GDP is growing and consumer confidence is high, rental markets strengthen. Watch for inflection points that signal cycle changes.
### Supply and Demand Dynamics
Monitor new construction permits, development pipelines, and absorption rates in your target markets. Oversupply pressures rents even in strong economies, while supply constraints create pricing power for property owners.
When building becomes difficult or expensive, existing properties become more valuable.
## Proven Strategies for Buying Multifamily Properties
Strategic buying during downturns or early expansion phases sets the foundation for exceptional returns.
### Focus on High-Growth Markets
Target locations with strong fundamentals: diverse employment, population growth, favorable business climates, and quality of life factors.
**Essential market fundamentals to evaluate:**
1. **Employment diversity** – Multiple industries, not reliant on single employer
2. **Population growth** – Positive migration trends and demographics
3. **Business climate** – Pro-growth policies and low business taxes
4. **Infrastructure** – Transportation, airports, and connectivity
5. **Quality of life** – Schools, entertainment, healthcare, and amenities
Within those markets, identify submarkets near major employers, transportation hubs, quality schools, and amenities.
Don’t just buy what’s cheap—buy what’s positioned for sustained growth. Learn more about [identifying high-growth markets](https://rodkhleif.com/how-to-find-the-best-markets/).
### Conduct Comprehensive Due Diligence
Never compromise on thorough analysis. Evaluate physical condition, review operating histories, analyze rent rolls, assess deferred maintenance, and identify value-add opportunities.
**Your due diligence checklist should include:**
1. Physical property inspection and condition assessment
2. Review of trailing 12-month financials
3. Rent roll analysis and lease audit
4. Deferred maintenance evaluation
5. Market rent comparables study
6. Operating expense benchmarking
7. Environmental and zoning review
8. Title and survey examination
Can you increase NOI through strategic renovations, improved management, or operational efficiencies?
The best acquisitions contain hidden value that less diligent investors overlook. Check out our [complete due diligence checklist](https://rodkhleif.com/multifamily-due-diligence/).
### Analyze Income Potential
A property’s true value extends beyond its purchase price. Assess realistic income potential by studying comparable rents, analyzing supply-demand dynamics, and projecting sustainable rent growth.
**Key income analysis steps:**
- Compare current rents to market comps
- Identify below-market units
- Calculate potential rent increases
- Evaluate other income opportunities (parking, storage, pet fees)
- Project realistic expense ratios
- Model value-add scenarios
Use current market data, not outdated assumptions. Talk to local property managers and review actual lease transactions.
### Master Negotiation in Buyer’s Markets
When conditions favor buyers, negotiation becomes your most powerful tool. Leverage market conditions and highlight property issues, deferred maintenance, and seller urgency.
**Effective negotiation tactics:**
- Use independent third-party inspections to identify issues
- Highlight deferred maintenance and capital expenditure needs
- Reference recent comparable sales at lower prices
- Request seller financing or favorable terms
- Negotiate extended due diligence periods
- Build rapport with sellers to understand their motivations
Build relationships with brokers representing motivated sellers. Off-market deals often provide the best opportunities.
Get proven [negotiation strategies for multifamily deals](https://rodkhleif.com/negotiation-strategies/).
## Strategic Selling: Maximizing Your Exit
Timing your sale correctly can add hundreds of thousands or millions to your profits.
### Time Your Exit Strategically
Monitor market indicators closely and anticipate price movements to maximize returns.
**Signals it’s time to sell:**
1. Compressed cap rates in your market
2. Bidding wars for similar properties
3. Aggressive buyer underwriting assumptions
4. Peak media attention on real estate investing
5. You’ve completed your value-add business plan
6. Unsolicited offers above your expected value
When you’re getting unsolicited offers above expected value, seriously consider selling.
[](https://rodkhleif.com/multifamily-real-estate-market-timing-when-to-buy-and-sell-for-maximum-profit/screenshot-2026-02-13-at-10-55-30-pm/)
### Prepare Properties for Maximum Value
Make strategic improvements that enhance appeal to institutional and private equity buyers.
**High-ROI preparation items:**
- Fresh exterior and interior paint
- Professional landscaping and curb appeal upgrades
- Modern LED lighting throughout
- Updated unit interiors (kitchens, baths, flooring)
- Common area renovations
- Deferred maintenance resolution
- Clean, organized financial records
- Updated rent roll with lease documentation
Clean financials and organized records also add significant value.
### Execute Effective Marketing
Package your offering professionally: quality photos, drone footage, detailed rent rolls, trailing 12-month financials, market analysis, and upside potential.
**Essential marketing materials:**
1. Professional photography and drone videography
2. Comprehensive offering memorandum
3. Detailed 12-month and T-3 financials
4. Current rent roll with lease terms
5. Market analysis and submarket overview
6. Capital improvements summary
7. Upside opportunity analysis
8. Property management reports
Leverage multiple channels; listing services, direct outreach, broker networks, and targeted digital marketing.
Create competition among buyers through controlled exposure. Multiple offers drive prices higher.
## The Psychology of Market Timing
While economic data provides the framework, investor psychology ultimately drives market action.
### Avoid Common Investor Mistakes
**The biggest psychological [pitfalls](https://rodkhleif.com/the-10-biggest-mistakes-new-multifamily-investors-make/):**
- **Herd mentality** – Buying just because everyone else is buying
- **Recency bias** – Assuming recent trends will continue forever
- **Confirmation bias** – Only seeing data that supports your existing beliefs
- **FOMO** – Fear of missing out drives overpaying at peaks
- **Panic selling** – Dumping assets during temporary downturns
- **Analysis paralysis** – Waiting for the “perfect” deal that never comes
Make decisions based on fundamental analysis, not fear or greed. Learn how to [overcome fear in real estate investing](https://rodkhleif.com/overcoming-fear/).
### Read Market Sentiment
When sentiment is overwhelmingly positive and everyone’s bullish, markets are often near peaks. When sentiment turns extremely negative, opportunities often emerge.
Use sentiment as a contrarian indicator, but validate it with hard economic data.
### Manage Emotions
FOMO pushes investors to overpay at peaks. Fear causes premature selling during corrections.
**How to stay disciplined:**
1. Develop a written investment thesis
2. Establish clear buy and sell criteria based on metrics
3. Create a decision-making framework
4. Consult with trusted advisors before major decisions
5. Review historical market cycles for perspective
6. Maintain adequate reserves to avoid forced sales
The best investors remain calm when others panic or get overly excited.
## ESG Considerations in Modern Multifamily Investing
Environmental, social, and governance factors increasingly shape long-term profitability and market resilience in 2026.
### Environmental Sustainability
Investors are placing premiums on properties with eco-friendly practices and energy-efficient systems.
**High-impact green improvements:**
- Solar panel installations
- Energy-efficient HVAC systems
- LED lighting throughout
- Low-flow water fixtures
- Smart thermostats
- EV charging stations
- Energy Star appliances
- Improved insulation and windows
Green properties reduce operational costs, attract quality tenants willing to pay higher rents, and position you favorably as regulations tighten.
### Social Responsibility and Governance
Properties prioritizing inclusivity, accessibility, community engagement, and strong governance practices perform better long-term.
Transparent operations and positive community relationships create resilience during downturns and enhance property reputation.
## The Federal Reserve’s Impact on Multifamily Markets
The Fed’s actions significantly influence multifamily investment opportunities. Understanding monetary policy helps you anticipate market shifts.
Recent years demonstrated multifamily’s resilience. When the Fed raised rates aggressively to combat inflation, multifamily remained strong compared to other real estate sectors.
**Why multifamily stays resilient:**
- Provides essential housing (non-discretionary need)
- Diversified income from multiple tenants
- Natural inflation hedge as rents rise with CPI
- Lower risk profile than other real estate sectors
- Strong institutional demand for stable assets
Fed policy continues shaping the landscape. Rate decisions directly impact financing costs, property valuations, and buyer competition.
Stay informed about Fed meetings and economic projections to time acquisitions and dispositions strategically.
## Taking Action: Your Market Timing Strategy
Multifamily real estate is a long-term wealth-building strategy, and market timing significantly maximizes your profits.
While there’s no foolproof method to predict market fluctuations with certainty, understanding these indicators provides valuable insights into optimal buying and selling windows.
**Your action plan:**
1. Track market indicators in your target markets weekly
2. Build relationships with brokers, lenders, and experienced investors
3. Maintain capital reserves for opportunities
4. Secure financing relationships before you need them
5. Create a written investment criteria document
6. Study market cycles and historical patterns
7. Join investor communities for real-time market intelligence
8. Continuously educate yourself on market dynamics
Most importantly, maintain capital reserves and financing relationships so you’re ready to act when opportunities emerge.
The fortunes in multifamily real estate are made by investors who understand cycles, control their emotions, and have the courage to buy when others won’t and sell when others can’t stop buying.
Ready to take your multifamily investing to the next level? [Join our investor community](https://rodkhleif.com/warrior-program/) and get access to proven strategies, market insights, and mentorship from experienced investors.
That’s how you build real wealth in multifamily real estate.
*Disclaimer: This article was written with the help of AI and reviewed by Rod and his team.*
**Categories:** Blog, Psychology of Success
**Tags:** Buying Apartments near Me, House Hacking Real Estate, Multi Family Apartments for Sale, multifamily investing, real estate investing, Real Estate Investors near Me, real estate syndication
---
### [How To Get Started With Multifamily Investing With Limited Capital](https://rodkhleif.com/how-to-get-started-with-multifamily-investing-with-limited-capital/)
**Published:** December 29, 2025
**Author:** Alex Khleif
**Content:**
If you are waiting to start in multifamily until you have more money, you may be waiting a long time. This game is not about asking, “How do I invest when I’m rich?” The game is **“How do I build skill, credibility, relationships, and momentum… so money follows me?”** Limited capital doesn’t disqualify you. It just forces you to get sharper, more resourceful, and more intentional. And honestly? This should be considered a gift, because it makes you learn the business the right way. Here are the most realistic ways to start multifamily investing with limited capital.
## **First: Define “Limited Capital” (So You Pick the Right Play)**
When people say “I don’t have money,” they usually mean one of these:
1. **I can’t afford a big down payment** (typical)
2. **I don’t have reserves** (dangerous)
3. **My income/credit isn’t financeable yet** (fixable)
4. **I’m scared to risk what I do have** (honest and very common)
Your strategy depends on which one you are. Because if you’re short on a down payment but you *do* have good credit and steady income? You’ve got options.
If you’re short on reserves? You need to slow down, build the runway, and partner smart.
## **Path #1: House Hack a Small Multifamily (The “Most Practical” Start)**
If you want the simplest on-ramp into multifamily with limited capital, [house hacking](https://rodkhleif.com/why-house-hacking-a-plex-is-the-best-possible-way-to-start-investing/) is a great start:
**Buy a 2–4 unit property, live in one unit, rent the others.
This strategy can greatly lower your housing costs. It can help you get a loan that lenders like. You will gain landlord experience quickly. It will also help you build a record for your next deal.
### **What to look for**
- Duplex, triplex, or fourplex in a stable rental area
- A property that’s *not perfect* but has obvious value-add (cosmetic upgrades, better management, rent increases to market)
### **The discipline most people miss**
You don’t buy a “dream home.” You buy a business that happens to include a place to sleep, and you build reserves.
## **Path #2: Partner Your Way In (Bring Value, Not Just Money)**
This is where most beginners get it wrong. They think the only thing they can bring is cash. This is absolutely not true.
In multifamily, people partner all the time based on:
- underwriting skill
- deal sourcing
- broker relationships
- asset management execution
- property management oversight
- capital raising / investor relations
If you’re low on cash, you become the person who reduces risk or increases certainty for the team. [Figure out what your superpower](https://rodkhleif.com/podcasts/finding-your-superpower/) is and bring that skill set.
### **What “superpower” can look like (even if you’re new)**
- You underwrite deals every day and become the “numbers machine”
- You learn one market deeply and bring opportunities
- You build broker relationships and become a reliable buyer presence
- You become the operations person who handles weekly reporting, due diligence tracking, vendor bids, insurance comparisons, etc.
Here’s the secret:
**Money is attracted to competence.
So if you want to get partnered into deals, stop trying to “convince” people you’re ready and start showing them you’re ready.
## **Path #3: Become the Deal Finder (Then Structure Yourself Into the Equity)**
You know what every serious operator wants? **Great deals. And [great deals are hard to find](https://rodkhleif.com/product/finding-deals-course/). If you can consistently bring real opportunities, you become valuable fast.
### **What this actually requires**
- picking one or two target property types (e.g., 50–150 unit value-add B/C multifamily)
- focusing on one market
- building broker relationships
- [underwriting](https://rodkhleif.com/commercial-real-estate-underwriting-tool/) quickly
- following up relentlessly
A new investor’s superpower is time and obsession. Most people dabble. If you don’t dabble and commit you’ll be leagues ahead of others.
## **Path #4: Use Creative Financing (But Only If You Know What You’re Doing)**
Creative financing can help limited-capital buyers, but it’s not magic and it’s not risk-free.
Some examples you’ll hear about:
- seller financing
- subject-to / loan assumptions (where applicable)
- master lease structures
- partnerships with pref equity / private debt
These can work, especially in slower markets or with tired owners. But let me give you the warning label:
**If you don’t understand the downside, you don’t understand the deal.
Creative finance is powerful when you have strong underwriting, legal structure done correctly, real reserves, and exit strategies you’ve stress-tested. Otherwise, it’s possible you might get crushed.
## **Path #5: Start as a Passive Investor (To Build Credibility + Learn)**
If you have limited money but can invest a little, consider being a passive investor. Look for a deal with a strong operator.
It helps you see how deals work in the real world. You can start building relationships with experienced operators. You will also begin to create a track record and gain credibility. You also get to see parts that most people don’t understand. This includes reporting, distributions, asset management, and refinances. You will know what “owning” really means after the closing table.
If you treat it like an apprenticeship, you can ask good questions and offer help. By showing up, you can often take on a more active role over time.
## **The Real Constraint Usually Isn’t Capital. It’s Credibility.**
I’m going to be blunt again.
Most people don’t actually lack money. What they lack is the stuff that makes money follow them: consistency, follow-through, enough underwriting reps, and the confidence to talk to brokers and investors without getting awkward. They also don’t have a network that trusts them yet.So let’s fix that.
Start building a simple “Credibility Stack.” You don’t need to pretend you’re a billionaire. You just need to become credible in a few specific ways. Know your market well enough to explain why it works, i.e., jobs, rents, supply and demand, and the landlord laws that matter. Get deal-fluent so you can underwrite quickly and speak the language without sounding like you’re reading from a script. Build an action history you can point to, because doing the work weekly beats talking about it once a month. And get around people who are actively doing deals, whether that’s coaches, masterminds, or serious investor groups.
One of the fastest, cheapest leverage moves is joining, or forming, a real accountability group. Weekly. Deal-focused. Action-focused. It keeps you sharp, it keeps you moving, and it puts you in the room with people who actually execute.
In Rod Khleif’s Warrior Program ecosystem, the biggest demand is for underwriting, broker outreach, deal evaluation, capital raising, and asset management. These skills are what really make a difference.
## **What I’d Do If I Were Starting Today With Limited Capital
If I was starting from scratch today without a pile of cash, I’d keep it simple and I’d stay locked in for 90 days. The fastest way to stall out is trying to do everything at once, so I’d pick one path and go all-in. House hack a 2–4 unit. Plug in as the underwriting/deal analyst on someone else’s team. Become a deal finder in one market. Or go passive while you apprentice and learn the business from the inside. One lane. No distractions.
Then I’d start building reps—real reps. Minimum three underwrites a week, every week. Not reading about underwriting. Not watching another YouTube breakdown. Actually underwriting deals, saving every file, writing down assumptions, and keeping a running log. Over time, you’ll start seeing patterns: what brokers consistently overpromise, what expenses get missed, where rent growth assumptions get sloppy, and what actually pencils in your market.
At the same time, I’d be talking to five brokers a week. Consistency matters more than being smooth. You need to become the person they recognize, the person who follows up, and the person who’s easy to work with. Brokers don’t send their best opportunities to the “someday investor.” They send them to the people who show up and keep showing up.
I’d also put together a basic “I’m serious” package. Nothing fancy. A one-page buyer profile is important. It should include clear criteria like property type, unit count, location, vintage, and value-add angle. You also need to show that you are active in the market. If you don’t have a long resume yet, your activity can show your skills. This includes your underwriting volume, broker calls, team role, and consistency.
And last, I’d get around real operators and potential partners as fast as possible. This business doesn’t scale as a solo act, especially when capital is tight. It’s always been and will always be a team sport. You need partners, mentors, lenders, vendors, property managers, and eventually investors. The quickest way to earn those relationships is simple: show up prepared, do what you say you’ll do, and bring value to the table before you ask for anything.
## **The Biggest Mistakes I See Beginners Make With Limited Capital**
### **1) Confusing “no money” with “no path”**
There’s almost always a path. But it requires work and humility.
### **2) Chasing 10 strategies at once**
Pick one. Execute it hard. Build momentum. Then expand.
### **3) Ignoring reserves**
If you don’t have reserves, you’re not investing, you’re gambling.
### **4) Trying to sound impressive instead of being prepared**
Nobody cares about hype. They care about competence.
### **5) Waiting for confidence before taking action**
Confidence comes from reps. Not from reading.
## **The Truth: You Don’t Need More Money First. You Need More Skill First.**
Money is not the only fuel in multifamily.
**Certainty is fuel.
**Competence is fuel.
**Relationships are fuel.
**Execution is fuel.
So if capital is limited, your job is simple:
Become the person who brings enough value that capital wants to partner with you.
And then? You’re in the game.
If you want to learn more about Multifamily Investing or hear from people who have made it, check out my podcast, [*The Lifetime Cashflow Through Real Estate Investing Podcast.* ](https://rodkhleif.com/lifetime-cashflow-podcast/)## FAQ: How to Start Multifamily Investing with Limited Capital
**How can I start multifamily investing with limited capital?
You can start multifamily investing with limited capital by house hacking a 2–4 unit property, partnering with experienced operators, bringing value through underwriting or deal sourcing, or investing passively to learn the business while building credibility.
**What is the best first multifamily property to buy with limited capital?
For most beginners with limited capital, a duplex, triplex, or fourplex is the best first step because you can live in one unit and rent the others to offset the mortgage while building real landlord and operating experience.
**Can I invest in multifamily with no money down?
It’s possible, but it’s not common and it’s rarely “free.” No-money-down multifamily deals usually require seller financing, assumable financing (when available), or partnerships where you contribute skills like underwriting, operations, or deal sourcing instead of cash.
**How do partnerships work if I have limited capital?
Partnerships work when you bring real value that reduces risk or increases returns—like sourcing deals, underwriting, due diligence support, asset management help, or investor communications—while another partner brings more capital and experience.
**Is house hacking considered multifamily investing?
Yes. Buying a 2–4 unit property and living in one unit while renting the others is a common entry point into multifamily investing because you’re operating a small multifamily property and building a track record.
**How much money do I need to start multifamily investing with limited capital?
The amount depends on your strategy and market. House hacking may require a down payment plus closing costs and reserves, while partnering may require less cash but more time and skill. Regardless of strategy, having reserves is critical to avoid getting forced into bad decisions.
**What’s the biggest mistake beginners make when starting with limited capital?
The biggest mistake is underestimating reserves and overestimating rents or renovations. Limited capital means you must underwrite conservatively, build a buffer, and avoid deals that only work if everything goes perfectly.
**Should I start as a passive investor if I have limited capital?
Starting as a passive investor can be a smart move if you can invest some capital and want to learn how deals operate. It helps you understand reporting, operations, and sponsor decision-making while building relationships that can lead to more active roles later.
**How do I build credibility for multifamily investing with limited capital?
Build credibility by underwriting deals weekly, learning one market deeply, consistently talking to brokers, creating a clear buyer profile, and working alongside experienced investors. Competence and consistency attract partners and capital.
**How long does it take to start multifamily investing with limited capital?
Timelines vary, but momentum comes from consistent weekly actions—underwriting, broker outreach, and networking. Many investors build deal-ready credibility within 90 days of focused effort, while closing a first deal can take longer depending on market conditions and strategy.
*Disclaimer: This article was written with the help of AI and reviewed by Rod and his team.* **Related reading:** For a complete overview of structures beyond conventional bank loans, including seller financing, master lease, sub-to, private money, JV, and syndication, read [creative financing in real estate](https://rodkhleif.com/creative-financing-in-real-estate-go-beyond-investment-property-lending/).
For the broader path, see our [10 step quick start to multifamily investing](https://rodkhleif.com/10-step-quick-start-multifamily-investing/) and the [first steps to becoming a multifamily syndicator](https://rodkhleif.com/what-are-the-first-steps-to-becoming-a-multifamily-syndicator/) once you are ready to scale.
**Categories:** Blog
---
### [10 Steps to Quick Start Multifamily Investing](https://rodkhleif.com/10-step-quick-start-multifamily-investing/)
**Published:** May 27, 2025
**Author:** Rod Khleif
**Excerpt:** Small Multifamily (2 – 30 units) is a niche with little competition that’s ripe with opportunities. The majority of the owners of these size properties are mom and pops, which often means below market rents, value add potential, and seller financing possibilities. Don’t overlook these small properties! Follow the quick 10-step plan below to take one down and start building Life Time Cash Flow!
**Content:**
### **Why Small Multifamily Right Now?**
If you’re serious about financial freedom, small multifamily (two to 30 units) is the lowest-hanging fruit in today’s market. Most of these properties are still owned by Mom-and-Pop landlords, meaning under-market rents, tired interiors, and wide-open value-add potential. In other words, opportunity is begging you to take massive, focused action.
> **Key takeaway:** The “perfect” deal isn’t out there. The perfect *deal for you* is waiting once you define your criteria and pull the trigger.
## **1. Audit Your Personal Finances**
Before you chase deals, inspect your own balance sheet. How much capital can you deploy? Will you lean on FHA, conventional, or a commercial mortgage? Identify gaps now so you can present yourself to lenders with confidence.
## **2. Choose Residential (2–4 Units) or Commercial (5–30 Units)**
Residential loans allow house-hacking and 30-year amortizations; commercial loans hinge on property performance and often carry balloon payments. Pick your lane so you can master its unique underwriting rules and exit strategies.
## **3. Laser-Focus on a Promising Market**
You can’t underwrite 2.25 million multifamily properties at once. Narrow your search to metros showing:
- Sustained job growth
- Rising median incomes
- Positive population trends
- Multiple recession-resistant employers
## **4. Recruit a Rockstar Broker & Relationship Banker**
Success is a team sport. Lock in an investor-savvy broker who eats multifamily for breakfast and a local banker who knows your name *before* you need a term sheet.
## **5. Warm Up Potential Investors Early**
Whether you need capital today or next year, start genuine relationships now. Talk life first, real estate second. When the right deal drops, your partners will already trust you.
## **6. Present Yourself Like a Pro**
This isn’t a hobby, this is your business. Grab a clean logo, simple WordPress or Squarespace site, Google Voice number, and quality business cards. Perception opens doors long before cash does.
## **7. Build a Gold-Mine Owner Database**
Download county assessor data or pull lists from ListSource, then track owners in a CRM or even a simple spreadsheet. Segment by unit count, equity, and length of ownership. This is intel you’ll wield for laser-targeted outreach.
## **8. Launch Your First Direct-Mail Campaign**
Hand-addressed letters still crush it with Mom-and-Pops. One of my Houston Warrior couples mailed just 300 letters and landed a 36-unit that now throws off over $10K a month. Consistency is king, set and forget weekly or monthly drops.
## **9. Stack Additional Deal-Flow Channels**
Fuel your pipeline with auctions, driving for dollars, Craigslist, LoopNet “over-the-hill” listings, and even Facebook Marketplace. Diversified lead gen keeps you from starving between mail-drop wins.
## **10. Practice Analyzing Deals Daily**
Residential (2–4 units) trades on comps; commercial (5+ units) trades on NOI and cap rate. Underwrite at least one deal a day until the numbers talk back to you. Reps build instincts, and instincts close deals.
### **Ready for the Deep Dive?**
I unpack each of these steps—plus the mindset hacks that propelled me past a **$50 million loss,** in my bestselling book, **“How to Create Lifetime Cash Flow Through Multifamily Properties.”
\[[Grab your free copy here »](https://www.lcfabook.com/core-book/?sl=rksite)\]
*Now get out there, my friend, and make your year the one you finally take massive, determined action toward true financial freedom!*
If you want a deeper walkthrough on starting with little money or moving toward larger deals, see [how to get started with limited capital](https://rodkhleif.com/how-to-get-started-with-multifamily-investing-with-limited-capital/) and the [first steps to becoming a multifamily syndicator](https://rodkhleif.com/what-are-the-first-steps-to-becoming-a-multifamily-syndicator/).
**Categories:** Blog, Finding Deals
**Tags:** Driving Force, landlord, motivation, multifamily, multifamily property investing, multifamily real estate, real estate, real estate investing, real estate podcast, Rod Khleif
---
### [Creative Financing in Real Estate: A 2026 Investor Guide](https://rodkhleif.com/creative-financing-in-real-estate-go-beyond-investment-property-lending/)
**Published:** April 27, 2026
**Author:** Rod Khleif
**Excerpt:** Creative financing strategies multifamily investors actually use. The 7-Lane Capital Map covers seller financing, master lease, sub-to, private money, hard money, JV, and syndication.
**Content:**
I have bought and sold over 2,000 properties in 40 years of investing. Almost none of the deals that built real wealth came from a clean conventional bank loan. The ones that built generational money used creative financing in real estate, the kind of structures most investors never learn because their bank, their broker, and their CPA are not paid to teach them. If you have been told that creative financing is risky, exotic, or only for “gurus” on YouTube, you have been told wrong. Used correctly, creative financing is the standard playbook for serious multifamily operators. This guide gives you the framework, the deal structures, and the exact decisions to make so you can fund your next property without depending on a bank that does not understand multifamily.
## Table of Contents
- [Why Most Investors Get Stuck on “Just Get a Loan”](#stuck-on-just-get-a-loan)
- [The 7-Lane Capital Map](#the-7-lane-capital-map)
- [How to Choose a Lane](#how-to-choose-a-lane)
- [How to Reverse-Engineer Your First Creative Deal](#reverse-engineer-first-deal)
- [Three Worked Scenarios](#three-worked-scenarios)
- [Reactive Path vs. The 7-Lane Path](#reactive-vs-7-lane)
- [Conventional Lending vs. Creative Financing](#conventional-vs-creative)
- [Warriors Who Used Creative Financing to Close](#warrior-proof)
- [Creative Financing in Real Estate FAQ](#creative-financing-faq)
- [Ready to Take the Next Step?](#next-step)
## Why Most Investors Get Stuck on “Just Get a Loan”
> Creative financing in real estate is any acquisition or capital structure that does not depend on a single conventional bank loan to the buyer. It includes seller financing, master lease options, subject-to deals, private money, hard money bridges, joint ventures, and syndication. Done right, it lets you control more property with less personal capital and less personal risk than a traditional loan would ever allow.
The reason most investors stall after their first duplex is simple. They have been trained to think there is only one path to ownership: pre-approval, 25% down, 30 year amortization, and a personal guarantee. That path works for a single house. It collapses the moment you try to scale into apartment buildings, because no one bank will keep underwriting you the same way once your debt-to-income ratio gets in the way of your ambition. You do not actually have a deal flow problem. You have a capital structure problem. The investors who scale fastest in this business have learned to match the right financing tool to the right deal, instead of forcing every deal into the same conventional box. ***Want to dive even deeper into Multifamily?*** [](https://rodkhleif.com/lcfa-ebook/)
[**Download the free Lifetime Cashflow book →**](https://rodkhleif.com/lcfa-ebook/)
### Signs You Are Stuck in the One-Loan Mindset
- You walk away from any deal where the seller will not accept a clean cash offer.
- Your only “down payment plan” is your own savings or a HELOC on your primary home.
- You think “raising capital” means asking your dad or your dentist for $50K.
- You assume the seller’s existing loan is irrelevant to your offer.
- Your underwriting only models a 75% LTV bank loan and nothing else.
- You have never run the numbers on a deal you would not own outright.
If three or more of those describe you, you are leaving deals on the table every month. The fix is not more cash. The fix is a wider toolkit. That is what the rest of this guide builds. ## The 7-Lane Capital Map
The 7-Lane Capital Map is the framework I teach inside the [Warrior Program](https://rodkhleif.com/rod-khleif-warrior-program/) for matching a deal to its best financing structure. Each lane is a complete capital strategy on its own, and most real-world deals combine two or three. ### Lane 1: Seller Financing
Seller financing is the simplest creative deal structure. The seller becomes the bank, holds a note for some or all of the purchase price, and you make payments directly to them instead of to a third-party lender. There is no bank underwriting, no personal financial statement gauntlet, and no agency call protection clause to worry about. The seller writes the terms with you in the purchase contract. Seller financing works best when the seller owns the property free and clear or has high equity, when they want passive income instead of a lump sum, and when they trust that you can operate the asset. Many sellers prefer it because it spreads their capital gains tax over years through installment sale treatment, instead of one giant tax hit at closing. For a deeper dive on the structure, listen to Rod’s episode on [seller financing in multifamily real estate](https://rodkhleif.com/podcasts/exploring-seller-financing-in-multifamily-real-estate/). ### Lane 2: Master Lease Option
A master lease option is two contracts in one. The first is a long-term lease, usually 3 to 10 years, that gives you full operational control of the property. The second is a fixed-price purchase option that lets you buy the property at any point during the lease term at a price you locked in today. You do not take title up front and you do not need a loan to control the property. This structure shines when a property is mismanaged but the seller will not accept a discount on price. You take over operations, push net operating income up, and exercise the option once the value has grown enough to justify a refinance into a permanent loan. Master leases also work for tired sellers who want out of day-to-day management but are not ready to sell. ### Lane 3: Subject To (Sub-To)
In a subject-to deal, you take ownership of the property “subject to” the existing mortgage staying in place. The seller’s loan does not get paid off at closing. You take title, you make the payments, and the loan keeps the seller’s name on it. This is the fastest way to acquire a property in a high interest rate environment because you inherit whatever interest rate and term the seller already has. Sub-to has real risk. The “due on sale” clause in most mortgages technically allows the lender to call the loan if title transfers. In practice this is rare on performing loans, but you have to be prepared with a refinance plan if it ever happens. Always use an attorney experienced in sub-to closings, and always keep loan payments current to the day. Pace Morby explains the structure clearly in [his Lifetime Cashflow podcast appearance with Rod](https://rodkhleif.com/podcasts/creative-financing-single-family-vs-multifamily-with-pace-morby-rod-khleif/). ### Lane 4: Private Money Lenders
Private money is capital you borrow from individuals you have a real relationship with. These are accredited investors, family members, friends, doctors, business owners, and other operators who are looking for better than stock-market returns secured by a real asset. You write a promissory note, give them a recorded mortgage on the property, and pay an interest rate that beats what they would earn from a CD. Private money is faster and more flexible than any institutional lender. You can close in two weeks. You can negotiate interest-only payments. You can structure a balloon at year five. The catch is that you must protect their capital better than you protect your own. One blown deal with a private lender ends your network forever. Treat every dollar like a sacred trust. For more on how to fund deals when you are starting out, see the guide on [multifamily investing with limited capital](https://rodkhleif.com/how-to-get-started-with-multifamily-investing-with-limited-capital/). ### Lane 5: Hard Money Bridge
Hard money is short-term, asset-based debt from a specialized lender. Rates run higher than conventional, often 9% to 12%, and terms are typically 6 to 24 months. The lender does not care much about your personal credit. They underwrite the asset, the value-add plan, and the exit. Hard money is the right tool when you need to close fast on a distressed deal that will not qualify for agency debt yet, with a clear plan to refinance into permanent debt once you stabilize. The mistake most beginners make with hard money is treating it like a hold strategy instead of a bridge. You should always know your refi exit before you sign the term sheet, and you should stress-test the rate environment 12 months out. If your refi plan depends on rates dropping a full point, you do not have a refi plan, you have a hope. ### Lane 6: Joint Venture (JV) Partnership
A JV partnership pairs an operator with capital partners on a single deal under a private agreement. The cash partner brings the down payment and reserves. The operator brings the deal, the underwriting, the lender relationships, and the asset management. The two split equity according to whatever they negotiate, often 70/30 or 60/40 in favor of the cash side, with the operator earning their position through performance over time. JV is how most investors do their first three or four deals before they ever set up a syndication. It is simpler legally, it does not require an SEC exemption registration in the same way a syndication does, and it lets you build a track record on someone else’s checkbook. To understand how multiple capital sources combine on a single deal, read the guide to [how the capital stack impacts returns](https://rodkhleif.com/financing-your-deal-understanding-the-capital-stack/). ### Lane 7: Syndication
Syndication is the highest-leverage lane in the entire framework. You pool capital from multiple limited partners under a Private Placement Memorandum (PPM), buy a much larger asset than any single partnership could fund, and the general partnership team manages the deal in exchange for an acquisition fee, asset management fee, and a promote share of the equity above a preferred return. This is how a beginner can go from owning zero units to controlling a 100-unit apartment building inside 18 months. Syndication is also the most regulated. You need an SEC attorney, a Reg D 506(b) or 506(c) exemption, a real estate fund administrator, and disciplined investor relations. It is not the right starting point for most people, but it is the right ending point for almost everyone serious about scale. Rod covers the structure end-to-end in [the complete guide to multifamily syndication](https://rodkhleif.com/what-is-multifamily-syndication-a-complete-guide/). ## How to Choose a Lane
Choosing the right lane is not about your favorite tactic. It is about matching three variables: the seller’s motivation, the property’s condition, and your own capital position. The 7-Lane Capital Map gives you the menu, but the deal itself tells you what to order. Sellers who own free and clear and want passive income lean toward seller financing. Sellers who hate management but love the income lean toward master lease options. Sellers carrying a low-rate loan they want to walk away from lean toward subject-to. Distressed properties with strong upside but ugly current numbers want hard money bridges. Investors with strong relationships and weaker wallets gravitate to private money and JV. Investors with track records and broad networks graduate to syndication. The deeper truth is that every commercial deal of any meaningful size uses a layered capital stack, not a single source. According to the Federal Reserve’s H.8 release on commercial bank assets, multifamily mortgage debt outstanding crossed two trillion dollars at the end of 2024, and the National Multifamily Housing Council’s quarterly survey consistently shows that more than 60% of professional operators report using a mix of agency, bridge, and equity capital on individual deals ([Federal Reserve H.8](https://www.federalreserve.gov/releases/h8/current/); [NMHC Quarterly Survey](https://www.nmhc.org/research-insight/quarterly-survey/)). The investors who get stuck believing they need one bank loan are out of step with how the rest of the industry actually finances deals. Build your relationships in every lane before you need them. The day you find an off-market 30-unit at the right price is not the day to start meeting private lenders. ## How to Reverse-Engineer Your First Creative Deal
Pick a target asset class and submarket, then work the structure back from the seller’s motivation. The same six steps work whether you are buying a fourplex or a 60-unit: 1. **Define the buy box.** Asset class, unit count range, market, sub-market, year built, vintage, and minimum cash-on-cash return target. If you cannot describe the next deal in one sentence, you are not ready to make offers.
2. **Source seller-direct, not just MLS.** Direct mail, broker relationships, Google ads on “sell my apartment building” intent, and warm introductions from your network. The best creative deals come from sellers no one else is talking to.
3. **Read the seller before you write the offer.** Ask why they are selling, what they will do with the money, what their tax situation looks like, and whether they would accept payments instead of a lump sum. Their answer dictates which of the seven lanes you propose.
4. **Underwrite three structures, not one.** Always model conventional, seller-financed, and a JV alternative side by side. The deal that does not pencil under conventional often pencils beautifully under creative.
5. **Lock financing parallel to negotiation.** Have your [multifamily financing options](https://rodkhleif.com/financing-your-multifamily-purchase/) mapped, your private lenders warm, and your [recourse vs. non-recourse](https://rodkhleif.com/recourse-vs-non-recourse-multifamily-financing-whats-the-difference/) decision made before you go under contract. Speed and certainty close deals.
6. **Plan the exit at the offer stage.** Hard money, sub-to, and bridge debt all need a refi or sale plan baked in. Write the exit on the same page as the offer or you will regret it 18 months later.
### Three Worked Scenarios
**Scenario 1: $500K seller-financed 4-unit (Lane 1).** Owner is 71 years old, owns free and clear, hates the property tax bill but does not want a lump sum that will push him into a higher capital gains bracket. You offer $500K with $50K down and a 7-year balloon note at 6.5%. He gets predictable monthly income and spreads his tax. You get the building with $50K of your own cash and a private lender funding the down payment as a 2nd position note. Total cash to close from your pocket: zero. This is exactly the kind of starter deal covered in [how to buy a multifamily property with no money](https://rodkhleif.com/how-to-buy-a-multifamily-property-with-no-money/). **Scenario 2: $2.4M sub-to plus JV on a 24-unit (Lanes 3 and 6).** Seller has a $1.6M conventional loan at 4.25% from 2019, an exhausted partnership, and a marriage falling apart. You take title sub-to the existing 4.25% loan, which is far below current market rates. A capital partner brings $400K to fund cosmetic value-add and reserves. Operator and capital partner split equity 30/70 after a 7% preferred return. The loan stays in the seller’s name on paper but the property and cash flow are yours. Five-year stabilization plan ends with a refi into agency permanent debt. **Scenario 3: $12M syndication on a 120-unit (Lane 7).** $8M Fannie Mae small balance loan, $4M raised from 18 limited partners under a 506(c) PPM. Class A 8% preferred return, 70/30 split above the pref. GP earns a 1.5% acquisition fee, a 2% asset management fee, and a 30% promote. Three-year value-add plan, refi at year three, hold for two more, sell year five. Operator does not put a dollar of personal capital in. The path from Scenario 1 to Scenario 3 takes most disciplined operators 18 to 36 months. ## Reactive Path vs. The 7-Lane Path
Reactive vs. FrameworkHow beginners stall vs. how Warriors scale Stage Reactive Path 7-Lane Path Deal sourcing ✗Scrolls Zillow and LoopNet for already-priced listings ✓Goes seller-direct, asks about motivation before price Capital plan ✗“I will get pre-approved with my bank” ✓Builds private money list, JV bench, and lender relationships in parallel Underwriting ✗Models one capital structure, kills the deal if it does not work ✓Models three structures side by side, picks the one that fits the seller Negotiation ✗Argues on price alone ✓Trades terms, time, and tax treatment for price flexibility Risk profile ✗Personal guarantee on every dollar of debt ✓Prefers non-recourse where possible, ring-fences risk by entity Speed to close ✗60-90 days, dependent on bank schedule ✓14-45 days using bridge, private money, or sub-to Scale ceiling ✗Caps out at 3 to 5 properties before DTI breaks ✓Scales unbounded through syndication and partnerships ## Conventional Lending vs. Creative Financing
Conventional vs. Creative FinancingWhere each tool actually wins Factor Conventional Loan Creative Financing Down payment ✗20 to 30% from your own funds ✓0 to 10% from your funds, balance from sellers, partners, or LPs Approval criteria ✗Personal DTI, FICO, tax returns, two years W-2 history ✓Property cash flow, operator track record, capital partner trust Closing speed ✗60 to 90 days, lender-paced ✓14 to 45 days, deal-paced Personal liability ✗Recourse and personal guarantee on most loans under $1M ✓Often non-recourse or carry-back, risk capped to entity Best use case ✗Stabilized, vanilla, owner-occupied or sub-5-unit ✓Value-add, distressed, off-market, or commercial multifamily Scale ceiling ✗10 financed properties under Fannie / Freddie limits ✓No personal cap, scales with relationships and track record Cost of capital ✗Lowest stated rate, but real cost includes opportunity cost of locked equity ✓Higher stated rate on debt, far higher cash-on-cash return on equity ## Warriors Who Used Creative Financing to Close
Inside the [Warrior Program](https://rodkhleif.com/rod-khleif-warrior-program/), members have collectively acquired over 260,000 units, and a meaningful percentage of those deals were closed using creative structures from the 7-Lane Capital Map. One Warrior closed a 32-unit at a 9% pref using seller financing and private money in 23 days. Another built a $24M portfolio over four years starting from a single $50K JV check on a 12-unit. A third walked into a Warrior call with no deal, no money, and no team and was joined onto an active syndication GP team within 90 days because they brought operational rigor to the table. The thread that connects every one of these stories is not capital. It is a refusal to accept that the only way to buy is the way the bank lays out. Rod’s experience over 40 years and 2,000+ properties is exactly that the deals you remember decades later are the ones you structured, not the ones you simply financed. > **Rod Khleif:** “The investors I have watched build the most generational wealth never asked the bank for permission. They learned to ask the seller for terms, the partner for capital, and the universe for the deal. Then they did the work.”
If you want to hear how successful operators are putting these structures together right now, listen to the [multifamily capital raising episode with Nelson Diaz](https://rodkhleif.com/podcasts/he-raised-600k-for-his-first-deal-in-6-weeks/) or Pace Morby on [creative financing in multifamily versus single family](https://rodkhleif.com/podcasts/creative-financing-single-family-vs-multifamily-with-pace-morby-rod-khleif/). The mindset is the same. The mechanics scale. ## Creative Financing in Real Estate FAQ
**Q: Is creative financing in real estate legal?** A: Yes, when structured correctly. Seller financing, master lease options, JVs, and syndications are all standard legal instruments used in commercial real estate every day. Subject-to deals are legal but require careful disclosure and documentation. Always work with an attorney experienced in your specific structure. **Q: How much money do I need to start with creative financing?** A: Less than you think. A seller-financed duplex can close with under $25K out of pocket if you bring in a private money lender for the down payment. A JV partnership can close with $0 of your own cash if you bring the deal and operational expertise to a capital partner. The capital you need depends on the lane, not the lane on the capital. **Q: What is the difference between seller financing and subject-to?** A: In seller financing, the seller’s existing loan is paid off at closing and the seller writes a new note directly to you. In subject-to, the seller’s existing loan stays in place and you take title with the loan still on the property. Sub-to is faster and lets you inherit the existing interest rate. Seller financing is cleaner legally but requires the seller to either own free and clear or to pay off their lien at closing. **Q: Can I buy a multifamily property with no money down using creative financing?** A: Yes, in some cases. The combinations that get you closest to zero down are seller financing plus private money second lien, JV with the operator earning equity through performance, and sub-to deals where the existing loan covers most of the purchase. Read more on the mechanics in [how to buy a multifamily property with no money](https://rodkhleif.com/how-to-buy-a-multifamily-property-with-no-money/). **Q: Is hard money worth it for multifamily deals?** A: Yes, when used as a bridge to permanent debt on a value-add deal. The high interest rate is acceptable for 6 to 18 months if it lets you close fast, force value through repositioning, and refinance into agency permanent debt at higher NOI. Hard money is the wrong tool for stabilized hold strategies. **Q: How does syndication work in creative financing?** A: A syndication pools capital from multiple limited partners to acquire a property too large for any single buyer. The general partnership team finds the deal, raises the equity, signs on the loan, and manages the asset, in exchange for fees and a promote share above a preferred return paid to the LPs. Syndication uses agency or bridge debt for the senior loan and equity from the LP raise for the down payment and reserves. **Q: Do I need an SEC license to raise capital?** A: No, but you do need to follow an SEC exemption such as Regulation D 506(b) or 506(c). Both let you raise capital from accredited investors without a full public registration, but each has different rules around general solicitation and verification of accreditation. Always work with an SEC attorney before accepting your first dollar from an outside investor. **Q: What is a capital stack and why does it matter?** A: The capital stack is the layered structure of debt and equity used to finance a deal. A typical multifamily stack includes a senior loan, sometimes a mezzanine layer, preferred equity, and common equity. Understanding the stack matters because each layer has different risk, return, and priority of payment. Read the full breakdown in [how the capital stack impacts returns](https://rodkhleif.com/financing-your-deal-understanding-the-capital-stack/). **Q: How do I find private money lenders?** A: Start with your existing network: attorneys, doctors, business owners, and other accredited friends and family. Build a one-page deal sheet that explains your strategy, returns, and security. Educate them on real estate as an asset class. Most first private loans come from people you already know, not strangers from the internet. **Q: When should I switch from JV to syndication?** A: When you have completed two or three JV deals, built a track record, developed a real investor list, and want to access deals larger than any single capital partner can fund. Syndication has higher legal and compliance overhead, so the deal size and recurring nature have to justify it. Most Warriors transition between deal three and deal six. ## Ready to Take the Next Step?
Creative financing is not optional in 2026. Rates are higher, banks are tighter, and the operators who scale are the ones who own a wider toolkit than a single conventional loan. The 7-Lane Capital Map gives you that toolkit. The next move is to put it into practice on your next deal. If you are serious about scaling beyond a single property and want to be in a room with operators who close creative deals every month, [**apply to the Warrior Program**](https://rodkhleif.com/rod-khleif-warrior-program/). Members have collectively acquired over 260,000 units and the program walks you through deal sourcing, structuring, raising capital, and running the asset, with weekly coaching from Rod and the Warrior network. If you are earlier in your journey and want a free, structured introduction to multifamily, the next [**Multifamily Bootcamp**](https://rodkhleif.com/bootcamp/) is the place to start. Three days of live training that have launched thousands of investors into their first deal. [](https://rodkhleif.com/bootcamp/)
[**Reserve your seat at the Multifamily Bootcamp →**](https://rodkhleif.com/bootcamp/)
[**Download the free Lifetime Cashflow book →**](https://rodkhleif.com/lcfa-ebook/)
*Disclaimer: This article was written by AI and reviewed by Rod and his team.* **Related reading:** [Letter of Intent Real Estate: Free Template 2026](https://rodkhleif.com/need-know-letter-intent/)
If you are weighing creative paths against a more conventional structure, see our [complete multifamily financing guide](https://rodkhleif.com/multifamily-financing-complete-guide/) and our breakdown of [when debt actually works for you](https://rodkhleif.com/is-debt-really-that-bad-utilizing-debt-vs-equity/).
**Categories:** Blog, Raising Capital, Real Estate
---
### [How to find an FHA multifamily lender?](https://rodkhleif.com/how-to-find-an-fha-multifamily-lender/)
**Published:** April 3, 2025
**Author:** Alex Khleif
**Content:**
**How to Find an FHA Multifamily Lender (Step-by-Step)**
Looking to finance your next multifamily property with low money down, fixed interest rates, and longer terms? An FHA multifamily loan might be the perfect fit. But how do you find the right lender who offers them?
Let’s break it down.
## What Is an FHA Multifamily Loan?
FHA multifamily loans are government-backed [financing options](https://rodkhleif.com/multifamily-financing-complete-guide/) insured by the Federal Housing Administration (FHA). They’re used to acquire, refinance, or construct multifamily properties—typically 5 units or more.
They come with low down payments (as low as 3.5% for certain types), competitive fixed interest rates, and long amortization periods (up to 35 years for some programs). These loans are especially powerful for newer investors looking for stability and favorable terms.
## Step 1: Know Which FHA Program You Need
There are several FHA multifamily loan programs, but here are the most common:
FHA 223(f) – For purchasing or refinancing existing multifamily properties. FHA 221(d)(4) – For ground-up construction or substantial rehabilitation. FHA 232 – For senior housing and assisted living facilities.
Knowing which program applies to your project will help you filter out lenders who specialize in that category.
## Step 2: Search for HUD-Approved Lenders
Only approved lenders can offer FHA-insured multifamily loans. To find them, visit the HUD Lender List Search and select your state. Filter results to “Multifamily Accelerated Processing (MAP) Lenders.” Look for lenders with strong activity in your property type and region. These lenders have experience navigating FHA’s detailed application process.
## Step 3: Research Lender Track Records
Not all FHA lenders are created equal. Here’s what to look for. Multifamily volume: Do they actively close FHA multifamily deals? Experience: Have they worked on deals similar in size and scope to yours? Reputation: Read reviews, check credentials, and ask for references. Don’t be afraid to schedule discovery calls with a few top picks.
## Step 4: Get Prequalified
Once you’ve found a few strong options, ask to get prequalified. This helps you understand your potential borrowing limits, see how your project stacks up, and get feedback on deal structure and timeline. Lenders familiar with FHA programs can guide you through pre-application steps and highlight what you’ll need for final underwriting.
## Final Thoughts
Finding the right FHA multifamily lender isn’t complicated—but it does require a bit of research and a solid game plan. The right lender won’t just fund your deal, they’ll be a partner in the process, helping you navigate the paperwork and close with confidence.
If an FHA path doesn’t fit your situation, you can also explore [creative financing](https://rodkhleif.com/creative-financing-in-real-estate-go-beyond-investment-property-lending/) strategies that go beyond traditional investment property lending.
**Categories:** Raising Capital
**Tags:** fha lender, fha multifamily, multifamily, real estate
---
### [Is Debt Really That Bad? The Power of Leverage](https://rodkhleif.com/is-debt-really-that-bad-utilizing-debt-vs-equity/)
**Published:** February 18, 2025
**Author:** Rod Khleif
**Excerpt:** If you’ve already purchased investment property, you may already have some knowledge about the information presented in this article. Although I go fairly deep, you could skip this one if you like. If you have never owned investment property, this information will definitely add value to you.
**Content:**
# **The Truth About Debt Financing in Real Estate**
If you’ve already purchased an investment property, you might be familiar with some of the concepts I’m about to share. But whether you’re new or experienced, understanding **debt financing** is crucial for any investor looking to build long-term wealth through real estate.
We’ve all been told: **Debt is bad.**
Over and over, we hear it. Cut up the credit cards, avoid loans, pay everything off as soon as possible.
But here’s the real question: **Is all debt bad?**
**No!**
**Can debt actually build wealth?**
**Absolutely!**
The key is knowing the difference between **bad debt and good debt.**
**Bad debt**= credit cards, car loans, and any borrowing that doesn’t produce income. This can be a financial trap.
G**ood debt=** debt used to acquire income producing assets. This can be one of the **most powerful tools for building wealth.**
## **Debt Financing: The Power of Leverage in Real Estate**
**Leverage**, or using **debt financing**, is what allows real estate investors to buy more property, scale faster, and boost returns without needing massive amounts of upfront capital.
Let’s break it down with a simple example.
### **No Debt vs. Smart Debt: Which Creates More Wealth?**
Imagine you buy a $1,000,000 property in cash. This property produces $75,000 in Net Operating Income (NOI) per year, giving you a 7.5% return.
Now, let’s say you use debt financing instead—putting 25% down ($250,000) and financing the remaining $750,000. Even after mortgage payments, you walk away with $20,000 in annual cash flow, giving you an 8% cash-on-cash return—higher than the all-cash scenario.
But here’s where debt financing gets really exciting…
Because you only put **$250,000 down**, you now have **$750,000 left** to invest in **three additional properties**.
Now, instead of earning $75,000 from one property, your **four leveraged properties could generate $80,000 to $100,000 in combined cash flow.**
✔ More cash flow
✔ More appreciation
✔ More tax benefits
✔ Faster portfolio growth
This is why smart investors use leverage. They don’t just buy properties, they **buy cash flow.**
## **The Dangers of Too Much Debt: Lessons from 2008**
Now, let’s be clear, **debt can be dangerous** if you misuse it.
If you were investing in 2005-2007, you saw a lot of risky loans with 85-90% loan-to-value (LTV) ratios, short term financing, and balloon payments. Many investors borrowed too much at the peak of the market. When values dropped, they couldn’t refinance, their loans came due, and they lost everything.
So **how do you protect yourself** from making the same mistake?
### **How to Use Debt Safely in Multifamily Investing**
1. **Keep Loan-to-Value (LTV) in Check:** Aim for 70-75% LTV in normal markets and 60-65% when prices get overheated.
2. **Secure Long-Term Fixed-Rate Loans:** 10- to 20-year fixed-rate financing protects you from rising interest rates and economic downturns.
3. **Maintain Strong Cash Reserves:** Keep 6-12 months of expenses in reserves to cover unexpected costs.
4. **Only Buy Cash-Flowing Properties:** Debt is only safe when the property’s income covers the mortgage, expenses, and reserves.
## **Debt Financing vs. No Debt: Which One Wins?**
A great way to compare **different leverage scenarios** is by looking at **[Internal Rate of Return](https://rodkhleif.com/measuring-returns-irr-vs-equity-multiple/) (IRR).**
Example:
- **Deal A:** 10% IRR with 50% leverage (lower risk, lower return)
- **Deal B:** 14% IRR with 75% leverage (higher risk, higher return)
Is the extra risk worth the extra return? If the market shifts, will you still be able to cover the mortgage?
This is why I always stress conservative leverage. You want to maximize returns while minimizing risk.
## **Using Equity to Expand Your Portfolio**
Over time, your properties **build equity,** which can be leveraged to acquire more assets.
### **How to Use Equity for Growth**
✔ **Cash-Out Refinance:** Pull equity from existing properties to fund new investments while keeping your LTV manageable.
✔ **1031 Exchange:** Sell a property tax-free and reinvest into a larger multifamily deal.
This is how experienced investors **keep scaling** without relying on their own money.
## **Final Thoughts from Rod Khleif**
If you want to build wealth through real estate, you need to understand debt financing.
Used wisely, **debt is not the enemy**, it’s a powerful tool.
The right debt financing strategy will allow you to:
✔ Scale faster
✔ Increase cash flow and returns
✔ Protect yourself from market downturns
But here’s the key, you have to **use debt responsibly.**
I’ve seen investors go from owning one duplex to controlling thousands of units simply by using smart leverage, securing long-term fixed-rate financing, and only buying properties with strong cash flow.
If you’re just starting out, focus on:
✔ Buying cash flowing properties
✔ Using moderate leverage (70-75% LTV max)
✔ Securing long-term, fixed-rate debt
✔ Keeping cash reserves for market shifts
As you gain experience, you’ll learn how to optimize debt financing to maximize returns, reduce risk, and create **lifetime cash flow.**
**If you’re serious about multifamily investing, I want to help you succeed.**
[](https://multifamilybootcamp.com)
**Ready to Build Your Multifamily Empire? 🚀**
Join my **Multifamily Bootcamp** that has helped thousands of investors go from **dreaming to doing**. This is your chance to **learn from a top real estate investing mentor** and get the exact strategies to **create financial freedom with multifamily real estate**.
🎟 **Reserve Your Spot Now:** [Get Your Ticket](https://rodkhleif.com/bootcamp/)
Let’s make this happen!
For a broader look at how leverage fits into a full multifamily deal structure, check out our [complete multifamily financing guide](https://rodkhleif.com/multifamily-financing-complete-guide/).
**Categories:** Blog, Raising Capital
**Tags:** apartment investing, business structures, Driving Force, landlord, motivation, multifamily, multifamily investment, multifamily property investing, multifamily real estate, real estate, real estate investing, real estate podcast, Rod Khleif, seller financing, tax law
---
### [Multifamily vs Commercial Real Estate: Which One Should You Invest In?](https://rodkhleif.com/multifamily-vs-commercial-property-which-one-should-you-invest-in-techbullion/)
**Published:** May 11, 2026
**Author:** Rod Khleif
**Content:**
When I closed my first apartment building, I had a stack of advice telling me I should have bought a strip mall instead. The math looked cleaner on paper, the leases were longer, and the tenants were national brands with logos I knew. Then 2008 hit and the strip mall guys I knew got wiped out while my apartments kept renting because people still needed somewhere to sleep.
That moment is when I stopped listening to “commercial sounds more sophisticated” and started building a portfolio that could survive any cycle. If you are weighing **multifamily vs commercial** real estate right now and want a framework instead of a hunch, this guide is for you. The TechBullion editors invited me to share an early version of this thinking [in this feature](https://techbullion.com/multifamily-vs-commercial-property-which-one-should-you-invest-in/); what follows is the full breakdown with the framework, the math, the scenarios, and the comparison tables I use with every Warrior who walks me through their first decision.
## Table of Contents
- [Why Most Investors Pick the Wrong Asset](#why-most-investors-pick-wrong)
- [The 5 Pillar Asset Decision Stack](#five-pillar-stack)
- [Why Multifamily Wins for Most New Operators](#why-multifamily-wins)
- [How to Reverse Engineer Your Asset Choice](#how-to-reverse-engineer)
- [Reactive Investor vs Framework Investor](#reactive-vs-framework)
- [Multifamily vs Commercial: The Side By Side](#side-by-side)
- [A Warrior Story: Frank Patalano Chose Multifamily](#warrior-story)
- [When Commercial Actually Wins](#when-commercial-wins)
- [Common Mistakes in the Multifamily vs Commercial Decision](#common-mistakes)
- [Multifamily vs Commercial FAQ](#multifamily-vs-commercial-faq)
- [Ready to Take the Next Step?](#ready-next-step)
## Why Most Investors Pick the Wrong Asset
> **Direct answer:** Multifamily vs commercial real estate is not a coin flip. Multifamily wins for most new operators because housing demand is structural, agency financing pushes leverage to 75 to 80 percent LTV, and a 20 unit asset spreads vacancy risk across 20 doors instead of 1 to 6 lease lines. Commercial wins for fully passive investors who can stomach concentrated tenant risk on long NNN leases.
That paragraph is the headline answer. The rest of this post is how to apply it to your situation, your capital, your timeline, and your tolerance for operational lift. I have coached Warriors who came in convinced commercial was the smart money play and left with their first apartment building under contract because the framework made the call obvious. I have also coached Warriors with a real edge in commercial NNN who stuck with it and built incredible portfolios. The point is not that one asset is universally better. The point is that you need a repeatable way to make the call.
### Signs You Are Picking the Wrong Asset
Run this checklist before you sign a contract. If two or more describe you, you are about to make an asset choice based on emotion, not analysis:
- You are choosing the asset because it sounds more impressive at a dinner party
- You have not stress tested the building with the largest tenant gone
- Your underwriting assumes lease renewal rates that history does not support
- You cannot name the worst case scenario for that asset class in the last two cycles
- Your debt strategy depends on the bank loving the deal as much as you do
- You are mixing up “lower management” with “lower risk”
- Your exit plan is “hold forever” because you are afraid of the resale market
- You are choosing commercial because a broker showed you a single trophy listing
- Your debt service coverage ratio model only stress tests at one rate scenario
That checklist is the same diagnostic I run with new Warriors. Most people fail two or three lines the first time through. The five pillar framework below fixes that.
## The 5 Pillar Asset Decision Stack
When a Warrior asks me how to choose between multifamily and commercial, I walk them through the same five pillars every time. These pillars are not opinions; they are the structural realities of each asset class that any sober underwriter will arrive at independently. The framework just makes those realities visible before the deal closes instead of after.
[**Want to apply this framework to a deal you are looking at right now? Join the Multifamily Bootcamp for the live walkthrough with worked examples →**](https://rodkhleif.com/bootcamp/)
### Pillar 1: Tenant Demand
Housing is the most non discretionary expense in a household budget. People will skip vacation, downgrade their car, drop streaming subscriptions, and rotate to private label groceries before they stop paying rent. That is the structural reason multifamily survived the 2008 financial crisis, survived the 2020 pandemic, and is still trading actively in 2026 while office and certain retail submarkets are repricing.
Commercial real estate is the opposite. Demand is tied to discretionary business decisions: lease renewals, hybrid work policies, consumer shopping habits, store footprint optimization. When economic uncertainty rises, a small business cuts office space first, and consumer foot traffic at retail drops fastest. The asset is functionally less recession resilient than housing because the underlying tenant decisions are elastic. You can run a business with less office, or shift sales online. You cannot raise a family in less house once the lease is signed.
The macro numbers back this up. [NMHC research](https://www.nmhc.org/research-insight/research-report/) consistently shows the United States is short roughly four to seven million housing units depending on methodology, and the renter household formation rate has outpaced new supply for over a decade. That structural shortage does not exist in office or retail. In fact, office has the opposite problem in many metros: too much supply chasing too little demand. So when you ask “what is the underlying demand picture for the next 10 years,” multifamily has a tailwind and office has a headwind. That is not a small detail.
### Pillar 2: Cash Flow Profile
A 20 unit apartment building with 95 percent occupancy still produces income on 19 units when one tenant moves out. A 4 tenant strip center with one anchor gone is at 75 percent collection overnight, and if the anchor was 60 percent of the income, you are at 40 percent collection. The two assets look similar on a gross rent line. They are very different on the variance around that gross rent line.
I call multifamily cash flow “smoothed by volume.” More small tenants paying smaller rents means individual moves out barely move the NOI needle. Multifamily NOI looks like a slightly wavy line. Commercial cash flow is “concentrated by lease.” A few big tenants paying big rents means one departure creates a cliff in income that lasts until the next deal is signed and the tenant improvement period burns through.
This is the single most underrated piece of the multifamily vs commercial debate. New investors look at the gross income on paper. Experienced operators look at the variance around that gross income. Multifamily has lower variance per dollar invested, which is exactly what banks reward with better debt terms. That is the bridge to Pillar 3.
### Pillar 3: Financing Leverage
This is where the two asset classes diverge the hardest, and most new investors miss it. Multifamily of five units or more qualifies for agency debt: Fannie Mae and Freddie Mac products that consistently push 75 to 80 percent loan to value at fixed rate, non recourse, 10 year terms with very competitive pricing. In some programs you can do supplemental loans, interest only periods, and assumable debt that helps your future exit.
Commercial deals (office, retail, industrial, hospitality) live in the world of CMBS, life company, regional bank, and credit union debt. Typical leverage caps out at 60 to 65 percent. Terms are usually 5 years with a balloon at the end that creates refinance risk if cap rates move. Most loans are full recourse for sponsors under a certain net worth threshold, which puts your personal balance sheet on the line.
The leverage gap is not a small detail. A 20 point swing in LTV roughly doubles your equity multiple on the same property at the same cap rate, all else equal. Multifamily lets you control more asset with less equity, which is why the same 250K of capital builds a portfolio in apartments faster than the same 250K does in retail or office. That compounding effect over 5 to 10 years is the single biggest reason multifamily wealth builds faster than commercial wealth for active operators.
### Pillar 4: Operational Lift
Multifamily management is repetitive. You set the playbook once: leasing, screening, lease renewals, maintenance tickets, turnover, evictions, capital expenditure planning. The same playbook runs 8 units or 800 units. Property management firms have built mature platforms around it. Software like AppFolio, Yardi, and Buildium is mature. Talent is mature: you can hire trained property managers, leasing agents, and maintenance technicians in almost any market in America.
Commercial is bespoke. Every lease is negotiated separately. Tenant improvement allowances (TI) are often six figure capital outlays per renewal. Lease administration requires specialists because each tenant has different load factors, common area maintenance allocations, escalation clauses, percentage rent clauses, exclusivity rights, co tenancy rights, and surrender provisions. The operational lift is not just higher than multifamily, it is qualitatively different. You are running a business that signs custom contracts with each customer.
If you are new and you want a business you can scale, multifamily is the lower friction path. The job description is knowable. The hiring profile is knowable. The reporting cadence is knowable. If you already have an operations team and you want to deploy capital with low ongoing labor (a stabilized NNN net leased strip center with national credit tenants on 10 year leases), commercial can fit your skill set. The question is which side of that operational profile matches the life you want to build.
### Pillar 5: Exit Liquidity
The buyer pool for a stabilized 50 unit apartment building in a primary or secondary market is huge. Local operators, regional syndicators, national funds, private REITs, family offices, and 1031 buyers from coastal markets are all bidding. You can usually exit a clean, well operated multifamily asset in 60 to 120 days at the prevailing market cap rate, often with multiple bidders.
The buyer pool for a 50,000 square foot suburban office building in 2026 is much thinner. The buyer pool for a non anchored retail strip center is thin. The buyer pool for a hotel is thin in many submarkets. Exits can stretch 6 to 12 months or longer, and price discovery is brutal because the comp set is thin. You may end up selling 10 to 20 percent below your underwriting target because the next bidder simply does not exist.
Liquidity at exit is what determines whether you actually realize your projected returns or whether your “paper gains” stay on paper. Multifamily wins this pillar in almost every market environment. Even in a down cycle, apartments trade. The buyer pool gets more conservative on price, but the bids show up. That is rarely true for office and not always true for retail.
## Why Multifamily Wins for Most New Operators
Across the five pillars, multifamily wins four outright and ties on operational lift if you are pursuing a fully passive NNN commercial play with a national credit tenant on a 15 year lease. For someone building a portfolio actively, multifamily is the structural answer.
The data backs this up. The [Federal Reserve rental vacancy rate](https://fred.stlouisfed.org/series/RRVRUSQ156N) has hovered in the 6 to 7 percent range nationally even through cycles, while office vacancy in many metros climbed past 18 to 20 percent in 2024 to 2026. That is not opinion, that is the macro tape. When a structural difference of more than 10 percentage points in vacancy exists between two asset classes, the lower vacancy asset is going to compound wealth faster on the same capital, period.
There is another reason most of the operators I have coached in the [Warrior Program](https://rodkhleif.com/rod-khleif-warrior-program/) build their wealth in apartments: the product is teachable. Underwriting an apartment building is a knowable skill. You learn rent comps, expense ratios, cap rates, debt sizing, and exit cap assumptions, and the model converges. Underwriting a single tenant office building with a CEO who is one bad earnings call away from giving back the lease is a guess. The model produces a number, but the number is anchored on one human decision you cannot control.
That is also why the [recession resilience of multifamily](https://rodkhleif.com/how-to-recession-proof-your-multi-family-portfolio/) is so durable. The risk is spread across many small tenant decisions that average out. Commercial concentrates risk in fewer larger tenant decisions that do not average. That is not a small distinction over a 10 year hold.
[](https://rodkhleif.com/lcfa-ebook/)
[**Click the cover to download my free book and use it as your daily reference for multifamily underwriting →**](https://rodkhleif.com/lcfa-ebook/)
## How to Reverse Engineer Your Asset Choice
The 5 Pillar Stack tells you which asset class wins for your profile. The next question is which specific deal in that asset class fits your goals. Here is the step by step process I walk every Warrior through. It works whether you have 50K to deploy as a limited partner or 5 million to lead as a general partner.
### Three Worked Scenarios
Same 2 million dollars of buying power deployed three ways looks like this. The left column compounds. The middle column depends on tenant retention. The right column depends on the broader return to office trend in your specific submarket. One of those three is a bet you can make with confidence in 2026 even if you have never bought a deal before.
### Step by step process
1. **Define your target monthly cash flow.** Think in retirement income terms, not deal terms. Most Warriors target 10K to 30K monthly net of debt service, taxes, and reserves.
2. **Reverse engineer the equity needed.** At a 7 percent cash on cash return on multifamily, 10K monthly requires roughly 1.7 million in deployed equity across the portfolio. Higher cash on cash, less equity. Lower cash on cash, more equity.
3. **Choose your asset class using the 5 Pillar Stack.** Most Warriors land on multifamily because the leverage gets them to the equity target in 24 to 48 months instead of 10 years on the same capital base.
4. **Build the buy box.** Unit count range, market, vintage, value add scope, expected exit cap rate. Write this down before you look at deals. Otherwise every listing looks attractive in isolation.
5. **Underwrite 20 deals to win 1.** Yes really. The win rate on great deals is in the low single digits. If you are winning 1 in 5, you are paying too much. If you are winning 0 in 50, your buy box is too tight.
6. **Close, operate, refinance, repeat.** This is where the agency debt leverage really shines because cash out refis return your equity to redeploy into the next deal. That is what compounds wealth.
That six step process is the same one I teach in the [Multifamily Bootcamp](https://rodkhleif.com/bootcamp/). It is also the basis of every Warrior portfolio I have helped build over the last 10 years. The framework is not the secret. The willingness to actually follow the framework when emotions push you toward a deal that does not fit is the secret.
## Reactive Investor vs Framework Investor
Why a Framework Beats a Hunch5 PLACES REACTIVE INVESTORS LOSE MONEY THE FRAMEWORK INVESTOR NEVER DOESDimensionReactive InvestorFramework InvestorAsset selection✗“Commercial sounds more sophisticated”✓Runs the 5 Pillar Stack first, then picksUnderwriting✗Trusts the broker pro forma at face value✓Stress tests with the largest tenant goneLeverage✗Takes whatever the bank offers✓Picks asset class for the LTV upsideTenant risk✗Assumes leases auto renew✓Models 30 percent rollover riskExit plan✗“Hold forever” because resale scares them✓Plans 5 to 10 year exit with clear buyer## Multifamily vs Commercial: The Side By Side
Multifamily vs Commercial Operating RealitiesHOW THE SAME 2 MILLION DOLLARS PERFORMS IN EACH ASSET CLASSOperating RealityCommercialMultifamilyTenant base✗1 to 6 commercial tenants✓50 plus residential tenantsAvg lease length✗3 to 10 years NNN, hard to refill✓12 months, easy to refillLTV available✗55 to 65 percent, often recourse✓75 to 80 percent agency, non recourseWorst case vacancy✗Anchor leaves, 40 percent income gone✓One unit empty, 2 percent goneCap ex cycle✗TI heavy on every renewal✓Predictable unit turn costDepreciation✗39 year schedule✓27.5 year schedule, faster shieldBuyer pool at exit✗Thin, slow, brutal price discovery✓Deep, fast, multiple bidders## A Warrior Story: Frank Patalano Chose Multifamily
When [Frank Patalano](https://rodkhleif.com/warrior-wins-frank-patalano/) joined the Warrior Program, he had a window of capital but was not sure which asset class to deploy it into. He was looking at retail strip centers because his network was telling him that is where the smart money was going. We walked him through the 5 Pillar Asset Decision Stack together and within 60 days he had his first multifamily under contract.
The interesting part of Frank’s story is not just the asset choice. It is the way he thinks about it now. He went from “commercial sounds smarter” to running the framework on every deal that crosses his desk. That is the exact mindset shift the framework is designed to create. You can hear him walk through it in his own words.
Watch the Full Interview
Frank Patalano walks through why he chose multifamily over retail and how the framework changed his investing.
> **Rod Khleif:** “I made every mistake possible in my first 10 years in real estate. The framework matters because it keeps you out of the trades that look smart on paper and lose you money in reality.”
If you want more student stories like Frank’s, the full library is on the [Lifetime Cash Flow Podcast](https://rodkhleif.com/lifetime-cashflow-podcast/). Listen to a few of those episodes back to back and you will notice a pattern: almost every Warrior who built real wealth did it by following a framework, not by chasing the deal that sounded smartest at the time. That is the entire game.
## When Commercial Actually Wins
I want to be fair to commercial because there are profiles where it absolutely is the right call. If you are an experienced operator with a leasing team and a tenant rep relationship, a well located strip center anchored by a strong national tenant on a 15 year NNN lease can produce mailbox money with very little ongoing labor. If you have specialized knowledge of a vertical like medical office, self storage, or industrial flex, the operational lift drops because you understand exactly what each tenant needs and how to keep them. And for the limited partner who just wants quarterly distributions on a 5 to 7 year hold with a strong sponsor, commercial syndications can be a clean fit.
Those are real wins, but notice what they have in common. They all assume specialized expertise, deep tenant relationships, or fully passive participation. They are not the right starting point for a new investor building a portfolio from scratch. That is exactly why the 5 Pillar Stack tilts toward multifamily for first time and second time buyers, and why most of the operators in the Warrior Program lead with apartments and only layer commercial in later, after they have already built the cash flow base in residential.
## Common Mistakes in the Multifamily vs Commercial Decision
After 5,000 plus students, I see the same handful of mistakes derail asset selection. Watch for these:
- **Confusing cap rate with cash on cash return.** A 7 cap commercial deal at 60 percent LTV produces different cash on cash than a 6 cap multifamily deal at 78 percent LTV. The leverage difference can flip which deal is “better” entirely once you run the equity returns.
- **Underestimating downtime.** Commercial leases that go vacant can sit for 9 to 18 months while you find the next tenant and complete tenant improvements. Underwriting that assumes 90 days of vacancy on a small business commercial space is wishful thinking and will not survive a real downturn.
- **Treating “diversification” as automatic.** Owning one commercial property with one anchor tenant is not diversified. Owning a 20 unit apartment building is diversified across 20 small tenants. Asset count matters less than tenant count when the question is risk concentration.
- **Following the broker’s narrative.** Brokers are paid on transactions. Their pro formas are optimized to make the deal close, not to keep you safe through cycle two. Build your own model from scratch before you trust theirs and make the broker defend their numbers.
- **Ignoring the exit.** The deal you cannot sell in 6 months is not a great deal regardless of the cap rate. Plan the exit the day you sign the LOI, not the day you list. Map the buyer pool, the comparable transactions, and the likely exit cap rate before you commit equity.
Fixing these is more about discipline than about education. The 5 Pillar Stack is designed to force the discipline because each pillar surfaces one of these mistakes before you commit capital to a deal that will not survive a downcycle.
## Multifamily vs Commercial FAQ
**Q: Is multifamily considered commercial real estate?**
A: Apartment buildings of 5 units or more are classified as commercial real estate for financing and tax purposes. In the multifamily vs commercial conversation, “commercial” usually refers to office, retail, industrial, and hospitality. Multifamily is a separate asset class that sits under the broader commercial umbrella but trades on different fundamentals.
**Q: Which is more profitable, multifamily or commercial?**
A: For active operators, multifamily generally compounds wealth faster because of higher leverage at 75 to 80 percent LTV, more predictable cash flow across many small tenants, and stronger exit liquidity. Commercial NNN can be more profitable per labor hour for passive investors when long leases hold and the tenant credit is strong.
**Q: Is multifamily a safer investment than commercial?**
A: Multifamily is structurally safer because tenant demand for housing is non discretionary and risk is spread across many small tenants. Commercial concentrates risk in fewer larger tenants, so a single departure can wipe out a year of cash flow before the next deal gets signed and stabilized.
**Q: How much money do I need to start investing in multifamily?**
A: With agency financing at 75 to 80 percent LTV, a 1 million dollar 8 to 10 unit building requires 200K to 250K in equity plus reserves. Many Warriors start as limited partners in syndications for as little as 50K, then transition to lead general partner roles after learning the playbook.
**Q: What is the difference between commercial real estate and multifamily syndication?**
A: A commercial syndication pools investor capital to buy office, retail, industrial, or hospitality. A multifamily syndication pools capital to buy apartment buildings of 5 plus units. The legal structures are very similar; the underlying asset risk profiles, financing options, and exit liquidity are very different.
**Q: Can you finance multifamily with conventional loans?**
A: Properties of 1 to 4 units qualify for residential conventional loans like a primary residence or single family rental. Properties of 5 units or more require commercial or agency multifamily loans. Agency products from Fannie Mae and Freddie Mac are usually the best terms for 5 plus unit deals.
**Q: What is a [good cap rate for multifamily](https://rodkhleif.com/what-is-a-good-cap-rate-for-multifamily/) in 2026?**
A: Market cap rates in 2026 range from 5.5 to 7.5 percent depending on market tier, asset class quality (A, B, or C), and vintage. Value add deals can pencil at higher entering cap rates if the operator can execute the business plan and exit 100 to 200 basis points tighter on stabilized NOI.
**Q: How does commercial real estate differ from multifamily for taxes?**
A: Both qualify for cost segregation, accelerated depreciation, and 1031 exchanges. The depreciation schedule for multifamily is 27.5 years; commercial is 39 years. That faster depreciation schedule on multifamily means more tax shielded cash flow per year for active investors.
**Q: Is commercial real estate dead in 2026?**
A: Office is repricing significantly and some submarkets will not recover for years. Retail is bifurcated: well located NNN with strong tenants is still trading at premium prices; speculative retail is struggling. Industrial remains strong. So “commercial” is too broad a label to call dead or alive without naming a subtype.
**Q: How long does it take to build wealth in multifamily vs commercial?**
A: Most Warriors hit financial freedom in 5 to 10 years through multifamily because of agency leverage and the cash out refinance cycle that returns equity to redeploy. Commercial timelines stretch longer because lower LTV means more equity per deal and slower portfolio velocity.
## Ready to Take the Next Step?
If you are still weighing multifamily vs commercial, the fastest way to make the call is to learn the multifamily playbook end to end and then decide. Once you see how the math actually works on a real deal, the decision usually makes itself.
Join the [**Multifamily Bootcamp**](https://rodkhleif.com/bootcamp/) for the live training where I walk through this exact framework with worked examples and deal teardowns. Already past the basics and ready to scale? Apply for the [**Warrior Program**](https://rodkhleif.com/rod-khleif-warrior-program/) for the full mentorship community.
Not ready for either yet? Start with my free book [**How to Create Lifetime Cashflow Through Multifamily Properties**](https://rodkhleif.com/lcfa-ebook/) and use it as your daily reference while you build your buy box.
*Disclaimer: This article was written with the help of AI and reviewed by Rod and his team.*
**Related reading:** [Letter of Intent Real Estate: Free Template 2026](https://rodkhleif.com/need-know-letter-intent/)
**Categories:** Blog, Featured, Real Estate
---
### [How to Increase NOI and Add Value to Your Property in 2026](https://rodkhleif.com/the-5-best-ways-to-add-value-to-a-property-and-increase-the-noi/)
**Published:** April 20, 2026
**Author:** Rod Khleif
**Excerpt:** There are two main factors that affect the long term profitability of an investment property – market appreciation and increasing cash flow. Outside of curb appeal and capex, market appreciation is pretty much out of our control. On the other hand, driving value by increasing cash flow is absolutely something we can control. Easier said than done some might say. Well, here are 5 ways to increase the NOI and add value to your property.
**Content:**
Every dollar you add to Net Operating Income is worth far more than a dollar. At a 6% cap rate, one extra dollar of NOI creates roughly sixteen dollars of property value. That is the single most powerful lever in multifamily, and most operators barely touch it.
I have owned over 2,000 properties and my Warrior students have closed hundreds of multifamily deals across the country. The difference between a mediocre deal and a wealth-building one almost always comes down to how aggressively and intelligently the owner grows NOI. This guide shows you exactly how to do it in today’s market.
## Table of Contents
- [What NOI Really Drives](#what-noi-really-drives)
- [The 2026 Multifamily Operating Environment](#the-2026-multifamily-operating-environment)
- [Strategy 1: Raise Rents the Right Way](#strategy-1-raise-rents-the-right-way)
- [Strategy 2: Cut Operating Expenses Without Cutting Quality](#strategy-2-cut-operating-expenses-without-cutting-quality)
- [Strategy 3: Add Revenue Streams Beyond Rent](#strategy-3-add-revenue-streams-beyond-rent)
- [Strategy 4: Execute Targeted Value-Add CapEx](#strategy-4-execute-targeted-value-add-capex)
- [Strategy 5: Reduce Vacancy and Turnover Loss](#strategy-5-reduce-vacancy-and-turnover-loss)
- [Strategy 6: Fix Your Expense Ratio and Benchmark Against Comps](#strategy-6-fix-your-expense-ratio-and-benchmark-against-comps)
- [The NOI-to-Value Math Every Operator Must Know](#the-noi-to-value-math-every-operator-must-know)
- [Warrior Case Study: $180,000 in NOI, $3 Million in Value](#warrior-case-study)
- [Common Mistakes That Kill NOI](#common-mistakes-that-kill-noi)
- [How to Increase NOI FAQ](#how-to-increase-noi-faq)
## What NOI Really Drives
NOI is income minus operating expenses before debt service and before capital expenditures. That is the number lenders underwrite. That is the number buyers pay for. That is the number that sets the value of your property.
When you treat NOI as the scoreboard, every operational decision gets simpler. You stop chasing gross rent and start protecting the gap between what comes in and what goes out. For a plain-language breakdown of how NOI is calculated, read my [complete guide to NOI in real estate](https://rodkhleif.com/a-complete-guide-noi-in-real-estate-in-2025/).
Here is what most new operators miss. A property that produces $500,000 in NOI at a 6% cap rate is worth about $8.3 million. Raise NOI by $50,000 and the property is now worth $9.1 million. You just created $800,000 of value by finding another $4,200 per month. That is the math that makes multifamily the best wealth vehicle in the country.
## The 2026 Multifamily Operating Environment
You cannot build an NOI plan without knowing the terrain. Here is what the national picture looks like right now:
- National average multifamily advertised rent reached $1,750 in March 2026, a year-over-year increase of only 0.1%, which is the weakest March reading on record dating back to 2012.
- Yardi Matrix forecasts 2026 advertised rent growth of roughly 1.2% nationally, with most of that gain concentrated in the Midwest and coastal markets.
- Supply has overwhelmed many Sun Belt markets. Austin is down 4.1% year over year, Denver down 3.5%, Tampa down 3.4%, Phoenix down 3.2%.
- Gateway and Midwest markets are running counter to the trend, led by New York City (+4.5%), San Francisco (+3.9%), Chicago (+3.4%), Minneapolis–St. Paul (+2.5%), and Kansas City (+2.3%).
- National occupancy is holding near 94.9%.
Translation for operators: you cannot rely on market rent growth to do the work for you this year. Every dollar of NOI you create has to be earned through better operations, smarter capital, and active revenue capture. The good news is most operators are asleep at the wheel, which means disciplined investors can steal market share.
## Strategy 1: Raise Rents the Right Way
Rent is the first place most people look and the first place most people mess up. Raising rent without matching value pushes out good tenants and drops your occupancy into a hole you cannot dig out of. Raise it the right way and you compound NOI for years.
**Run a real rent comp survey every quarter.** Pull three to five actual competing properties within one to three miles. Match unit type, square footage, year built, condition, and amenity set. Most operators are shocked to find they are 5% to 15% below market.
**Test increases on lease renewals first.** Before you adjust street rents for the whole property, push a renewal cohort and watch retention. If retention holds above 55% on a 3% to 5% increase, you have room.
**Tie every rent bump to visible improvements.** A resident accepts a $40 increase on a unit with new flooring, lighting, and a smart thermostat far faster than the same increase on a tired unit. You are not raising rent. You are repricing value.
**Stagger, do not shock.** If you are 10% below market on a 120-unit property, spreading increases over 12 to 18 months holds retention steady while still capturing most of the upside.
Use my [free multifamily deal analyzer](https://rodkhleif.com/deal-underwriting-tool/) to model the NOI impact of different rent scenarios before you send a single renewal notice.
## Strategy 2: Cut Operating Expenses Without Cutting Quality
Every dollar of expense you eliminate is a dollar of NOI. Every dollar of NOI is roughly $16 of value at a 6% cap. The expense side is where most operators leave the biggest money on the table because they never audit it properly.
**Audit utilities first.** LED retrofits, low-flow aerators, smart thermostats in common areas, and bulk-purchased energy contracts routinely cut utility expense by 10% to 25% on a value-add property.
**Renegotiate every vendor contract annually.** Landscaping, pest control, trash, security, pool service, unit turn vendors. Get three bids every single year. Vendors who know you are shopping will sharpen their pencils.
**Implement RUBS or submetering.** Ratio Utility Billing Systems shift water, sewer, and trash back to residents. On a 100-unit property, RUBS commonly adds $30 to $60 per unit per month, which is $36,000 to $72,000 in annual NOI.
**Stop overpaying property management.** The wrong management company can cost you 100 basis points of NOI margin in a single year. The right one pays for itself several times over. My guide on [how to hire a third-party property management company](https://rodkhleif.com/how-to-hire-a-third-party-property-management-company/) walks through the vetting process I use with my own deals.
**Reconcile real estate taxes.** If your property is over-assessed, protest it. A successful protest on a $10 million property can easily drop your tax bill by $15,000 to $40,000 per year.
For a deeper look at what top operators audit every quarter, read [evaluating multifamily expenses](https://rodkhleif.com/evaluating-expenses-tricks-of-the-trade/) and listen to episode 405 of my podcast on [decreasing expenses in multifamily](https://rodkhleif.com/podcasts/ep-405-decreasing-expenses-in-multifamily-double-header/).
## Strategy 3: Add Revenue Streams Beyond Rent
Amateurs think revenue means rent. Professionals know revenue means everything residents are willing to pay for. These add-on income streams have outsized impact because they carry almost no expense drag.
Revenue StreamTypical Monthly Income per UnitNotesPet fees and pet rent$25 to $50One-time fee plus monthly pet rentRUBS (water, sewer, trash)$30 to $60Requires lease addendumCovered or reserved parking$25 to $75Capital-light, high marginTrash valet service$15 to $25Charge $25, pay vendor $8 to $10In-unit washer and dryer rental$40 to $75If units do not already have W/DStorage units and lockers$20 to $50Use dead space and wasted closetsApplication and admin fees$75 to $200 per applicantSet at marketLate feesVariesEnforce consistently per leaseBulk internet or Wi-Fi package$25 to $50Negotiate with a local providerRun the math on a 100-unit property. Add $40 per unit per month in blended ancillary income and you pick up $48,000 per year in NOI. At a 6% cap rate, that is roughly $800,000 of property value created from a few lease amendments and vendor contracts.
For a broader revenue menu tailored to apartment operators, see my list of [ten ways to increase revenue in an apartment investment](https://rodkhleif.com/ten-ways-to-increase-revenue-in-an-apartment-investment/).
## Strategy 4: Execute Targeted Value-Add CapEx
This is where NOI leaps rather than crawls. Targeted value-add capital expenditure, done on a disciplined schedule with clear rent premiums attached, is the fastest route to forced appreciation.
**The unit renovation premium formula that actually works.** Light renovation (paint, lighting, plumbing fixtures, hardware, backsplash) at a cost of $3,500 to $5,500 per unit typically drives rent premiums of $100 to $200 per month. Mid-level renovation (above plus flooring, counters, appliances) at $6,000 to $10,000 per unit drives $200 to $350 premiums. Heavy renovation (above plus cabinets, bathrooms, in-unit laundry) at $12,000 to $20,000 per unit drives $350 to $600 premiums in the right market.
**Exterior and common area improvements.** Signage, leasing office, dog park, package lockers, fitness room, pool area. These do not increase rent directly, but they increase renewal rates and justify rent pushes on turns.
**Prioritize capital that pays back in 24 to 36 months.** Anything longer, scrutinize hard. Anything shorter, do more of it.
Before you swing a hammer, underwrite every renovation line item individually. Know the cost, the rent premium, the payback period, and the NOI impact at stabilization. If you cannot defend those four numbers to a lender, do not spend the money.
## Strategy 5: Reduce Vacancy and Turnover Loss
Every turn costs you. Lost rent during downtime, make-ready expense, marketing cost, leasing commission. On a property with 40% annual turnover, you can easily bleed 4% to 6% of gross potential rent through turnover alone.
**Target sub-40% turnover on long-term holds.** The national multifamily benchmark runs between 40% and 55%. Beat that by ten points and you have added real NOI without touching rent.
**Pre-lease at 60 days out.** Start marketing, pricing, and leasing renewals and vacants 45 to 60 days before move-out. Days of vacancy kill you.
**Retention is cheaper than acquisition.** A $200 appliance upgrade, a quick carpet clean, or a $500 renewal concession is far cheaper than 45 days of vacancy plus a $2,500 make-ready plus a $1,000 leasing commission.
**Lean on your property manager.** If your manager is not tracking days vacant, make-ready time, renewal percentage, and delinquency by unit every week, you have the wrong manager.
For seasonal operators, see my breakdown on [managing occupancy in the off-season to maximize NOI](https://rodkhleif.com/managing-occupancy-in-the-off-season-to-maximize-noi/).
## Strategy 6: Fix Your Expense Ratio and Benchmark Against Comps
The operating expense ratio (OpEx divided by effective gross income) is the scoreboard most lazy operators ignore. For stabilized conventional multifamily, you should benchmark against:
- Class A stabilized: 35% to 42% expense ratio
- Class B stabilized: 40% to 48%
- Class C stabilized: 45% to 55%
- Deep value-add repositions: often 55% to 65% during reposition, dropping on stabilization
If your expense ratio is five points above market for your class, you are leaking NOI somewhere. That leak almost always lives in one of four buckets: payroll, repairs and maintenance, utilities, or management fee structure. Open each one up, item by item, against your benchmarks.
Pair this against cap rate compression in your market. For how cap rates flow into valuation alongside NOI, read [what is a good cap rate for multifamily](https://rodkhleif.com/what-is-a-good-cap-rate-for-multifamily/).
## The NOI-to-Value Math Every Operator Must Know
Here is the formula that drives every multifamily decision I make:
**Property Value = NOI ÷ Cap Rate**
Every dollar of additional NOI is multiplied by the reciprocal of the cap rate. Run the table on a 100-unit property:
Cap RateValue of $1 of NOIValue of $100,000 NOI Increase4.5%$22.22$2,222,0005.0%$20.00$2,000,0005.5%$18.18$1,818,0006.0%$16.67$1,667,0006.5%$15.38$1,538,0007.0%$14.29$1,429,0007.5%$13.33$1,333,000That chart is the single most important piece of math in this business. Internalize it. Every operational decision you make should start with one question: what does this do to NOI, and therefore to property value?
## Warrior Case Study: $180,000 in NOI, $3 Million in Value
One of my Warrior students, Andrew Dressel, closed a 124-unit property and executed a tight renovation plan: five interior line items averaging roughly $5,000 per unit with an average rent premium of $150 per month. Over the full reposition, that drove more than $180,000 in projected NOI lift.
At a 6% cap rate, that is roughly $3 million of created value on a single deal.
This is not an outlier. Anthony and Candace Coffey executed $1.2 million in CapEx on a 133-unit property and projected $100 per door rent increases across the renovated units. Alekhya Mukherji deployed external and interior capex on a 176-unit property projecting a $61,600 per month increase. Anchal turned all 66 units on his property and projected $400 in rent increases. These are real numbers from real Warriors executing the exact playbook in this article.
The common thread: they underwrote the NOI plan before they closed the deal, then executed it like operators, not investors.
## Common Mistakes That Kill NOI
I see the same NOI-killing mistakes over and over again. Avoid these:
**Raising rent without matching value.** Creates turnover, drops occupancy, destroys NOI.
**Deferring maintenance to pad short-term numbers.** Every deferred dollar becomes three dollars of capital later, plus vacancy loss while you fix it.
**Trusting property managers without monitoring them.** Your PM works for you. Inspect what you expect. Weekly.
**Underwriting to best case.** Use realistic rent growth, realistic expense growth, realistic vacancy. Pro forma is a plan, not a fantasy.
**Ignoring submeter and RUBS opportunities.** Free money left on the table every single month.
**Skipping the tax protest.** Your assessed value is an opinion, not a law. Protest it.
**Taking on deals with thin margins.** If you need perfect execution to cash flow, you bought the wrong deal.
## How to Increase NOI FAQ
**Q: What is a good NOI for a multifamily property?**
A: A healthy stabilized multifamily property usually runs an operating margin of 55% to 65% (NOI as a percentage of effective gross income). The absolute dollar value matters less than whether it meets your debt service coverage, your cash-on-cash return target, and your valuation goal at refinance or sale.
**Q: How much can you realistically increase NOI in the first year?**
A: Disciplined operators commonly grow NOI 8% to 20% in year one on a value-add property. The first year gains come from quick wins: vendor renegotiation, ancillary income, loss-to-lease recapture, and tax protest. Deeper renovation gains land in years two and three.
**Q: What is the fastest way to increase NOI?**
A: Ancillary income is usually the fastest. RUBS, pet rent, parking fees, and late fee enforcement can be rolled out on 30 to 60 day lease notices and show up in the NOI within a quarter. No capital required.
**Q: Does increasing NOI always increase property value?**
A: In commercial multifamily, yes. Commercial multifamily is valued using the capitalization method, where value equals NOI divided by cap rate. Every dollar of recurring, defensible NOI increase creates multiples of that dollar in property value, subject to the prevailing cap rate in your market.
**Q: How do you increase NOI in commercial real estate without raising rents?**
A: Cut operating expenses, add ancillary income streams, reduce vacancy and turnover, protest real estate taxes, and tighten collections. On most properties there is more NOI to be found on the expense and fee side than on the base rent side.
**Q: What is the operating expense ratio for multifamily in 2026?**
A: As a rough benchmark, expect 35% to 42% on Class A stabilized, 40% to 48% on Class B, and 45% to 55% on Class C. Repositions during the value-add phase often run 55% to 65%. Benchmark against properties of similar class, size, and market, not national averages.
**Q: How does NOI affect cap rate?**
A: NOI does not set the cap rate. Market conditions set the cap rate. NOI sets the value once the market tells you what cap rate applies. Rising NOI against a stable cap rate compounds your equity. Rising NOI against a compressing cap rate is the multifamily grand slam.
**Q: What is forced appreciation in multifamily?**
A: Forced appreciation is the increase in property value that results from increasing NOI, independent of market conditions. If the market cap rate does not move but you add $100,000 in NOI, the property is still worth roughly $1.67 million more at a 6% cap. You forced that value to appear.
**Q: Should I focus on increasing NOI or lowering expenses first?**
A: Always audit expenses first. Expense cuts flow one-to-one into NOI with no behavioral risk to residents. Rent increases carry retention risk and take longer to show up. Run the expense audit first, then layer in revenue and value-add strategies.
**Q: How often should I review NOI on my multifamily property?**
A: Monthly at minimum, weekly on the leading indicators. Review trailing three months (T3) and trailing twelve months (T12) NOI monthly against budget. Review occupancy, delinquency, and days-vacant weekly. NOI is a lagging indicator. The leading indicators are what you can actually manage.
## Ready to Take the Next Step?
NOI is the game. If you want to scale past one or two properties and build the kind of portfolio my Warriors are building, you need the systems, the team, and the community to execute at a higher level. That is exactly what the Warrior Program delivers.
**Join the Warrior Program:** [Learn how to become a Warrior and start closing multifamily deals with coaching and community behind you.](https://rodkhleif.com/rod-khleif-warrior-program/)
**Grab my free book:** [How to Create Lifetime Cashflow Through Multifamily Properties](https://rodkhleif.com/lcfa-ebook/), including the 90-day action plan that my students use to get their first deal under contract.
*Disclaimer: This article was written by Rod and reviewed by his team.*
**Related reading:** [Letter of Intent Real Estate: Free Template 2026](https://rodkhleif.com/need-know-letter-intent/)
**Categories:** Blog, Real Estate
**Tags:** multifamily property investing, real estate, real estate investing, Rod Khleif
---
### [Opportunity Zones for Multifamily: Tax Strategy, Risks, and What's Changed in 2026](https://rodkhleif.com/opportunity-zones-for-multifamily/)
**Published:** May 14, 2026
**Author:** Rod Khleif
**Excerpt:** Opportunity zones for multifamily let investors defer capital gains, exclude appreciation after 10 years, and stack tax benefits. Here is the 2026 playbook.
**Content:**
I have seen brilliant operators leave six and seven figures of tax savings on the table because they treated opportunity zones for multifamily like a fad instead of a tool. The structure is real, the math is enormous, and 2026 is the most consequential year the program has ever had. If you have a capital gain coming or a deferred gain already running, you cannot afford to wing this one.
This guide walks you through how the program works under current law, what changed when the One Big Beautiful Bill Act made the incentive permanent, why multifamily is the ideal asset class to capture it, and exactly how to evaluate a deal so you do not end up holding a tax bill instead of a windfall.
## Table of Contents
- [Why Most Multifamily Investors Misread Opportunity Zones](#why-investors-misread-qoz)
- [What Is a Qualified Opportunity Zone](#what-is-a-qoz)
- [The QOZ Multifamily Wealth Stack](#qoz-wealth-stack)
- [How Opportunity Zones for Multifamily Actually Work](#mechanics)
- [Why Multifamily Fits the QOZ Structure Better Than Any Other Asset](#why-multifamily-fits)
- [The Three Paths Into a QOZ Multifamily Deal](#three-paths)
- [The After Tax Math: A Worked Example](#after-tax-math)
- [The Risks Every Investor Must Understand](#risks)
- [What Changed in 2026 and What Is Coming Next](#what-changed-2026)
- [How to Evaluate a QOZ Multifamily Sponsor](#how-to-evaluate)
- [QOZ vs 1031 Exchange: Which Belongs in Your Portfolio](#qoz-vs-1031)
- [How to Invest in a QOZ Multifamily Deal Step by Step](#how-to-invest)
- [Warrior Story: Tax Sophistication as a Compounding Skill](#warrior-story)
- [Opportunity Zones for Multifamily FAQ](#opportunity-zones-for-multifamily-faq)
- [Ready to Take the Next Step](#next-step)
## Why Most Multifamily Investors Misread Opportunity Zones
> Opportunity zones for multifamily are not a tax loophole and they are not a giveaway. They are a wealth compounding structure that lets you defer the capital gains tax on a sale, double the basis of a property through value add execution, and pay zero federal tax on the appreciation if you hold for ten years. The asset class matters more than the address.
Investors trip up on this program for one of three reasons. They read about it during the 2018 hype cycle, assumed the basis step ups still exist, and never updated their mental model. Or they conflate opportunity zones with low income housing tax credits and assume the operating math is the same. Or they ignore the program entirely because the deferral end date felt far away. None of those are good positions to be in heading into 2026.
### Signs You Are Misreading the QOZ Opportunity
Read this short list. If you check more than two boxes, your QOZ mental model needs a refresh before you commit a dollar of gain.
- You still think the seven year basis step up is available.
- You believe a property qualifies just because it sits inside a designated census tract.
- You assume you need real estate gains to invest. You can use any eligible capital gain.
- You think the program ends on December 31, 2026. The investment incentive is permanent now.
- You have a deferred gain sitting in a QOF and have not modeled the 2026 inclusion tax bill.
- You assume the “substantial improvement” rule applies to the whole property including land. It does not.
## What Is a Qualified Opportunity Zone
A qualified opportunity zone is a census tract that the governor of a state nominated and the U.S. Treasury certified as an economically distressed community eligible for special tax treatment. The program was created by the 2017 Tax Cuts and Jobs Act to channel private capital into roughly 8,700 designated tracts nationwide. The mechanism is elegant: investors get powerful tax benefits, the community gets long term capital, and the Treasury collects deferred tax revenue later rather than now.
Three core benefits exist under the original law that governs investments made through December 31, 2026. You defer the tax on the capital gain you roll into a Qualified Opportunity Fund until the earlier of an inclusion event or that 2026 deadline. The basis step up benefits that reduced 10 percent or 15 percent of the original gain were tied to five year and seven year holding periods, and both of those windows closed years ago for new investors. The third benefit is the one that does all the heavy lifting: if you hold your QOF interest for at least ten years, every dollar of appreciation on the QOZ investment is excluded from federal tax when you sell.
Compare this to a [1031 exchange](https://rodkhleif.com/using-the-1031-exchange-to-maximize-tax-benefits-in-real-estate-investing/), which only defers tax and only works for real estate to real estate transitions. Opportunity zones work for any eligible capital gain, including a stock sale, a business sale, a crypto exit, or a prior real estate disposition. The exclusion of future appreciation is what makes the structure so powerful. You are not deferring a future tax. You are eliminating it.
## The QOZ Multifamily Wealth Stack
I built the QOZ Multifamily Wealth Stack to keep new investors from skipping a layer and torching the entire benefit. Most QOZ failures I have seen came from rushing one of these five layers. Stack them in order, get each one right, and the math takes care of itself. Use the workbook at the bottom of the post to run the framework against your own deal.
[**Want personal coaching on tax efficient multifamily structures? Apply to the Warrior Program →**](https://rodkhleif.com/rod-khleif-warrior-program/)
### Layer 1: Eligible Gain Trigger
The structure starts the moment you realize an eligible capital gain. Stocks, business equity, real estate, crypto, collectibles. Short term or long term, the gain qualifies. If you do not have a recognized gain on the books, you cannot use this tool. So step one is honest. Do you have a gain, or are you trying to fit a strategy you read about to a situation that does not call for it.
### Layer 2: The 180 Day Window
From the date of the sale you have 180 days to invest the gain into a Qualified Opportunity Fund. Miss the window and the tax is due on next year’s return. Partnership and S corp K 1 gains have flexible start dates, which is why CPAs love this layer when clients sell businesses. Calendar this deadline the minute the closing date hits.
### Layer 3: QOF Vehicle Selection
The capital has to flow into a Qualified Opportunity Fund, not directly into a property. The fund is the legal wrapper that holds the QOZ business or QOZ property. You can form your own QOF for a single asset, invest passively into a syndicated QOF run by an experienced sponsor, or buy into a fund of funds. The right vehicle depends on how much control you want, how much complexity you can absorb, and how diversified you want to be across markets.
### Layer 4: Substantial Improvement Execution
The QOZ statute requires the fund to either start a new business in the zone or “substantially improve” an existing property. Substantial improvement means doubling the adjusted basis of the building (not the land) within 30 months of acquisition. This is the rule that makes value add multifamily a near perfect match. Buy a tired property, pour capex into kitchens, baths, common areas, HVAC, exteriors, and amenities, and you naturally hit the basis doubling test. If the sponsor cannot show you a substantial improvement schedule with line item costs, walk away.
### Layer 5: Ten Year Compounding Hold
The exclusion benefit only triggers if you hold the QOF interest for at least ten years and sell or step up basis through the program’s election. Pull out at year seven and you collect cash flow but lose the appreciation exclusion. The ten year horizon also gives the value add business plan time to play out: lease up, stabilization, refinance, and a long enough operating window for inflation and rent growth to compound. Build the hold period into your liquidity plan up front.
## How Opportunity Zones for Multifamily Actually Work
Once the framework is in your head, the mechanics are simple. The sequence below is what you would actually do, in order, after a triggering sale. Use this as a checklist, not a substitute for legal and tax counsel.
The investor sells an asset and generates a capital gain. The investor wires the gain (just the gain, not the basis) to a Qualified Opportunity Fund within 180 days. The fund deploys the capital into a Qualified Opportunity Zone property or business inside one of the certified tracts. The fund either acquires raw land plus new construction or buys an existing structure and substantially improves it within 30 months. The investor reports the deferral on Form 8949 and the QOF reports on Form 8997 every year the investment is held. The investor recognizes the deferred gain on December 31, 2026 (under the original law) or on the new five year anniversary trigger under the OZ 2.0 rules for investments made after that date. After year ten, the investor elects to step up basis to fair market value on sale, paying zero federal tax on the appreciation.
The 30 month substantial improvement clock is the operational pressure point. Sponsors who underestimate construction timelines, permitting friction, or labor and supply chain risk can blow the test and forfeit the entire QOZ benefit. Underwriting that schedule honestly is non negotiable, which is one reason I rank sponsor track record higher than market thesis when I vet a deal. See our [multifamily underwriting guide](https://rodkhleif.com/how-to-underwrite-a-multifamily-deal-step-by-step-the-complete-guide/) for the full process I use.
## Why Multifamily Fits the QOZ Structure Better Than Any Other Asset
You can run a QOZ play in industrial, retail, hospitality, or office. Multifamily wins on five separate dimensions, and the wins compound on each other.
First, the substantial improvement test aligns naturally with value add renovation budgets. A typical 1980s vintage Class B or C apartment building costs roughly half land and half improvements, and a $10 to $20 thousand per unit interior and exterior reno program will routinely double the building basis within the 30 month window. According to the [National Multifamily Housing Council](https://www.nmhc.org/research-insight/quick-facts-figures/), the United States needs to build 4.3 million additional apartments by 2035 to meet demand. The undersupplied workforce housing tier that most QOZ tracts target is exactly where that need is concentrated.
Second, many designated tracts sit in the path of growth in metros that are already adding population and jobs. Not every zone gentrifies, but the ones that do reward patient capital handsomely.
Third, the long hold period required to capture the appreciation exclusion matches the natural multifamily cycle. Cash flow during years one through ten covers the inclusion tax bill on the deferred gain, the value add lifts net operating income, refinance proceeds return capital, and the eventual sale captures appreciation tax free at the federal level.
Fourth, you can stack tax benefits. The QOZ appreciation exclusion sits on top of normal multifamily depreciation, which can be accelerated with a cost segregation study at acquisition. Bonus depreciation rules let you front load deductions in year one. The combined effect can drive your effective tax rate on cash flow toward zero for the first several years while the appreciation benefit ripens in the background.
Fifth, multifamily operations are forgiving. Hospitality and retail QOZ deals are more sensitive to economic cycles. Workforce housing is what people downgrade *into* during a recession, not out of. For more on building cycle resilient portfolios see our guide to [recession proof multifamily strategy](https://rodkhleif.com/how-to-recession-proof-your-multi-family-portfolio/).
## The Three Paths Into a QOZ Multifamily Deal
You can participate in this structure three different ways. Each path has its own risk and control profile, and the right one depends on your check size, your tax sophistication, and how much time you want to spend on compliance.
The first path is direct ownership through a QOF you form yourself. You hire counsel, file the self certification, control acquisition, and run the asset. The control is total. The complexity is also total. Annual fund certifications, semi annual 90 percent asset tests, K 1 distribution mechanics, and ongoing IRS reporting are all on you. This path makes sense for investors with at least $2 million of gain to deploy and an existing operating team.
The second path is a syndicated QOF run by an experienced multifamily sponsor. This is the most common route for investors with $100 thousand to $1 million of gain. You become a limited partner alongside other accredited investors. The sponsor handles QOZ compliance, the substantial improvement schedule, and operations. You receive K 1s and quarterly reports. Our [guide to multifamily syndication](https://rodkhleif.com/what-is-multifamily-syndication-a-complete-guide/) walks through the structure end to end, and our piece on [what a general partner does](https://rodkhleif.com/what-is-a-general-partner-gp-in-real-estate/) covers the operator side.
The third path is a QOZ focused fund of funds. You invest in a sponsor whose entire business is allocating capital across multiple QOFs. The advantage is diversification across markets and operators. The cost is layered fees, since the fund of funds charges on top of the underlying QOF fees. Fees can absorb a meaningful chunk of return, so the diversification value has to be real.
## The After Tax Math: A Worked Example
The cleanest way to see the QOZ advantage is to run two paths side by side on the same starting gain. Consider an investor with a $500,000 long term capital gain from a stock sale who is in the top federal bracket and subject to NIIT.
Path A pays the tax now. At the 20 percent federal long term rate plus the 3.8 percent NIIT, the all in federal hit is roughly 23.8 percent, or about $119,000. The investor has approximately $381,000 left to invest in a standard non QOZ multifamily syndication. Assume the deal hits a 13 percent average annual return over ten years. Future value of $381,000 at 13 percent for ten years is approximately $1,295,000. Sale generates roughly $914,000 of additional gain, taxed at 23.8 percent, costing another $218,000. Net after tax value at year ten is approximately $1,077,000.
Path B rolls the full $500,000 of gain into a QOZ multifamily QOF. The investor pays the 2026 inclusion tax of about $119,000 from outside savings (or from interim cash distributions from the QOF). The QOF capital compounds at the same 13 percent for ten years, growing to roughly $1,700,000. At year ten the investor sells with the basis step up election, and the appreciation of approximately $1,200,000 is excluded from federal tax. After accounting for the $119,000 already paid on the original gain, the investor’s net after tax wealth is approximately $1,581,000.
The differential is approximately $500,000 of additional after tax wealth on a $500,000 gain. That is not a marketing number. It is what the math says when you compare apples to apples on the same return assumption. Returns depend on deal execution, market dynamics, financing terms, and tax law remaining stable. The point is not the exact figure. The point is the magnitude.
## The Risks Every Investor Must Understand
I have not met a sophisticated investor who lost money on a great deal. I have met plenty who lost money on a good idea executed by the wrong operator. QOZ structures carry six risks specifically.
**Location risk.** By definition every zone is economically distressed. Some are improving. Some have been improving for decades and have nearly stabilized. Some will never improve. The address alone tells you nothing. The submarket trajectory, employer base, school quality, and infrastructure investment trajectory tell you everything.
**Illiquidity.** The ten year minimum hold is a hard requirement to capture the appreciation exclusion. There is no early exit that preserves the full benefit. If you might need the capital in years five through nine, this is the wrong structure.
**Sponsor risk.** QOZ compliance is more complex than standard multifamily syndication. A sponsor who botches the substantial improvement test, the 90 percent asset test, or the K 1 reporting can cost you the entire tax benefit even if the property itself performs.
**Legislative risk.** Congress passed the One Big Beautiful Bill Act in 2025, which made the program permanent and changed the benefit structure for investments made after December 31, 2026. Future legislation could change it again. Investors with deferred gains already running have already absorbed one structural reset on the basis step up benefits.
**Substantial improvement execution risk.** If the fund fails to double the building basis within 30 months, the property loses QOZ status and you lose the appreciation exclusion. Construction delays, supply chain issues, and budget overruns are not theoretical risks in 2026.
**Operational risk.** Workforce housing operations require specialized management. Resident turnover, collections, fair housing compliance, and capex sequencing are all harder in the Class B and C tier where most QOZ multifamily lives. Our [due diligence checklist](https://rodkhleif.com/7-core-questions-to-guide-your-due-diligence/) covers what to verify before committing.
## What Changed in 2026 and What Is Coming Next
The single biggest legislative event in this program’s history happened in 2025 when Congress passed and the President signed the One Big Beautiful Bill Act. According to the [Economic Innovation Group](https://eig.org/opportunity-zones-2-0-where-things-stand/), which co created the original concept, the OBBBA made the opportunity zone incentive permanent. The sunset that was originally scheduled for December 31, 2026 is gone. The next decennial QOZ designations take effect January 1, 2027 on a rolling ten year cycle.
For investors who deferred gains before December 31, 2026, the original rules still govern. The deferred gain comes onto the 2026 tax return and the tax is due by April 15, 2027. Many early investors are facing five and six figure tax bills on gains they have not yet liquidated, so cash planning for that April 2027 bill needs to happen now. The IRS still requires Form 8949 to report the deferral and Form 8997 to track the QOF investment each year.
For investments made on or after January 1, 2027, OZ 2.0 changes the structure. The deferral period becomes a rolling five years rather than tied to a fixed sunset date. A permanent 10 percent basis step up returns at the five year mark, and a 30 percent step up applies to Qualified Rural Opportunity Funds. The income tests for tract qualification tighten from 80 percent of area median to 70 percent, which means fewer tracts will qualify and the ones that do will skew toward more distressed communities. The blanket Puerto Rico designation goes away. The contiguous tract rule disappears.
The practical takeaway: if you have a recognized gain in 2026, the original OZ 1.0 rules apply to your investment. If you have a gain in 2027 or later, plan around OZ 2.0. Either way the program is now a permanent feature of the code, which finally removes the policy uncertainty that made some investors hesitate during 2023 and 2024.
## How to Evaluate a QOZ Multifamily Sponsor
Picking the right sponsor is more important in a QOZ deal than in a standard syndication because the tax benefit you came for can be destroyed by a compliance miss that has nothing to do with operating performance. Use these criteria as the floor, not the ceiling.
Demand a multifamily operating track record that predates their QOZ work. Lots of sponsors learned QOZ structuring before they learned how to run apartments. The combination is rare and worth paying for. Ask for the QOF legal structure, the tax opinion from outside counsel, and a copy of the substantial improvement budget with line items. Verify the market thesis with third party data on population, employment, and rent trends. Confirm the hold period assumptions match the QOZ timeline (no balloon exits at year seven). Read the fee schedule end to end. Acquisition fees, asset management fees, refinance fees, and promote structure should all add up to a sponsor incentive that aligns with your timeline. Walk away if anything feels rushed or evasive.
Our piece on [how to buy an apartment building](https://rodkhleif.com/buying-an-apartment-building-complete-guide/) covers the operational diligence layer in more detail. Pair that with QOZ specific tax counsel from a CPA who has signed at least a dozen Form 8996s and you have a defensible underwriting process.
## QOZ vs 1031 Exchange: Which Belongs in Your Portfolio
I get asked weekly which tool is better. The honest answer is both, applied to different situations. The comparison table below is the cheat sheet I share with Warriors.
QOZ vs 1031 ExchangePICK THE RIGHT TOOL FOR THE RIGHT GAINDimension1031 ExchangeQOZ InvestmentSource of capital✗Real estate sale only✓Any eligible capital gainTax treatment✗Defer only, basis carries forward✓Defer original gain, exclude all appreciation after 10 yearsTimeline✗45 days to identify, 180 days to close✓180 days to invest in a QOFReinvestment rules✗Must reinvest full sale price including debt✓Only the gain itself, basis stays liquidLiquidity profile✗Hold indefinitely, daisy chain into next 1031✓10 year minimum, then full exitThe right mental model is a portfolio one. Use 1031 exchanges to keep real estate basis rolling forward when you are moving from one property to a larger one. Use opportunity zones to convert non real estate gains into multifamily exposure while permanently shielding the future appreciation. Read our deep dive on the [1031 exchange rules](https://rodkhleif.com/1031-exchange-faq-everything-investors-need-to-know/) for the companion piece.
## How to Invest in a QOZ Multifamily Deal Step by Step
Use this six step sequence as your operating checklist whenever a new eligible gain crosses your desk. None of these steps is optional. Skipping one is how investors blow the benefit.
1. **Confirm the eligible gain.** Pull your closing statement, K 1, or 1099. Identify the gain amount, the recognition date, and whether the gain is short term or long term. The 180 day clock starts from the date of recognition, not the date you decide to invest.
2. **Assemble the advisory team.** Engage a CPA with QOZ experience and a securities attorney before you wire money. A QOZ tax memo costs a fraction of the tax benefit at stake and protects you in audit.
3. **Vet the sponsor and the QOF structure.** Read the private placement memorandum, the operating agreement, and the QOF tax opinion. Stress test the substantial improvement schedule. Confirm the sponsor has W2 employees on the asset management team, not just at the GP entity.
4. **Model the after tax math honestly.** Build a year by year cash flow with the 2026 inclusion tax bill, the operating distributions, the refinance event, and the year ten sale at the basis step up. Stress the assumptions down 25 percent.
5. **Execute the wire and document the deferral election.** The QOF must receive the gain within 180 days. File Form 8949 with the deferral election on your next return. The QOF files Form 8996 for fund certification.
6. **Maintain compliance for 10 years.** File Form 8997 every year you hold the investment. Track your QOF basis. When the 2026 inclusion event triggers, plan the cash to pay the resulting federal tax in April 2027. After year ten, elect the basis step up on sale and pay zero federal tax on the appreciation.
## Warrior Story: Tax Sophistication as a Compounding Skill
I have watched dozens of Warriors transform their results in real estate, and the pattern is consistent. The investors who learn the tax structures move faster, take smarter risks, and compound wealth more rapidly than the ones who ignore them. [Anthony Metzger](https://rodkhleif.com/podcasts/from-teaching-grade-school-to-raising-millions/) went from teaching grade school to raising millions in multifamily capital. The leverage was not just deal flow. It was tax sophistication paired with relentless execution. When you understand how QOZs, cost segregation, bonus depreciation, and 1031 exchanges fit together, every deal you bring to a passive investor becomes more compelling. That is what scaling looks like.
Watch the Full Interview
Anthony walks through the leap from teacher to multifamily syndicator on the Lifetime Cash Flow Podcast.
> **Rod Khleif:** “Tax law is not a side note in multifamily. It is the difference between building wealth and renting it from the IRS. Learn the structures, surround yourself with operators who already use them, and the compounding takes care of itself.”
## Opportunity Zones for Multifamily FAQ
**Q: Can I use any capital gain for a QOZ investment, or only real estate gains?**
A: Any eligible capital gain qualifies. Stocks, business equity, crypto, collectibles, prior real estate exits, and partnership K 1 gains all work. Short term and long term gains are both eligible. The flexibility on capital source is one of the biggest advantages over a 1031 exchange, which is restricted to real estate gains only.
**Q: What happens if I sell my QOF investment before the 10 year mark?**
A: You forfeit the appreciation exclusion. The deferred original gain still comes due, and you owe federal tax on any gain inside the QOF since investment. The structure is built around the ten year hold, so plan your liquidity around it. Selling at year seven captures only the deferral benefit, not the wealth creation benefit.
**Q: Do I still get depreciation deductions in a QOZ multifamily deal?**
A: Yes. Depreciation runs normally on top of the QOZ benefits. Many sponsors layer a cost segregation study at acquisition to accelerate deductions, which means you can shelter cash flow in the early years while the appreciation exclusion ripens in the background. The stack is one of the most efficient tax shelters in the code.
**Q: Can a QOF use leverage on a multifamily property?**
A: Yes. Standard agency and bridge debt are allowed, and most sponsors leverage between 60 and 75 percent loan to cost. The leverage does not impact QOZ eligibility as long as the substantial improvement test is met on the building basis. Be cautious of QOFs that lever above 80 percent on workforce housing assets.
**Q: What is the minimum investment for a QOZ multifamily syndication?**
A: Most syndicated QOFs accept minimums between $50,000 and $250,000 from accredited investors. Direct ownership of a single asset QOF typically requires at least $1 million of gain to make the legal and compliance costs worthwhile. Fund of funds vehicles sometimes accept smaller checks but layer additional fees on top.
**Q: Are QOZ benefits available in every state?**
A: The federal benefits apply uniformly because the program is federal. State conformity varies. Most states follow federal treatment automatically, but California, Massachusetts, North Carolina, and a few others have decoupled or partially decoupled. Confirm state treatment with your CPA before assuming you avoid state level capital gains tax.
**Q: What happens after December 31, 2026 under the new law?**
A: The opportunity zone program is permanent under the One Big Beautiful Bill Act. Investments made on or after January 1, 2027 follow OZ 2.0 rules with a rolling five year deferral, a 10 percent basis step up at five years, and tightened income tests for qualifying tracts. Pre 2027 investments continue under the original rules.
**Q: How does the 2026 deferred gain recognition affect me?**
A: If you deferred a gain into a QOF before December 31, 2026, the deferred amount becomes taxable on your 2026 return. Tax is due by April 15, 2027. Many investors face six figure tax bills with no liquidity from the investment, so cash planning for that bill is critical. Talk to your CPA now.
**Q: Can I roll a QOZ investment into another QOZ at year ten?**
A: No, the appreciation exclusion happens at the sale, and the proceeds are no longer gain so they cannot be rolled. You can, however, generate a new eligible gain through another transaction and roll that new gain into a new QOF. The QOZ benefit is per gain, not perpetual.
**Q: Is a QOZ multifamily fund a good fit for retirement accounts?**
A: Generally no. Retirement accounts do not generate capital gains the same way taxable accounts do, so the QOZ structure offers no benefit inside an IRA or 401(k). Use QOZ structures for taxable account gains only. Self directed IRAs can hold multifamily, but you would not use the QOZ wrapper.
If you are still building your foundation before diving into a QOZ syndication, start with my free book. It walks through the multifamily fundamentals every investor needs before they evaluate sophisticated tax structures like opportunity zones. Click the cover below to download the full PDF and use it as your daily reference.
[](https://rodkhleif.com/lcfa-ebook/)
[**Download the free Lifetime Cashflow Academy ebook →**](https://rodkhleif.com/lcfa-ebook/)
## Ready to Take the Next Step
Opportunity zones for multifamily are one of the most powerful wealth structures left in the code, and 2026 is the year the program transitions from a one shot incentive into a permanent feature. If you have a capital gain on the horizon, the right path is not to figure this out alone. It is to surround yourself with operators and educators who already use these structures every day.
The Warrior Program is where serious multifamily investors learn how to source, underwrite, raise capital for, and operate value add deals at scale. Apply to the [**Warrior Program**](https://rodkhleif.com/rod-khleif-warrior-program/) if you are ready to build a portfolio that uses every tax structure in the code.
If you are earlier in the journey, start with the free guide. Download the [**Lifetime Cash Flow Academy ebook**](https://rodkhleif.com/lcfa-ebook/) for the foundational principles I teach every Warrior in week one.
*Disclaimer: This article was written with the help of AI and reviewed by Rod and his team. It is educational only and does not constitute tax, legal, or investment advice. Consult a qualified CPA and securities attorney before making any QOZ investment.*
**Categories:** Multifamily Investing
---
### [Multifamily DSCR Loan vs Agency Debt](https://rodkhleif.com/multifamily-dscr-loan-vs-agency-debt/)
**Published:** May 13, 2026
**Author:** Rod Khleif
**Content:**
I have watched too many multifamily investors lose great deals because their lender wanted three years of tax returns showing depreciation losses while a clean cash flowing property sat on the contract waiting. A multifamily DSCR loan was built for that exact moment. It qualifies the deal on the property’s ability to service its own mortgage instead of on your taxable income, and the right investor uses it to close in three weeks while everyone else is still waiting on agency underwriting.
This guide walks through how multifamily DSCR loans actually work, when they beat agency debt, when they are the wrong tool, what they cost in 2026, and how to underwrite a deal so your DSCR clears with cushion. If you are a passive investor in syndications, the section near the end on questions to ask a GP will save you from bad capital calls.
## Table of Contents
- [Why Most Multifamily Investors Pick the Wrong Loan](#wrong-loan)
- [The Five Filter DSCR Stack](#five-filter-stack)
- [How a Multifamily DSCR Loan Actually Works](#how-dscr-works)
- [Multifamily DSCR Loan Requirements in 2026](#requirements)
- [DSCR Loan Rates and What Moves Them](#rates)
- [How to Underwrite a Multifamily DSCR Deal in Five Steps](#underwrite-five-steps)
- [DSCR Loan vs Agency Debt](#vs-agency)
- [PITIA Based vs NOI Based DSCR](#pitia-vs-noi)
- [When DSCR Is the Right Tool](#right-tool)
- [When DSCR Is the Wrong Tool](#wrong-tool)
- [A Warrior Who Scaled With DSCR Debt](#warrior-story)
- [Common Mistakes to Avoid](#mistakes)
- [DSCR Loans for Passive LPs in Syndications](#passive-lps)
- [Multifamily DSCR Loan FAQ](#faq)
- [Ready to Take the Next Step?](#cta)
## Why Most Multifamily Investors Pick the Wrong Loan
> A multifamily DSCR loan qualifies the property on its own cash flow rather than the borrower’s tax returns or W2 income. Lenders calculate Debt Service Coverage Ratio as net operating income divided by annual debt service, or rent divided by PITIA on smaller deals, and approve any property that clears their threshold without ever opening your personal tax file.
Conventional and agency lenders measure you, not the deal. They want W2 stubs, two years of returns, a debt to income ratio under 43 percent, and a story for every passive loss on Schedule E. That works fine for someone buying their first house. For a real estate investor running a portfolio with bonus depreciation, cost segregation, and accelerated write offs, it is a brick wall. You can be sitting on $400,000 of taxable losses and $80,000 a month of real cash flow and a full doc underwriter will still tell you no.
The fix is not louder arguing with the underwriter. The fix is a different loan product. DSCR financing exists because lenders eventually figured out that the property itself is the better credit. The property does not have a tax return. The property has a rent roll, a T12, an insurance binder, and a tax bill. Plug those into a coverage ratio and you have a decision. Three weeks later you are at the closing table.
### Signs Your Deal Belongs in a DSCR Loan
Use this short list to self diagnose before you call a lender:
- Your last two tax returns show passive losses or modest taxable income that does not reflect your real cash flow.
- You hold properties through an LLC or a revocable trust for liability protection.
- The deal is under $1.2 million and unlikely to clear agency small balance minimums.
- You need to close in 30 days or less to beat another offer.
- You are past the conventional 10 mortgage cap.
- You are self employed, foreign national, or otherwise outside the W2 box.
- You want to scale into 5 to 10 properties without re documenting your life every six months.
If two or more of those describe you, agency or conventional debt will fight you on this deal. Read on.
## The Five Filter DSCR Stack
I use a simple framework to decide whether a multifamily DSCR loan is the right financing tool or whether the deal belongs on a different shelf. I call it the Five Filter DSCR Stack. Run the deal through each filter in order, and by the time you reach Filter 05 you know exactly what financing path makes sense.
[**Want a live walkthrough of how I run real deals through this stack? Join the next free Multifamily Bootcamp →**](https://rodkhleif.com/bootcamp/)
### Filter 01. Size
DSCR loans are happiest between roughly $100,000 and $1.5 million. Below $100,000 you struggle to find a lender willing to underwrite the file because fixed costs eat their margin. Above $1.5 million the same property usually qualifies for Fannie Mae or Freddie Mac small balance debt at 50 to 150 basis points lower. The sweet spot for DSCR is small multifamily, two to ten units, where the deal is too big for a conventional rental loan and too small for agency programs.
### Filter 02. Speed
If you need to close in 21 to 30 days, DSCR is one of the only paths that actually delivers. Agency timelines run 60 to 90 days even on a clean file. The reason is documentation. DSCR underwriters do not chase your tax returns, business returns, K1s, or your CPA. They chase the property’s appraisal, the rent roll, the insurance binder, and the LLC operating agreement. That is a much shorter checklist.
### Filter 03. Docs
This is the filter that saves most experienced investors. If you write off depreciation aggressively, run cost segregation studies, or own a stack of pass through entities, your personal returns make conventional underwriters nervous even when your real cash flow is strong. DSCR removes that fight entirely. You hand over an LLC operating agreement, a rent roll, a T12, and a credit pull. No personal returns, no DTI calculation, no game of explaining bonus depreciation to a 22 year old underwriter.
### Filter 04. Property
The property has to actually cover its own mortgage at acquisition. That means an in place DSCR of at least 1.0 to qualify and 1.25 or higher to win the best pricing. If you are buying a value add building that runs negative cash flow until you push rents, you need bridge or hard money first and then a DSCR refinance after stabilization. The deal that lands you at a 0.85 DSCR today is not a DSCR loan deal today. It might be a beautiful BRRRR deal tomorrow.
### Filter 05. Exit
DSCR loans usually come with prepayment penalty structures, often three, four, or five year step downs. Take a 30 year DSCR loan with a five year prepay and then try to 1031 out at year two and you will eat a meaningful penalty. Match the prepay structure to your real hold plan. If you are a long term holder, take the lower rate that comes with a longer prepay. If you might sell or refi inside three years, pay the rate premium for a shorter prepay window.
## How a Multifamily DSCR Loan Actually Works
Underwriting on a DSCR loan revolves around a single number, the Debt Service Coverage Ratio. There are two ways the math gets done depending on the size of the deal, and missing the distinction is one of the most expensive rookie mistakes in the entire space.
For one to four unit residential rentals and small multifamily under five units, most DSCR programs use a simplified formula. The lender takes the market rent for the property and divides it by the monthly PITIA payment. PITIA stands for principal, interest, taxes, insurance, and HOA if applicable. That number is your DSCR. A duplex renting for $4,000 a month with a $3,200 PITIA produces a 1.25 DSCR. Done.
For five plus unit properties most lenders shift to commercial style underwriting. They calculate net operating income, which is rent minus vacancy minus operating expenses minus reserves, then divide that NOI by the annual debt service. A 20 unit apartment with $400,000 of NOI and $320,000 of annual debt service produces the same 1.25 DSCR but the math is far more conservative because NOI includes property management, repairs, vacancy assumptions, and replacement reserves. That difference matters when you are comparing apples to apples.
According to recent data from the [National Multifamily Housing Council](https://www.nmhc.org/research-insight/quarterly-survey/), debt availability tightened meaningfully in 2024 and remained selective into 2026, with non agency lenders capturing share specifically in the small multifamily space agency products do not serve. That is the lane DSCR loans own.
One nuance worth flagging: the same property can produce wildly different DSCRs depending on whether the lender uses the small balance PITIA method or the commercial NOI method. A property with $50,000 of NOI on a $40,000 annual debt service shows a 1.25 DSCR on the commercial method, but if a small balance lender ignores operating expenses and just runs gross rent over PITIA, that same property might score 1.55. Same building. Two completely different numbers. Always ask up front which method the lender uses before you spend a week underwriting against the wrong formula.
## Multifamily DSCR Loan Requirements in 2026
Program terms shift constantly so treat what follows as a framework, not a quote. As of early 2026, here is what most reputable DSCR lenders are asking for on multifamily product:
- **Credit score:** 620 minimum for entry level programs, 680 to 740 plus for best pricing. Score above 740 and you typically save 25 to 75 basis points.
- **Down payment:** 20 to 25 percent on most multifamily programs, with 15 percent available on a small number of aggressive products at a rate premium.
- **Minimum DSCR ratio:** 1.0 to clear the box, 1.25 or higher to unlock the lowest rates and the highest leverage.
- **Cash reserves:** 3 to 12 months of mortgage payments held in liquid accounts. Larger loan sizes pull longer reserve requirements.
- **Property condition:** Rent ready at closing. Major deferred maintenance kicks you toward bridge debt.
- **Loan to value:** 75 to 80 percent purchase, 70 to 75 percent rate and term refinance, 65 to 70 percent cash out refinance.
Property eligibility on multifamily DSCR programs spans one to four unit rentals, five to ten unit small multifamily, short term rentals in many markets, and mixed use buildings where the residential square footage is majority. Programs vary, so confirm property type approval before you sign the contract.
Borrower flexibility is one of the genuine perks. DSCR programs typically allow foreign national borrowers, LLCs, revocable living trusts, partnerships, and S corps. Some require a personal guarantee from the principals, others offer fully non recourse structures at slightly higher rates. Experience requirements are usually entry level on single family and small multifamily but tighten quickly on five plus unit deals, where many lenders want to see at least one or two prior investment properties in your name.
## DSCR Loan Rates and What Moves Them
DSCR rates in May 2026 run roughly 6.0 to 8.5 percent for typical multifamily borrowers, with the cleanest files pricing closer to the bottom of that range and weaker credit or higher leverage scenarios closer to the top. The pricing structure is usually a Treasury index plus a spread, with most programs running 250 to 400 basis points over the 5 year or 10 year Treasury depending on loan term.
Several inputs move your rate within that range. Credit score moves it most. A 760 plus borrower can be 75 basis points cheaper than a 660 borrower on the same property. DSCR ratio matters next. A 1.40 in place DSCR usually beats a 1.05 by 25 to 50 basis points because the lender’s risk drops. Down payment matters less than people think above 25 percent but matters enormously at 20 percent versus 25 percent thresholds.
Two pricing levers that investors underuse: buydown points and prepayment penalty term. Paying 1 to 2 points up front to buy your rate down can shave 25 to 50 basis points off the note rate, which on a $750,000 loan saves serious money over a five year hold. Lengthening your prepayment penalty term from three years to five years also reduces the rate, sometimes by another 25 basis points. Both of those moves only make sense if your real hold plan supports them.
The single number that actually matters is the monthly payment in your hand, not the headline rate on the term sheet. A 6.75 percent rate with no points often beats a 6.25 percent rate with two points, depending on hold period. Run the breakeven math before you sign.
## How to Underwrite a Multifamily DSCR Deal in Five Steps
Here is the exact process I teach Warrior students to run on every deal before they call a DSCR lender. This is the deal side of the equation, not the lender shopping side.
1. **Pull the rent roll and trailing 12 month profit and loss.** Both documents have to tie. If the rent roll says 18 occupied units and the T12 says 15, you have a problem. Reconcile before you spend another hour on the file.
2. **Choose the calculation method.** Confirm with the lender whether the program runs PITIA based DSCR or commercial NOI based DSCR. The wrong assumption here can blow up your loan sizing by 20 to 30 percent.
3. **Stress test for vacancy and expenses.** Run the DSCR at acquisition. Then rerun it with vacancy at 8 percent instead of 4 percent. Rerun it again with operating expenses 10 percent higher than current. If any of those scenarios drop you under 1.10, the deal is thin.
4. **Quote three lenders in parallel.** Get term sheets from at least three DSCR shops on the same day. Compare rate, points, prepay structure, max LTV, and total cost over your intended hold. Lender competition is the single biggest savings lever available to you.
5. **Lock prepay to your exit.** Decide your exit before you sign anything. If you plan to refi or sell in two years, take a two year or three year prepay step down even at a rate premium. If you are holding ten years, lock the five year prepay for the lower rate.
The files that close fastest share a pattern. Clean rent roll, clean T12, current leases scanned, LLC operating agreement ready, insurance binder available, and one decision maker on the borrower side. Files that delay always share the opposite pattern.
### Three Worked Scenarios Across Deal Sizes
The math changes meaningfully as you move up the size curve. Here are three real world style scenarios at different multifamily deal sizes showing how the calculation method and the best financing path both shift.
Notice the pattern. At $250K you are using PITIA based math and DSCR is the clear winner because no agency program touches a deal that small. At $1.2 million on an 8 unit you are still inside DSCR territory and the commercial NOI calculation kicks in. At $2.5 million on a 20 unit the same DSCR clears, but Fannie Mae or Freddie Mac small balance debt is now in play and the agency rate is usually 50 to 100 basis points lower. The right financing depends on the deal, not on your preference.
## DSCR Loan vs Agency Debt
This is the comparison that decides most experienced investors’ financing choice. Side by side:
DSCR LOAN vs AGENCY DEBTSIDE BY SIDE COMPARISONFactorAgency DebtDSCR LoanDocumentation✗Full borrower financials✓Property cash flow onlyMinimum Loan Size✗$1M plus small balance✓$100K to $250K floorProperty Size✗5 plus units, no upper cap✓1 to 10 units typicalMinimum DSCR✗1.25 to 1.30✓1.0 to 1.25Closing Speed✗60 to 90 days✓21 to 30 daysRate Premium✓Lower base rate✗50 to 150 bps higherRecourse✓Non recourse✓Often non recourseBest Use CaseStabilized $1M plus, rate sensitive, long holdSmall multifamily, fast close, complex returnsThe honest takeaway is that DSCR wins for deals under $1 million, time sensitive closings, and investors with complicated personal financials. Agency wins on rate and loan size for stabilized larger properties. The investor who masters both, and knows when to deploy each, dramatically outperforms the investor who is loyal to one product. For a deeper look at the full multifamily financing landscape, my [multifamily financing complete guide](https://rodkhleif.com/multifamily-financing-complete-guide/) walks through every major option.
## PITIA Based vs NOI Based DSCR
If you only remember one nuance from this entire guide, remember this one. The same property can produce wildly different DSCRs depending on which calculation method your lender uses.
PITIA BASED vs NOI BASED DSCRWHICH MATH YOUR LENDER USES MATTERSDimensionPITIA MethodNOI MethodTypical Use1 to 4 unit residential, small DSCR5 plus unit commercial multifamilyFormulaGross rent divided by PITIANOI divided by annual debt serviceExpenses Included✗Taxes, insurance, HOA only✓Full operating expenses plus reservesVacancy Assumption✗Usually ignored✓5 to 8 percent built inDifficulty to Clear✓Easier, less conservative✗Tougher, more conservativeInvestor RiskHidden expense risk on cash flowCloser to real cash flow realityAlways know which method your lender is using before you spend underwriting hours on the file. My [multifamily underwriting guide](https://rodkhleif.com/multifamily-underwriting-guide/) goes deeper on the NOI calculation specifically.
## When DSCR Is the Right Tool
Five scenarios where a multifamily DSCR loan is clearly the right tool for the job:
1. **Small multifamily in the 5 to 10 unit range.** Too big for conventional residential lenders, too small for agency programs. DSCR owns this lane.
2. **Investors with significant depreciation and write offs.** Your real cash flow looks great. Your tax return looks like you barely break even. DSCR ignores the second one.
3. **Self employed investors without W2 documentation.** Business owners, contractors, and entrepreneurs with non standard income streams skip the agency obstacle course entirely.
4. **Time sensitive deals where 60 to 90 day agency timelines will not work.** Foreclosure auctions, off market opportunities with short fuses, and 1031 exchange deadlines all push toward DSCR speed.
5. **Scaling past the conventional 10 property cap.** Fannie Mae stops counting once you cross 10 financed properties. DSCR lenders do not.
A sixth bonus scenario worth naming: LLC and entity ownership for liability protection without agency complications. DSCR programs are built for LLCs from the ground up.
## When DSCR Is the Wrong Tool
The wrong loan kills more deals than the wrong property. Five scenarios where DSCR is not the answer:
- **Large stabilized properties where the agency rate advantage outweighs DSCR convenience.** On a $4 million stabilized apartment building, a 100 basis point rate savings from Fannie Mae or Freddie Mac dwarfs the documentation hassle.
- **Heavy value add deals where the property does not cash flow at acquisition.** A 0.85 DSCR will not qualify for DSCR financing. That deal needs bridge debt first, DSCR second.
- **Long term holders who care more about rate than flexibility.** If you are buying for a 20 year hold and the cash flow is tight, the rate matters more than anything else.
- **Ground up construction.** DSCR programs underwrite existing income. New construction needs a construction loan, then DSCR or agency refinance after certificate of occupancy.
- **Mixed use buildings where commercial square footage is majority.** Most DSCR programs cap commercial square footage at 30 to 49 percent. Beyond that you are in commercial mortgage backed securities territory.
If your deal is heavy value add, my [BRRRR method for multifamily investors](https://rodkhleif.com/brrrr-method-for-multifamily-investors/) walks through how to bridge to DSCR refinance properly.
## A Warrior Who Scaled With DSCR Debt
[Anthony Metzger](https://rodkhleif.com/podcasts/from-teaching-grade-school-to-raising-millions/) walked into the Warrior program as a grade school teacher with a small portfolio and a big ambition. Two of his early scaling moves were small multifamily acquisitions financed through DSCR debt. The reason was simple. He was self employed on the side, his tax returns were complicated, and he needed to close fast on opportunities that would not wait for a 90 day agency timeline. DSCR was the only path that worked.
Watch the Full Interview
Anthony walks through how he went from teaching grade school to raising real capital and scaling a multifamily portfolio with the right financing at each step.
The pattern I see again and again with our Warriors is that the financing decision is downstream of the scaling decision. If you have decided to scale past 10 doors, you need DSCR or commercial financing in your toolkit. Period. The investors who get stuck at five or six properties are usually the ones who treat their lender like a marriage instead of a tool.
> **Rod Khleif:** “The right loan for the deal is the loan that lets you close the deal. Stop trying to force every property into the same financing box. Build a relationship with two DSCR shops, two agency shops, and one bridge shop, and let the deal pick the product.”
## Common Mistakes to Avoid
Seven mistakes that I see repeatedly on DSCR files. Avoid all of them:
- **Underestimating the prepayment penalty.** A 5 percent prepay in year one on a $600,000 loan is $30,000. That eats most of a 1031 exchange profit if you sell too early.
- **Confusing PITIA based DSCR with NOI based DSCR.** Walking into a 5 plus unit deal assuming PITIA math will get you a rude surprise at underwriting when NOI math drops your DSCR by 30 percent.
- **Not stress testing for vacancy and expense creep.** A 1.0 DSCR at acquisition means zero cushion. One vacancy and you are paying out of pocket. Build for 1.15 or higher in your stress case.
- **Forgetting that property tax reassessment can crater DSCR post acquisition.** Buy a property at $1 million that was last assessed at $500,000 and you might wake up to a property tax bill that doubled. Run your DSCR at the reassessed tax bill, not the current one.
- **Ignoring the rate premium when agency was actually available.** If your deal could have qualified for Fannie or Freddie, taking DSCR convenience costs real money over a long hold.
- **Stacking short prepay DSCR debt across a correlated portfolio.** Five DSCR loans with three year step downs all coming due in the same 12 month window during a rate spike is a refinance nightmare.
- **Skipping the due diligence trip because the lender does not require it.** DSCR does not protect you from a bad property. Walk every unit. Pull every lease. My [multifamily due diligence guide](https://rodkhleif.com/finding-deals/the-most-important-multi-family-due-diligence-tools/) is the checklist I make every Warrior run before closing.
## DSCR Loans for Passive LPs in Syndications
Even if you are not signing the loan yourself, you need to understand DSCR financing because plenty of syndicators use it on smaller deals. If you are an LP in a 20 to 50 unit deal under $5 million, there is a real chance the GP is financing it through DSCR rather than agency.
That changes your risk profile in three ways. First, DSCR loans usually carry shorter terms and higher rates than agency, so the refinance risk and rate exposure are higher. Second, DSCR prepay structures can lock the deal into specific exit timing whether or not the market is cooperative. Third, the loan to value is often slightly tighter on DSCR than agency, which means less leverage and lower equity multiple potential.
Questions every passive LP should ask the GP before signing the subscription docs:
- What is the in place DSCR at acquisition?
- What does the DSCR look like at year three pro forma versus stress case?
- What happens to the loan if rents come in 5 to 10 percent under projection?
- What is the prepay structure, and how does it line up with the planned hold?
- Is the loan recourse or non recourse, and who is signing the guarantee?
If you want a deeper passive investor framework, my [multifamily financing complete guide](https://rodkhleif.com/multifamily-financing-complete-guide/) covers the LP perspective in detail.
## Multifamily DSCR Loan FAQ
**Q: What is the minimum DSCR to qualify for a multifamily DSCR loan?**
A: Most programs in 2026 require a minimum DSCR of 1.0 to qualify, with 1.25 or higher unlocking the best pricing and maximum leverage. A handful of aggressive programs go down to 0.75 DSCR with significant rate adjustments, but those should be treated as bridge style products, not long term holds. The lower your DSCR at acquisition, the thinner your cushion against vacancy or expense increases.
**Q: Can I get a multifamily DSCR loan on a property I plan to renovate?**
A: DSCR loans underwrite the property as it is today, so if the property does not cash flow at 1.0 DSCR currently, you cannot qualify. Most investors use a bridge or hard money loan for the acquisition and renovation phase, then refinance into a permanent DSCR loan once the property stabilizes at the higher post renovation rent roll. This bridge to DSCR path is the standard playbook for value add multifamily deals.
**Q: Do multifamily DSCR loans require a personal guarantee?**
A: It depends on the program and lender. Many DSCR loans require a personal guarantee from the principal owners of the borrowing LLC, but a growing number of programs offer non recourse structures at slightly higher rates. The trade off is real. Non recourse means the property is the only collateral. Recourse means your other assets are exposed if the loan defaults.
**Q: Can I use a DSCR loan inside an LLC?**
A: Yes, and most DSCR programs prefer LLC borrowers. Single member LLCs and multi member LLCs both work, as do certain trust structures. Most programs require a personal guarantee from the LLC members, a clean operating agreement, and verification that the LLC was formed in a state recognized by the lender. The LLC structure is one of the genuine advantages over conventional financing.
**Q: What is the difference between a multifamily DSCR loan and a small balance agency loan?**
A: The biggest differences are loan size, documentation, and speed. Agency small balance programs from Fannie Mae and Freddie Mac typically start at $1 million and require full borrower documentation, but offer lower rates and longer prepay flexibility. DSCR programs go down to $100,000 to $250,000, require only property level documentation, and close faster, but at a 50 to 150 basis point rate premium. The deal size and timeline usually decide which is the right tool.
**Q: Are multifamily DSCR loans available for short term rentals?**
A: Yes, but with more conservative underwriting than long term rentals. Most programs use trailing 12 month short term rental income with a haircut, or in some cases switch to market long term rent comps to calculate DSCR. Programs vary widely on whether they accept Airbnb and VRBO income, so confirm with the lender up front. Markets with short term rental restrictions can disqualify the property entirely.
**Q: Can I refinance an agency loan into a DSCR loan?**
A: Yes, and there are specific scenarios where it makes sense. The most common is when an agency loan is coming up on a balloon or rate reset and the borrower wants to lock long term, but the tax returns no longer support agency underwriting. Another is when an investor is preparing to sell within a year or two and wants the flexibility of a shorter DSCR prepay window. Run the math on rate, points, and prepay before refinancing.
**Q: What credit score do I really need for the best DSCR rates?**
A: 740 plus typically unlocks the lowest rate tier on most programs, with notable improvements at the 700 and 720 break points. A 660 to 680 borrower can still qualify but usually pays 50 to 100 basis points more than a 740 plus borrower on the same property. If you are within 30 days of a closing, do not open new credit accounts and do not let utilization spike. A small score swing can move you between rate tiers.
**Q: Are multifamily DSCR loan rates higher than conventional?**
A: Yes, usually by 50 to 150 basis points. The premium pays for the lack of personal income documentation, the faster closing speed, and the willingness to lend in the small multifamily space agency programs avoid. For deals that would never qualify for conventional financing in the first place, the rate premium is irrelevant because no alternative exists. For deals that could qualify either way, you have to run the math on hold period and total cost.
**Q: Do multifamily DSCR loans have prepayment penalties?**
A: Almost always, yes. Most DSCR loans come with three, four, or five year prepayment penalty step downs, typically structured as 5 percent in year one declining to 1 percent in the final prepay year, then open prepay after. Some programs offer prepay buyouts where you can buy out the prepay at origination for a higher rate. Match your prepay term to your real hold plan.
## Ready to Take the Next Step?
DSCR financing is not a workaround. It is a purpose built tool that beats agency debt in specific scenarios and loses in others. The investors who win in 2026 are the ones who know exactly which loan fits which deal and never try to force a deal into the wrong financing box.
If you are still working through your first multifamily deal and want a live walkthrough of how to choose financing, evaluate properties, and underwrite with confidence, the free Multifamily Bootcamp is where I teach this end to end alongside a community of investors taking action every week. [**Reserve your seat at the next free Multifamily Bootcamp**](https://rodkhleif.com/bootcamp/).
Want to keep the framework on hand for every deal you underwrite? Start with the free 60 Days to Cash Flow ebook. [**Download the free ebook here**](https://rodkhleif.com/lcfa-ebook/). When you are ready to scale beyond your first few properties, the [**Warrior Program**](https://rodkhleif.com/rod-khleif-warrior-program/) is the deeper coaching environment for serious operators.
*Disclaimer: This article was written with the help of AI and reviewed by Rod and his team. Loan terms, rates, and program requirements change constantly. Treat this article as an educational framework, not financial advice. Always work with a licensed mortgage professional and your CPA before signing a loan commitment.*
**Categories:** Multifamily Investing, Raising Capital
**Tags:** Agency Debt, DSCR Loan, Multifamily Financing, Real Estate Financing, Rental Property Loans, Small Multifamily
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### [Capital Stacking Loan: The Smart Investor Structure](https://rodkhleif.com/capital-stacking-loan/)
**Published:** February 17, 2026
**Author:** Alex Khleif
**Content:**
Capital stacking is how I buy properties worth millions while keeping my personal capital requirements tiny. I use several funding sources. I use FHA loans, private money, seller financing, and cash. This helps me combine capital. It also lowers my down payment. Here’s what most people don’t understand: when you stack capital correctly, you control a $2 million property with maybe $50,000 of your own money. It sounds too good to be true, but I’ve done it dozens of times and taught my students to do the same. Let me break down the exact mechanics so you can use these strategies on your next deal.
If you’re raising money for a large real estate acquisition or growing your business with outside capital, understanding the capital stack is non-negotiable. How you structure your funding affects risk, returns, and control. A strategy for stacking capital loans is essential.
In this article, I’ll explain what a capital stacking loan is, how it works in real estate and business lending, and how smart investors use this strategy to improve cash flow, optimize financing, reduce equity dilution, and find the best lenders for capital stacking loans.
## 
## What Is a Capital Stacking Loan?
A capital stacking loan is a financing strategy that combines different funding types. Each type has its own risk, return, and repayment terms. Together, they fund one project or deal.
This strategy is widely used in:
- Commercial real estate acquisitions
- Mergers and acquisitions
- Startup expansion
- Multifamily syndications
In real estate, capital stacking typically includes senior debt, mezzanine debt, preferred equity, and common equity. In a capital stacking business loan, layers may include term loans, lines of credit, convertible debt, and equity investment.
**The goal?** Build a financing structure that aligns investor and lender interests. Manage risk well. Maximize leverage while protecting your control and ownership.
## How Does Capital Stacking Work?
Think of the capital stack like a layered pyramid. Each layer has a different level of priority, risk, and potential return:
### 1. Senior Debt (Lowest Risk, Lowest Return)
This is typically a bank loan or mortgage secured by the asset. It gets repaid first and usually carries the lowest interest rate.
**Key characteristics:**
- First position lien on the property
- 65-75% loan-to-value (LTV) in real estate
- Lowest interest rates (often 5-8%)
- Most secure position in the stack
### 2. Mezzanine Debt (Moderate Risk/Return)
Subordinate to senior debt, this layer often comes from private lenders and carries higher interest rates. It may include equity kickers or profit participation.
**Key characteristics:**
- Second position behind senior debt
- 10-15% of total project value
- Higher interest rates (10-15%)
- May include warrants or equity upside
### 3. Preferred Equity (Higher Risk/Return)
Investors here receive fixed returns and priority over common equity holders but typically don’t have voting control.
**Key characteristics:**
- Preferred return (often 8-12%)
- Paid before common equity
- Limited or no voting rights
- Priority in liquidation scenarios
### 4. Common Equity (Highest Risk, Highest Return)
This includes the sponsor’s or business owner’s investment. Common equity gets paid last but also has unlimited upside potential.
**Key characteristics:**
- Last to be repaid
- Highest potential returns (15-25%+ IRR)
- Full voting control
- Bears the most risk
This structure lets the project owner or business operator control more of the asset with less personal capital. It still offers attractive returns to multiple stakeholders.
Want to learn more about the cap stack? Check out our [comprehensive cap stack guide](https://rodkhleif.com/financing-your-deal-understanding-the-capital-stack/).
## Benefits of Capital Stacking
**1. Optimized Leverage** Use more financing with less cash up front. This lets you scale faster. It also helps you keep cash for other opportunities.
**2. Investor Alignment** Give different classes of investors different roles, returns, and timelines based on their risk tolerance and investment objectives.
**3. Risk Management** Higher-risk investors take higher positions in the stack. This protects senior lenders. It also creates a buffer for the entire structure.
**4. Flexible Terms** Mix and match funding sources based on your specific needs, timeline, and market conditions.
**5. Reduced Equity Dilution** By using multiple debt layers, you can reduce the amount of equity you need to raise, maintaining more ownership and control.
Whether you’re funding a $10 million apartment complex or growing an e-commerce brand, capital stacking can be the key to efficient, scalable growth.
## Capital Stacking in Real Estate: Practical Example
Let’s look at how a capital stack might work on a $10 million multifamily acquisition:
**Total Property Value:** $10,000,000
**The Stack Breakdown:**
1. **Senior Debt (70%):** $7,000,000 bank loan at 6.5% interest
2. **Mezzanine Debt (10%):** $1,000,000 at 12% interest with 2% equity kicker
3. **Preferred Equity (10%):** $1,000,000 at 10% preferred return
4. **Common Equity (10%):** $1,000,000 sponsor and investor equity
This structure lets the sponsor control a $10 million asset.They raise $2 million in total equity ($1M preferred + $1M common).The sponsor may contribute only $200,000 to $300,000 of their own capital.
Learn more about [structuring multifamily syndications](https://rodkhleif.com/what-is-multifamily-syndication-a-complete-guide/).
## Capital Stacking Business Loan: Use Cases
Capital stacking isn’t just for real estate. Many growth-focused businesses use capital stacking loans to fuel expansion without over-relying on one financing type or diluting equity excessively.
**Common business use cases:**
**Business Acquisitions** Combine SBA loans, seller financing, and equity investment to acquire competitors or complementary businesses.
**Startup Growth** Use venture debt, angel capital, and lines of credit to scale operations while preserving founder ownership.
**Franchise Rollout** Blend term loans, equipment financing, and preferred equity to expand rapidly across multiple locations.
**E-commerce Expansion** Stack inventory financing, revenue-based financing, and equity to scale product lines and marketing.
This approach is especially useful for businesses seeking to avoid heavy equity dilution or retain majority ownership while still accessing large amounts of growth capital.
## How to Structure a Capital Stacking Business Loan
[](https://rodkhleif.com/capital-stacking-loan/screenshot-2026-02-17-at-11-00-13-am/)
**Step 1: Determine Total Capital Needed** Calculate exactly how much funding your project or business expansion requires, including contingencies.
**Step 2: Assess Your Equity Position** Decide how much you can or want to contribute personally and how much equity you’re willing to give up.
**Step 3: Maximize Senior Debt** Secure the largest senior debt position possible at favorable terms—this is your cheapest capital.
**Step 4: Fill the Gap with Mezzanine or Preferred**
Use mezzanine debt or preferred equity to bridge the gap.
This gap sits between senior debt and your equity contribution.
**Step 5: Structure Common Equity** Determine common equity requirements and structure profit splits, voting rights, and exit terms.
**Step 6: Document Everything** Work with experienced attorneys to create proper operating agreements, promissory notes, and security documents.
## How to Find Capital Stacking Loan Lenders
Not all lenders understand or offer layered capital solutions. When seeking capital stacking loan lenders, look for:
**1. Experience with Structured Finance** Lenders who often work in commercial real estate, M&A, or venture lending. They understand complex capital structures.
**2. Custom Deal Structuring** Providers that can coordinate with other lenders or equity partners and aren’t rigid about “one-size-fits-all” terms.
**3. Speed and Flexibility** Especially important for bridge loans, mezzanine funding, or time-sensitive opportunities.
**4. Track Record** Lenders with proven experience in your specific asset class or industry.
**Where to find them:**
- Commercial banks with CRE divisions
- Private debt funds and family offices
- Mezzanine lenders specializing in real estate
- Business development companies (BDCs)
- Hard money lenders for short-term needs
- Capital advisory firms that can source multiple layers
You may need to work with multiple parties simultaneously, including banks, private lenders, equity investors, and specialized capital advisory firms.
Get our list of [recommended multifamily lenders](https://rodkhleif.com/multifamily-lenders/).
## Common Capital Stacking Mistakes to Avoid
**1. Misaligned Investor Expectations** Clearly define returns, timelines, and exit strategies for each layer of the stack before accepting capital.
**2. Overleveraging** Just because you can stack more debt doesn’t mean you should. Maintain adequate cash flow coverage.
**3. Ignoring Covenants and Restrictions** Senior lenders often restrict additional debt. Read and understand all loan documents.
**4. Poor Documentation** Vague agreements lead to disputes. Use experienced attorneys to document every layer properly.
**5. Underestimating Costs** Each layer of capital has associated costs—origination fees, legal fees, and ongoing servicing costs.
## Capital Stacking and Investor Returns
Understanding how the capital stack affects investor returns is crucial for both sponsors and investors.
**Waterfall Distribution Example:**
In a typical real estate syndication with a capital stack:
1. **Senior debt** gets paid monthly interest and principal
2. **Mezzanine debt** receives monthly or quarterly interest payments
3. **Preferred equity** receives their preferred return (e.g., 8% annually)
4. **Common equity** receives remaining cash flow and profit splits
Upon sale or refinance, the same priority applies. Common equity can still see strong upside if the property performs well.
**Example return scenario on a successful deal:**
- Senior Debt: 6.5% fixed return
- Mezzanine Debt: 12% + 2% equity participation = ~15% total return
- Preferred Equity: 10% preferred return
- Common Equity: Could see 20-30%+ IRR depending on deal performance
Learn how to [analyze multifamily deals and investor returns](https://rodkhleif.com/podcasts/multifamily-insights-deal-analysis-and-debt-strategies/).
## Legal and Compliance Considerations
Capital stacking involves securities regulations, especially when raising equity from multiple investors.
**Critical compliance requirements:**
**1. SEC Regulations** Most private placements use Regulation D exemptions (Rule 506(b) or 506(c)). Work with securities attorneys.
**2. Accredited Investor Verification** If raising under 506(c), you must verify accredited investor status.
**3. Private Placement Memorandums (PPM)** Comprehensive offering documents that disclose all risks, terms, and deal structure.
**4. Operating Agreements** Define governance, voting rights, profit distributions, and exit provisions.
**5. Subscription Agreements** Legal contracts between the sponsor and each investor.
Never attempt to structure a capital stack without [proper legal counsel](https://rodkhleif.com/podcasts/why-a-killer-sec-attorney-is-your-secret-weapon-in-real-estate/). The costs of non-compliance far exceed legal fees.
## Capital Stacking in 2026: Current Market Trends
**Interest Rate Environment** With the Federal Reserve’s recent rate decisions, senior debt costs remain elevated, making mezzanine and preferred equity more attractive for filling financing gaps.
**Increased Institutional Interest** More family offices and institutional investors are participating in mezzanine and preferred equity positions in well-structured deals.
**Technology Platforms.** New fintech platforms make it easier to find capital. They also help manage multiple layers of capital. This is especially helpful for smaller deals.
**ESG Integration** Lenders and investors increasingly favor projects with strong environmental, social, and governance components, potentially offering better terms.
## Taking Action: Your Capital Stacking Strategy
Capital stacking is an advanced strategy that, if done right, unlocks powerful investment and business growth opportunities.
Whether you invest in real estate or run a business, understanding the capital stack helps you:
- Scale faster with less personal capital
- Protect your equity and maintain control
- Work effectively with sophisticated lenders and investors
- Structure deals that align everyone’s interests
**Your next steps:**
1. **Educate yourself** on capital stack structures and terminology
2. **Build your team** including attorneys, CPAs, and capital advisors
3. **Network with lenders** who understand layered finance
4. **Start small** and gain experience before tackling larger, more complex stacks
5. **Document everything** meticulously from day one
If you’re evaluating a deal or building your first stack, don’t go it alone. Work with capital advisors, commercial lenders, or business finance experts to structure the most strategic stack possible.
## FAQ: Capital Stacking Loan Strategy
**Q: What exactly is a capital stacking loan?**
A capital stacking loan is a structured financing method that combines multiple types of funding—like senior debt, mezzanine debt, and equity—to finance one deal. Each layer of the “stack” carries different risk, return, and repayment priority.
**Q: Why is capital stacking used in real estate investing?**
Capital stacking allows real estate investors to use more leverage, bring in different types of investors with varying risk tolerances, and reduce the amount of their own cash needed. It’s how you acquire large commercial deals while managing risk and return across multiple stakeholders.
**Q: What’s the difference between senior debt and mezzanine debt?**
Senior debt is your first lien mortgage with the lowest risk, lowest cost, and gets paid first. Mezzanine debt sits behind senior debt and is riskier, so it comes with higher interest rates and sometimes equity participation. Both are common in capital stacking real estate deals.
**Q: How is capital stacking used in business loans?**
In a capital stacking business loan, you might combine an SBA loan with seller financing, private equity, or a working capital line. The idea is to customize your financing so you don’t rely too heavily on any one source or give up too much ownership control.
**Q: Is capital stacking only for big deals?**
No. While it’s common in large commercial real estate or M&A transactions, smart investors and entrepreneurs use capital stacking principles for small business expansion, real estate flips, or mid-size multifamily deals. It’s about structure and strategy, not size.
**Q: What’s preferred equity, and where does it fit?**
Preferred equity sits between mezzanine debt and common equity. These investors receive a set return before common shareholders get paid, but they usually don’t have voting rights or operational control. It’s a popular middle ground in the capital stack.
**Q: How do I find capital stacking loan lenders?**
Look for lenders experienced in commercial real estate, M&A, or venture lending. These capital stacking loan lenders understand layered finance and can coordinate with other funding partners like private equity firms or family offices.
**Q: Can I structure a capital stack myself?**
You can, but I don’t recommend going solo on your first deal. Work with an experienced capital advisor or commercial lender who understands structured finance. It’ll save you time, stress, and potentially costly mistakes.
**Q: What are the risks of capital stacking?**
The more complex the stack, the more moving parts you’re managing. Misaligned incentives, repayment disputes, or changing interest rates can impact performance. That’s why clarity, proper contracts, and capable advisors are essential.
**Q: How does capital stacking impact investor returns?**
It can significantly improve returns for those higher in the stack, like common equity holders, but it also concentrates risk. A well-structured stack balances upside potential with downside protection, depending on each investor’s role and risk tolerance.
**Q: Is capital stacking legal and SEC-compliant?**
Absolutely, but if you’re raising money from multiple investors, especially in real estate syndications, you must stay SEC compliant. Work with syndication attorneys to ensure your private placement memorandums and offering documents are properly structured.
**Q: What industries use capital stacking business loans?**
Industries like commercial real estate, franchising, e-commerce, private equity rollups, SaaS companies, and tech startups commonly use capital stacking. Any business that needs growth capital but wants to manage dilution and risk can benefit.
**Q: Where can I learn more about how syndicators structure capital stacks?**
Download our [Guide to Apartment Building Syndications](https://rodkhleif.com/syndication-guide/) or join our [Multifamily Bootcamp](https://rodkhleif.com/bootcamp/). We walk through real-world examples of capital stacking, investor returns, and legal structuring, all with hands-on coaching.
*Disclaimer: This post was written with the help of AI and edited by Rod and his team.*
Join our next bootcamp!
[](https://rodkhleif.com/bootcamp/)
Download our guide to [apartment building syndications.](https://rodkhleif.com/guide-to-multifamily-syndications/)
[](https://rodkhleif.com/guide-to-multifamily-syndications/)
**Related reading:** For a complete overview of structures beyond conventional bank loans, including seller financing, master lease, sub-to, private money, JV, and syndication, read [creative financing in real estate](https://rodkhleif.com/creative-financing-in-real-estate-go-beyond-investment-property-lending/).
**Categories:** Blog
---
### [The Power of Mindset in Multifamily](https://rodkhleif.com/the-power-of-mastermind-groups-in-multifamily-real-estate-investment/)
**Published:** December 11, 2025
**Author:** Rod Khleif
**Excerpt:** Multifamily real estate investment is a dynamic and challenging business. We have to be quick on our feet if we’re going to keep up with the market, beat out the competition, and build a business that’ll provide us with a lifetime of reliable cash flow.
**Content:**
Smart investing is key to financial independence, and multifamily real estate is one of the best paths. While many people dream of building wealth this way, few take the leap. The main reason is that success relies more on your mindset than just deals or money. So what is a multifamily mindset? In this article we will break down what it means and what it takes to achieve one.
## The Power of a Growth-Oriented Mindset in Multifamily Investing
Top real estate investors do not just analyze properties and numbers. They adopt a mindset focused on growth, opportunity, and long-term success. This way of thinking enables investors to expand their portfolios, generate passive income, and create lasting financial stability.
If you want to master multifamily real estate investing, it is important to:
- Develop strategic thinking
- Connect with knowledgeable mentors and peers
- Use valuable educational resources
## Building the Right Multifamily Mindset
Developing the right mindset is not just a tactic, but a shift in how you view your business and opportunities. Confident multifamily investors recognize that building wealth is a long-term game, not a quick fix.
Key mindset qualities include:
**Thinking Bigger**
Instead of buying single-family homes, multifamily investors target properties that produce multiple rental incomes, providing greater financial stability.
**Commitment to Continuous Learning**
Successful investors join mentorships, industry groups, and training programs. For example, Rod Khleif’s Multifamily Bootcamp is a popular choice. These activities help them learn more and grow.
**Overcoming Fear and Limiting Beliefs**
Many people hesitate because of fear. Developing confidence and a proactive mindset helps overcome doubt and encourages action.
**Harnessing Networking Power**
Real estate is about relationships. Building connections opens doors to exclusive deals, financing options, partnerships, and valuable guidance.
## Why Multifamily Real Estate Is the Best Investment for Building Wealth
Although many start with single-family rentals, experienced investors recognize multifamily properties as superior for creating wealth. Here are the main reasons:
1. Greater Cash Flow with Lower Risk
2. With multiple tenants, you have several income streams. This means that vacancies affect your earnings less.
3. Economies of Scale
4. Managing one 20-unit property is often easier and more efficient than managing 20 single-family homes in different locations.
5. Appreciation and Forced Equity Growth
6. By renovating, improving management, and increasing rents, investors can actively increase property value and build equity.
7. More Attractive Financing
8. Lenders often view multifamily properties as less risky, making it easier to secure loans with favorable terms.
9. Tax Advantages
10. Owning multifamily real estate offers tax benefits. These include depreciation, deductions, and cost segregation. These benefits can help lower your tax burden.
These factors make multifamily investing one of the smartest ways to build long-term wealth.
# Mindset: The Biggest Challenge to Success
Mindset is often the biggest barrier to financial success in multifamily real estate. It goes beyond just numbers and strategies. Common concerns include:
- Fear of making mistakes
- Feeling inexperienced
- The belief that a lot of money is required to start
- Doubt about finding or managing deals
The truth is that thousands of investors began their journeys with no prior experience. Success comes from adopting a growth mindset, seeking mentorship, and taking consistent action.
## How Networking Can Accelerate Your Success
Real estate investing is highly collaborative. Successful investors build strong networks that provide:
- Access to off-market deals
- Better financing opportunities
- Strategic partnerships that fill skill gaps
- Mentorship from proven professionals
Joining mastermind groups, attending meetups, or signing up for seminars can help you connect with supportive people. One example is Rod Khleif’s Multifamily Bootcamp. These activities can also lead to new opportunities.
## Staying Ahead by Understanding Market Trends
Smart investors do their homework before buying. They examine market trends to identify the best opportunities. Some trends shaping multifamily real estate include:
- There is a growing demand for rental properties because of high home prices and economic uncertainty.
- Increased investment in suburban and growing secondary markets
- Adapting to interest rate changes to maintain strong returns
- Using technology such as data analytics and AI to make better investment decisions
Understanding these trends helps you make informed decisions and stay competitive.
## Take the Next Step Toward Financial Freedom
If you want to build wealth with multifamily real estate, start by developing a growth mindset. Focus on taking action. Surround yourself with industry experts, stay informed, and tap into strong networks.
Consider enrolling in my Multifamily Bootcamp to gain the technical skills and mindset needed for success.
Your path to financial freedom begins with a single decision. Are you ready to take action?
## FAQ: Mindset in Multifamily Investing
**What does “multifamily mindset” actually mean?**
“Multifamily mindset” is the mental framework you bring to apartment investing: how you think about risk, opportunity, growth, and setbacks. It’s shifting from a short-term, deal-by-deal mentality to a long-term focus on building skills, relationships, and a portfolio that creates real freedom over time.
**Why is mindset so important in multifamily investing?**
Multifamily deals take time, effort, and resilience; there are always rejected offers, tough lenders, and surprises in due diligence. The right mindset keeps you focused on learning and adapting rather than quitting when things get uncomfortable. In practice, mindset often becomes the difference between people who talk about deals and people who actually close them.
**How can I overcome the fear of taking my first multifamily deal?**
Start by shrinking the goal: you don’t need your dream deal first, you need a doable one. Educate yourself, get a mentor or peer group, and underwrite a lot of deals so the numbers feel familiar. When the right deal lines up, you won’t feel “ready,” but you’ll feel prepared enough to take a calculated step instead of a blind leap.
**What are the most common limiting beliefs in multifamily investing?**
Common limiting beliefs sound like: “I don’t have enough money,” “I don’t know enough yet,” “The market is too expensive,” or “People like me don’t do big deals.” These are stories, not facts. In reality, you can partner for capital and experience, build skills as you go, and start with smaller deals while you grow into larger ones.
**How do I build confidence if I’ve never done a deal before?**
Confidence in multifamily comes from competence + repetition. Consistently underwrite deals, attend meetups, ask questions, and discuss deals with more experienced investors. The more you look at real opportunities, the less “mystical” multifamily seems. It becomes a skill you are developing.
**How does mindset help when the market feels uncertain?**
In a choppy market, a strong multifamily mindset keeps you grounded in fundamentals instead of headlines. You focus on deals that cash flow, conservative underwriting, strong locations, and long-term demographics. Rather than trying to time the market perfectly, you commit to being ready when good deals show up and patient when they don’t.
**How do I stay motivated when deals keep falling through?**
Assume from day one that some deals will fall apart—this is normal, not personal. After each one, do a quick “post-mortem”: What did I learn about underwriting, lenders, partners, or my criteria? If every dead deal makes you sharper, you’re actually moving closer to the one that works, instead of starting over each time.
**How does mindset influence the way I work with partners and teams?**
A healthy multifamily mindset sees partnerships as force multipliers, not as threats. You’re clear on your strengths, honest about your gaps, and willing to bring in people who are better than you in certain areas. That mindset leads to better teams, better decisions, and less burnout than trying to be the smartest person in every room.
**How can I develop a long-term mindset in multifamily investing?**
Decide upfront that you’re building a career and portfolio, not chasing a one-off deal. Set 3–5 year goals for units, equity, and skills, then reverse engineer what you need to do in the next 12 months and 90 days. When you think in years instead of weeks, short delays and setbacks feel like part of the journey, not reasons to quit.
**How do I balance “taking action” with not being reckless?**
The multifamily mindset is “ready, aim, fire” not “ready, aim, aim, aim forever.” Stick to a clear investing plan. This plan should include markets, deal size, returns, and risk limits. Then, act on deals that match this plan, even if you feel nervous. You’re not eliminating discomfort—you’re using education, mentors, and conservative numbers to keep risk intelligent rather than impulsive.
**What daily or weekly habits support a strong multifamily mindset?**
Helpful habits are important. Here are some you can try:
- Review deals a few times a week.
- Reach out to new contacts.
- Follow up with your network.
- Set aside regular time for learning. You can use podcasts, books, or coaching for this.
Even 30 to 60 focused minutes each day adds up over time. It helps build the identity of “I am a multifamily investor,” not “I’m just thinking about it.”
**Can mindset really make up for lack of money or experience?**
Mindset alone doesn’t close deals. However, it does help you build skills, relationships, and opportunities over time. Plenty of multifamily investors started with no money and no track record. The ones who succeed are usually those who adopt a growth mindset, partner smart, stay coachable, and keep moving forward when others stall out.
**Related reading:** [How Goal Setting Accelerates Real Estate Success](https://rodkhleif.com/how-goal-setting-accelerates-real-estate-success/) — the 3-layer Lifetime Cashflow Goal Stack behind every Warrior portfolio.
**Categories:** Blog, Psychology of Success
**Tags:** apartment investing, business structures, Driving Force, investing, investor mistakes, landlord, motivation, multifamily, multifamily investment, multifamily property investing, multifamily real estate, non-recourse loan, real estate, real estate investing, real estate podcast, Rod Khleif
---
### [How to Vet a Multifamily Real Estate Mentor](https://rodkhleif.com/how-to-vet-a-multifamily-real-estate-mentor/)
**Published:** April 15, 2026
**Author:** Alex Khleif
**Content:**
I have watched people hand over $30,000, $50,000, even six figures to the wrong mentor. They do not usually lose that money because the mentor was a fraud. They lose it because they never ran real due diligence before they paid. You would never buy a 100-unit apartment building without inspecting the roof, pulling the T12, and talking to the current tenants. A mentorship program deserves the same scrutiny, and most people skip it.
This post gives you the exact filter I wish every aspiring multifamily investor ran before they picked a coach, a mastermind, or a mentorship program. It is built around 25 years of watching students succeed, and honestly, watching some of them waste money with the wrong fit.
## Table of Contents
- [Why Vetting a Multifamily Mentor Matters More Than the Price Tag](#why-vetting-matters)
- [The 7-Filter Multifamily Mentor Vetting Framework](#the-7-filter-framework)
- [Red Flags That Should End the Conversation Immediately](#red-flags)
- [Green Flags That Signal a Real Operator](#green-flags)
- [How to Compare Multifamily Mentorship Programs Side by Side](#compare-programs)
- [Questions to Ask on the Strategy Call](#strategy-call-questions)
- [How to Verify a Mentor’s Track Record](#verify-track-record)
- [Mentor vs. Mastermind vs. Bootcamp: Which Do You Actually Need?](#mentor-vs-mastermind)
- [The Cost Conversation: What “Worth It” Actually Looks Like](#cost-conversation)
- [How to Vet a Multifamily Real Estate Mentor FAQ](#faq)
- [Ready to Take the Next Step?](#ready-next-step)
## Why Vetting a Multifamily Mentor Matters More Than the Price Tag
Most people compare mentors on price. That is the wrong axis.
A $25,000 program that gets you into your first 80-unit deal inside 12 months is free. A $3,000 program that teaches you nothing you could not find on a podcast is expensive. What you are really buying is access, feedback on your actual deals, introductions to capital and brokers, and accountability when you want to quit. None of those things show up on a sales page.
When I got wiped out in 2008, I had 800 single-family homes and no one in my corner who had been through a downturn at scale. If I had spent real money on the right mentor earlier, I would have skipped the worst chapter of my life. That lesson is the reason I take this seriously. You should too.
Investors are comparing mentors aggressively right now, searching “are the seminars worth it,” “success rates,” and “student reviews” more than ever. The programs that win are the ones that make it easy to verify their claims. Your job as the buyer is to force that verification before you pay.
## The 7-Filter Multifamily Mentor Vetting Framework
Here is the exact checklist I would run if I were evaluating any multifamily mentor tomorrow. Every filter has a clear pass or fail. If a mentor fails three of these, walk away. If they fail one of the first three, run.
### Filter 1: Verified Operator Experience
Has the mentor actually bought, operated, and ideally sold multifamily assets? Not just “invested passively.” Not just “taught” it. Actually signed on loans, hired property management, and handled a bad tenant, a bad quarter, and a bad year.
How to verify: ask for specific deal examples with property addresses, unit counts, purchase dates, and current or exit status. Real operators can answer this in thirty seconds. If the answer is vague, that is your answer.
### Filter 2: Cycle Experience
Has the mentor invested through more than one market cycle? If the only thing they know is the 2012 to 2021 bull run, they do not have anything to teach you about underwriting today.
I rode multifamily from 2001 into 2008, watched the crash, and rebuilt. Cycle experience is the difference between a mentor who teaches you to underwrite with a realistic exit cap and one who still models 3 percent rent growth forever.
### Filter 3: Student Outcomes at Scale
Ask a direct question. “How many students have closed their first deal in the last 24 months? What unit counts? Can I talk to three of them who are not on your testimonial page?”
A legitimate program will have this data and will connect you with unbiased alumni. A weak program will deflect. Our community has 2,604 student-owned units tracked through case studies and 343-plus documented deals, which is the kind of number you should ask any program to produce. If they cannot, that is a filter failure.
### Filter 4: Transparent Teaching Structure
What, specifically, do you get? How many live calls per week or month? Is there deal review? Is there underwriting feedback on a real deal you bring? Are there small-group accountability pods, or is it one giant Zoom and a Facebook group?
“Access to a community” is not a curriculum. Get it in writing.
### Filter 5: Mindset Integration
This one is underrated. Multifamily is 80 percent psychology. If a mentor teaches tactics only, you will learn how to run the numbers but you will quit the first time a broker ghosts you or a deal falls through.
A serious mentor addresses fear, goal-setting, limiting beliefs, and the mental game of staying in the fight long enough to win. If the curriculum has zero mindset content, that is a gap you will pay for later.
### Filter 6: Network and Capital Access
Mentorship is not a classroom. It is a doorway. Who will you meet? What brokers, lenders, sponsors, and capital partners are inside the community? Who has raised capital from who?
Ask this directly: “If I show up with a signed LOI next month, what does your community do for me?” A weak program will hand-wave. A real one can name three specific things.
### Filter 7: Alignment of Incentives
Is the mentor still actively investing alongside students, or are they fully retired from deals and selling education only? Neither is automatically wrong, but you need to know. If they are still investing, there is skin in the game. If they have pivoted fully to teaching, ask how they stay current on underwriting, financing, and market conditions.
## Red Flags That Should End the Conversation Immediately
Some behaviors are deal-breakers. If you see any of these on a strategy call, thank them for their time and leave.
- Pressure to sign up before you hang up the phone, with a “limited-time discount” that ends in 30 minutes
- Refusal to name specific students or put you in touch with alumni you can interview
- No verifiable track record, or a track record that only exists in screenshots
- Guarantees of specific returns or first-year income
- Heavy emotional selling with no actual math on the call
- A curriculum that is “proprietary” and they will not describe it until after you pay
- Zero mention of risk, downturns, bad deals, or what happens if you fail
You are evaluating a business relationship. Treat the sales call like you would treat a partner interview. Anyone who flinches at that is the wrong partner.
## Green Flags That Signal a Real Operator
The opposite list matters too. These are the signals I would look for:
- The mentor openly talks about deals that went sideways and what they learned
- The program has a published refund or satisfaction policy
- Alumni are easy to find on LinkedIn, podcasts, and social, not just on the sales page
- There is a public body of work (podcast, book, speaking, case studies) you can evaluate for free before paying
- The mentor or the team shows up on live calls consistently, not just in recorded videos
- There is a clear ladder, from free content to introductory events to the high-touch program, so you can sample the teaching style before committing
- The community is active and students openly post wins and losses without the mentor curating every word
## How to Compare Multifamily Mentorship Programs Side by Side
Put every mentor you are considering into a simple scorecard. Here is the exact format I recommend:
FilterMentor AMentor BMentor CYears actively operating multifamilyUnits currently owned or GP’d onCycles invested through (2008, 2020, 2022-24)Students with verified first deal closed in last 24 monthsLive coaching calls per monthPersonal deal-review on your underwriting (Y/N)Access to capital partners inside community (Y/N)Mindset curriculum included (Y/N)Alumni you can speak with before paying (# offered)Clear refund or satisfaction policy (Y/N)Price (one-time vs. recurring)Program lengthFill this in for every mentor. Do not go by the feeling you got on the strategy call. Go by the rows. The right mentor stands out on paper, not on vibes.
## Questions to Ask on the Strategy Call
Bring this list to every mentorship sales call. Write down the answers word for word.
1. “How many units do you currently own or are you actively GP on?”
2. “Walk me through your worst deal. What happened and what did you learn?”
3. “How many of your students closed their first deal in the last 12 months? What unit sizes?”
4. “Can you introduce me to three alumni who are not featured on your website?”
5. “What happens if I do not get a deal done in 12 months? Is there ongoing access or does it end?”
6. “What, specifically, do you offer that a $40 book plus a free podcast does not?”
7. “Who teaches on the live calls? You personally, a team, or pre-recorded?”
8. “What is your refund policy?”
9. “What is the typical student profile who succeeds here? Who typically does not?”
10. “What would you say I should not do if I joined? What mistakes do students make?”
Question 10 is my favorite. A good mentor will answer it honestly. A weak one will dodge.
## How to Verify a Mentor’s Track Record
Every claim can be checked. Here is how.
- **Deal addresses:** Public property records show owners, dates, and sometimes loan amounts. Most counties let you look this up for free.
- **Student claims:** LinkedIn is your friend. Search the program name. See how many people list it on their profile and what they are actually doing now.
- **Podcast and media:** Has the mentor been interviewed on shows they do not control? Real operators get invited onto other people’s podcasts. Teachers who only do marketing do not.
- **SEC filings:** If the mentor raises capital through syndications, their deals may be in SEC EDGAR under Form D filings. This is public and free.
- **Reviews outside the mentor’s own site:** Search for the program name on Reddit, YouTube, and independent review sites. Read the critical reviews first. Every real program has some. The question is whether the critiques feel fair and whether the mentor has responded to them publicly.
I have a dedicated page addressing the tough questions about my own programs. [That is the model to look for](https://rodkhleif.com/is-rod-khleif-a-scam/) in any mentor you are considering. The willingness to answer hard questions in public is a proxy for the willingness to answer them privately when you are a student.
## Mentor vs. Mastermind vs. Bootcamp: Which Do You Actually Need?
People use these words interchangeably. They should not. Match the format to where you actually are.
FormatBest ForTypical InvestmentWhat You GetBootcamp or intensive eventYou have read the book, listened to podcasts, and need a structured weekend to see if multifamily is right for you$97 to $1,5002-3 days of teaching, networking, a clear framework, sometimes access to the mentor’s ecosystem afterwardGroup mentorship programYou have decided multifamily is your vehicle and you want a 12+ month container to close your first deal$10,000 to $60,000Ongoing calls, deal review, community, accountability, capital connectionsMastermind (peer group)You already own multifamily and want to scale faster with operators at or above your level$15,000 to $75,000+ per yearPeer group, high-level strategy, partnerships, not beginner curriculum1-on-1 coachingYou have a specific operational problem (turnaround, capital raise, exit) and need a senior operator for direct adviceVaries widelyPersonalized attention, limited curriculumIf you are new, start with a bootcamp before you commit to a mentorship. [Our bootcamp](https://rodkhleif.com/bootcamp/) is designed exactly for this reason. It lets you sample the teaching, meet the community, and make an informed decision about the deeper program. A mentor who does not offer a lower-stakes entry point is asking you to make a big commitment on a small information set. That is a bad trade.
## The Cost Conversation: What “Worth It” Actually Looks Like
Here is the math that actually matters.
If a mentorship costs $35,000, and it gets you into one 60-unit deal at a 20 percent GP equity position with $500,000 in cash flow and appreciation over a 5-year hold, the mentorship paid for itself roughly 14 times. That is the math you should run before the emotional math of “this feels expensive.”
But it only works if the mentor actually helps you close. That is why the filters above are not optional. You are not buying access to information. You are buying the probability of a closed deal and the confidence to keep going through the three or four broken escrows you will have before that first deal closes.
Our community tracks real outcomes. Jennifer Barner came through the early programs, scaled to more than 1,200 units, and put all four of her kids through college debt-free. Anthony closed a 218-unit deal as his first deal with no money and no prior real estate experience. Loren went from bootcamp to resigning from his job inside 12 months. These are not typical results, but they are possible results, and they exist because the vetting, on their end, matched the mentorship, on ours.
If you want to get specific about your own numbers, [grab our free book here](https://rodkhleif.com/lcfa-ebook/). Run your own math. Then vet the mentor. Then decide.
For a deeper dive on how to educate yourself and screen mentorships, I wrote [a full breakdown on what finding mentorship for multifamily actually looks like](https://rodkhleif.com/how-do-you-find-mentorship-for-multifamily-real-estate/). Read it before your next strategy call. And for the broader education roadmap, [here is the complete beginner’s guide](https://rodkhleif.com/multifamily-investing-the-complete-beginners-guide/). For ongoing free education, [the Lifetime Cashflow podcast](https://rodkhleif.com/lifetime-cashflow-podcast/) is where I interview operators every week and you can hear how they think before you ever pay a dollar.
## How to Vet a Multifamily Real Estate Mentor FAQ
**Q: How do I vet a multifamily real estate mentor?**
A: Verify three things first: their operator track record with specific properties and dates, their cycle experience (especially 2008 and 2020-2024), and their student outcomes with names and deal sizes. Then look at teaching structure, mindset integration, network access, and incentive alignment. Run all seven filters before you consider price.
**Q: What questions should I ask before joining a multifamily mentorship program?**
A: Ask how many units they currently own, their worst deal story, student close rates in the last 12 months, whether you can speak to three alumni not on their site, refund policy, and what specifically you get beyond books and podcasts. The answer to “what mistakes do students make in your program?” is especially revealing.
**Q: How much should a multifamily real estate mentorship cost?**
A: Group mentorship programs typically range from $10,000 to $60,000. Bootcamps and weekend intensives run $97 to $1,500. Masterminds for active operators run $15,000 to $75,000+ per year. Price alone is not the signal. The ratio of price to proven student outcomes is.
**Q: Are multifamily real estate mentorship programs worth it?**
A: They can be, if you pick the right one and do the work. Worth it means the program reliably shortens your time to first deal and improves the quality of that first deal. That only happens when the mentor has real operating experience, real student outcomes, and real feedback on your actual deals.
**Q: What are red flags when choosing a multifamily mentor?**
A: Pressure to buy on the first call, refusal to connect you with alumni, guaranteed returns, no verifiable track record, proprietary curriculum you cannot see until you pay, no acknowledgement of risk or failed deals, and heavy emotional selling without real math.
**Q: Can I succeed in multifamily investing without a mentor?**
A: Yes, and some people have. But you will take longer, make more expensive mistakes, and have fewer capital partners. A good mentor compresses years into months because they have already made the mistakes you would make.
**Q: How long should a multifamily mentorship program last?**
A: A minimum of 12 months is reasonable for a first-deal-focused program. First deals often take 9 to 18 months from decision to close. A program that ends at 90 days is usually too short unless it is specifically a focused bootcamp or a refresher.
**Q: What is the difference between a mentor and a mastermind?**
A: A mentor teaches you their system and provides feedback on your execution. A mastermind is a peer group of operators at or above your level who share strategy, deals, and partnerships. Beginners need a mentor first. Experienced operators benefit from a mastermind.
**Q: How do I verify a multifamily mentor’s track record?**
A: Check public property records for deal addresses they claim, search LinkedIn for alumni and current employees, look for interviews on podcasts they do not own, check SEC EDGAR for Form D filings if they syndicate, and read critical reviews on Reddit and YouTube.
**Q: Should a multifamily mentor still be actively investing?**
A: Ideally yes, or they should be clearly transparent that they have pivoted to teaching and explain how they stay current on markets, underwriting, and financing. A mentor who stopped investing in 2018 and has not adjusted their teaching for current interest rates is teaching you an outdated playbook.
## Ready to Take the Next Step?
The best way to vet any mentor, including me, is to sample their teaching before you commit. Our 3-day multifamily bootcamp is built exactly for this. You see how I teach, meet the community, and make your decision on real information, not a sales page.
[**Check out the next Multifamily Bootcamp →**](https://rodkhleif.com/bootcamp/)
Prefer to start free? [**Download “How to Create Lifetime Cashflow Through Multifamily Properties”**](https://rodkhleif.com/lcfa-ebook/) and run the math before your next strategy call with anyone.
*Disclaimer: This article was written by Rod and reviewed by his team.*
**Categories:** Due Diligence, Multifamily Investing, Psychology of Success, Real Estate
---
### [Columbus Real Estate Market: Submarket Analysis](https://rodkhleif.com/sub-market-analysis-columbus-oh/)
**Published:** January 17, 2025
**Author:** Graciela
**Content:**
As part of our ongoing submarket analysis of popular cities in the United States, today we’re taking a closer look at the Columbus real estate market. We’ve reviewed several deals in the Columbus area and see strong fundamentals, but there are emerging factors that could impact certain property types and investment strategies.
## **What We Look for in a Submarket**
**When evaluating a real estate submarket analysis**, we focus on key market trends and data points, including:
## **Columbus Housing Market: Key Stats & Trends**
Columbus is making national headlines with major economic development projects, most notably Intel’s $20 billion chip plant in New Albany, which is expected to create:
- **3,000 new manufacturing jobs**
- **7,000 construction jobs**
Additional large-scale developments in Central Ohio include:
- **The Ohio State Wexner Medical Center:** $1.9B, 820-room hospital (opening 2026).
- **Grant Medical Center:** $400M, 270,000 sq. ft. expansion.
- **OhioHealth Dublin Methodist Hospital:** $200M expansion.
- **Ease Logistics HQ:** Bringing in 700 employees.
In 2023, Columbus added 14,000 new jobs (a 1.2% increase, the highest in Ohio), reinforcing a strong labor marketand sustained demand for housing.
## **Population Growth & Housing Affordability in Columbus**
Our sub market analysis of Columbus shows that is the 14th largest city in the U.S., with a population of 900,000. However, growth has slowed since 2020, with a 0.5% increase in 2023, driven mainly by international immigration.
Key housing market trends:
- **Median home prices:** $290,000.
- **Median household income:** $63,000.
- **Average rent:** $1,300/month (1.5% YoY growth).
- **Rent-to-income ratio:** A resident needs $52,000 annually to afford a typical apartment.
- **Home affordability gap:** Buyers need $100,000 in annual income to afford the median home ($2,500/month mortgage), well above median earnings.
- 56% of Columbus residents rent, reinforcing demand for multifamily properties.
While rental affordability remains strong, home prices have pushed more people toward renting, further fueling demand in the Columbus housing market.
## **Employment Diversity & Market Stability**
One of Columbus’ strengths is its **diverse job market**, which provides stability for **property owners** and investors:
- **Healthcare:** 16%
- **Retail:** 14%
- **Manufacturing:** 10%
- **Financial Services:** 10%
- **Transportation & Logistics:** 9%
- **IT & Professional Services:** 12%
- **Government & Education:** 7%
With **job growth expected to continue**, wages should rise, **supporting further rent growth** and demand for **multifamily properties** in the **Columbus area**.
## **Multifamily Market Trends & New Construction**
Columbus has been a top-performing multifamily market, with Marcus & Millichap ranking it among the top tertiary markets for apartment transactions.
### **New Apartment Construction & Vacancy Trends**
- Ranks 3rd in the Midwest for new apartment construction (2023).
- 1,500 new units delivered per quarter over the past year.
- 9,000 additional apartments currently under construction.
But here’s the challenge:
- Columbus added 4,500 residents in 2023, but built 6,000 apartments, outpacing demand.
- As a result, vacancy rates have increased to 5.7%, up 80 basis points YoY.
- With more supply in the pipeline, some submarkets may experience rising vacancies.
If demand doesn’t keep pace, rental growth could slow in certain areas, making it essential for investors to be selective in their property type and location.
## **Crime & Safety in Columbus**
One of the **biggest concerns** when investing in the Columbus real estate market is **crime**. Statistically, Columbus is one of the most dangerous cities in the U.S.:
- **Ranks 5/100 for safety** (**95% of cities are safer**).
- **40 out of every 1,000 residents** are victims of a violent or property crime.
- **Columbus has one of the highest car theft rates in the country.**
For investors, this means carefully evaluating submarkets before purchasing. A deal can look strong financially, but location matters when it comes to occupancy, tenant retention, and rent growth.
## **Upcoming Zoning Changes & Investment Risk**
A major factor that could impact the Columbus housing market is a proposed zoning change currently under review by the Columbus City Council.
### **Key Changes in the Proposal:**
✔ **Loosens density restrictions**, increasing the number of buildable units.
✔ Expands the development potential from 12,000 to 88,000 new housing units.
✔ Streamlines approval processes, making it easier for developers to build.
### **Why This Matters for Investors:**
- Some submarkets could see a flood of new supply, **impacting rents.**
- Previously stable neighborhoods may experience increased density.
- Faster construction approvals could shift long-term demand-supply balance.
Investors need to understand which areas are affected and how these zoning changes could reshape the Columbus housing market.
## **Our Thoughts: Investing in Columbus**
We **like Columbus**, but **not all of Columbus**. Here’s our assessment:
✔ **Strong job growth** supports rental demand.
✔ **Favorable taxes & insurance costs** make it attractive for investors.
✔ **Rent is still affordable**, and **home prices remain out of reach for many buyers**.
⚠ **Crime is a major issue**, so neighborhood selection is critical.
⚠ **New apartment supply is increasing**, which could impact vacancies.
⚠ **Potential zoning changes could shift the market** in unexpected ways.
When evaluating a deal in Columbus, we focus on employment trends, local crime rates, new construction risk, and upcoming zoning changes before moving forward.
### **Is Columbus Still a Good Market for Investors?**
Columbus remains a strong market for multifamily investment opportunities, but careful due diligence is key. Real estate investors should stay on top of market trends, monitor home prices, and assess submarket conditions to make informed decisions.
Columbus remains a solid market for multifamily investment, but like any city, it requires careful evaluation. With strong job growth, a diverse economy, and steady rental demand, there are plenty of opportunities—but rising supply, crime concerns, and potential zoning changes mean investors need to be strategic about where and what they buy.
If you’re looking for expert guidance on navigating the Columbus real estate market or multifamily investing in general, **Rod Khleif** has been helping investors find and close great deals for years. His expertise in market analysis and deal structuring can help you make smart, data-driven investment decisions. [Reach out to learn more.](https://rodkhleif.com/rod-khleif-warrior-program/)
**Categories:** Blog, Real Estate
---
### [Multifamily Real Estate Is the Best Hedge Against Inflation](https://rodkhleif.com/multi-family-versus-inflation-who-wins/)
**Published:** January 24, 2025
**Author:** Graciela
**Content:**
## **Why Multifamily Real Estate Is the Best Inflation Hedge for Investors**
Investment professionals often highlight **multifamily real estate, gold, and Treasury Inflation-Protected Securities (TIPS)** as the best ways to hedge against inflation. But when it comes to **long-term growth, passive income, and wealth building**, **multifamily real estate consistently outperforms.**
### **How Multifamily Real Estate Protects Against Inflation**
Inflation weakens purchasing power, making it essential to invest in assets that **increase in value over time**. According to **Forbes**, inflation has averaged **3.8% per year from 1960 to 2021**, but **rents have risen 73% since 2000**, compared to just **46% for general inflation**.
This data suggests that rents will likely continue to climb, making multifamily properties a proven inflation-resistant investment.
### **Why Inflation Actually Benefits Multifamily Real Estate Investors**
Unlike other assets, multifamily real estate thrives in inflationary environments because of:
✔ **Higher Interest Rates Drive More Renters** – When mortgage rates rise, homeownership becomes less affordable, increasing rental demand.
✔ **Rents Increase Faster Than Expenses** – Rent inflation has **outpaced overall inflation by 1.27% annually since 1980**, boosting net operating income (NOI).
✔ **New Construction Slows, Reducing Supply** – Higher interest rates make development more expensive, increasing competition for existing rental units.
### **Fixed-Rate Financing: The Ultimate Inflation Hedge**
Smart multifamily investors use fixed-rate debt, meaning their mortgage payments remain constant while rental income rises with inflation. This creates higher NOI, stronger cash flow, and greater equity growth over time.
With operating expenses typically averaging 50% of rental income, as rents rise, investors enjoy:
✅ **Higher Net Operating Income (NOI)**
✅ **Stronger Property Valuations**
✅ **More Predictable, Inflation-Resistant Cash Flow**
### **The Future of Multifamily Investing in 2024 & Beyond**
Although post-COVID overbuilding affected some markets, supply levels are stabilizing, and the Federal Reserve’s potential rate cuts could increase inflation once again. This presents an opportunity for investors who understand the fundamentals to position themselves for long-term gains.
### **Looking to Invest in Multifamily Real Estate?**
Multifamily real estate remains one of the safest and most profitable ways to hedge against inflation, providing consistent rental income, NOI growth, and long-term appreciation. But investing successfully requires the right strategy, guidance, and market insight.
That’s where Rod Khleif comes in. As a seasoned multifamily investor, mentor, and educator, he’s helped countless investors scale their portfolios and build lasting wealth.
If you’re ready to capitalize on the power of multifamily real estate, [connect with Rod today](https://rodkhleif.com/rod-khleif-warrior-program/) and take the next step toward financial freedom and security.
**Categories:** Blog, Real Estate
**Tags:** House Hacking Real Estate, multifamily investing, multifamily real estate, Real Estate Course, real estate syndication
---
### [Top Real Estate Markets: Where People Are Moving](https://rodkhleif.com/2024-us-migration-trends/)
**Published:** February 19, 2025
**Author:** Graciela
**Content:**
## **What It Means for Multifamily Investors**
When it comes to successful multifamily real estate investing, population growth is one of the most critical factors. If people are moving into a market, demand for housing rises, rents increase, and investors see strong cash flow and appreciation. But if a market starts losing residents, it’s a sign to reevaluate your strategy.
So, where are people moving in 2024? According to PODS Moving, the Carolinas and Georgia are seeing the biggest inbound migration—while Florida is losing some of its shine. Let’s break down what’s happening and what it means for real estate investors.
## **The Carolinas Are Booming—Florida Slows Down**
People are flocking to the **Southern Appalachian Region**, including **North Carolina, South Carolina, and Georgia**. Why?
- **Lower cost of living**
- **Strong job markets**
- **High quality of life** with access to nature and vibrant cities
- **Growing business hubs** attracting corporate relocations
PODS reports that 60% of movers are heading to these states. Just last year, Florida was the most popular destination, but rising insurance costs and hurricane risks have started to slow its momentum. Florida is still growing, but investors should factor in rising expenses and shifting demand.
## **Top Cities for Business Growth & Investment**
For multifamily investors, it’s not just about population trends, it’s also about where businesses are moving. Strong job markets create sustained rental demand and higher occupancy rates.
**According to PODS, the top relocation cities for businesses in 2024 are:**
- **Austin, TX**
- **Atlanta, GA**
- **Phoenix, AZ**
- **Raleigh, NC**
- **Nashville, TN**
These cities are attracting corporate relocations because they offer pro-business environments, lower taxes, and strong labor markets. For investors, these are prime multifamily markets with long term growth potential.
## **Where People Are Leaving & Why It Matters**
The cities **losing population** in 2024 look a lot like they have for the past few years. **California continues to top the list for outbound migration**, with **seven of the top 20 move-out cities** in the country.
Why are people leaving?
- **Sky-high cost of living** (50% higher than the U.S. average)
- **Heavy traffic congestion**
- **Rising crime rates**
**Austin, TX** also made the list of top move-out cities, which may surprise some investors. But housing costs have skyrocketed 53% since 2019, and congestion has driven many to lower-cost alternatives like San Antonio.
For investors, outward migration signals lower demand and potential rent stagnation, so staying ahead of these trends is key.
## **Key Takeaways for Real Estate Investors**
As a **multifamily investor**, you need to think **long-term** and focus on **markets that will continue growing**. Here’s how you can **apply these trends** to your investment strategy:
✔ **Prioritize population growth markets.** Areas with **inbound migration** signal **strong rental demand and appreciation potential**.
✔ **Watch business relocation trends.** Cities attracting **new companies and job seekers** will see long-term economic strength.
✔ **Avoid overheated markets.** If **rents are significantly higher** than similar surrounding areas, it could be a red flag that **rent growth may slow**.
✔ **Look for affordability and quality of life.** People are choosing markets where they can **live well without overspending**—follow that trend.
**Bottom Line:** The Carolinas, Georgia, and key Sun Belt cities are **the strongest multifamily investment markets in 2024**. Meanwhile, Florida’s rise is **slowing**, and high-cost states like **California continue to see outbound migration**.
Want to learn more about **where to invest and how to scale your multifamily portfolio**?
**Want a Mentor Who’s Done What You Want to Do?**
[Check out Rod’s coaching program. ](https://rodkhleif.com/rod-khleif-warrior-program/)
The fastest way to succeed in multifamily real estate is by **learning directly from someone who’s been there, done that**. With **Rod Khleif’s Multifamily Real Estate Coaching Program**, you get:
✅ **Personalized guidance** from a top real estate investing coach
✅ **Step-by-step strategies** to find deals, raise capital, and scale
✅ **Access to a powerful network** of successful investors
**Categories:** Blog, Real Estate
---
### [Finding the “Perfect” Real Estate Deal in 2025](https://rodkhleif.com/finding-perfect-deal/)
**Published:** May 23, 2025
**Author:** Rod Khleif
**Excerpt:** Leo Tolstoy once wrote, “If you look for perfection, you'll never be content.” On one level, that might sound defeatist: “You’ll never be perfect, so why even try?” On the other hand, Tolstoy’ might just have offered a wise insight for real estate investment.
**Content:**
# **A Real-World Guide for Multifamily Investors in 2025**
*(Rod Khleif’s proven blueprint for identifying, evaluating, and closing winning multifamily deals—even in a competitive market)
## **Why “Perfect” Is a Moving Target**
Perfectionism can be poison for investors. I learned that lesson after clawing my way back from a $50 million loss in 2008: **“perfect” deals don’t exist. There are only deals that perfectly match your criteria.** When you define those criteria with precision and discipline, you’ll stop second-guessing yourself, start making offers, and build real momentum on the path to financial freedom.
> **Key takeaway:** *Finding the perfect real estate deal* is really about finding your perfect deal.
## 
## **Step 1: Lock In Your Investment Criteria**
Your criteria are the filters that protect you from shiny-object syndrome and bad decisions. Before you log one minute on [LoopNet](https://www.loopnet.com/) or pick up the phone to brokers, answer these questions:
**Criterion**
**Why It Matters**
**Quick Action**
**Market**
Determines job growth, landlord-tenant laws, population trends, and rent potential.
Identify 1–3 metros you know *intimately* or where you have trusted “boots on the ground.”
**Asset Size**
Influences financing, management structure, and scalability.
Newer investors: start with 2–4 units; scale to 5+ units as you build confidence and a team.
**Property Class (A–D)**
Sets expectations for rent growth, tenant profile, and rehab budget.
Match class to your risk tolerance and capital reserves.
**Stability Level**
Dictates how soon you’ll see cash flow and how hard financing will be.
Decide whether you want *stabilized*, *value-add*, or *heavy reposition* projects.
**Price Range**
Keeps you realistic about capital requirements and equity partners.
Get pre-qualified (residential) or line up debt & equity relationships (commercial).
**Management Style**
Affects day-to-day workload and NOI.
Choose self-management, on-site staff, or third-party management before you buy.
## **Step 2: Choose Your Target Market**
**1. Your Backyard** – Instant familiarity, quick drive bys, and personal relationships with brokers, contractors, and local banks.
**2. Your Hometown** – You still know the neighborhoods; family or friends can be your eyes and ears.
**3. Boots on the Ground** – Invest where you have a *trusted* partner who can walk units, attend inspections, and oversee rehabs.
**4. Retirement or Vacation Spot** – You already visit, so leverage that knowledge while building a future income stream.
**5. Two-Hour Radius Rule** – If nothing else fits, draw a two-hour drive circle around your home and start analyzing sub-markets.
> **Pro tip:** Study population growth, job diversity, and landlord friendliness. A great property in a lousy market is still a lousy deal.
## **Step 3: Dial In Unit Count & Property Class**
### **Unit Count**
- **2–4 Units (Residential Multifamily)
- Easier financing, lower down payments, FHA options.
- Perfect training ground for beginners.
- **5+ Units (Commercial Multifamily)
- Valued on **Net Operating Income (NOI)**, not comps.
- Same effort as small properties, but scale and appreciation accelerate wealth.
### **Property Class**
- **Class A** – Newest, luxury amenities, lowest cap rates, slowest rent growth.
- **Class B** – Middle-income, light value-add potential, strong demand.
- **Class C** – 30–50 years old, heavy value-add upside, higher cash flow.
- **Class D** – Deep-discount cash-flow plays, headache tenants, high management intensity.
Choose the class that matches your **capital, team strength, and stress tolerance.
## **Step 4: Assess Stability & Value Add Potential**
**Stability Level**
**What It Looks Like**
**Risk vs. Reward**
**Stabilized (≥90 % occupied)**
Turn-key, market rents, minimal deferred maintenance.
Lower risk, lower upside.
**Light Value-Add**
Cosmetic upgrades, rent bumps, minor operational efficiencies.
Moderate risk, solid upside.
**Heavy Value-Add (<80 % occupied)**
Significant rehab, management overhaul.
Higher risk, larger equity multiple.
**Vacant/Reposition**
Empty shell, major cap-ex, lease-up needed.
Highest risk, potentially life-changing upside. This is *only for experienced teams*.
Always know **why** a property sits below market occupancy before pulling the trigger.
## **Step 5: Price Range & Financing Strategy**
1. **Residential Loans (≤4 units)** – Conventional, FHA, or VA. Get pre-approved so brokers take you seriously.
2. **Agency Debt (5+ units)** – Fannie Mae & Freddie Mac remain the gold standard for stabilized assets.
3. **Bridge or Construction Loans** – Ideal for value-add plays but carry higher interest and tighter timelines.
4. **Equity Partners or Syndication** – If you’re short on down payment, raise equity in exchange for shares of cash flow and appreciation.
> **Rod’s rule:** Always line up debt *and* equity before you LOI. Momentum dies when you scramble for capital.
## **Step 6: Define Your Management Plan**
- **Self-Management** – Best education you’ll ever get, but be realistic about time commitment.
- **Resident Manager** – Offer rent credits on small properties to handle maintenance and leasing.
- **Third-Party Management** – Leverage experienced teams, especially when scaling fast or investing out of state.
- **Hybrid** – Start with third-party, then transition in-house once you exceed 75–100 units in one market.
Remember: **Poor management can sink even the “perfect” deal.
## **Final Thoughts: Turn Criteria Into Confidence**
*Finding the perfect real estate deal* starts with crystal clear criteria and ends with decisive action. Revisit your criteria quarterly as markets shift and your skill set grows. Refuse to chase unicorns, and refuse to settle for mediocrity. When your numbers work, your gut is calm, and your team is aligned, **pull the trigger** and welcome that next property into your portfolio.
Ready to sharpen your acquisition skills even further? [**Download my free “Financing Your Multifamily Purchase Workbook”**](https://rodkhleif.com/financing-your-multifamily-purchase/) and learn exactly how to fund that perfect deal when it lands on your desk.
**To Your Success,
**Rod Khleif
Host of the [*Lifetime CashFlow* Podcast](https://rodkhleif.com/lifetime-cashflow-podcast/) | Founder of the [Warriors Multifamily Mastermind](https://rodkhleif.com/rod-khleif-warrior-program/) | Author of [*How to Create Lifetime CashFlow Through Multifamily Properties*](https://www.lcfabook.com/core-book/)
*P.S. Bookmark this guide and share it with your accountability partner. The faster you apply it, the sooner you’ll be celebrating your own “perfect” multifamily closing.*
**Categories:** Blog, Finding Deals
**Tags:** Driving Force, landlord, motivation, multifamily, multifamily property investing, multifamily real estate, real estate, real estate investing, real estate podcast, Rod Khleif
---
### [Investing in Multifamily Properties While Working Full Time](https://rodkhleif.com/investing-multifamily-properties-working-full-time/)
**Published:** May 31, 2025
**Author:** Rod Khleif
**Excerpt:** Do you want to invest in multifamily properties but you're worried about losing that income from your full-time job? What if there was a way that you could invest in real estate AND keep your 9-5 income stream?
**Content:**
*How busy, high earning professionals can keep their 9-to-5 paycheck and still build Lifetime Cash Flow through apartments, Rod Khleif style, and invest in multifamily properties while working full time.*
### **Why Multifamily Is the Smartest Side Hustle for Busy Professionals**
If you’re a successful business owner or an executive with a healthy W-2, you already understand cash flow. Multifamily real estate multiplies that concept by giving you **four separate wealth engines at once,** monthly income, forced appreciation, principal pay down, and tax advantages. The best part? You don’t have to quit your career to start reaping those benefits.
### **Focus on a Job That Supercharges Your Deal Flow**
Before you start making offers, ask yourself: *Will my current day job accelerate or slow down my investing goals?* If you’re open to change, target roles that put you next to properties or capital every day. Think commercial loan analyst, property-management supervisor, or in-house underwriter for a regional bank. You’ll collect a salary, build insider knowledge, and hear about off-market listings long before they hit LoopNet.
> **Action Tip:** Add “commercial real-estate” and “multifamily” to your LinkedIn job-seekers alert. Connections you make today can become partners tomorrow.
### **Systemize Everything You Can’t Outsource**
Multifamily wealth is a game of consistent follow up, but your time is limited. Implement a lightweight CRM (HubSpot, Pipedrive, or Streak) to automate:
- Weekly “looking for 20- to 50-unit deals” emails to brokers
- Investor nurture sequences that educate prospects while you’re at work
- Instant “thank-you” notes to owners who fill out your property-evaluation form
Set it once, let it run, and get back to your core genius: building relationships.
### **Defend Your Calendar With the 80/20 Rule**
Block two “non-negotiable” real estate sessions each week: one hour before work, one hour after. Use that time only for high-yield tasks:
- Underwrite at least one deal
- Call one broker or property manager
- Touch base with one prospective investor
Everything else, such as social media scrolling, spreadsheet formatting, belongs outside that protected zone.
### **Your Virtual Team Is Your Secret Weapon**
A $7/hour virtual assistant in the Philippines can:
- Scrape county records for absentee owners
- Compile broker lists
- Post Craigslist ads
- Update your deal tracker
Document each task once, hand it off, and inspect weekly results. Every hour you buy back is an hour you can spend on strategy or family.
### **Hire a Property Manager Before You Need One**
Emergency plumbing calls destroy next day productivity. Interview managers while you’re still searching for deals. The right company:
- Guards your NOI by negotiating vendor discounts
- Handles leasing, renewals, and fair-housing compliance
- Sends you KPI dashboards so you don’t have to babysit
Bake their fee into your underwriting and sleep like a pro on both fronts, your day job and your rentals.
### **Wholesaling: Quick Capital Without Quitting Your Job**
Short on down-payment money? Control a small multifamily deal with an assignable contract, then flip that paper to another investor for a $5k–$20k assignment fee. Two or three successful wholesale exits can fund your first “buy-and-hold” acquisition without touching retirement funds.
### **Daily Micro-Goals Keep Momentum Alive**
Set three achievable micro targets every morning:
1. Analyze one listing in your target market
2. Send one follow up email or text to a broker
3. Learn one new underwriting metric or tax strategy
Small, consistent wins compound faster than sporadic 12-hour Saturdays.
### **Mindset: The Ultimate Competitive Edge**
Fear of losing a paycheck stops more would-be investors than lack of deals or money. Shift your thinking:
*Your job is the venture capitalist that finances your real estate business.* Use that income stream to qualify for loans, fund earnest-money deposits, and ride out the inevitable surprises.
### **Quick-Start Checklist for Busy Professionals**
- Pick a cash-flow market and a realistic unit range (20-50 doors)
- Build a broker “dream team” and talk to them weekly
- Line up financing: W2s and good credit give you leverage commercial investors envy
- Draft a five-minute pitch deck for friends and colleagues who may co-invest
- Analyze deals daily until the numbers “talk back” to you
- Write and submit at least one LOI every month. Remember momentum matters
## **Frequently Asked Questions**
**Is it risky to use my day-job income to qualify for commercial loans?
Lenders love W-2 borrowers because they show steady income. Just maintain a prudent debt-to-income ratio and a six-month liquidity buffer.
**Can I really manage a 30-unit building while working 50 hours a week?
Yes—by hiring a professional manager, automating back-end admin, and focusing your limited time on strategic oversight rather than day-to-day tasks.
**What if I don’t have a large network of investors yet?
Start with smaller joint ventures or wholesaling to build your credibility. As your track record grows, so will your capital base.
---
Ready to turn your current salary into the down payment for your first 30-unit property? **Download my free book, “[How to Create Lifetime Cash Flow Through Multifamily Properties](https://rodkhleif.com/lcfa-ebook/),”** then book a [free strategy call](https://rodkhleif.com/rod-khleif-warrior-program/) to map your next move. Your future self will thank you.
**Categories:** Blog, Finding Deals
**Tags:** apartment investing, business structures, Driving Force, landlord, motivation, multifamily, multifamily property investing, multifamily real estate, real estate, real estate investing, real estate podcast, Rod Khleif, seller financing
---
### [Landlord Disaster Plan: 9 Steps to Protect Assets 2025](https://rodkhleif.com/what-a-landlord-needs-to-do-to-prepare-for-disaster-2/)
**Published:** June 2, 2025
**Author:** Rod Khleif
**Excerpt:** What a Landlord Needs to do to Prepare for Disaster. While I was on vacation in Switzerland in September of this year Florida residents saw the awesome power of nature as Hurricane Irma tore through southern Florida. The strongest of its kind in over 10 years, Irma killed more than 100 people and caused over $60 billion in damage.
**Content:**
### **Why Disaster Planning Is Non Negotiable for 2025 Multifamily Investors**
September in Switzerland should have been all alpine vistas and fondue, yet I spent half that vacation glued to hurricane trackers as Irma battered Florida with 180-mph winds. In the end, 100 lives were lost and property damage topped $60 billion. That storm, and every apartment fire, gas leak, or burst riser I’ve dealt with since, reminds me of an iron rule: crisis management is part of asset management.
Ignore it, and the headlines (or lawsuits) will write themselves. Prepare, and you’ll safeguard your tenants, compress downtime, and guard the Lifetime Cash Flow those doors are supposed to provide.
## **Core Principles of Landlord Disaster Preparedness**
- **Speed beats perfection.** Bad news ages like fish; have mechanisms that trigger within minutes, not hours.
- **Clarity prevents chaos.** Everyone on your team; from the leasing agent to the night porter—must know their exact role.
- **Documentation equals dollars.** Insurers and regulators pay faster when you can prove every step you took.
Burn these into your operating manual and the rest of this roadmap becomes easy to execute.
## **Landlord Disaster Prep Playbook: How to Protect Tenants, Property & Cash Flow Before the Next Crisis Hits**
### **1. Build a Clear Chain of Command**
Disasters don’t wait for you to finish a Zoom call. **Designate an on-site incident commander**—usually your property manager or maintenance supervisor—who can execute without asking permission. Then establish two backups in case the primary leader is off-site.
**Role**
**Primary Tasks**
**Backup 1**
**Backup 2**
Incident Commander
Declare emergency, coordinate evacuation, liaise with first responders
PM assistant
Lead maintenance tech
Safety Officer
Account for tenants, control re-entry, oversee shelter-in-place when required
Leasing agent
Courtesy officer
Documentation Lead
Time-stamp photos, video, and incident log for insurance & legal
Admin assistant
Virtual assistant (off-site)
Media Liaison
Handle all press inquiries
Owner/GP
Pre-appointed PR firm
Print this hierarchy, laminate it, and post copies in the leasing office, maintenance shop, and staff break room. **Indecision kills; hierarchy saves.
### **2. Implement Multi-Channel, Redundant Communication**
**Mass Texting (Urgent):** A platform like Textedly, WeText, or AppFolio’s built-in SMS blasts warnings to every tenant in under 60 seconds, critical for fires, active shooters, or gas leaks.
**Phone Trees (Follow-Up):** Especially useful for seniors who may not text. Assign each staff 10-15 residents to call for welfare checks.
**Email & Portals (Detailed Updates):** Once the immediate threat subsides, push longer updates, repair timelines, relocation options, insurance FAQs; via email and your resident portal.
**Physical Notices (Last Mile):** If power or cell towers fail, old-school door placards still work. Keep pre-printed “DO NOT ENTER. INSPECTION IN PROGRESS” signs in your emergency kit.
> **Pro Tip:** Test every platform quarterly. A list that isn’t maintained is a lawsuit waiting to happen.
### **3. Craft Your Written Disaster Plan, and Practice!**
#### **Elements Your Plan Must Contain**
1. **Threat Matrix:** Rank likely hazards (fire, hurricane, tornado, active shooter, cyber-attack on smart-home systems).
2. **Evacuation & Shelter in Place Maps:** Include mobility-impaired routes, pet areas, and generator locations.
3. **Tenant Accountability:** Roll-call procedure for garden-style vs. high-rise properties.
4. **Utility Control Chart:** Exact breaker, gas shutoff, and water main locations with labeled photos.
5. **Vendor Call Sheet:** 24/7 numbers for restoration, plumbing, electrical, security board-up, and public adjusters.
6. **Insurance Protocol:** Step-by-step claims submission, policy numbers, and deductible amounts.
7. **Data Backup Procedure:** Off-site or cloud copies of leases, ledgers, and video footage.
Store digital copies in a password-protected drive *and* hard copies in a waterproof box on-site. Conduct at least one **full-scale drill per year,** fire alarms blaring, fake smoke, the works. Residents grumble at first, then thank you later.
### **4. Harden Your Asset Before Trouble Appears**
**System**
**Preventive Move**
**ROI**
**Roof & Gutters**
Semi-annual drone inspection; clear debris pre-hurricane season
Cuts water-intrusion claims 30 %
**Plumbing Risers**
Ultrasonic pipe thickness tests every five years
Avoids multi-floor water disasters
**Electrical Panels**
Infrared scanning for hot spots
Stops basement fires before they start
**Generators**
Monthly 30-minute load test; keep fuel at 80 %
Guarantees life-safety systems stay online
**Tree Canopy**
Arborist prune + wind-load assessment
Prevents limbs through windows during storms
Up-front CapEx here saves six figures in uninsured losses and occupancy attrition later.
### **5. Secure Adequate, and Appropriate, Insurance**
- **Replacement-Cost vs. Actual Cash Value:** Always insure for replacement cost; ACV pays out pennies on the dollar after depreciation.
- **Loss-of-Rents Coverage:** Minimum 12 months; 18–24 months in coastal or seismic zones.
- **Ordinance or Law Endorsement:** Covers code upgrades (e.g., sprinklers) required during rebuild.
- **Flood & Wind Riders:** Standard policies exclude these perils. If you’re anywhere near a 500-year floodplain, get the rider.
- **Cyber Liability:** Smart thermostats and access control are hackable; liability protection is cheap compared to reputation damage.
Meet with your broker annually.
### **6. Stage a Financial & Vendor War Chest**
**Operating Reserves:
- Keep **3-6 months of expenses** in liquid reserves. Disaster recovery burns cash long before insurers reimburse.
**Credit Lines:
- Secure a revolving LOC tied to the property or the portfolio, better terms are granted before you need them.
**Preferred Vendors:
- Sign pre-negotiated contracts with restoration and security firms, including guaranteed response times.
- Join local apartment associations; many have mutual-aid vendor agreements during regional events.
### **7. Train Your Tenants: Yes, Really.**
- Include a one-page **“Emergency Quick Guide”** in every lease packet.
- Host an annual safety barbecue: demo fire extinguishers, hurricane shutter practice, pet evacuation tips.
- Offer a rent credit raffle for tenants who complete an online disaster prep quiz. Engagement now means calm compliance later.
Remember, informed tenants protect themselves *and your NOI*.
### **8. Master the Media Narrative**
Cameras roll before the fire is out. **Script your first statement now** so you’re not improvising on live TV:
> “Our primary concern is resident safety. We activated our emergency plan within minutes, coordinated with first responders, and are providing temporary housing for affected families. We’ll share updates as soon as they’re verified.”
Do **not** speculate on cause or liability. Defer technical questions until investigators conclude. Pair every statement with visible action, water distribution, Red Cross liaison, onsite owner presence, to transform skeptical reporters into storytelling allies.
If potential litigation lurks, loop in counsel before any press interaction. Nothing wrong with “We’re cooperating fully and can’t comment further at this stage.” Its ok to have a multifamily disaster plan.
### **9. Post-Event: From Chaos to Cash-Flow Restoration**
1. **Triage Units** Red (uninhabitable), Yellow (minor rehab), Green (turn key).
2. **File Claims Fast** Upload geotagged photos within 24 hours; speed determines adjuster priority.
3. **Mobilize Vendors** Pre-signed contracts bypass bidding delays.
4. **Communicate Constantly** Daily portal updates keep tenants and investors aligned.
5. **Document Every Dollar** Use job costing software; insurers reimburse only what you can prove.
6. **Re-Occupy in Phases** Turn Yellow units first to restart rent flow while Red units undergo major rehab.
Target a **90-day rent-roll recovery** on moderate events; 12-18 months for catastrophic rebuilds.
## **72-Hour Quick-Start Checklist**
- ✅ Review insurance declarations page for coverage gaps.
- ✅ Verify SMS alert system reaches 100 % of tenants; run test blast.
- ✅ Update vendor roster with 24/7 contacts and signed service agreements.
- ✅ Walk property to confirm utility shutoff labels are visible and weatherproof.
- ✅ Back up digital lease files to encrypted cloud storage.
Complete this in one weekend and you’re leagues ahead of owners who still rely on hope and goodwill.
### **Final Word**
Disasters are inevitable; unpreparedness is optional. By installing a robust chain of command, redundant communication, bulletproof insurance, and a written plan your team rehearses, you’ll navigate fire, flood, or Category 5 winds with the same discipline you bring to acquisitions and asset management.
Take 15 minutes to forward this article to your property manager and book a [strategy call](https://rodkhleif.com/rod-khleif-warrior-program/) with your insurance broker. The next headline doesn’t have to feature *your* property.
**Categories:** Blog, Property Management
**Tags:** apartment investing, business structures, disaster, Driving Force, landlord, motivation, multifamily, multifamily investment, multifamily property investing, multifamily real estate, real estate, real estate investing, real estate podcast, Rod Khleif, seller financing
---
### [7 Reasons to Walk Away From a Multifamily Deal](https://rodkhleif.com/7-reasons-to-walk-away-from-a-multifamily-real-estate-deal/)
**Published:** September 13, 2025
**Author:** Rod Khleif
**Excerpt:** In over 40 years of experience in this business, I’ve seen pretty much everything. As a result, I’ve developed what you might call a sixth sense for evaluating deals.
**Content:**
One of the toughest lessons in multifamily investing isn’t how to find deals, it’s how to walk away from them.
Every new investor dreams of landing their first property. But here’s the truth: forcing a bad deal just to “get in the game” can set you back years. The best investors understand that protecting capital is priority number one. Success isn’t just about the deals you close, but also about the ones you avoid.
Here are seven clear reasons why you should walk away from a multifamily deal.
## **1. The Numbers Don’t Work**
In real estate, emotions lie. Numbers don’t.
If the deal does not meet your minimum return goals, don’t try to justify it. This includes cash-on-cash, internal rate of return (IRR), or debt service coverage ratio (DSCR).
**Red flags:
- [Rent growth](https://rodkhleif.com/where-are-rents-still-rising/) assumptions higher than market trends.
- Operating expenses that look “too clean.”
- Missing or underestimated reserves.
**Action Step:** Define your buy box. If the numbers don’t fit, don’t force it.
## **2. Location Problems**
You can fix a property, but you can’t fix a [location](https://rodkhleif.com/2024-us-migration-trends/). If the deal is in a market with a shrinking population, low job growth, or bad tenant laws, you will face challenges.
**Red flags:
- Crime stats trending upward.
- Employers leaving the market.
- Areas dependent on one major industry that’s declining.
**Action Step:** Validate every market with data and not just gut feelings or broker pitches.
## **3. Deferred Maintenance and CapEx Surprises**
Every property has a to-do list. But some are ticking time bombs.
Roof issues, foundation cracks, outdated plumbing, or major HVAC problems can destroy your budget. What looks like a cosmetic facelift may actually be a full-blown capital expenditure project.
**Red flags:
- Sellers who avoid inspections or downplay repairs.
- High “other expenses” in T12 financials with no explanation.
- Properties with long histories of patchwork fixes.
**Action Step:** Always budget conservatively and assume CapEx will cost more than you think.
## **4. Seller Games and Lack of Transparency**
A trustworthy seller is worth their weight in gold. If you feel like you’re pulling teeth to get basic information, walk away.
**Red flags:
- Refusal to provide rent rolls, T12, or utility bills.
- Sudden changes to financials during due diligence.
- Overly complicated ownership structures with no clear decision-maker.
**Action Step:** Transparency builds trust. If the seller isn’t upfront, the risk isn’t worth the deal.
## **5. Overpriced or Low Appraisal**
In 2025, discipline matters more than ever. Rising interest rates and tighter lending standards mean paying too much is a recipe for disaster.
**Red flags:
- Brokers pushing pro forma numbers instead of actuals.
- Appraisal values that don’t match asking price.
- Cap rates compressed below market norms.
**Action Step:** Stick to your [underwriting](https://rodkhleif.com/commercial-real-estate-underwriting-tool/). If you have to stretch just to “win” the deal, you’ll likely regret it.
## **6. Financing Doesn’t Line Up**
Even the best property becomes a nightmare if the financing isn’t right.
**Red flags:
- DSCR below 1.25 with conservative underwriting.
- Lenders requiring personal recourse when the deal can’t support it.
- Loan terms that don’t match your business plan (e.g., short IO on a heavy value-add).
**Action Step:** If financing doesn’t fit, walk away. Forcing bad debt on a good property can sink your cash flow and flexibility.
## **7. Bad Partnership Dynamics**
Multifamily is a team sport. And sometimes the people involved are the biggest risk.
**Red flags:
- Partners with no experience but big promises.
- Misaligned goals (short-term flippers vs. long-term holders).
- Lack of transparency about fees, roles, or decision-making.
**Action Step:** Only work with people you know, like, and trust. A great deal with the wrong team will still lose money.
## **Conclusion**
Walking away from a deal isn’t failure, it’s wisdom. The best investors aren’t deal junkies. They’re disciplined capital protectors.
Remember:
> *“Sometimes the best deal is the one we walk away from.”* – Rod Khleif
If you want to learn how to confidently analyze deals, spot red flags, and structure financing for maximum protection and growth, check out my free book [*How to Create Lifetime Cash Flow Through Multifamily Properties.*](https://rodkhleif.com/lcfa-ebook/)
And if you’re serious about scaling faster with the right guidance, join us at the next [**Multifamily Bootcamp**](https://multifamilybootcamp.com) or apply for mentorship through the [**Warrior Program**.](https://rodkhleif.com/rod-khleif-warrior-program/)
Because sometimes the smartest move isn’t to close. It’s to walk away.
## **Frequently Asked Questions (FAQ)**
### **When should I walk away from a multifamily deal?
Walk away if the numbers don’t hit your return criteria, the location has poor fundamentals, financing terms are unfavorable, or if the seller lacks transparency. Protecting capital is always more important than forcing a deal.
### **What is the biggest red flag in multifamily investing?
Unrealistic underwriting is one of the biggest red flags. If rent growth, expenses, or occupancy assumptions look too good to be true, they usually are.
### **How much deferred maintenance is too much?
It depends on your business plan and reserves. Cosmetic fixes are manageable, but properties with structural, plumbing, or electrical issues can require millions in CapEx and may not justify the risk.
### **Can a deal still work if the appraisal comes in low?
Sometimes, but often it’s a sign the property is overpriced. Unless the seller adjusts pricing or terms, a low appraisal is usually a reason to walk away.
### **What role does financing play in walking away?
Financing is critical. If debt service coverage is weak, if you’re forced into recourse terms that expose personal assets, or if loan terms don’t match your business plan, the risk outweighs the reward.
### **Should I ever partner with someone I don’t fully trust?
No. Multifamily is a team sport, and bad partnerships destroy good deals. Only move forward when goals, roles, and expectations are clear — and the people involved are trustworthy.
### **Is walking away common in multifamily?
Yes. Experienced investors often analyze dozens of deals before closing one. Discipline is what separates long-term success from costly mistakes
*Disclaimer: This article was written with the help of AI and reviewed by Rod’s team. Real estate investing involves risk. Always consult licensed professionals.*
**Categories:** Due Diligence, Finding Deals, Property Management, Real Estate
**Tags:** apartment investing, business structures, investing, investor mistakes, landlord, multifamily, multifamily investment, multifamily property investing, multifamily real estate, real estate, real estate investing, real estate podcast, Rod Khleif
---
### [The Power of Networking In Real Estate](https://rodkhleif.com/ep-103-power-networking-driving-force-success-tip-2/)
**Published:** November 18, 2025
**Author:** Rod Khleif
**Excerpt:** Ep #103 - The Power of Networking - Your Driving Force Success Tip
**Content:**
If there’s one thing I’ve seen over and over in this business, it’s this: real estate is not a “property” business, it’s a “people” business. You don’t grow a multifamily portfolio just because you are the smartest person. You grow it by building the right relationships. These include brokers, lenders, partners, investors, and operators. They can open doors you didn’t even know were there. That’s the true power of networking in real estate and why the most successful investors treat their network as an asset just like their deals and their balance sheet.
In this article, we will explain why networking is important. We will discuss who to include in your real estate network. We will also cover how to build strong relationships that can lead to deals, funding, and long-term financial freedom.
## Why Networking Is a Superpower in Real Estate
You can underwrite deals all day, but without people, those spreadsheets go nowhere. Strategic networking in real estate helps you find better deals, raise capital, learn faster, and build a team that allows you to scale. Brokers and wholesalers reach out to people they know and trust before anything goes public. Investors send money to those they believe in, not just to Proformas. Experienced operators can save you time. They share what works in different markets and asset classes. This helps you avoid years of trial and error.
Networking also gives you something data can’t: support when things get tough. Markets shift, deals fall apart, renovations go over budget, and tenants move out. A strong community gives you encouragement, accountability, and perspective when you feel like quitting. In short, real estate networking multiplies every other effort you’re making, from finding deals to raising money to operating your properties efficiently.
## The Key Players in Your Real Estate Network
Not all connections are equal. A powerful networking strategy in real estate focuses on intentionally adding the right people to your circle and then nurturing those relationships over time.
### 1. Brokers and Deal Finders
For investors, especially in multifamily real estate, deals are oxygen and brokers are the gatekeepers. Good relationships with brokers can give you access to pocket listings. They can provide honest feedback on your offers. You will gain better insight into local submarkets. You will also learn early about owners who really want to sell. These relationships aren’t built with one email; they’re built through consistency, following through on what you say, underwriting quickly, and closing when you say you will.
### 2. Other Real Estate Investors
Many beginners see other investors as competition, but experienced investors understand that other investors are often their best allies. They can become partners on larger deals, sources of capital, guides who share market intel and lessons learned, and connectors who introduce you to their lenders, managers, and contractors. Some of the best multifamily deals never go on the open market. They are traded among trusted networks of operators and investors.
### 3. Private Lenders and Equity Partners
If you want to grow beyond a handful of small properties, you’ll need to tap into private capital. Your network of private lenders and equity partners might include high-income professionals, business owners, other real estate investors, and even small funds or family offices. The deeper and more trusted your network is, the easier it becomes to fund deals quickly, negotiate better terms, and move on opportunities while others are still trying to assemble a capital stack.
### 4. Mentors and Coaches
You can absolutely figure things out on your own, but it will take longer and cost more. Mentors and coaches inside your real estate networking ecosystem help you avoid landmines, hold you accountable, and compress decades of experience into days. The right mentor not only answers technical questions but can also introduce you to their team, partners, and investors when you’ve proven you’re serious, ethical, and action-driven.
### 5. Your Operations Team
Your real estate network doesn’t stop at the closing table. You’re also building long-term relationships with property managers, lenders, attorneys, insurance brokers, CPAs, cost segregation specialists, contractors, and vendors. Together, they form your operations ecosystem — the people who help you protect, optimize, and grow your assets. A strong operations team can be the difference between a deal that looks good on paper and a deal that actually produces stable cash flow and equity growth.
## How to Network in Real Estate (Without Being Awkward)
Now let’s get practical. Here’s how to do real estate networking in a way that feels natural, adds value, and leads to real opportunities instead of awkward small talk and forgotten business cards.
### Start With a Clear Networking Goal
Don’t “network” just to collect contacts. Start by defining what you actually need from your real estate network right now. Are you looking for your first partner? Brokers in a specific target market? Passive investors for an upcoming deal? A mentor who has already scaled a portfolio? When you know who you’re looking for, you can ask better questions, attend the right events, and focus each conversation on a meaningful next step.
### Focus on Adding Value First
This is where most new investors go wrong. They lead with the ask: *“Can you fund my deal?”*, *“Can you mentor me?”*, or *“Can I pick your brain?”* Instead, flip the script and ask, “How can I make this person’s life easier?” You can add value by sharing helpful resources, taking thorough notes at a conference and sending them to the group, connecting people who need each other, or offering to help with underwriting, market research, or building presentations. In real estate networking, value creates velocity; the more you give without immediately asking for something back, the more doors will open.
### Show Up Where Real Estate Investors Actually Are
You can’t build a powerful real estate network sitting on the couch scrolling social media. Get yourself into rooms where serious investors spend their time: local REI meetups, multifamily bootcamps and conferences, online communities and masterminds, and structured mentorship programs. When you consistently show up in the same places, you stop being a stranger and start being a familiar face people recognize, trust, and feel comfortable doing business with.
### Join or Create an Accountability Group
One of the most powerful forms of networking for real estate investors is a small, committed accountability group. Think 4-10 investors who meet weekly or bi-weekly to share goals, review deals, troubleshoot challenges, and hold each other accountable. These groups create deeper relationships than large events, because you see each other’s progress, setbacks, and growth over time. That’s often where genuine partnerships and lifelong friendships are formed.
## Mistakes to Avoid When Networking in Real Estate
A strong network is built not only by what you do, but also by what you avoid. Here are some common mistakes that can slow your progress.
### 1. Being Transactional
If every interaction ends with a pitch, people will start dodging your calls and messages. Instead of asking, *“What can I get from this person?”*, shift to *“How can we win together over the long term?”* Treat networking in real estate as relationship-building, not deal-hunting, and you’ll naturally attract more serious partners and investors.
### 2. Never Following Up
You can meet amazing people at events and then never speak again, which means all that effort and travel produced zero real value. Avoid this by following up within 24 hours, referencing something specific you discussed, and suggesting a simple next step like a short call, coffee, or sharing a deal you’re working on. Fortunes in real estate are built on follow-up, not on first impressions alone.
### 3. Over-Promising and Under-Delivering
Your reputation is your brand. If you tell someone you’ll send them underwriting, make an introduction, or share a resource, do it quickly and reliably. Over time, people learn whether you’re someone who follows through or someone they have to chase. The investors and operators who consistently do what they say become magnets for opportunities, capital, and team members.
### 4. Staying in the Wrong Rooms
Not every group is your group. If you’re always the most driven person in the room, or if the people around you talk big but never take action, it might be time to level up. Look for communities where deals are actually getting done, where people share real numbers, and where there’s a culture of action and accountability. You want a network that pulls you forward, not one that keeps you comfortable and stuck.
If you want to join a very active community of real estate investors, you should consider [Rod Khleif’s Warrior Program](https://rodkhleif.com/rod-khleif-warrior-program/). This is a group of 1,700+ active investors who are always eager to help.
## How Networking Accelerates Your Real Estate Journey
When you take networking in real estate seriously and do it consistently, you’ll start to notice real changes: shorter learning curves because you’re tapping into other people’s experience, more and better deal flow because brokers and operators think of you when opportunities arise, and easier capital raises because you’ve built relationships with investors long before you present them with a deal. Your operations improve because you gain access to proven property managers, lenders, and contractors, and your confidence grows because you’re no longer trying to figure everything out alone.
Over time, your real estate network becomes one of your most valuable assets, producing long-term benefits in the form of deal flow, partnerships, investor relationships, and personal growth. It doesn’t show up on a balance sheet, but it impacts every number that does.
## Your Next Steps: Build Your Real Estate Network on Purpose
Don’t let this just be another article you read and forget. Turn it into a simple action plan:
1. Identify 3–5 key relationship types you need right now — maybe that’s a broker in your target market, a mentor, a property manager, a capital partner, or a small accountability group.
2. Schedule 2–3 networking activities this month — a local meetup, a virtual event, a call with an investor you admire, or follow-up conversations with people you’ve already met.
3. Create or join an accountability group to keep you focused, moving, and supported when you hit resistance.
4. Make “add value first” your rule in every conversation; ask yourself how you can help before you think about what you want.
If you do these consistently, your network will start working for you — bringing deals, capital, and opportunities you never could have engineered on your own. That’s the real power of networking in real estate.
## FAQ: Networking in Real Estate
### What is networking in real estate?
Networking in real estate is the process of building relationships with brokers, investors, lenders, property managers, and other professionals to share information, find deals, raise capital, and grow your portfolio. Instead of trying to do everything alone, you leverage a real estate network to move faster and smarter.
### Why is networking important in real estate investing?
Networking in real estate is critical because most of the best opportunities never hit the public market. Strong relationships help you access off-market deals, learn from experienced investors, find reliable team members, and connect with private lenders and equity partners. In short, your network often determines the quality of your deals and the speed of your growth.
### How do I start networking in real estate with no experience?
If you’re brand new, start by showing up and adding value. Attend local real estate meetups, REI clubs, and online groups. Introduce yourself clearly (what market you’re focused on and what you want to learn), ask good questions, and offer help—taking notes, sharing resources, underwriting simple deals, or connecting people. You don’t need a big track record to start networking in real estate; you just need to be consistent and reliable.
### What are the best ways to network in real estate?
The best ways to network in real estate include:
- Local meetups and REI clubs
- Multifamily and commercial real estate conferences
- Online communities (Facebook groups, LinkedIn, forums, masterminds)
- Mentorship and coaching programs
- Small accountability groups that meet weekly or bi-weekly
Mix in-person events with online networking so you’re building relationships in multiple places.
### How can networking help me find real estate deals?
Effective networking in real estate puts you on the radar of people who control deal flow: brokers, wholesalers, and other investors. When they know who you are, what you’re looking for, and that you can perform, they’re more likely to call you with off-market or early-stage opportunities. Many investors get their best deals through relationships, not public listings.
### Can networking help me raise money for real estate deals?
Yes. Networking is one of the most powerful ways to raise money for real estate deals. By consistently building relationships with high-income professionals, business owners, and other investors, you create a warm audience that knows, likes, and trusts you. When a solid deal comes along, these existing relationships make it much easier to raise equity quickly and confidently.
### How often should I be networking as a real estate investor?
As a rule of thumb, make networking in real estate a weekly habit, not a once-a-year activity. Aim for:
- 1–2 events or calls per week
- A small number of new connections each month
- Regular follow-ups with key contacts
Even 15- 30 minutes a day spent on calls, messages, or follow-ups can dramatically grow your real estate network over time.
### What if I’m introverted or shy, can I still be good at real estate networking?
Absolutely. Introverts often excel at networking in real estate because they listen well and build deeper one-on-one relationships. Focus on smaller events, scheduled calls, and accountability groups instead of huge crowds. Come prepared with a few questions, a clear introduction, and a simple follow-up system so you don’t have to “wing it.”
### Is online networking as effective as in-person networking in real estate?
Both are valuable and they work best together. Online networking (social media, Zoom calls, communities, masterminds) allows you to connect with investors and operators in different markets, while in-person networking builds trust faster and often leads to deeper relationships. Use online platforms to start conversations and in-person events to strengthen them.
### What are the biggest networking mistakes real estate investors make?
Common mistakes include:
- Only reaching out when they need something
- Collecting business cards but never following up
- Talking about themselves the entire time
- Over-promising and under-delivering
- Staying in low-action rooms where no one is doing deals
Avoid these by focusing on adding value first, following up consistently, and surrounding yourself with action-takers.
### How can I track and organize my real estate network?
Treat your network like a business asset. Use a simple CRM, spreadsheet, or contact tool to track:
- Where you met
- What each person does and wants
- How you can help them
- When you last followed up
Set reminders to check in regularly. This turns random networking in real estate into a structured relationship-building system.
### How long does it take for networking to pay off in real estate?
There’s no fixed timeline, but serious investors typically see benefits within a few months of consistent effort. At first, you’ll build knowledge and confidence; then relationships start turning into real deal flow, referrals, and capital. Networking in real estate compounds. Every conversation can lead to another, and over time the momentum becomes hard to stop.
*Disclaimer: This article was written with the help of AI and reviewed by Rod & his team.*
**Categories:** Psychology of Success, Real Estate
**Tags:** Driving Force, genius, lifetime cashflow podcast, motivation, multifamily, multifamily investing, multifamily real estate, networking, podcast, real estate, real estate investing, real estate podcast, Rod Khleif
---
### [Why Now Is a Good Time for a Multifamily Mentor](https://rodkhleif.com/why-now-is-a-good-time-for-a-multifamily-mentor/)
**Published:** December 18, 2025
**Author:** Alex Khleif
**Content:**
If you’ve been thinking about getting into or leveling up in multifamily, there has never been a more important time to have a mentor in your corner. We’re in a market where interest rates, lending standards, and deal quality are shifting simultaneously. Some operators are getting crushed, others are quietly buying the best deals they’ve seen in years. The gap between those two groups isn’t luck. It’s education, relationships, and guidance, and that’s precisely where a multifamily mentor comes in.
## **The Market Is No Longer “Easy Mode”**
Not long ago, it felt like almost anyone could do a deal and look smart because:
- Debt was cheap and widely available
- Values kept creeping up across most markets
- Strong rent growth covered a lot of rookie mistakes
Today, the landscape looks very different:
- Interest rates are higher and less predictable
- Lenders are underwriting more conservatively
- Rents in some submarkets are flat or softening
- A wave of refinances and loan maturities is forcing weaker operators to sell
In this environment, you don’t just need *a* deal—you need a **well-structured** deal that can handle stress, bumps, and surprises.
A mentor who has actually invested through multiple cycles has seen all of this before. They know what happens when rates reset, collections dip, a contractor falls apart, or an LP suddenly wants out. Their experience helps you avoid rookie mistakes that can wipe you out in a tighter market.
## **Underwriting Is More Important (And Easier to Mess Up)**
In a challenging environment, sloppy underwriting is lethal. Small changes to exit cap rates, interest rates, rent growth, or expenses can change a great deal into one that barely pays its debt. That’s why having someone who knows where those numbers get exaggerated is so critical.
A multifamily mentor helps you build or refine your underwriting model and pressure-test your assumptions, rather than falling in love with a glossy pro forma. They show you what’s normal in your market, what’s optimistic, and where brokers and sponsors tend to “polish” the story. Instead of guessing, you learn to underwrite as if you plan to own and run the property, not just flip a spreadsheet.
## **Lenders and Equity Partners Expect Professionalism**
Right now, lenders and investors are cautious and selective. They are:
- Asking tougher, more detailed questions
- Digging deeper into your background and track record
- Prioritizing deals with clear business plans and real stress tests
If you’re new, walking into that environment without guidance is like showing up to a championship game without a coach.
A mentor can help you:
- Tighten your pitch decks, investor presentations, and loan packages
- Position your story and team so you build confidence, not doubt
- Prepare for the questions lenders and LPs actually ask in this market
- Avoid sounding like someone who just watched a few YouTube videos and decided to raise millions
Very often, the difference between “We’ll pass for now” and “We’re in” isn’t the dirt—it’s how prepared and dialed-in *you* are.
## **Deal Flow and Relationships Are Everything**
The best multifamily deals rarely show up on a public listing site with a neon “buy me” sign. They come through brokers who trust you, off-market conversations, referrals from other operators, and relationships with lenders and property managers who know when an owner is in trouble. If you’re new, breaking into those circles is tough because people want proof that you can perform.
A good mentor already lives in that ecosystem. They have connections they can introduce you to, trusted property managers, and reliable lenders. They also have a history of closed deals that give you some credibility as you build your own reputation. You still have to earn your reputation, but a mentor can get you into rooms you wouldn’t reach alone and help you show up as if you belong there from day one.
## **A Multifamily Mentor Speeds Up Your Learning**
Learning alone usually looks like this:
- Binge-watching content without a clear direction
- Guessing what actually matters and what doesn’t
- Making expensive mistakes in time, money, or both
- Losing momentum when deals fall apart or numbers don’t make sense
With a mentor, the process gets sharper:
- You get a roadmap that matches your goals and experience level
- You know what to focus on first, second, and third
- You have someone to review your deals, offer feedback, and keep you from obvious pitfalls
- You move faster toward real results instead of spinning on theory
The outcome is simple: you close your first (or next) deal sooner, raise capital more effectively, and avoid a lot of the painful lessons others pay for. In a market with both opportunity and risk, compressing years of trial and error into months of focused progress is one of the biggest advantages a mentor can give you.
## **Accountability Is a Competitive Edge Right Now**
Lots of people say they want financial freedom; far fewer behave like investors every single week. The real gap isn’t information, it’s accountability. Underwriting deals consistently, growing your network, making offers, and following up with brokers and lenders are boring, repeatable actions—but they’re exactly what most people stop doing when life gets busy or headlines get scary.
A multifamily mentor, especially inside a mentorship community, gives you structure and gentle pressure. You get check-ins, clear next steps when you’re stuck, and the reminder that others at your level are still moving forward even when things feel uncertain. In a cycle where many investors are frozen or distracted, the willingness to be consistent and accountable can quietly become your superpower.
## **Emotional & Mindset Support in a Noisy Market**
The numbers matter—but your mindset is what keeps you in the game long enough to benefit from good numbers.
In a choppy or recessionary environment, you will:
- Lose on some offers
- Watch deals die in due diligence
- Hear doubts from friends, family, or colleagues
- Have days where you wonder if you should “wait until things calm down”
A mentor who has been through multiple cycles helps you:
- Focus on fundamentals instead of doom-scroll headlines
- See dead deals as part of the process, not a personal failure
- Understand that not all markets and submarkets move the same way
- Balance caution with action so you don’t sit on the sidelines forever
You’re not just learning how to evaluate assets—you’re learning how to think and act like a resilient, long-term investor.
## **You Don’t Need a Perfect Market, You Need a System**
There is no magical moment when rates are low, prices are cheap, competition is light, the economy is booming, and every headline is optimistic. Those conditions almost never show up at the same time. Waiting for that scenario might feel safe, but it usually just means you never start.
What you really need is a system you can trust. This system should help you find deals, analyze them, structure debt and equity, and manage the assets after closing. A multifamily mentor helps you build that system around your goals, your risk tolerance, your time and capital, and the realities of today’s market—not yesterday’s. Once you have a process, you can use it again and again. You won’t have to keep asking, “Should I invest now?”
## **Why Now Specifically Is a Smart Time to Find a Mentor**
Right now, we’re in a unique window where:
- Overleveraged owners are being forced into tough decisions
- Banks and agencies are still lending—but with more scrutiny
- Educated, capital-ready buyers can negotiate better pricing and terms
- Operators who got in sloppy are starting to get exposed
In the next few years, some investors will:
- Buy quality assets at attractive bases
- Build credibility with lenders and limited partners
- Come out of this cycle with more units and stronger cash flow
Others will:
- Sit on the sidelines waiting for “certainty” that never really comes
- Or jump into risky deals blindly and get burned
A multifamily mentor doesn’t erase risk, but they tilt the playing field in your favor. They help you see opportunities more clearly, avoid obvious traps, move faster on the right deals, and build a real track record instead of just consuming content and hoping for the best.
## **Where Someone Like Rod Khleif Fits In**
If you’re looking for a mentor, it’s not just about a big resume—it’s about values, teaching style, and the ecosystem you plug into. That’s why a lot of investors gravitate toward someone like Rod Khleif. He’s been through multiple market cycles, has decades of real estate experience, and has built a community of students who’ve collectively closed thousands of units.
Rod focuses on both sides of the equation: tactical skills such as underwriting, capital raising, and asset management, and mindset pillars such as clarity, goals, resilience, and contribution. You can learn a lot from free content. Having a mentor, live training, and a network of multifamily investors can help you move faster. These resources can help you go from being just interested to actively joining the game. If you like his approach, checking out his bootcamps or mentorship programs can be an easy way to connect with a proven system. This is better than trying to put everything together on your own.
## **Multifamily Mentor Bottom Line**
You *can* figure multifamily out on your own—but you’ll likely pay for it in:
- Lost time
- Missed opportunities
- Preventable mistakes
In a market where conditions are shifting and stakes are higher, that’s an expensive way to learn.
A strong multifamily mentor brings you:
- Real-world experience from multiple market cycles
- A clear, repeatable process for finding, analyzing, and operating deals
- Relationships, credibility, and accountability
- The mindset and support to keep going when others quit
You don’t need to be fearless; you need to be **guided, prepared, and consistent**. That’s why *now* is such a powerful time to have a multifamily mentor in your corner, and why plugging into a mentor and community like Rod Khleif’s can be the catalyst that finally moves you from watching deals to actually closing them.
Want to learn more about [Rod Khleif’s Multifamily Mentorship Program? ](https://rodkhleif.com/rod-khleif-warrior-program/)
**Categories:** Blog, Psychology of Success, Real Estate
---
### [How to Educate Yourself to Become a Successful Multifamily Investor](https://rodkhleif.com/how-to-educate-yourself-to-become-a-successful-multifamily-investor/)
**Published:** January 26, 2026
**Author:** Alex Khleif
**Content:**
Multifamily real estate investing has created more millionaires than perhaps any other investment vehicle in modern history. But here’s the truth that nobody tells you: success in this industry isn’t about luck, connections, or even having large amounts of capital to start. It’s about education. The difference between investors who build generational wealth and those who struggle or fail comes down to one thing: how they educated themselves. In this comprehensive guide, you’ll discover the exact education path that successful multifamily investors follow to go from complete beginner to accomplished apartment building owner. So keep reading and find out how to become a successful multifamily investor.
## Why Education is the True Foundation of Multifamily Success
Before we dive into the specific education strategies, let’s address a fundamental truth: multifamily real estate is not simple. Anyone who tells you otherwise is either lying or trying to sell you something (or both).
Successful multifamily investing requires knowledge across multiple disciplines including financial analysis, market research, property management, negotiation, capital raising, legal structures, and exit strategies. The good news? All of these skills can be learned through proper education.
Consider this: **the average successful multifamily investor spends 6-18 months intensively educating themselves before closing their first deal.** This isn’t wasted time—it’s strategic preparation that prevents costly mistakes and accelerates long-term success.
$50K+
Average cost of a major mistake for uneducated investors
6-12mo
Time investment needed for comprehensive education
10X
Return on education investment for serious students
## The Five Pillars of Multifamily Real Estate Education
Successful multifamily investors build their education on five essential pillars. Let’s explore each one and how to maximize your learning in these critical areas.
### 1. Foundational Knowledge: Understanding How the Business Works
Before you can analyze deals, raise capital, or manage properties, you need to understand the fundamental mechanics of multifamily investing.
**What you need to learn:**
- How multifamily properties generate income and build wealth
- The difference between residential and commercial real estate financing
- Understanding cap rates, NOI, cash-on-cash returns, and IRR
- Property classes (A, B, C, D) and which to target
- The fundamentals of property management and operations
- Market analysis and identifying strong growth markets
- Value-add strategies that increase property value
**Best learning resources:**
- **Books:** Start with foundational texts like “The ABCs of Real Estate Investing” by Ken McElroy and “What Every Real Estate Investor Needs to Know About Cash Flow” by Frank Gallinelli
- **Podcasts:** Listen to [Rod Khleif’s “Lifetime Cashflow Through Real Estate Investing” podcast](https://rodkhleif.com/lifetime-cashflow-podcast/), which has over 17 million downloads and features interviews with successful investors and industry experts
- **Online forums:** Join BiggerPockets and participate actively in the multifamily investing forums to learn from experienced investors
- **YouTube channels:** Follow educational content from proven multifamily investors who share deal analyses and market insights
### Accelerate Your Foundation with Expert Training
While self-study is valuable, nothing replaces structured, comprehensive training from someone who’s actually done it. Rod Khleif has personally owned and managed over 2,000 properties across 40+ years of active investing.
His [3-day Multifamily Bootcamp](https://rodkhleif.com/bootcamp/) delivers the complete blueprint for multifamily mastery in an intensive live training event. You’ll learn step-by-step how to find deals, analyze properties, secure financing, and generate consistent monthly cash flow—plus breakthrough the limiting beliefs that hold most investors back.
The bootcamp provides everything you need including due diligence checklists, financing templates, scripts for talking to lenders, sample agreements, and complete purchase and sale documents. These are the exact same systems Rod has used to build his portfolio of 2,000+ units.
### 2. Deal Analysis: The Skill That Protects Your Capital
The ability to accurately analyze multifamily deals separates successful investors from those who lose money. This is perhaps the most critical skill you’ll develop.
**What you need to master:**
- Reading and analyzing rent rolls to verify income
- Scrutinizing operating expense statements for red flags
- Running comparable market analyses to determine realistic rental rates
- Creating detailed renovation budgets and timelines
- Building comprehensive financial models with conservative assumptions
- Conducting sensitivity analyses to understand risk factors
- Calculating multiple return metrics (cap rate, CoC, IRR, equity multiple)
**How to learn deal analysis:**
- **Practice relentlessly:** Analyze 100+ deals before making your first offer. Use platforms like LoopNet and CommercialCafe to find properties and run the numbers
- **Use professional tools:** Invest in quality underwriting software or comprehensive Excel templates designed for multifamily analysis
- **Get expert feedback:** Have experienced investors review your deal analyses to identify blind spots and errors in your assumptions
- **Study real case studies:** Learn from actual deals, both successful and failed, to understand what works and what doesn’t
#### Pro Tip: The 100-Deal Rule
Commit to analyzing 100 multifamily properties before submitting your first offer. By deal #100, you’ll have developed the pattern recognition to spot winners and losers almost instantly. This education through repetition is invaluable and costs nothing but your time.
### 3. Market Knowledge: Understanding Where and When to Invest
The best deal structure in the world won’t save you if you invest in a declining market. Market selection is critical to long-term success.
**Essential market analysis skills:**
- Identifying markets with strong population and job growth
- Understanding supply and demand dynamics in different markets
- Analyzing the new construction pipeline and potential oversupply
- Evaluating landlord-friendly vs. tenant-friendly legislation
- Recognizing emerging markets before they become obvious
- Understanding submarket variations within larger metros
**Where to find market intelligence:**
- Bureau of Labor Statistics for employment data
- U.S. Census Bureau for population trends and demographics
- CoStar and other commercial real estate data platforms
- Local economic development authorities
- Relationships with brokers who specialize in your target markets
- Multifamily market research reports from major brokerages
### 4. Financing and Capital Raising: Fueling Your Deals
Understanding how to finance multifamily properties and raise capital from investors is what separates small operators from true syndicators who can scale quickly.
**Critical financing knowledge:**
- Commercial loan structures (agency, bank, CMBS, bridge, etc.)
- Understanding debt service coverage ratios (DSCR) and loan-to-value (LTV)
- The pros and cons of fixed-rate vs. floating-rate loans
- How to build relationships with commercial lenders
- Understanding prepayment penalties and defeasance
- Creative financing strategies for deals that don’t fit traditional boxes
**Capital raising fundamentals:**
- SEC regulations for 506(b) and 506(c) offerings
- Creating compelling investor presentations and pitch decks
- Understanding preferred returns and equity splits
- Building and nurturing an investor database
- Communicating transparently with investors throughout the hold period
- Legal structures for syndications (LLCs, limited partnerships, etc.)
### Get Done-For-You Investor Documents
Creating professional investor documents from scratch can cost $10,000-$25,000 in legal fees and take months. The [Warrior Program](https://rodkhleif.com/rod-khleif-coaching-program/) provides done-for-you Private Placement Memorandums (PPMs), email templates, pitch decks, and all the documents you need to raise capital professionally.
Warriors also receive unlimited deal analysis—every deal you consider is evaluated by experienced multifamily investors to ensure you’re making sound investments. This single benefit has saved Warriors hundreds of thousands of dollars in avoided mistakes.
The program includes one-on-one mentorship with seasoned investors, live group coaching with Rod and his expert team, and access to a network of 1,700+ active investors who collectively own approximately 260,000 units.
### 5. Operations and Management: Executing the Business Plan
Understanding how to actually operate multifamily properties is essential, whether you’re self-managing or hiring a property management company.
**Operational knowledge you need:**
- Property management best practices and systems
- How to evaluate and select property management companies
- Understanding maintenance, CapEx, and renovation workflows
- Tenant screening and lease management
- Strategies for increasing occupancy and reducing turnover
- How to increase rents while maintaining tenant satisfaction
- Emergency preparedness and risk management
**Best ways to learn operations:**
- Start with a small property you can self-manage to learn the basics
- Shadow property managers at existing properties
- Join local apartment associations to network with property managers
- Read property management case studies and post-mortems
- Attend property management conferences and trade shows
## The Fastest Path: Mentorship and Coaching
While self-education is possible, the fastest and most effective path to multifamily success is learning directly from someone who has already achieved what you want to accomplish.
**Why mentorship accelerates your success:**
- **Avoid costly mistakes:** Learn from someone else’s experience rather than your own expensive failures
- **Compress timeframes:** What might take you 5 years to learn on your own can be taught in 6-12 months with proper guidance
- **Get accountability:** A mentor keeps you focused and moving forward when challenges arise
- **Access their network:** Leverage your mentor’s relationships with brokers, lenders, and other investors
- **Receive deal-specific guidance:** Get expert input on your actual deals, not just theoretical knowledge
- **Develop the right mindset:** Learn the mental models and belief systems that separate successful investors from strugglers
When evaluating mentorship programs, look for coaches who have significant personal investing experience (not just teaching experience), provide ongoing support beyond initial training, offer community and networking opportunities, have verifiable student success stories, and teach proven systems rather than unproven theories.
### Join 1,700+ Active Investors in the Warrior Community
The Warriors collectively own approximately 260,000 units and have created over $2 billion in real estate value. These aren’t theoretical students—they’re active investors building real wealth through multifamily real estate.
Rod Khleif’s Warrior Program combines in-depth tactical training with high-performance mindset coaching. This isn’t just education—it’s mentorship, accountability, deal flow, investor training, and a built-in network of top operators.
Warriors receive Rod’s private phone number for immediate access anytime they need guidance. This level of accessibility is virtually unheard of in the industry.
[Explore Warrior Program Options](https://rodkhleif.com/rod-khleif-warrior-program/)
## Creating Your Personal Education Plan
Now that you understand the five pillars of multifamily education, here’s how to create your personalized learning roadmap:
### Months 1-2: Foundation Building
- Read 3-5 foundational multifamily investing books
- Listen to 20+ podcast episodes from top multifamily investors
- Join BiggerPockets and read through popular multifamily threads
- Attend free local real estate meetups and investor events
- Start following multifamily markets that interest you
### Months 3-4: Deal Analysis Mastery
- Analyze your first 50 multifamily properties
- Build or acquire a comprehensive underwriting model
- Study actual offering memorandums from properties on the market
- Take a course or attend a bootcamp focused on multifamily analysis
- Start building relationships with commercial real estate brokers
### Months 5-6: Advanced Training and Networking
- Attend a comprehensive multifamily training event or bootcamp
- Consider joining a mentorship program or coaching community
- Network intensively with other investors and industry professionals
- Begin building your investor database for future capital raises
- Tour properties in your target markets with brokers
### Months 7-12: Deal Execution Preparation
- Analyze your next 50+ properties with increasingly refined criteria
- Build your team (attorney, CPA, lender, property manager)
- Consider partnering with an experienced investor on your first deal
- Continue education through conferences, webinars, and coaching
- Submit your first letters of intent and offers on properties
## Free Resources to Accelerate Your Education
While premium education programs provide the fastest path to success, there are also numerous free resources you can leverage:
- **Saturday Webinars:** Rod Khleif hosts a free webinar every Saturday where he teaches multifamily strategies and hosts live “Ask Me Anything” sessions. This is one of the most accessible resources in the industry—you can literally ask Rod questions directly and get expert answers for free
- **Podcasts:** Beyond Rod’s podcast, explore shows from Joe Fairless, Michael Blank, and Jake & Gino
- **Online forums:** BiggerPockets, Reddit’s r/CommercialRealEstate, and Facebook groups
- **YouTube:** Many successful investors share deal analyses and market insights
- **Broker webinars:** Major commercial brokerages host quarterly market update webinars
- **Local REIAs:** Real Estate Investment Associations offer networking and education
## The Investment That Pays the Highest Returns
Here’s something most people don’t realize: **investing in your education provides higher returns than almost any property investment you’ll ever make.**
Consider this scenario: You invest $15,000 in comprehensive multifamily education and mentorship. Through that education, you avoid overpaying for your first property by $100,000 (extremely common for uneducated investors). You also learn strategies that increase NOI by $25,000 annually. That single avoided mistake and operational improvement turns your $15,000 education investment into a 800%+ return.
But the returns compound over time. Better education leads to better deal analysis, which leads to better acquisitions, which leads to stronger returns, which leads to more investor capital for future deals, which leads to the ability to scale faster.
**The most successful multifamily investors never stop learning.** They attend conferences, join masterminds, hire coaches, and constantly upgrade their knowledge. Education isn’t a one-time event—it’s a continuous commitment to growth.
## Frequently Asked Questions About How to Become a Successful Mutifamily Investor
**How long does it take to educate yourself enough to invest in multifamily real estate?**
Most successful multifamily investors spend 6-18 months intensively educating themselves before closing their first deal. However, the timeline varies based on your learning speed, available time, and whether you’re learning independently or through structured mentorship. With an intensive program like Rod Khleif’s Warrior Program, some investors close their first deal within 6-12 months. The key is not rushing the education process—a few extra months of learning can save you hundreds of thousands in mistakes. That said, education is ongoing. Even experienced investors continue learning throughout their careers to stay current with market conditions, financing options, and operational strategies.
**Is it possible to learn multifamily investing for free, or do I need to invest in paid education?**
You can absolutely learn the basics of multifamily investing for free through podcasts, books, online forums, YouTube videos, and free webinars like Rod’s Saturday training sessions. Many investors have successfully educated themselves using only free resources. However, paid education and mentorship dramatically accelerate your learning curve and help you avoid costly mistakes. Consider that one major error on a multifamily deal can cost $50,000-$100,000 or more. If a $10,000-$20,000 education investment helps you avoid even one significant mistake, it pays for itself many times over. Additionally, paid programs provide structured learning paths, personalized feedback on your deals, done-for-you documents, and access to networks of experienced investors. The best approach is often combining free resources for foundation building with targeted paid education for advanced topics and mentorship.
**What’s the difference between reading books and attending a multifamily bootcamp or joining a coaching program?**
Books provide valuable foundational knowledge and can be consumed at your own pace for minimal cost. However, they have significant limitations: they can’t provide feedback on your specific deals, answer your unique questions, connect you with other investors, or hold you accountable to taking action. A quality bootcamp or coaching program offers structured, comprehensive education that covers topics in a logical sequence; live interaction where you can ask questions and get immediate answers; deal analysis feedback on your actual properties from experienced investors; networking opportunities with other students and industry professionals; done-for-you templates, documents, and systems you can implement immediately; accountability to actually take action rather than staying in perpetual learning mode; and ongoing support as you encounter challenges. Think of books as the foundation and coaching as the accelerator. Most successful investors use both.
**How do I know if a multifamily education program or mentor is legitimate and worth the investment?**
Evaluate education programs and mentors using these criteria: Actual investing experience—the instructor should have personally owned and managed multifamily properties, not just taught others how to do it. Rod Khleif, for example, has owned over 2,000 properties across 40+ years. Verifiable student results—look for specific testimonials with real numbers and outcomes from actual students. The Warrior Program has helped create a community that collectively owns 260,000+ units. Comprehensive curriculum—the program should cover all aspects of multifamily investing, not just one narrow topic. Ongoing support—look for programs that provide continued access to the instructor and community, not just a one-time event. Transparent pricing—legitimate programs are upfront about costs. Beware of high-pressure sales tactics or promises that sound too good to be true. Accessibility—the best mentors make themselves available to students for questions and guidance. Start by attending free events or webinars to evaluate the teaching style and expertise before committing to paid programs.
**Should I focus on getting a degree in real estate or pursue practical multifamily education instead?**
This depends on your goals and current situation. A formal real estate degree can provide valuable foundational knowledge in finance, economics, and property management. Universities like Harvard, MIT, and Cornell offer respected real estate programs. However, traditional degree programs have drawbacks for aspiring multifamily investors: they’re expensive (often $50,000-$200,000+), time-consuming (2-4 years), focused on theory rather than practical application, and not specifically tailored to multifamily investing. Most successful multifamily investors don’t have formal real estate degrees. Instead, they pursue practical education through mentorship programs, bootcamps, and hands-on experience. If you’re already in college, a real estate degree can be valuable. But if you’re a working professional looking to transition into multifamily investing, practical education through proven programs and mentorship will get you to your first deal much faster and at a fraction of the cost. You can always pursue formal education later if desired.
**What’s the best way to practice multifamily deal analysis before I have money to invest?**
Practicing deal analysis costs nothing but your time and is one of the most valuable educational activities you can undertake. Here’s how to practice effectively: Find properties to analyze on LoopNet, CommercialCafe, Crexi, and other commercial real estate listing sites. Create or acquire a comprehensive underwriting spreadsheet or use specialized software. Commit to analyzing 100+ properties before making your first offer—this builds pattern recognition. Request actual offering memorandums from brokers for properties in your target market. Run the numbers using the information provided and note your questions. Study rent rolls from listed properties to learn how to evaluate income. Compare your analyses with actual sale prices when properties close to calibrate your underwriting. Join the Warrior Program or similar communities where experienced investors will review your deal analyses and provide feedback. Attend broker tours of properties on the market to see how your paper analysis compares to the physical reality. Practice is free, builds expertise, and costs you nothing. By the time you’re ready to invest, you’ll have developed the skills to quickly identify winning deals.
**Is networking really necessary for multifamily investing success, or can I succeed working alone?**
While technically possible to invest alone, networking exponentially increases your success rate and speed of growth in multifamily real estate. Here’s why networking is critical: Deal flow comes through relationships—brokers share off-market opportunities with investors they know and trust. Capital raising requires relationships—you need investors who believe in you and your expertise. Your team is built through networking—finding quality lenders, attorneys, property managers, and contractors happens through referrals. Learning accelerates through peer relationships—other investors share lessons learned, market insights, and strategies that books don’t teach. Partnerships expand opportunities—many deals require partners with complementary skills or capital. Support during challenges comes from community—when problems arise, having experienced investors to consult is invaluable. The most effective networking happens through quality communities like the Warrior Program where members actively collaborate, joint venture on deals, and support each other’s success. Attending conferences, local meetups, and joining mastermind groups should be core components of your education plan. Real estate is a relationship business—your network often determines your net worth.
**What topics should I prioritize learning first as a complete beginner?**
As a complete beginner, focus on building your foundation in this order: First, understand how multifamily properties create wealth—learn about cash flow, appreciation, loan paydown, and tax benefits. This helps you understand why you’re investing. Second, learn basic multifamily terminology and metrics—cap rates, NOI, cash-on-cash return, IRR, DSCR, LTV, etc. You need to speak the language. Third, study deal analysis fundamentals—how to evaluate income, expenses, and calculate returns. This protects your capital. Fourth, understand different property classes (A, B, C, D) and financing options—this helps you identify which properties match your goals and capabilities. Fifth, learn market analysis basics—how to identify strong markets with good fundamentals. This determines where you invest. Once you have these foundations, progress to advanced topics like syndication structures, capital raising, property management, and value-add strategies. The best way to build this foundation quickly is through a structured program like Rod’s Multifamily Bootcamp, which takes you through these topics in a logical sequence over three intensive days. Trying to learn everything at once leads to confusion—follow a proven curriculum.
### Ready to Transform Your Financial Future Through Multifamily Real Estate?
Your journey to building generational wealth through multifamily investing starts with a single step: committing to world-class education.
Join Rod Khleif’s free Saturday webinar to experience his teaching style and get your questions answered directly. Or explore the Warrior Program to access comprehensive mentorship, unlimited deal analysis, done-for-you investor documents, and a community of 1,700+ active investors.
Don’t spend years learning through expensive mistakes. Learn from someone who’s already walked the path and successfully built a portfolio of 2,000+ properties across four decades.
[Start Your Education Journey Today](https://rodkhleif.com/)
Education is the ultimate leverage in multifamily real estate investing. While you can’t control interest rates, market cycles, or economic conditions, you can always control how much you know and how effectively you apply that knowledge. Invest in your education first, and the returns will compound throughout your entire investing career.
*Disclaimer: This artical was written with the help of AI and reviewed by Rod and his Team.*
**Categories:** Real Estate
---
### [Which books best explain multifamily investing and apartment syndications?](https://rodkhleif.com/which-books-best-explain-multifamily-investing-and-apartment-syndications/)
**Published:** January 7, 2026
**Author:** Alex Khleif
**Content:**
> *I’ve read hundreds of real estate books throughout my career, and I want to share the ones that actually changed how I think and invest. The best multifamily books compress decades of trial-and-error learning into readable formats that accelerate your education. Here’s what I look for in a great multifamily book: it teaches real frameworks, not theory, and it’s written by someone who actually builds successful portfolios. Most people read random books and get a mixed bag of solid wisdom and terrible advice. Let me recommend the specific books that shaped my thinking and continue to guide my investment decisions.- Rod Khleif*
If you’re trying to learn multifamily in 2026, “more books” isn’t the answer. The right books are the ones that teach you how apartments actually work as a business (income, expenses, NOI), how value is created (not hoped for), and how to structure and communicate deals responsibly. This guide breaks down the best books for multifamily investing and syndications into clear categories. Under each category, I’m also linking to the most relevant resources on RodKhleif.com so you can apply what you learn instead of letting it sit on a shelf.
## The best beginner roadmap (learn the full process end-to-end)
If you’re new, you want one clean overview that connects the dots: deal flow, underwriting basics, financing, due diligence, and what “operators actually do.” Without a roadmap, beginners tend to binge content and still feel lost.
**Book picks**
[**How to Create Lifetime Cashflow Through Multifamily Properties** (Rod Khleif)](https://www.amazon.com/Lifetime-Cashflow-Through-Multifamily-Properties/dp/0999225014/ref=sr_1_1?adgrpid=185684971425&dib=eyJ2IjoiMSJ9.wPom9effP8f18yayYhKUBnLIHBqO1NQaT-uvyrxrllzDxaXpXLwK5B7sekGXBClIiWCvUGSta_BT_XTAliL6hEL0qa7mkxKx-eK7lo0e5wPHXvstqEfY7YLvnatkvurAhv4S_YoVbEK1Od0YW5a0J65wqnRrrXR1KLWO_29uM1u4lNDWJh6CUjXlrYcNxF7xWEaRx-KqJl7UCURRtndfKMpjM6weqeSiKHCdIYs19B8.LsjBmIe2Mctjz2aWL4sTl2UUtsyrcdG3DVaMvI0BsWk&dib_tag=se&hvadid=779674212947&hvdev=c&hvexpln=0&hvlocphy=9197794&hvnetw=g&hvocijid=14632120164193972397--&hvqmt=e&hvrand=14632120164193972397&hvtargid=kwd-1640876219942&hydadcr=22592_13821282_8484&keywords=how+to+create+lifetime+cashflow&mcid=52c630841e3e3ac68a97c84603849a62&qid=1767817280&sr=8-1) is a strong “start here” read because it’s written to move you from curiosity to action with a clear step-by-step framework.
**Rod’s resources to pair with this category**
Beginner hub:
Free eBook:
Books page:
*How to use this category:* Don’t try to “finish” learning. Read enough to understand the flow, then immediately start analyzing deals so the concepts stick.
## Deal analysis and underwriting (where confidence is built)
Underwriting is the skill that turns “education” into investing. In 2026, it’s not just about rent growth and cap rates. Expenses, capex, insurance, taxes, and debt structure can swing the outcome fast. Your goal is to build judgment through reps and realistic assumptions.
**Book picks**
If you want a value-add mindset that’s easy to digest, [**Multi-Family Millions** (David Lindahl)](https://www.google.com/search?q=Multi-Family+Millions+(David+Lindahl)&rlz=1C5CHFA_enUS913US913&oq=Multi-Family+Millions+(David+Lindahl)&gs_lcrp=EgZjaHJvbWUyBggAEEUYOTIICAEQABgWGB4yCAgCEAAYFhgeMgoIAxAAGAoYFhgeMg0IBBAAGIYDGIAEGIoFMgoIBRAAGIAEGKIEMgoIBhAAGKIEGIkFMgcIBxAAGO8F0gEHMjk2ajBqN6gCALACAA&sourceid=chrome&ie=UTF-8) is a classic for understanding how operators look for repositioning opportunities and increase NOI.
If you want to go deeper and build real financial skill, [**Real Estate Finance & Investments** (Brueggeman & Fisher)](https://www.google.com/search?q=real+estate+finance+%26+investments+(brueggeman+%26+fisher)&rlz=1C5CHFA_enUS913US913&oq=Real+Estate+Finance+%26+Investments+(Brueggeman+%26+Fisher)&gs_lcrp=EgZjaHJvbWUqCggAEAAY4wIYgAQyCggAEAAY4wIYgAQyBwgBEC4YgAQyCAgCEAAYFhgeMggIAxAAGBYYHjIICAQQABgWGB4yCAgFEAAYFhgeMggIBhAAGBYYHjIICAcQABgWGB4yCAgIEAAYFhgeMggICRAAGBYYHtIBBzI2N2owajmoAgCwAgA&sourceid=chrome&ie=UTF-8) is a more serious foundation for understanding debt, risk, and decision-making.
**Rod’s resources to pair with this category**
Underwriting tool:
Forms/checklists:
Finding & analyzing deals article:
## Syndication fundamentals (how apartment syndications actually work)
This is the category you said I missed—and you’re right: if someone wants to understand apartment syndications in a clean, beginner-friendly way, Rod’s syndication guide should be included up front.
In 2026, syndication knowledge needs to cover two things at once: the mechanics (GP/LP roles, fees, waterfalls, reporting) and the reality (raising capital is a trust business, and execution is everything).
**Book picks**
[**The Hands-Off Investor** (Brian Burke)](https://praxcap.com/the-hands-off-investor/) is one of the clearest explanations of how syndications work from an investor perspective, including how to evaluate sponsors and reduce risk.
[**Best Ever Apartment Syndication Book**](https://www.bestevercre.com/books) (Joe Fairless & Theo Hicks) is a tactical operator-oriented walkthrough that helps you understand how syndicators find deals, structure offerings, and build teams.
**Rod’s resources to pair with this category**
Free download (Guide to Multifamily Syndications):
Syndication resource hub:
What is multifamily syndication? (complete guide):
The syndication business (launching a syndicate):
## Capital raising, investor trust, and syndication marketing (the “soft skills” that decide outcomes)
Most people treat capital raising like a script problem. It’s not. It’s a clarity and trust problem. In 2026, investors are asking better questions, underwriting is more conservative, and transparency matters more than ever. If you plan to raise money, you need systems for communication, education, and credibility—before you ever ask for a dollar.
**Rod’s resources to pair with this category**
Raising money overview:
Syndication marketing framework:
Deal structures overview (alignment & waterfalls):
**Apply it immediately**
As you read, practice explaining a deal in plain English: what it is today, what’s broken, what the plan is, what could go wrong, and how investors are protected. If you can’t explain it clearly, you don’t understand it yet.
## Due diligence and operations (where beginners get hurt)
Multifamily is a business wrapped in real estate. That means you can “win” the spreadsheet and still lose in operations if you don’t verify reality. Beginners often underestimate how much due diligence matters, especially around deferred maintenance, collections, payroll, insurance history, and renovation timelines.
**Rod’s resources to pair with this category**
Due diligence guide (free download):
Due diligence resource hub:
Warrior Wins (real deal case studies):
*2026 best practice:* Learn due diligence before you have a deal under contract. Emotional attachment is expensive. Checklists and verification save you.
## Financing and risk discipline (the 2026 reality check)
In 2026, financing terms and risk tolerance can change quickly. Beginners should understand the basics of how multifamily financing works, what lenders care about, and how refinance risk affects deals. Even if you’re not borrowing yet, knowing the constraints makes your underwriting more realistic.
**Rod’s resources to pair with this category**
Financing overview:
### Path A: Beginner → Confident analyzer
Start with Rod’s roadmap, then immediately use the underwriting tool and forms to analyze real deals every week. Add one due diligence resource so you understand what’s actually being verified in the field. This path is perfect if you’re building competence before going active.
Start here:
Underwrite here:
Learn due diligence here:
### Path B: Aspiring syndicator (GP track)
Start with Rod’s Guide to Multifamily Syndications and syndication hub, then layer in capital raising and marketing systems. Pair that with a syndication book that explains sponsor/investor risk clearly, and study real case studies to learn how operators handle problems.
Syndication guide:
Syndication hub:
Capital raising:
Case studies:
## A quick “apply what you read” system (this is the multiplier)
Here’s the simple rule: every time you read, create an output. Underwrite one deal. Write a one-paragraph deal summary. Identify three risks. Draft five questions you’d ask a broker or operator. The output forces clarity, and clarity is what gets you results.
If you want structure and accountability around this, Rod’s training options are the fast lane (especially if you’re trying to go from learning to executing with a community and coaching).
Bootcamp:
Coaching / Warrior Program:
***Important note:** Syndications involve legal and compliance considerations. This article is educational and not legal, tax, or investment advice. Always consult qualified professionals for your specific situation. This article was written with the help of AI and reviewed by Rod and his team.*
**Categories:** Blog, Featured, Multifamily Investing
---
### [How Do You Find Mentorship for Multifamily Real Estate?](https://rodkhleif.com/how-do-you-find-mentorship-for-multifamily-real-estate/)
**Published:** September 18, 2025
**Author:** Alex Khleif
**Content:**
> I serve as mentor to hundreds of investors, and I’ve learned exactly what separates great mentorship from mediocre coaching that wastes your time and money. Finding a great multifamily mentor requires identifying someone with proven track record, real accessibility, and teaching style that matches how you learn. Here’s what most mentors don’t do: they’re not still actively investing, they’re not scaling, or they’re not genuinely invested in your personal growth. I built my mentorship around the principles I wish I’d had as a broke investor trying to buy my first property. Let me show you what criteria to look for so you find mentorship that actually transforms your results. – Rod Khleif
Finding mentorship for multifamily real estate deals can dramatically accelerate your success. You’ll avoid costly mistakes, learn proven strategies, and gain access to opportunities that might otherwise take years to uncover on your own. The right mentor doesn’t just teach you, they save you money, help you make money faster and they open doors. In this guide, we will explain how to find mentorship for multifamily real estate. You can choose from free community groups or structured coaching programs. We will show you what to look for in a mentor relationship.
## **Why Mentorship Matters in Multifamily**
Multifamily investing is not simple. Between underwriting, [raising capital](https://rodkhleif.com/podcasts/capital-raising-in-multifamily-real-estate/), and managing properties, there are countless moving parts. Books and podcasts can give you knowledge, but mentorship provides real-time feedback and accountability.
Research inside investor communities shows that those who engage with mentors and accountability groups close deals faster, scale portfolios larger, and remain active through market cycles . In other words, mentorship shortens the learning curve and provides the support needed to persevere.
## **1. Join Local Real Estate Investor Associations (REIAs)**
One of the most accessible ways to find a mentor is through your local REIA. These groups host monthly meetings where experienced investors share insights and newcomers can [network](https://rodkhleif.com/12-tips-for-successful-networking/).
At these events:
- Introduce yourself to speakers and active members.
- Ask if they’ve mentored others before.
- Volunteer to help with event organization to show initiative.
The in-person connections can lead to lasting relationships, especially when paired with consistent follow-ups.
## **2. Tap Into Online Communities**
Digital platforms make mentorship more accessible than ever. Communities like **BiggerPockets** allow you to interact with seasoned investors, join niche subgroups, and participate in “deal review” threads.
On LinkedIn, Instagram, and Facebook:
- Follow multifamily thought leaders.
- Join Facebook Groups like “[Multifamily Real Estate Investing](https://www.facebook.com/groups/multifamilyrealestateinvesting)” Group with over 55k members as of 9/25.
- Engage with their posts (ask meaningful questions, not just “great post”).
- Share your own journey to attract experienced mentors who resonate with your drive.
Some online mentors will even jump on Zoom calls to review your underwriting or capital raise strategy if you’ve shown genuine effort first.
## **3. Attend Workshops, Bootcamps, and Conferences**
Live events are mentorship goldmines. You get education, but more importantly, you get proximity. Being in the same room with active investors creates opportunities to form mentorship relationships naturally.
Look for:
- [**Multifamily bootcamps**](https://rodkhleif.com/checkouts/virtual-47/) that combine teaching with networking.
- National conferences that attract top operators.
- Smaller workshops where you can interact more personally with the speaker.
Pro tip: Don’t just attend, participate. Ask thoughtful questions, volunteer to share your goals, and follow up after the event.
## **4. Reach Out Directly to Experienced Investors**
[Cold outreach](https://rodkhleif.com/podcasts/from-cold-calling-to-building-a-350m-property-portfolio/) works when done respectfully. Identify successful operators in your market and send a concise message:
- Share who you are and what you’re working on.
- Express why you admire their path.
- Offer value (for example, helping analyze deals or doing market research).
Many investors are willing to mentor beginners who show initiative and persistence. The key is to respect their time and approach the relationship as a giver, not just a taker.
## **5. Connect With Property Managers and Brokers**
Mentors don’t always come from the investing side. [Multifamily property managers](https://rodkhleif.com/how-to-hire-a-third-party-property-management-company/) and brokers see deals every day and understand what separates success from failure.
- **Property managers** can mentor you on operations, tenant retention, and expense control.
- **Brokers** can guide you on deal flow, underwriting assumptions, and how to build credibility with sellers.
[Building these relationships](https://rodkhleif.com/podcasts/growing-wealth-by-going-bigger/) can give you “informal mentorship” that still shapes your growth.
## **6. Leverage Educational Platforms That Include Mentorship**
Some real estate education companies provide structured mentorship as part of their programs. This is where you get both formal learning and built-in accountability.
For example, Rod Khleif’s [**Warrior Program**](https://rodkhleif.com/rod-khleif-coaching-program/) combines:
- A network of 1,700+ active multifamily investors.
- Direct coaching from experienced mentors who’ve closed deals.
- Accountability groups to keep you moving forward .
- Access to tools, resources, and partnerships that extend beyond theory.
This structured model ensures you’re never “going it alone” and is often the fastest path to scaling.
## **7. Start or Join Accountability Groups**
Accountability groups are smaller circles of investors who meet regularly to share progress, challenges, and wins. Inside Rod Khleif’s community, for example, investors meet weekly to review [underwriting](https://rodkhleif.com/commercial-real-estate-underwriting-tool/), broker outreach, and capital raising .
Why they work:
- They keep you consistent.
- You learn from peers who may be just a step ahead.
- They often lead to partnerships on actual deals.
You can start your own accountability group through Meetup.com, social media, or by organizing people you’ve met at events.
## **8. Build Relationships With Attorneys and Lenders**
Attorneys, lenders, and even insurance brokers can act as mentors in their own way. They’ve seen hundreds of deals and know what pitfalls to avoid. Many will happily explain deal structures, financing nuances, or compliance tips if you build trust and show appreciation for their expertise.
This type of “situational mentorship” can fill in gaps as you build your network of guides.
## **9. Offer Value First**
No matter which path you pursue, mentorship works best when it’s a two-way street. Before asking someone to guide you, [consider what you can offer](https://rodkhleif.com/podcasts/finding-your-superpower/):
- Administrative help.
- Market research.
- Digital marketing support.
- Assisting on [due diligence](https://rodkhleif.com/a-comprehensive-guide-to-multifamily-due-diligence/).
Even small contributions can demonstrate your seriousness and earn you deeper mentorship.
## **10. Align With a Comprehensive Mentor**
While you can “mix and match” mentorship from different sources, the most effective path is often aligning with a mentor or program that provides a complete ecosystem: education, accountability, community, and deal support.
That’s why so many investors gravitate toward structured programs like Rod Khleif’s Warrior Program. It offers:
- **Live events and bootcamps** where you learn directly from practitioners.
- **Free resources** like Rod’s [*Guide to Apartment Syndications*](https://rodkhleif.com/guide-to-multifamily-syndications/), his top-ranked *[Lifetime CashFlow Podcast](https://rodkhleif.com/lifetime-cashflow-podcast/)*, and extensive blogs.
- **Community support** that fosters mentorship beyond just the coaches—many Warriors close deals together.
## **Final Thoughts: How to Take Action**
Finding a mentor for multifamily real estate is less about luck and more about strategy. Show up consistently, add value first, and immerse yourself in the communities where successful investors gather.
You can find support through local REIAs, online forums, accountability groups, or programs like Rod Khleif’s Warrior Program. The path is available; you just need to take the first step.
**Remember:** Mentorship isn’t just about knowledge. It’s about access, accountability, and belief. The right mentor can help you see opportunities you didn’t know existed and push you to achieve goals you once thought were out of reach.
## **FAQ: How to Find Mentorship for Multifamily Real Estate Deals?**
**Why is mentorship important in multifamily real estate?
Mentorship shortens the learning curve and provides accountability. A mentor can help you with underwriting, raising capital, managing brokers, and avoiding costly mistakes. They also provide encouragement and perspective, especially in tough markets. Investors with mentors typically close deals faster and scale portfolios more effectively than those who go it alone. Mentor, Rod Khleif, is known for being fully transparent about mistakes and challenges he’s faced in the past so he can help his student avoid them.
**How can I find a multifamily real estate mentor?
You can connect with mentors through local REIAs, real estate meetups, and online platforms like BiggerPockets. Social media communities on LinkedIn, Instagram, and Facebook are also effective. Attending bootcamps, workshops, or multifamily conferences gives you face-to-face access to experienced operators. Structured programs like Rod Khleif’s Warrior Program offer direct mentorship, accountability groups, and deal support.
**What is an accountability group in multifamily investing?
An accountability group is a small circle of investors—usually 5–10 people—who meet regularly to share progress, challenges, and wins. They review underwriting, capital raising, and deal strategies together. Members push each other to take action, and partnerships often form within the group. In Rod Khleif’s Warrior Program, accountability groups are a core component and have helped many investors close their first deals.
**Are paid mentorship programs worth it?
Paid mentorship programs can be extremely valuable if they include structured guidance, accountability, and community support. They provide direct access to experienced investors, proven systems, and deal flow that’s hard to replicate alone. For example, Rod Khleif’s Warrior Program offers one-on-one mentorship, a network of over 1,700 active multifamily investors, and resources designed to help members take action quickly. His program is well respected, with over 260,000 student owned units and hundreds of case studies.
**What are the risks of choosing the wrong mentor?
A poor mentorship match can waste time and money. Risks include working with someone who overpromises, lacks real deal experience, or doesn’t have your best interests in mind. Always vet potential mentors by asking about their track record, the size and type of deals they’ve done, and speaking with past students or partners.
**How do I know if I’m ready for a mentor?
You’re ready for a mentor if you’ve done basic education (books, podcasts, online courses) and are actively looking for deals or partners. Mentors value students who take initiative. If you’re committed to taking action and open to feedback, you’ll benefit from mentorship, even if you’re just starting out.
**What are the best events to find mentors for multifamily real estate?
Multifamily bootcamps, REI conferences, and real estate expos are excellent places to meet mentors. These events attract top operators and active investors, creating opportunities for networking and mentorship. Look for events that combine teaching with networking, such as Rod Khleif’s Multifamily Bootcamps, where attendees gain both education and access to a powerful community.
**What free mentorship options are available?
If you’re not ready for a paid program, you can still find mentorship through free avenues: joining REIAs, participating in online forums, starting an accountability group, or connecting with experienced investors on LinkedIn. Many podcasts, blogs, and free guides from thought leaders like Rod Khleif also provide mentorship-style insights at no cost.
*Disclaimer: This article was written with the help of AI and reviewed by Rod’s team.*
**Categories:** Blog, Psychology of Success, Real Estate
**Tags:** how to find a multifamily mentor, multifamily investing, multifamily mentorship, multifamily real estate
---
### [What You Should Know About Prepayment Penalties](https://rodkhleif.com/what-you-should-know-about-pre-payment-penalties/)
**Published:** December 14, 2025
**Author:** PerryL
**Content:**
In multifamily real estate financing, most transactions involve a combination of debt and equity. In most debt financing, a commercial mortgage loan with a fixed term of five to twenty-five years is used. The lenders in these agreements structure them in a way as to gain a predictable income in terms of interest. However, borrowers sometimes repay their debts before they are due. In such cases, the lenders face a loss of interest income. To cover this loss, lenders charge prepayment penalties.
In this updated 2026 edition, we will examine:
**What Prepayment Penalties Are
**Why pre-payment penalties can sometimes be beneficial
**Current market and regulatory developments in prepayment penalties
As you complete this lesson, you will grasp an important part of prepayment penalties in loan agreements, particularly in light of the increasing multifamily financing market in 2026.
## **What Is a Prepayment Penalty?**
A prepayment penalty is a charge imposed by lenders on borrowers for repaying a loan before the end of its term. Suppose you took a five-year adjustable-rate mortgage for a 50-unit multifamily property, but you refinance or sell your property in two years when you come across a better interest rate; in such a case, you will have to pay a prepayment penalty.
Although it is financially prudent to refinance to lower your monthly payments, this is contingent on the magnitude and nature of the penalty involved.
## **Why Do Lenders Charge Prepayment Penalties?**
Lenders allocate budgetary allowances for expected returns based on interest payments over the loan term. Pre-payment prevents them from getting higher returns because they will not have to work with higher interest rates due to early returns of the principal amount.
**2026 Market Insights:
As a consequence of this instability in the economy and with forecasts of interest rate fluctuations continuing in 2026, lenders have become increasingly prudent in their lending practices and have turned to prepayment penalties.
## **Kinds of Prepayment Penalties in 2026**
### **1. Prepayment Penalties: Soft & Hard**
**Soft Penalty:** Borrowers are allowed to sell the collateral without incurring a penalty but with a refinance.
**Hard Penalty:** The penalty will be charged in case of prepayment, which might be because of sale or refinance.
**Calculation Methods:
- Fixed Amount: A fixed amount such as $5,000.
- Percentage of Loan Balance
This cost will reduce with time, such as 5% in year one, dropping each year.
- Percentage of Interest: Tied to a part of the outstanding interest payments due, such as 75% of the interest in 12 months.
### **2. Defeasance**
A characteristic of Commercial Mortgage-Backed Securities (CMBS) lending, “defeasance” involves prepaying a mortgage with a portfolio of Treasury obligations with returns equal to those of the interest in the remaining life of a mortgage. While defeasance shields investors in a mortgage-backed security, it can be very expensive when accomplished before a mortgage is repaid.
### **3. Yield Maintenance**
Yield maintenance protects a lender from a decrease in interest income when a borrower fails to make payments. Yield maintenance can be calculated if the present value of payments owed on a loan is measured against the income on a Treasury or other comparable instrument.
## **“New Developments to Understand Regarding Prepayment Penalties in 2026”**
**Prepayment Clauses Under Scrutiny:** Some state regulators and consumer advocates have called for increased prepayment notice and limits on the level of prepayment penalties in an attempt to better protect consumers.
**Technology-Driven Loan Servicing
Advanced technology-driven systems have enabled more accurate calculations of prepayment charges, and borrowers can evaluate these charges in real time.
**Green Financing Incentives:** A growing number of lenders in 2026 will begin waiving or reducing prepayment charges for borrowers taking out refinance loans in order to implement energy-efficient solutions.
## **When Can a Prepayment Penalty Be Worth While?**
**Profitable Sale of a Property at a Significant Profit:** Although a penalty will have to be paid, a lucrative profit may make it worthwhile to repay a loan early.
**Refinancing for Savings of Interest:** When refinancing saves interest with a lower rate, which in turn saves money over a fixed time, it is justifiable to make a payment.
## **FAQ: What You Should Know About Prepayment Penalties in 2026**
### **What is a prepayment penalty in a real estate transaction?**
**Prepayment Penalties
A prepayment penalty is a charge your lender imposes if you repay a loan before the end of the predetermined term. Your lender may charge you a prepayment penalty if you refinance a loan because of a better interest rate, if you sell your property early, among other reasons. As of 2026, prepayment penalties remain prevalent in multifamily and commercial loans, particularly with fixed-rate debt.
### **Why do lenders charge prepayment penalties?**
A predictable series of interest payments is how lenders structure their loans. With early payoff, lenders will have a reduced and uncertain return, which they can invest in another product. Prepayment penalties shield this return and make it simpler for lenders to estimate a loan’s pricing in an uncertain interest rate environment in 2026.
### **Will late payment charges become less common in 2026?**
Yes. Even in their adjustment to rate shocks over the last years, prepayment penalties have remained a common part of lending in multifamily and commercial mortgages. They appear most frequently in fixed-rate, CMBS, and agency loans, or in any transaction where a fixed capital commitment is being locked in by a lender.
### **What’s a prepayment charge? Can a soft prepayment charge be avoided?**
Soft prepayment penalty: You can transfer your ownership without any charge, but if you refinance your purchase, you will be charged a prepayment penalty. A hard prepayment penalty charges you regardless of whether you refinance your purchase or you’re selling it. A hard prepayment penalty gives you less flexibility in exit options but with a better rate of interest.
### **How are prepayment fees calculated in 2026?**
Usually, you will notice one or more of the following:
- Fixed dollar amount – A flat rate charge (for example, $5,000).
- Percentage of outstanding balance – Usually a step-down schedule (5% in year one, 4%, 3%, and so on).
- Percentage of remaining interest – A part of your interest payments over a fixed time, such as the next 6-12 months.
With larger commercial loans, you need to watch out for defeasance or yield maintenance clauses, which are used to protect the bondholders’ yield or the bond’s interest rate.
### **What is defeasance, and how does it work?**
*Defeasance* remains a prevalent practice in CMBS lending in 2026. Although it does not actually “repay” the debt, you can think of it this way: you replace this payment stream with a new portfolio of Treasury or similar obligations with an equivalent cash flow. While this preserves your income commitments to your bondholders, it can become very complicated and expensive if you do it early in your term.
### What is Yield Maintenance?
Yield maintenance is a prepayment structure in which you can repay your loan so that you will have earned exactly as much if you had simply retained your money in your own loan. The prepayment charge computes based on the present cost of additional payments in contrast with additional investment opportunities available in treasuries. A case where lower interest is higher than your interest attracts a rather high cost in yield maintenance.
### **What is shifting in prepayment penalties in 2026?**
Prepayment penalties in 2026 will follow a few trends in their appearance in these transactions:
“Regulatory pressure & transparency − Some states and regulators are pushing for greater disclosures and more borrower-friendly terms, especially with smaller multifamily and residential loans,”
Improved tech & modeling tools – Better lending servicing technology enables a borrower to estimate prepayment penalties in real time, making it simpler to project different dates of exit or refinance.
“Green” and impact-driven refinance incentives – Ever more lenders are receptive to lowering or forgoing charges in exchange for your refinance into borrowings linked with energy efficiency or ESG-positive upgrades.
### **Can a Prepayment Penalty Ever Be in My Favor As A Borrower?**
It can. Loans with better prepayment protection sometimes will have lower interest rates or better front-end terms because they provide a more predictable income stream for lenders. A reasonable prepayment penalty period may very well be a trade-off for investors in a higher-risk product.
### **When is it advisable to pay a prepayment penalty?**
Penalization by payment or agreement can be sensible in situations such as:
They see you’re making a healthy profit and that the net profit dwarfs your expense.
Refinancing into significantly better debt and interest savings are greater than the hit, which makes your financial situation better.
Your portfolio is being repositioned in 2026, and this will unlock equity for better investment, risk reduction, and/or loan consolidation.
The trick is to do the math: total penalty & cost vs. projected savings/profits.
### **How can I assess if refinancing will be worthwhile despite the “penalty” in 2026?**
“You or your advisor should model:”
The total prepayment penalty and closing cost
The new interest rate, amortization, and payment
“The breakeven point—how long it takes for savings to exceed the penalty,”
### **What do I want to inquire with my lender concerning prepayment charges before signing in 2026?**
Before closing on a 2026 loan, you’ll want to ask Is it a hard or soft punishment, and for how many years? Is it a step-down, yield maintenance, defeasance, or fixed fee structure? Could you provide example calculations for prepayments in years 2, 3, 5, and beyond? Are there exceptions or reductions (partial paydowns, green upgrades, interest-rate resets)?) Having clear answers to these important questions can help you negotiate better, plan your exits, and avoid costly surprises when you do decide to sell or refinance.
**Categories:** Blog, Raising Capital
---
### [What Are the Best Ways to Learn Apartment Investing Online?](https://rodkhleif.com/what-are-the-best-ways-to-learn-apartment-investing-online/)
**Published:** March 11, 2026
**Author:** Alex Khleif
**Content:**
### A Complete Stage-by-Stage Roadmap: With Every Top Resource Listed, Including Why Rod Khleif Is the Ultimate One-Stop Shop
Apartment investing has quietly become one of the most powerful wealth-building strategies available to everyday Americans. Unlike the volatility of the stock market or the ceiling of single-family rentals, multifamily real estate offers scalable, recurring income that compounds over time. The question most aspiring investors face isn’t whether to get into the game — it’s how to learn it properly without wasting years or thousands of dollars on the wrong resources.
The good news? You can build a serious, deal-ready education entirely online. You don’t need a real estate license, a finance degree, or a rich uncle. You need the right roadmap and the right mentors. This guide organizes the best online resources by learning stage — covering free content, courses, books, underwriting tools, market research, networking, and advanced topics — and within each category, you’ll find Rod Khleif’s resources listed right alongside the other top options.
Why does Rod Khleif appear in nearly every category? Because he has built the most comprehensive, most trusted, and most results-proven multifamily education platform in the industry — a genuine one-stop shop covering every stage of the learning journey. His students collectively own over 260,000 apartment units across the United States, with 373+ tracked deals closed and over $745 million in capital raised. Those aren’t marketing claims — they’re published on a live community dashboard. But we’ll get to that. First, let’s map out the full path.
## Build Your Foundation with Free Content
Every serious investor starts here. Before spending a dollar on courses or coaching, the internet provides an enormous amount of free, high-quality content to orient yourself in the multifamily space.
### Podcasts
Podcasts are the highest-leverage free learning tool available. You can absorb hours of expert conversation during a commute, workout, or household tasks. For apartment investing specifically, these are the shows worth your time:
**⭐ Lifetime Cashflow Through Real Estate Investing — Rod Khleif** The #1 ranked multifamily podcast with over 17 million downloads. Rod interviews successful investors, breaks down deals, and covers every aspect of apartment investing from beginner basics to advanced syndication. This is the single most listened-to free resource in the multifamily space. 👉 Listen at [rodkhleif.com/lifetime-cashflow-podcast](https://rodkhleif.com/lifetime-cashflow-podcast/) or on Apple Podcasts and Spotify.
**Apartment Building Investing with Michael Blank** — focused on multifamily syndication for beginners. 👉 Available on Apple Podcasts and Spotify
**Old Capital Real Estate Investing Podcast** — particularly strong on lending, financing, and debt structures. 👉 Available on Apple Podcasts and Spotify
### YouTube
YouTube is a visual classroom for apartment investing — especially useful for deal analysis walkthroughs, market overviews, and underwriting tutorials. Search for playlists on “multifamily investing basics” and focus on channels that show real numbers over lifestyle content.
**⭐ Rod Khleif YouTube Channel** — Free educational videos covering deal analysis, underwriting walkthroughs, market evaluation, mindset, and real investor interviews. One of the most substantive free video libraries in multifamily education. 👉 [youtube.com/@RodKhleif](https://www.youtube.com/@RodKhleif)
**Michael Blank** — focused on syndicating apartment deals. 👉 [youtube.com/@TheMichaelBlank](https://www.youtube.com/@TheMichaelBlank)
**Grant Cardone** — filter for fundamentals and deal content rather than lifestyle/marketing videos. 👉 [youtube.com/@GrantCardone](https://www.youtube.com/@GrantCardone)
### Webinars
Live webinars offer something podcasts and videos can’t: the ability to ask questions in real time and get answers directly from experienced investors.
**⭐ Rod Khleif’s Webinar** — Rod hosts a complete Multifamily Bootcamp where he teaches multifamily strategies and hosts live “Ask Me Anything” sessions. Attendees can ask Rod questions directly and get expert answers for free. This is one of the most accessible and valuable resources in the industry. It is like an intensive course with one of the most experienced multifamily investors in the country. 👉 Register at [rodkhleif.com](https://rodkhleif.com/)
**NMHC** — hosts quarterly market update webinars for the multifamily industry. 👉 [nmhc.org](https://www.nmhc.org/)
**Commercial lender webinars** — major lenders regularly host free educational sessions on financing structures. Check Marcus & Millichap, CBRE, and Walker & Dunlop event pages.
### Free Books and Written Resources
**⭐ Free Book: How to Create Lifetime CashFlow Through Multifamily Properties — Rod Khleif** Rod’s bestselling book is available for just the cost of shipping. A complete, step-by-step plan for building wealth through apartment investing. The author has used every principle in the plan. 👉 Claim it at [rodkhleif.com](https://rodkhleif.com/)
**⭐ Rod Khleif Blog and Article Library** — Comprehensive free written guides on every aspect of multifamily investing, from beginner fundamentals to advanced syndication. 👉 [rodkhleif.com/blog](https://rodkhleif.com/blog/)
## Structured Learning: Books and Courses
Free content is excellent for orientation, but structured education is where real comprehension develops. Books and courses fill the gaps that scattered YouTube and podcast learning creates.
### Books
**⭐ How to Create Lifetime CashFlow Through Multifamily Properties — Rod Khleif** Rod’s bestselling book and one of the most widely recommended starting points in multifamily education. Covers the full investment process from finding deals to managing properties for long-term cash flow. 👉 [https://www.amazon.com/Lifetime-Cashflow-Through-Multifamily-Properties/](https://www.amazon.com/Lifetime-Cashflow-Through-Multifamily-Properties/dp/0999225014)
**Financial Freedom with Real Estate Investing — Michael Blank** Particularly useful for understanding the path from zero to syndication. 👉 Available on [Amazon](https://www.amazon.com/)
### Online Courses
**⭐ Multifamily Investing Course — Rod Khleif** Rod’s signature course and the complete blueprint for finding, funding, evaluating, and closing profitable multifamily deals. Covers both solo investing and syndication tracks. Includes downloadable tools, templates, and real-world case studies. Backed by a money-back guarantee. 👉 [rodkhleif.com/courses](https://rodkhleif.com/courses/)
**⭐ Wholesaling Course — Rod Khleif** Teaches how to make money from multifamily real estate without owning it — structuring wholesale deals, finding buyers, and flipping contracts with no money down. A strong entry point for investors with limited capital. 👉 [rodkhleif.com/courses](https://rodkhleif.com/courses/)
**⭐ Mindset and Performance Course — Rod Khleif** Addresses the psychological side of real estate investing. Rod consistently teaches that success is 80–90% mindset. This course covers overcoming limiting beliefs, eliminating fear, and building the clarity needed for bold action. 👉 [rodkhleif.com/courses](https://rodkhleif.com/courses/)
**⭐ Social Media Marketing Course — Rod Khleif** Teaches the exact tactics Rod uses to generate millions of monthly impressions across YouTube, TikTok, Facebook, Instagram, and podcasting — particularly valuable for investors building a brand to attract capital and off-market deals. 👉 [rodkhleif.com/courses](https://rodkhleif.com/courses/)
**Jake & Gino’s Wheelbarrow Profits Academy** — strong on the operational and management side of multifamily. 👉 [jakeandgino.com](https://www.jakeandgino.com/)
## Learn the Numbers: Underwriting Is Everything
The numbers don’t lie, but you have to know how to read them. Underwriting is the most critical skill you can develop as an apartment investor, and it’s entirely learnable online. The metrics every investor must internalize: Net Operating Income (NOI), cap rate, Debt Service Coverage Ratio (DSCR), cash-on-cash return, Internal Rate of Return (IRR), rent rolls, and T-12 financial statements.
**⭐ Warrior Program Underwriting Tool — Rod Khleif** The Warrior Program includes proprietary underwriting tools, templates, and deal analyzers built specifically for multifamily investing — the same tools Rod’s students have used to evaluate the deals that produced 260,000+ student-owned units. 👉
**⭐ Unlimited Deal Analysis — Rod Khleif Warrior Program** Every deal a Warrior Program member is considering gets evaluated by Rod’s coaching team. An extraordinary resource for investors still developing their underwriting instincts. 👉 [rodkhleif.com/rod-khleif-coaching-program](https://rodkhleif.com/rod-khleif-coaching-program/)
**LoopNet** — pull real commercial listings and practice running your own numbers against broker pro formas. 👉 [loopnet.com](https://www.loopnet.com/)
**Crexi** — another strong commercial listing platform for deal practice. 👉 [crexi.com](https://www.crexi.com/)
## Market Research: Know Your Market Before You Buy
Great investors don’t just find good buildings — they find good markets first. All of this research is available for free online.
**⭐ Rod Khleif Blog and Market Guides** Free written content on how to evaluate markets for multifamily investing, including what metrics to prioritize, what data sources to use, and how to interpret trends; all from the perspective of an investor who has actively invested across multiple market cycles. 👉 [rodkhleif.com](https://rodkhleif.com/)
**City-Data.com** — population trends, demographics, and economic data by city. 👉 [city-data.com](https://www.city-data.com/)
**U.S. Census Bureau** — official population growth, housing, and economic data. 👉 [census.gov](https://www.census.gov/)
**BestPlaces.net** — comparative cost of living, quality of life, and economic metrics. 👉 [bestplaces.net](https://www.bestplaces.net/)
**Rentometer** — rent trends and comparables by address or market. 👉 [rentometer.com](https://www.rentometer.com/)
**Apartments.com** — vacancy trends and current rent data by market. 👉 [apartments.com](https://www.apartments.com/)
## Networking and Mentorship: The Biggest Accelerator
No investor succeeds in isolation. The fastest learners find communities where knowledge flows freely and accountability keeps them moving.
### Online Communities
**⭐ Warrior Program Community — Rod Khleif** One of the most active and results-oriented investor networks in the multifamily space, with access to Warrior-only mastermind events and peer networking with operators across all major U.S. markets. The community of investors who collectively own 260,000+ units is arguably as valuable as the curriculum itself. 👉 [rodkhleif.com/rod-khleif-coaching-program](https://rodkhleif.com/rod-khleif-coaching-program/)
**Lifetime Cashflow Skool Community – Rod Khleif** Rod’s free online community. Where he shares tons of content and has his students have frequent discussions. 👉 [https://www.skool.com/lcfa ](https://www.skool.com/lcfa)
**Multifamily Facebook Group** — **Rod Khleif** Rod runs the largest multifmaily investing facebook group in the world. As of Marvch 2026 it has 55.9k members. 👉
**Local REIAs (Real Estate Investment Associations)** — many now host virtual Zoom meetups. 👉 Find yours at [nationalreia.org](https://www.nationalreia.org/)
### Mentorship Programs
**⭐ Warrior Mentorship Program — Rod Khleif** Rod’s flagship offering. One-on-one mentorship with a seasoned multifamily investor, live group coaching with Rod and his expert team, step-by-step deal training, and an accountability framework designed to move members from education to execution. Students range from complete beginners to experienced operators scaling into large syndications. 👉 [rodkhleif.com/rod-khleif-coaching-program](https://rodkhleif.com/rod-khleif-coaching-program/)
**Jake & Gino’s Wheelbarrow Profits Academy** — mentorship focused on the operational and systems side of apartment management. 👉 [jakeandgino.com](https://www.jakeandgino.com/)
### Bootcamps and Live Events
**⭐ Multifamily Bootcamp — Rod Khleif** An immersive multi-day event offered in both virtual and in-person formats. Rod personally teaches deal finding, financing, underwriting, and closing strategies alongside his top coaches and students. 👉 [rodkhleif.com/bootcamp](https://rodkhleif.com/bootcamp)
**BiggerPockets Annual Summit** — community-driven in-person and virtual events. 👉 [biggerpockets.com](https://www.biggerpockets.com/)
**NMHC Events** — national apartment industry conferences. 👉 [nmhc.org/meetings](https://www.nmhc.org/meetings/)
## Advanced Topics: Syndication, Debt, and Value-Add
Once your foundation is solid, the learning deepens into the more complex mechanics that unlock larger deals and passive capital raises.
**⭐ Rod Khleif — Syndication Training** Covers the full syndication process — structuring deals, raising capital under 506(b) and 506(c) exemptions, creating investor documents, and managing the capital raise. [What Is Multifamily Syndication?](https://rodkhleif.com/what-is-multifamily-syndication-a-complete-guide/)
**⭐ Rod Khleif Value-Add Training** Rod’s curriculum covers renovation strategy, repositioning plays, rent optimization, and how to force appreciation on underperforming assets — the core of multifamily value-add investing. 👉 [rodkhleif.com/courses](https://rodkhleif.com/courses/)
**SEC.gov** — the authoritative source for 506(b) and 506(c) syndication rules. 👉 [sec.gov](https://www.sec.gov/)
**Old Capital Real Estate Investing Podcast** — particularly strong on debt structures and lender relationships. 👉 Available on Apple Podcasts and Spotify
## Why Rod Khleif Is the Best One-Stop Resource in Apartment Investing Education
You’ve now seen Rod Khleif’s resources listed across every category in this guide — podcasts, YouTube, free webinars, books, courses, underwriting tools, mentorship programs, communities, bootcamps, and advanced training. That’s not an accident. Rod has built the most comprehensive multifamily education platform available online, and the results his students produce are what separate him from every other educator in the space.
### The Numbers That Build Trust
- 40+ years of active real estate investing experience
- 2,000+ properties personally owned and managed
- 20+ million podcast downloads on the Lifetime Cashflow Through Real Estate Investing podcast — consistently ranked #1 in the multifamily category
- 260,000+ apartment units now owned by Warrior Program students — a verified milestone announced in September 2025
- 373+ tracked deals closed by program participants and $745 million+ in total capital raised by the Warrior community
- Students active in all major U.S. markets
No other multifamily educator publishes a live community dashboard tracking real student outcomes the way Rod does. That transparency is itself a signal of legitimacy that separates Rod from the crowded field of online real estate educators. 👉 See the live dashboard at [rodkhleif.com/warrior-community-dashboard](https://rodkhleif.com/warrior-community-dashboard/)
### The Story Behind the Credibility
Rod Khleif came to the United States from the Netherlands as a child. He bought his first rental property with money he’d saved from mowing lawns. Over the decades that followed, he built a portfolio of over 2,000 properties — and then lost approximately $50 million in the 2008 financial crisis when his single-family portfolio collapsed while his multifamily holdings held their value.
That experience — massive success, devastating failure, and deliberate rebuilding — is what gives Rod’s teaching its unusual depth. He isn’t sharing theory. He’s sharing the hard-won wisdom of someone who has lived on both sides of the market and who understands, viscerally, why conservative underwriting and professional operations are the foundation of lasting wealth.
Beyond his own investing career, Rod has launched more than 24 businesses and built a philanthropic organization — the Tiny Hands Foundation — that has extended support to over 95,000 children in need. The full picture of who Rod is explains why so many serious investors trust him with their education.
### The Complete One-Stop Shop
What makes Rod uniquely valuable compared to every other resource in this guide is that you can follow his ecosystem from day one all the way to deal-closing without ever needing to go elsewhere. The path looks like this:
- **Start for free:** Podcast, YouTube channel, Saturday webinar, and free blog articles
- **First paid step:** Free book (cost of shipping only)
- **Structured learning:** Standalone courses in multifamily investing, wholesaling, mindset, and marketing
- **Full acceleration:** The Warrior Mentorship Program — one-on-one coaching, deal analysis, community, and bootcamps
At every commitment level and every experience level, Rod has a resource that meets you where you are. No other single educator in the multifamily space offers that range with that level of documented, verifiable student outcomes.
## A Note on Avoiding Common Pitfalls Online
Not all real estate education online is created equal. As you build your learning path, maintain healthy skepticism toward programs that promise guaranteed returns, rely heavily on lifestyle marketing over deal content, or charge high fees without transparent outcome data. Red flags include high-pressure sales tactics, “no money, no risk” promises, and educators who never show actual underwriting or discuss risk honestly.
The standard to apply to any educator is simple: Do they show real deals with real numbers? Do they discuss failure and risk openly? Do they have documented outcomes from real students? Rod Khleif meets all three tests — and backs it up with a publicly accessible dashboard that most educators in this space simply cannot match.
## Your Online Apartment Investing Education Starts Today
The path to becoming a capable, deal-ready apartment investor is entirely navigable online. Start with free podcasts and YouTube to build vocabulary — Rod Khleif’s podcast alone gives you hundreds of hours of expert content at no cost. Move into structured books and courses when you’re ready for systematic depth. Develop underwriting skills through repetition with real listings. Research markets using free data tools. Build your network through online communities and virtual events. And when you’re ready to close actual deals, invest in a proven mentorship program.
At every stage of that journey, Rod Khleif’s resources are trusted, comprehensive, and proven to deliver results. From the free Saturday webinar and top-ranked podcast to the Multifamily Investing Course and the Warrior Program, which has produced more verified student outcomes than any comparable program in the industry, Rod’s platform is the closest thing to a complete
**Categories:** Blog, Multifamily Investing, Real Estate
---
### [How to Learn Apartment Investing with a 9 - 5](https://rodkhleif.com/how-to-learn-apartment-investing-as-a-busy-professional/)
**Published:** January 5, 2026
**Author:** Alex Khleif
**Content:**
If you’re a busy professional, the challenge isn’t a lack of interest. It’s that your calendar is already full, your brain is already full, and most “education” in real estate is designed for someone with endless free time. The best way to learn apartment investing isn’t to binge podcasts or build a perfect spreadsheet model. To learn apartment investing, you need to create a weekly routine. This routine will help you go from just reading information to making confident decisions. So how do you learn apartment investing as a busy professional?
## **Stop trying to “learn everything” and start learning the job**
A lot of people accidentally turn learning into a hobby. They stay in research mode because it feels productive and safe. It’s easy to read about cap rates. It’s harder to underwrite a real deal and admit, “I don’t understand why this expense line is so high.”
Your goal as a busy professional is to learn the job quickly by doing the job in small, consistent chunks. You don’t need to know everything about every loan product and every market cycle to get started. You need working competence in a few core things: how deals make money, how to evaluate risk, and how to communicate what you’re seeing.
## **The 90-day approach that actually fits a busy schedule**
If you want a plan that works in real life, think in 90-day sprints. Ninety days is long enough to build momentum and short enough to stay focused.
In the first 30 days, you’re building a baseline. That means learning how to read a rent roll, interpret a T-12, understand what NOI actually is, and why it’s the heart of value. If you can’t translate a deal into plain English, you don’t understand it yet.
In days 31-60, you start building pattern recognition. This is where the confidence comes from, and it only comes from repetition. Underwrite deals even when they don’t pencil. That’s not wasted time because bad deals teach you faster because they force you to ask better questions.
You begin to see the same problems come up repeatedly. Here’s a simplified version of the sentence, split into shorter sentences:
- Some expense ratios seem too high.
- There are overly optimistic rent assumptions.
- Some properties have hidden costs.
- In certain markets, insurance or taxes are reducing returns.
In days 61-90, you shift from learning in private to participating in public. This is where you start talking to brokers, operators, and investors consistently. Not because you’re ready. Because you become ready by having the conversations. This is also the phase where you choose your “first win” path. You can house hack a small multifamily property. You can also partner as an analyst. Another option is to find deals for an operator. Lastly, you can invest passively while you learn about the business from the inside.
## **The weekly rhythm that builds real competence**
Busy professionals don’t need more tasks. They need fewer tasks that matter.
If you only did two things every week for three months, you’d move farther than most people: underwrite a couple deals and have a couple real conversations.
Underwriting teaches you how the math works and where risk hides. Conversations teach you how the market actually behaves, what’s happening with demand, what sellers are doing, what lenders are changing, and what real operators are solving for right now.
You’re not calling brokers to pitch. You’re calling to become familiar and credible. You’re not talking to operators to ask for favors. You’re talking to learn what a real deal looks like and how decisions get made.
That mix is the fastest learning curve in this business.
## **Use “time blocks,” not willpower**
Most busy people fail here because they rely on motivation. Motivation is unreliable. Calendar blocks are real.
Two focused blocks a week can be enough if you protect them like meetings. One block is for underwriting and notes. The other is for outreach and follow-up. Not 20 emails. Just a few meaningful touches, and a couple conversations.
Consistency beats intensity. A little every week beats a big push once a month.
## **What to pay attention to first (so you don’t drown)**
Apartment investing can get complicated, but your early learning should be simple.
Focus on the drivers that move the needle: income quality, expense reality, capex needs, and debt terms. Learn to be skeptical of rent growth assumptions and learn to take expenses seriously. In 2026, expenses are not a footnote—insurance, taxes, payroll, repairs, and turnover can make a “great deal” quietly become a headache.
Also, learn to explain the deal like a story. What is it today? What is broken? What is the plan? What will it become? And what could go wrong? If you can communicate that clearly, you’re already ahead of most people.
## **The fastest shortcut is proximity to people doing deals**
Books can teach concepts. [Check out Rod’s Best Selling book and more. ](https://rodkhleif.com/books/)
Podcasts can teach perspective. Check out Rod’s podcast, *[The Lifetime Cashflow Through Real Estate Investing Podcast.](https://rodkhleif.com/lifetime-cashflow-podcast/)*
If you want to learn faster as a busy professional, get close to operators. Join a community. Go to one meetup a month. Offer value in a way that fits your schedule. The easiest way to become valuable quickly is to get good at underwriting and communicating what you find.
When you can analyze a deal, summarize it cleanly, and ask smart questions, you stop being “another person who wants to learn” and start being someone other investors want around.
## **A practical starting point for this week**
Pick one market and one asset type so you stop scattering your attention. Choose one underwriting template and commit to it for 90 days. Underwrite two real deals this week, even if they’re ugly, and write down what you don’t understand. Then have two conversations: one broker, one operator, one investor, whatever is accessible. Make sure to listen for what they’re seeing in the market.
That’s it. Do that weekly, and you’ll be shocked how quickly the fog clears.
## **A simple “busy professional” checklist to start this week**
- Pick one market and one asset type (don’t overthink it)
- Get one [underwriting template](https://rodkhleif.com/deal-underwriting-tool/) and commit for 90 days
- Underwrite 2 deals this week
- Message 2 brokers with your criteria
- Reach out to 1 operator and offer to help underwrite
- Track everything in a simple spreadsheet: deal link, notes, assumptions, results
Do that for four weeks and your confidence will change. If you keep this up, you’ll be way more competant and able to have conversations with active investors.
## **Final thought**
The best way to learn apartment investing as a busy professional is to stop trying to “study” it and start practicing it.
You don’t need more information. You need a system: reps plus relationships, every week. Ninety days of that will change your competence, and once you have competence, confidence follows.
## **FAQ: What’s the best way to learn apartment investing as a busy professional?**
**How much time do I realistically need each week to make progress?
If you can consistently protect 3-5 focused hours per week, you can build real momentum. Consistency is key. Two focused sessions beat “whenever I can” every time.
**What should I learn first if I’m starting from zero?
Start with how apartments make money and how value is created: income, expenses, NOI, and debt service. If you can read a rent roll and T-12 and explain what’s happening in plain English, you’re already building the right foundation.
**Do I need to build a complicated underwriting model to get good at this?
No. A simple, consistent model is better than a fancy one you don’t fully understand. The goal early on is pattern recognition and good assumptions—not 50 tabs and perfection.
**How many deals should I underwrite before I feel confident?
Confidence usually shows up after repetition. For most people, 15–30 underwrites (done thoughtfully, with notes on assumptions and risks) is where things start to “click.”
**Should I pick one market or look nationally?
Pick one market to start. It reduces overwhelm and speeds up learning because you’re comparing deals in the same environment. You’ll learn faster when you’re not constantly switching contexts.
**What’s the fastest way to learn without buying a deal right away?
Underwrite real deals and have real conversations. Talk to brokers, operators, and investors so you can hear what the market is actually doing. You’ll learn quicker from five good conversations than fifty hours of content.
**What do I say to a broker if I feel inexperienced?
Keep it simple and professional: share your criteria, tell them you’re underwriting consistently, ask what they’re seeing in the submarket, and ask to be added to their list. You’re trying to become familiar and credible over time.
**Is it better to start by investing passively or trying to be active?
It depends on bandwidth. If you truly can’t take on operations, passive investing with a strong operator can be a smart way to learn the business while building exposure. If you want to be active but you’re time-constrained, partnering as an analyst (underwriting support) is often the best “busy professional” entry point.
**What’s the biggest mistake busy professionals make when learning apartment investing?
They turn learning into content consumption and delay the hard part ,which is doing reps and talking to people. The fastest progress comes from underwriting real deals and building relationships, not from trying to “learn everything” first.
**How do I know when I’m ready to pursue my first deal or partnership?
You can underwrite a deal if you meet a few conditions.
First, you need to make reasonable assumptions.
Second, you should be able to explain the deal clearly.
Finally, having relationships with brokers, operators, or lenders can help with execution.
Readiness looks like repeatable process, not perfect certainty.
*Disclaimer: This article was written with the help of AI and reviewed by Rod and his team.*
**Categories:** Blog, Real Estate
---
### [Learn Passive Mobile Home Park Investing with Syndication](https://rodkhleif.com/learn-passive-mobile-home-park-investing-with-syndications/)
**Published:** December 8, 2025
**Author:** Alex Khleif
**Content:**
Mobile home parks have started to become popular with smart investors. They offer good cash flow and access to affordable housing. The challenge is that running a park can be very hands-on. You have to deal with aging buildings, collections, tenant problems, and city relations. These issues require active management. That’s why more people are choosing passive mobile home park investing with syndications. You provide the money, and a professional operator does the hard work.
In a [syndication](https://rodkhleif.com/guide-to-multifamily-syndications/), you invest as a limited partner alongside other investors, while a sponsor team finds the deal, secures financing, and runs the park. If the business plan is sound and the sponsor executes well, you share in the cash flow and eventual profits without becoming a full-time park operator.
Passive mobile home park investing with syndications lets you skip the day-to-day work and still participate in the upside. You bring capital; an experienced sponsor brings the deal, the team, and the execution.
## **What Is Passive Mobile Home Park Investing with Syndications?**
At a high level, passive investing means you’re funding the deal, not running it. You’re trading control and time for leverage and simplicity.
In practice, that means:
- You **don’t** find the park, negotiate with the seller, or arrange financing.
- You **don’t** manage tenants, handle collections, or fix utilities.
- You **do** invest capital into a deal or fund run by a sponsor and share in the profits.
In a typical syndication:
- You’re a **Limited Partner (LP)**, or passive investor.
- The sponsor is the [**General Partner (GP)**](https://rodkhleif.com/questions-to-ask-a-general-partner-in-a-syndication-before-investing/), or active operator.
- Everyone invests into one entity (usually an LLC or LP) that owns the park.
Your main job is to decide **who** you invest with and **which** deals you trust.
## Why Mobile Home Parks Appeal to Passive Investors
Mobile home parks have a few built-in advantages that make them appealing, especially when paired with a strong operator. MHPs sit at the intersection of three powerful factors: affordability, constrained supply, and potentially lower capital costs per household. Key reasons investors like this asset class:
- **Affordable housing niche
- Residents often own their homes and pay lot rent only.
- Demand tends to stay strong, even when the economy softens.
- **Limited new supply
- Zoning and neighborhood resistance make new parks hard to build.
- Existing parks benefit from strong demand and constrained competition.
- **Tenant-owned home model (TOH)
- Residents maintain their own homes.
- Owners focus on land, roads, utilities, and common areas.
- CapEx per occupied site can be lower than many other asset classes.
Many operators focus on mobile home parks. This is because there is high demand and limited supply. Additionally, there can often be lower capital expenses. This can often be another reason why limited partners join them in syndications.
## How Mobile Home Park Syndications Work
Put simply: a mobile home park syndication is a group investment. The sponsor picks a park. They look at its finances and condition. Then, they create a business plan. This plan aims to increase income and property value over the course of several years. First, you raise equity from limited partners. Next, you close on the property using an entity like an LLC. Finally, you carry out the plan for all investors.
Your returns as a passive investor typically come from three places. First, once the park is stabilized, you may receive regular cash flow distributions from Net Operating Income after expenses, reserves, and debt service. Second, as the sponsor improves income, by raising under-market lot rents responsibly, tightening collections, infilling vacant lots, or cleaning up expenses, the property’s value increases, which you participate in at refinance or sale. Third, paying down loans over time can provide extra benefits. The tax treatment of depreciation is also important. Always review the details with a tax professional.
You will usually see a preferred return offered to limited partners, followed by a profit split between investors and the sponsor. The details vary by deal, but the core idea is that the sponsor earns fees and a share of the upside in exchange for sourcing, managing, and eventually exiting the investment, while your role is to contribute capital and evaluate whether the structure feels fair and aligned.
Here’s the basic flow:
1. **Sponsor finds the deal
- Sources a park through brokers, owners, or off-market channels.
- Analyzes financials, infrastructure, tenant base, and upside potential.
2. **Sponsor secures financing
- Negotiates purchase terms.
- Lines up debt with a bank or agency lender.
3. **Sponsor raises equity from investors
- Presents the business plan to LPs.
- LPs invest capital (often $25k–$100k+ each).
4. **LLC or LP buys the park
- The entity (not you personally) owns the asset.
- The sponsor runs operations under an operating agreement.
5. **Business plan is executed
- Improve collections, adjust rents, fix infrastructure, fill vacant lots.
- Distributions start once the park is stable and cash flowing.
6. **Exit or refinance
- After several years, the sponsor sells or refinances.
- Profits are split between LPs and sponsor according to the agreement.
You’re not signing on loans or running the park, but you are tied to the deal for the full hold period, usually five to ten years.
## **Where LP Returns Typically Come From**
Passive mobile home park investing usually pays off through a few main channels. Understanding them helps you read pro formas with a clearer eye.
Typical return drivers:
- **Cash flow distributions
- Paid from Net Operating Income (NOI) after expenses, reserves, and debt.
- Often monthly or quarterly once the park is stabilized.
- **Forced appreciation
- Sponsor increases NOI by raising under-market lot rents responsibly, improving collections, reducing waste, and infilling vacant lots.
- Higher NOI at a given cap rate = higher property value at refinance or sale.
- **Debt paydown and tax benefits
- As the loan is paid down, equity grows.
- Depreciation and other deductions may offset part of your taxable income (talk to your CPA).
The exact mix depends on the deal, the market, and how well the operator executes.
## **Key Risks in Passive Mobile Home Park Syndications**
You still face real risks as an LP. The big three to keep in mind are sponsor risk, infrastructure risk, and market/regulatory risk.
1. **Sponsor (operator) risk
- Weak or inexperienced sponsors can underestimate CapEx, mishandle tenant or city relationships, and fail to execute rent and infill plans.
2. **Infrastructure risk
- Older parks may have aging water/sewer lines, septic systems, undersized electrical, or poor drainage.
- If not properly inspected and budgeted for, these can crush returns.
3. **Market and regulatory risk
- Weak or shrinking markets can limit rent growth and make backfilling vacancies harder.
- Regulatory changes (rent control, tenant protections, environmental rules) can cap income growth or add compliance costs.
Your best defense is a realistic view of these risks and a sponsor who is equally realistic in their underwriting and communication.
## What to Look for in Sponsors and Deals
You should evaluate the sponsor before looking at any individual park. This is often the most important part of mobile home park syndications. You want to see experience with mobile home parks specifically, not just general real estate. Ask how many parks they have acquired, how their existing portfolio is performing, and what happened in their toughest deals. Pay attention to how clearly they explain their strategy and how candid they are about past mistakes, since that often reveals more than a polished pitch deck.
Once you’re comfortable with the sponsor, you can dig into the deal itself. Start with the tenant mix and the ratio of tenant-owned versus park-owned homes, because that affects both income and management intensity. Examine current lot rents and compare them to similar parks in the area to see whether there is room for careful rent increases. Look at physical and economic occupancy, the condition of roads and utilities, and the planned capital improvements, along with their timelines and budgets.
On the financial side, review the assumptions around rent growth, expenses, vacancy, and exit cap rates. Conservative projections usually leave room for surprises, while aggressive ones may look exciting on paper but require everything to go right. Your goal is not just to decide whether the target return looks attractive, but whether the path to get there feels realistic.
## How to Get Started as a Passive Investor
Getting started with passive mobile home park investing doesn’t require rushing into the first syndication you see. A simple approach works well for most investors:
- Spend some time learning basic mobile home park terminology and common business models.
- Build a short list of potential sponsors through referrals, events, podcasts, or investor communities.
- Talk with each sponsor, ask detailed questions about track record and communication, and review a few deals even if you don’t invest in them.
- When you’re ready, start with an amount of capital you can leave invested for the full hold period, typically five to ten years.
Treat your first investment as both a return opportunity and an education. Watch how the sponsor reports, how the park performs compared to projections, and how you feel about the illiquidity and risk profile. As time goes on, you can improve your criteria. You can also decide if mobile home park syndications should play a bigger part in your overall portfolio.
Passive mobile home park investing through syndications is ultimately about pairing a solid asset class with the right partners. If you choose operators carefully and stay disciplined about underwriting, it can become a truly hands-off way to participate in one of the most durable segments of the housing market.
## **FAQ: Passive Mobile Home Park Syndications**
### **What is a passive mobile home park syndication?**
A passive mobile home park syndication is a group investment where multiple investors pool capital to buy a mobile home park, while a professional operator (the sponsor) runs the deal. You invest as a limited partner, sharing in cash flow and profits without being involved in day-to-day operations.
### **How is passive mobile home park investing different from owning a park myself?**
When you own a park directly, you’re responsible for finding the deal, arranging financing, managing tenants, fixing infrastructure issues, and handling city or utility relationships. In a passive syndication, the sponsor handles all of that while you focus on evaluating the sponsor, the business plan, and the projected returns. You trade control for time freedom and professional execution.
### **Who are the main players in a mobile home park syndication?**
The two key roles are the **General Partner (GP)** and the **Limited Partners (LPs)**. The GP or sponsor sources the deal, secures financing, manages the park, and executes the business plan, while LPs provide most of the equity capital and receive a share of cash flow and profits.
### **How do investors make money in passive mobile home park syndications?**
Returns typically come from three places: ongoing cash flow distributions from Net Operating Income, “forced appreciation” as the sponsor increases NOI and raises the park’s value, and long-term benefits from loan paydown and tax advantages. The exact mix depends on the deal structure and how well the operator executes the plan.
### **What makes mobile home parks attractive for passive investors?**
Mobile home parks sit in the affordable housing space, where demand tends to be strong and alternatives are limited. New parks are hard to build because of zoning and community resistance, so existing parks benefit from constrained supply. When many residents own their homes and pay only lot rent, capital expenses per site can be lower than in many other asset classes.
### **What are the main risks in passive mobile home park investing syndications?**
The biggest risks are usually sponsor risk, infrastructure risk, and market or regulatory risk. A weak operator can misjudge CapEx, mismanage tenants, or fail to execute the business plan; aging utilities can create costly surprises; and poor markets or changing regulations can limit rent growth and exit options. Good due diligence reduces these risks but can’t eliminate them entirely.
### **How do I evaluate a sponsor before investing?**
Look at their track record (number of parks, years in the niche, realized returns), communication style (clear, candid, data-driven), and alignment (their own money in the deal, reasonable fees, performance-based profit splits). If you wouldn’t trust them with a rough year—not just a good one—they’re not the right sponsor.
### **What should I look for in a specific mobile home park syndication deal?**
Focus on the tenant mix (tenant-owned vs park-owned homes), current vs market lot rents, physical and economic occupancy, and the condition of infrastructure like water, sewer, and roads. Then review underwriting assumptions around rent growth, expenses, vacancy, and exit cap rates to make sure they’re conservative and stress-tested, not optimistic wishful thinking.
### **How are passive mobile home park syndications typically structured?**
Most syndications include a preferred return to LPs (for example, 6%–8% annually), followed by a profit split between LPs and the sponsor once the pref is met. You’ll also see fees for acquisition, asset management, and sometimes refinance or disposition, along with a projected hold period, usually five to ten years.
### **How much money do I need to invest in a mobile home park syndication?**
Minimum investments vary by sponsor and deal but commonly range from $25,000 to $100,000. Some funds or platforms may offer lower minimums, but you should still treat each commitment as long-term, illiquid capital you’re comfortable locking up for the full hold period.
### **Are passive mobile home park syndications really “hands off”?**
They’re about as hands-off as real estate gets, because you’re not the one dealing with tenants, repairs, or lenders. However, you still have responsibilities: doing proper due diligence, reading investor reports, and tracking performance against projections so you can decide whether to reinvest with that sponsor in the future.
### **How do I get started with passive mobile home park investing?**
Start by learning the basics of mobile home park operations and terminology, then build a shortlist of sponsors through referrals, events, and research. Have calls with those sponsors, review a few deals even if you don’t invest, and when you’re ready, start with an amount you can leave invested for several years while you learn from the experience.
*This article was written with the help of AI and reviewed by Rod’s team. Always consult a licensed processsional.*
**Categories:** Blog, Mobile Home Parks
---
### [Industrial Flex Space Investing for Beginners](https://rodkhleif.com/industrial-flex-space-investing-for-beginners/)
**Published:** November 24, 2025
**Author:** Alex Khleif
**Content:**
I see industrial flex space as the next big opportunity in real estate, and I’m actively looking at deals in this category alongside multifamily. Flex space, properties that mix office, light industrial, and warehouse space, is perfect for businesses outgrowing small offices but not ready for full industrial. Here’s the reality: flex space generates better cash flow than traditional office and more stability than pure warehouses. Most investors dismiss flex space because they don’t understand it, but that’s where opportunity lives. Let me share why I’m personally adding flex space to my portfolio and why you should consider it too.
Industrial flex space lives in that sweet spot between warehouse, light industrial, and office. It’s a space used by contractors, e-commerce companies, small manufacturers, showrooms, creative studios, and local service businesses. More companies want flexible spaces instead of large offices. This change has made this area more appealing to investors. If you are new to commercial real estate, industrial flex might feel a little mysterious compared to apartments or single-family homes. The good news is that once you understand what it is, how it generates income, and how to underwrite it simply, it becomes a very approachable asset class. This guide will walk you through industrial flex space investing for beginners in clear, practical terms.
## What Is Industrial Flex Space?
Industrial flex space is a type of commercial property that combines warehouse or light industrial space with office or showroom areas under one roof. Think roll-up doors in the back, glass doors and reception in the front, and an open floor plan that can be divided for different uses. Tenants can “flex” how much of the space is office versus warehouse as their business evolves.
Common users include trades (HVAC, electrical, plumbing), local distributors, e-commerce brands, small manufacturers, lab or R&D groups, fitness or training studios, and even creative agencies. Because the spaces are versatile, landlords can serve a wide range of businesses with one type of product.
## Why Investors Are Paying Attention to Flex Industrial
Several trends are driving interest in industrial flex space. Small and mid-sized businesses are looking for functional, affordable space that isn’t a traditional office tower or a massive warehouse. Flex properties can provide that mix at a price point that works for both tenants and owners.
At the same time, e-commerce, last-mile logistics, and just-in-time inventory are pushing demand for smaller, well-located industrial footprints. Many markets have limited supply of modern flex product, especially near major highways and population centers. For investors, this combination of strong tenant demand and constrained supply can translate into stable occupancy and attractive returns when the deal is underwritten well.
## How Industrial Flex Space Makes Money
At its core, industrial flex space generates income through commercial leases. Tenants pay rent for the space, and the structure of that rent can vary depending on the market and the sophistication of the property. Understanding the basic income and expense structure is the first step for beginners.
Common revenue sources include:
- **Base rent:** The primary rent paid per square foot, usually on an annual basis (e.g., $10–$14/SF/year).
- **Reimbursements:** Tenant reimbursement of expenses like property taxes, insurance, and common area maintenance (often called “NNN” or “CAM” charges).
- **Additional income:** Fees from parking, storage yards, signage, or small service charges where applicable.
On the expense side, you’ll see property taxes, insurance, maintenance, management fees, utilities (for common areas or vacant spaces), and reserves for capital improvements. After subtracting operating expenses from total income, you get Net Operating Income (NOI). Like other commercial assets, the value of an industrial flex property is driven primarily by its NOI and the market cap rate.
## Key Features of Flex Industrial Properties
When you look at industrial flex space investing for beginners, there are a few physical and functional characteristics that stand out. Getting familiar with these will help you read listings and broker packages more confidently.
**Important features include:**
- **Clear height:** The interior height of the warehouse portion, which affects usability for storage, racking, or certain types of equipment.
- **Loading type:** Grade-level roll-up doors vs dock-high loading, which impacts what kind of tenants you can attract.
- **Office vs warehouse ratio:** The percentage of the space built out as office or showroom versus open warehouse or production area.
- **Power and utilities:** Amperage, phase of power, HVAC, and any specialized utility capacity needed for light manufacturing or labs.
- **Bay size and divisibility:** How easily the property can be divided into smaller units for multiple tenants or assembled for larger ones.
Understanding these elements helps you match the physical building to the tenant types that are most active in a given market.
## Active vs Passive Industrial Flex Investing
Just like with other commercial assets, you can participate in industrial flex space as either an active investor or a passive investor. Each path comes with a different blend of control, workload, and risk.
If you are an active investor, you might:
- Source and negotiate deals directly with owners or brokers.
- Arrange financing and possibly raise equity from partners.
- Oversee property management, leasing strategies, and capital improvements.
If you are a passive investor, you might:
- Invest as a limited partner (LP) in an industrial flex syndication or fund.
- Place capital with a sponsor that specializes in industrial and flex assets.
- Rely on their team for acquisitions, leasing, and asset management while you receive distributions and updates.
For most beginners, starting passively with a strong, experienced sponsor can be a smart way to learn the asset class before taking on a full active role.
## Pros and Cons of Industrial Flex Space
Every asset class has strengths and trade-offs. Industrial flex space is no different, and seeing both sides clearly helps you decide if it fits your strategy.
Potential advantages:
- **Diverse tenant base:** You are not reliant on a single industry, which can reduce concentration risk.
- **Functional, needs-based space:** Many tenants need this type of space to run their core business, which supports demand.
- **Value-add opportunities:** There can be room to improve rents, upgrade dated spaces, or reconfigure for more modern uses.
Potential challenges:
- **Leasing risk:** Vacancies can feel more painful if large tenants occupy significant chunks of the building.
- **Tenant improvements (TI):** Some tenants require build-outs or modifications, which must be managed and budgeted.
- **Location sensitivity:** Industrial flex performs best with good access and strong surrounding demand; weaker locations can struggle.
You want to match the risk profile of the deal to your personal risk tolerance and your broader portfolio.
## How to Underwrite Industrial Flex Space as a Beginner
Underwriting doesn’t need to be overly complicated, especially when you are getting started. Your goal is to understand where income is coming from, how durable it is, and what realistic expenses look like.
Basic underwriting steps include:
1. **Review rent roll and leases**
Look at current tenants, their lease terms, rental rates, and expiration dates. Identify near-term rollover risk and whether rents are below, at, or above market.
2. **Analyze current income and expenses**
Request trailing 12-month (T-12) financials plus a current rent roll. Compare the expense ratio to typical ranges in your market, and adjust any clearly underreported or one-time items to a sustainable level.
3. **Check market rents and vacancy**
Talk to brokers, property managers, and data sources to see what similar flex spaces are renting for and what the local vacancy rate is. This helps you gauge realistic rent growth and lease-up assumptions.
4. **Model conservative scenarios**
Stress-test your projections by reducing rent growth, increasing vacancy, or adjusting TI and leasing costs upward. See how the returns hold up under less optimistic assumptions.
When you keep your analysis straightforward and conservative, you reduce the likelihood of being surprised after closing.
## Location and Tenant Demand: What to Look For
Industrial flex space investing for beginners is much easier when you focus on strong locations with visible, diversified demand. You are not just buying a building; you are buying into a local ecosystem of businesses and logistics.
Positive signs include:
- Proximity to major highways or transportation corridors.
- Healthy small business and service economies in the area.
- Low to moderate vacancy for similar flex inventory.
- Limited new supply being built relative to demand.
You also want to understand the tenant mix in your subject property and nearby parks. A variety of trades, services, e-commerce, and light industrial users can create more stability than a property dominated by one industry that could be disrupted.
## Common Risks and Mistakes to Avoid
As with any investment, beginners can run into trouble if they overlook key details or get too aggressive with assumptions. Knowing the main pitfalls ahead of time helps you avoid expensive lessons.
Common risks and mistakes include:
- Ignoring lease structures: Not fully understanding responsibilities under NNN, modified gross, or gross leases can lead to surprise expenses.
- Underestimating tenant improvements: Assuming tenants will take space “as-is” when the market expects landlord-funded build-outs.
- Overpaying based on pro forma: Paying a price that assumes future rent increases or lease-up before those improvements are actually executed.
- Neglecting capital needs: Overlooking roof, parking, HVAC, or structural items that may require significant capital in the near term.
Disciplined due diligence, conservative underwriting, and the guidance of experienced partners go a long way in managing these risks.
## Getting Started With Industrial Flex Space in 90 Days
If industrial flex space investing for beginners feels like a good fit, you can start building momentum without trying to master everything at once. A simple 90-day plan can help you move from theory to action in a structured way.
Over the next 90 days, you can:
1. **Study the basics**
Learn key terms (NNN leases, clear height, TI, CAM, cap rate) and read a few case studies on industrial and flex deals to build your foundation.
2. **Clarify your role and capital**
Decide whether you want to be an active buyer or a passive LP. Define how much capital you can deploy and what return profile you are targeting.
3. **Build relationships**
Connect with commercial brokers, property managers, and sponsors who specialize in industrial and flex assets. Ask questions and review real-world offerings.
4. **Practice underwriting sample deals**
Take a few real or sample OM packages and model conservative scenarios. Focus on understanding leases, expenses, and realistic market rents.
5. **Choose your first move**
That might be committing to a small LP position in a flex deal with a reputable sponsor, or targeting a specific submarket and starting to make offers with an experienced team.
Industrial flex space is not the flashiest asset class, but that is often the point. For investors who value practical real estate, it can be a strong addition to a diverse portfolio. Investing in industrial flex space can be easier and more rewarding for beginners. To achieve this, you need a basic understanding of the asset. It’s also important to have good partners and to pay attention to the numbers.
## **FAQ: Industrial Flex Space Investing for Beginners**
**What is industrial flex space?**
Industrial flex space is a type of commercial property that combines warehouse or light industrial space with office or showroom space under one roof. Tenants can “flex” how much of the unit is office versus warehouse, depending on their business needs. Common users include trades, e-commerce brands, small manufacturers, and service businesses that need both storage and front-facing space.
**Why is industrial flex space attractive to beginner investors?**
Industrial flex space is attractive because it serves real, everyday business needs at a price point many tenants can afford. Demand is supported by trends like e-commerce, last-mile logistics, and small business growth. For beginners, flex industrial can offer relatively straightforward leases, diversified tenant bases, and stable cash flow when bought in the right locations.
**How does industrial flex space make money?**
Industrial flex properties generate income through commercial leases paid by tenants. Revenue usually comes from base rent (charged per square foot per year), plus reimbursements for expenses like property taxes, insurance, and common area maintenance (CAM) in NNN-style leases. Some properties also earn additional income from parking, storage yards, or signage.
**Is industrial flex space investing good for beginners?**
Yes, industrial flex space investing for beginners can be a good fit if you take a conservative approach and lean on experienced partners. The asset class is often less management-intensive than retail and can be more stable than office in many markets. That said, you still need to understand leases, tenant needs, and basic underwriting before jumping in.
**What should beginners look for in an industrial flex property?**
Beginners should focus on location, tenant demand, and building functionality. Look for properties near major roads or highways, in areas with active small businesses and low vacancy for similar space. Physically, pay attention to loading doors, clear height, office-to-warehouse ratio, parking, and power capacity so the space fits what local tenants actually want.
**How can beginners invest passively in industrial flex space?**
If you don’t want to manage buildings, you can invest passively. You can do this in industrial-focused syndications or funds as a limited partner (LP). In that structure, an experienced sponsor finds and operates the deals, while you contribute capital and receive preferred returns and profit splits. Some REITs also own industrial and flex assets, letting you buy in like a stock.
**What are the main risks of industrial flex space investing?**
Key risks include leasing risk, where losing a large tenant can create a noticeable vacancy, and market risk, if you buy in an area with weak business demand. There’s also risk around tenant improvements (TI) and capital needs like roofs, HVAC, or parking lots. Beginners should mitigate these risks through careful due diligence, conservative projections, and strong property management.
**How do leases in industrial flex space typically work?**
Many industrial flex properties use NNN or modified gross leases, where tenants pay base rent plus some or all of the operating expenses. Lease terms often run 3- 7 years, sometimes with renewal options and scheduled rent bumps. As a beginner, it’s important to know who pays for what. This includes taxes, insurance, maintenance, utilities, and capital items before you buy.
**How do I analyze an industrial flex deal as a beginner?**
Start by reviewing the rent roll (who rents what, at what rate, and for how long) and the trailing 12-month financials for real income and expenses. Compare rents to local market rates, check vacancy levels, and estimate a realistic expense ratio. Then model a conservative scenario with modest rent growth, reasonable leasing costs, and a buffer for unexpected repairs.
**How can I get started with industrial flex space investing?**
Begin with education: learn key terms like NNN, CAM, TI, clear height, and cap rate. Decide whether you want to be an active owner or a passive LP, then define your budget and return goals. Start by talking to industrial brokers, sponsors, and property managers. Practice underwriting real deals. This way, you will be ready when the right industrial flex opportunity comes up.
*Disclaimer: This article was written with the help of AI and reviewed internally by Rod and his team. Always consult a licensed professional.*
**Categories:** Industrial Flex Space, Real Estate
---
### [Value Add Opportunity in Real Estate: How to Maximize Profit](https://rodkhleif.com/value-add-opportunity-what-does-it-mean-and-should-i-consider-it/)
**Published:** September 23, 2025
**Author:** Rod Khleif
**Excerpt:** If you have spent any time at all researching potential apartment investments within the last several years, I am certain that you have presented with a property in which the seller and/or agent have presented the deal as a great “value-add opportunity.”
**Content:**
Value-add multifamily is how I built my portfolio. I buy underperforming apartment buildings and turn them into cash-flowing assets. I’ve specialized in value-add deals for my entire career because they offer returns two, three, sometimes four times higher than stabilized properties. Here’s the difference: value-add properties have rent below market, deferred maintenance, or bad management that creates hidden profit potential. Most investors skip them because they look scary in the photos, but that’s exactly where I make my money. Let me walk you through how to identify, analyze, and execute value-add deals that multiply your returns.
## What Is a Value Add Opportunity?
A value add opportunity in real estate is a strategy. Investors buy properties that are not doing well. They make improvements to increase income, value, and overall returns. Value-add deals target buildings that need work. These buildings often have outdated interiors, bad management, or low rental prices. Instead of purchasing stable assets that are already improved, investors look for these opportunities. These buildings can be updated for higher profits.
The core objective is to increase net operating income (NOI). Property values in commercial and multifamily real estate depend on NOI and cap rates. Even small improvements can lead to significant increases in value. Raising rents by $100 per unit on a 20-unit property brings in an extra $24,000 each year. This increase adds about $400,000 in value at a six percent cap rate.
This ability to “force appreciation” instead of depending on market growth makes value add opportunities very appealing. Investors want strong risk-adjusted returns.
## How Value Add Investments Work
Value add projects improve both physical condition and operational performance. Common strategies include:
- Renovate outdated interiors with new flooring, appliances, lighting, and countertops to justify higher rents
- Enhance curb appeal with landscaping, exterior paint, signage, and parking improvements to attract stronger tenants
- Add or modernizing amenities such as laundry facilities, gyms, dog parks, or package lockers
- Reposition the property to serve a different tenant profile, for example targeting professionals instead of students
- Optimize management to reduce expenses, streamline operations, and boost efficiency
By combining upgrades with operational improvements, investors create higher NOI, which increases property value and allows refinancing or profitable sales.
## How to Identify a Genuine Value Add Opportunity
Not every property marketed as “value add” is worth the label. Some sellers use the term loosely to attract buyers. To identify real opportunities, investors must look for:
- Strong locations in healthy rental markets with consistent tenant demand
- Rents that are below market rate and have room for growth
- Moderate deferred maintenance that can be resolved without excessive cost
- Operational inefficiencies that can be corrected through better management
- Clear, achievable renovations that align with tenant demand and budget
### Warning Signs to Avoid
- Major renovations already completed by the seller with little remaining upside
- Severe structural issues, code violations, or environmental hazards that outweigh potential profits
- Properties with poor layouts or unit mixes that cannot be fixed cost-effectively
- Rent growth assumptions that are not supported by the local market
The best opportunities are underperforming properties in strong markets, where reasonable improvements can unlock significant upside.
## Real-World Example of a Value Add Strategy
The Property
An investor acquires an eight-unit multifamily property in a neighborhood with rising demand. Current rents are $800 per two-bedroom unit, while comparable buildings rent for $950. The property is listed for $600,000, or $75,000 per unit.
The Plan
The investor allocates $6,000 per unit, or $48,000 total, for interior renovations including updated flooring, modern appliances, new lighting, and countertops. Projected rent increases are $150 per unit.
The Results
- New annual rental income: $91,200 ($950 x 8 x 12)
- Operating expenses: $40,000
- New NOI: $51,200
- Property value at a 6.1 percent cap rate: approximately $839,344
The renovations create $239,344 in added value with only $48,000 invested. The payback period is just 3.3 years, well under the common four-year benchmark.
When It Doesn’t Work
If renovations cost $10,000 per unit but rents only increase by $40, the result is an $80,000 renovation with just $62,950 in added value. Instead of creating equity, the investor loses $20,000 and faces a 21-year payback period. This demonstrates why disciplined underwriting and realistic assumptions are essential.
## Why Value Add Investments Are Popular
Investors pursue value add opportunities because they provide:
- Forced appreciation based on NOI improvements rather than speculation
- Higher cash flow through justified rent increases
- Faster equity growth compared to turnkey properties
- Greater control over outcomes through proactive improvements
For many investors, value add strategies are the key to transforming a modest portfolio into long-term wealth.
## Key Takeaways for Investors
Value add investing can deliver exceptional returns, but it requires careful execution. To maximize success:
1. Verify that the local market can support the rent increases you project
2. Align renovation costs with realistic returns and tenant demand
3. Calculate payback periods before committing capital
4. Avoid properties with structural or location issues that cannot be fixed
The most successful deals are those where targeted improvements create measurable increases in income and property value.
## Final Thoughts
A value add opportunity in real estate is not about gambling on market growth. It is about making strategic, calculated improvements that unlock real wealth. By focusing on properties with untapped potential, disciplined investors can accelerate portfolio growth, strengthen cash flow, and build lasting equity.
If you want to learn how to find, analyze, and execute multifamily value add investments, download my free 200-page book on real estate investing. It covers everything from market evaluation to financing strategies and can help you start building lifetime cash flow through real estate.
## **Value Add Real Estate: FAQ**
**What is a value add opportunity in real estate?
A value-add opportunity is a property you can improve through targeted renovations and better operations to increase net operating income, which raises the asset’s value and cash flow.
**How does value add create appreciation?
Commercial and multifamily values are largely a function of NOI divided by the market cap rate. When NOI rises through higher rents or lower controllable expenses, value increases even if market cap rates stay the same.
**What qualifies as a “real” value-add vs. marketing hype?
Clear rent gaps to market, solvable physical issues, fixable management inefficiencies, achievable amenity upgrades, and a renovation budget that is proportionate to the rent lift. If major upgrades are already complete or the rent gap is tiny, upside may be limited.
**Which improvements typically move the needle most?
Interior unit updates, energy-efficient appliances and lighting, in-unit laundry where feasible, kitchen and bath refreshes, flooring, parking and curb appeal, security and access control, Wi-Fi or package solutions, pet amenities, and targeted common-area upgrades.
**How do I estimate rent lift confidently?
Use true comps with matching bed and bath counts, similar vintage and location, and comparable finish levels. Confirm through property manager opinions, recent leases, and a test unit if possible. Avoid relying only on asking rents.
**What metrics should I use to evaluate value-add?
NOI growth, return on cost, cash-on-cash return, internal rate of return, equity multiple, payback period on capex, breakeven occupancy, and debt service coverage ratio.
**What is a good payback period for renovations?
Many operators target three to four years or less on interior upgrades. Faster paybacks are better, since they reduce risk and allow quicker recycling of capital.
**How do I budget renovation costs?
Create a detailed scope per unit and per common area. Include labor, materials, contingency, unit turns, lost rent during down time, permit and design fees, and taxes. Add a contingency of ten to fifteen percent for interiors and fifteen to twenty percent for exteriors or unknowns.
**What are common underwriting mistakes in value-add deals?
Overestimating rent growth, underestimating vacancy during turns, ignoring tax reassessment, underbudgeting capex, assuming expense reductions without proof, and forgetting lender reserves or interest rate variability.
**How should I stage the renovation timeline?
Sequence turns as leases roll, prove the rent lift with a few test units, then accelerate. For exteriors and amenities, schedule around seasonality and occupancy. Keep lenders and property management aligned on schedules and draws.
**What financing options fit value-add strategies?
Bridge loans for heavy lift and quick rehabs, agency loans with light rehab plans and strong in-place DSCR, bank loans for smaller projects, and supplemental loans or cash-out refis once NOI is stabilized.
**How do I control expenses while upgrading?
Batch material orders, standardize finishes, bid competitively, use preventative maintenance, submeter utilities where allowed, add water-saving fixtures, and implement professional management with clear KPIs.
**Which risks are hardest to fix?
Poor location fundamentals, functional obsolescence that tenants reject, severe structural or environmental issues, chronic crime without a credible remediation plan, and markets with weak demand or shrinking population.
**What due diligence items are critical for value-add?
Full lease audit, T-12 and general ledger review, real estate tax history and likely reassessment, utility and insurance quotes, permit history, capital needs assessment, environmental reports, survey and zoning compliance, and vendor contracts.
**How do I verify management upside?
Benchmark payroll, admin, repairs, marketing, and contract services against peers. Validate staffing plans with your manager, audit work orders and turns, and set measurable targets for delinquency, renewals, and maintenance response.
**What exit strategies align with value-add?
Refinance to return capital after stabilization, sale to core or core-plus buyers seeking stable yield, or hold for cash flow with supplemental debt. The right choice depends on cap rates, debt markets, and your fund or personal goals.
**How do I protect downside in a changing market?
Underwrite higher exit cap rates, include interest rate buffers, use conservative rent lifts, keep adequate operating and replacement reserves, and maintain flexible timelines in contracts and scopes.
**How can amenities increase rent without overspending?
Prioritize high-utilization, low-maintenance features such as secure package lockers, reliable internet, pet stations, grills, and shaded seating. Survey residents to confirm willingness to pay before investing in pools or gyms.
**What is a practical rule of thumb for rent lift vs. capex?
Aim for at least a five to seven percent return on cost from the rent increase alone. For example, one hundred dollars monthly rent lift per unit can justify approximately fourteen to twenty thousand dollars in all-in capex at that return target, depending on your hurdle and market.
**When should I walk away from a “value-add” deal?
When the renovation cost per unit consumes most of the total value created, when rent lifts depend on unrealistic comps, when DSCR is stressed even after stabilization, or when due diligence reveals unfixable issues.
**What is the best way to start on my first value-add?
Pick a solid submarket, confirm a real rent gap, run a tight scope on a small number of units first, measure results, and only then scale. Partner with an experienced property manager and contractor, and keep a conservative cash buffer.
**Categories:** Blog, Property Management
**Tags:** apartment investing, business structures, Driving Force, expenses, investing, investor mistakes, landlord, motivation, multifamily, multifamily investment, multifamily property investing, multifamily real estate, real estate, real estate investing, real estate podcast, recourse loan, Rod Khleif
---
### [Measuring Returns: Understanding How IRR Works](https://rodkhleif.com/measuring-returns-understanding-how-irr-works/)
**Published:** November 20, 2025
**Author:** Rod Khleif
**Excerpt:** When considering an investment in a multifamily property, one of the first questions that an investor may ask themselves is, “If I invest in this property, what is the return I can expect on my investment?”
**Content:**
If you’ve spent any time looking at real estate deals, you’ve seen a slide screaming: “Projected IRR: 16%.” It sounds impressive, but on its own it doesn’t tell you whether the deal is conservative, aggressive, or even realistic. To make smart decisions, you need to understand what’s behind that number instead of taking it at face value. To be a serious real estate investor you must understand how IRR works, what it really measures, and where it can mislead you. Once you understand it, you’ll spot overhyped projections much faster and feel more confident comparing deals. IRR becomes a decision tool instead of a sales tactic.
## What Is IRR, Really?
IRR stands for Internal Rate of Return. In simple terms, it is the annualized rate of return that makes the net present value (NPV) of all your cash flows equal zero. Said another way, it is the discount rate at which the present value of every dollar going into the deal equals the present value of every dollar coming out.
In plain English, IRR is the average annual return your money earns after accounting for the timing of every cash flow. It does not only care about how much profit you make; it also cares about *when* you receive that profit. That timing factor is exactly what separates IRR from simpler return metrics.
## Why Timing Matters So Much
Two deals can create the same total profit but have very different levels of attractiveness. Imagine one deal where you invest today and receive nothing for five years, and another where you get steady distributions plus a sale at the end. Both could produce $100,000 in profit, but the second deal is usually more appealing because you receive part of your return earlier and can reinvest it.
IRR captures this difference by valuing earlier cash flows more heavily than later ones. When you receive more of your money sooner, the IRR is higher because your capital is working harder over time. Understanding this is crucial if you want to compare deals with different hold periods, cash flow patterns, or exit strategies.
## The Building Blocks of IRR in Real Estate
To calculate IRR in a real estate investment, you need a series of cash flows over time. These are not just the initial investment and the final sale; they include everything that happens in between. The pattern and timing of these cash flows are exactly what IRR is measuring.
For a typical multifamily deal, that cash-flow stream usually includes:
- Your initial equity investment (a negative cash flow at time zero)
- Ongoing distributions from cash flow operations
- Refinance proceeds that may return some or all of your capital
- Final sale proceeds at the end of the hold period
You feed this timeline of cash flows into a spreadsheet and use the IRR function to calculate a single annualized percentage. You do not need to solve the equation manually, but you do need to understand what assumptions are going into the projection. If the cash flows are overly optimistic, the IRR will be inflated and misleading.
## A Simple Example of How IRR Works
Let’s look at a simplified example to see how IRR reacts to timing. Suppose you invest $100,000 in Deal A, receive no cash flow for four years, and then get $200,000 back in year 5. You doubled your money over five years, which sounds like a 20% simple average return per year, but the actual IRR is lower because all the profit arrives at the end.
In this case, the IRR is around 14-15%, not 20%, because your money sat idle in terms of distributions until the final year. IRR “understands” that waiting five years for the payoff is not the same as earning profit steadily every year. The longer your money is locked up without cash flow, the more IRR penalizes the deal.
Now imagine Deal B, where you again invest $100,000, but this time you receive $10,000 per year in years 1–4 and $160,000 in year 5. You still receive $200,000 total, so the profit is the same, but part of it comes earlier. In this scenario, the IRR is higher than in Deal A because you started getting your return right away instead of waiting until the end.
## IRR vs. Cash-on-Cash vs. Equity Multiple
IRR is powerful, but it should never be the only number you look at. To actually evaluate a real estate deal, you need to understand how IRR compares to other key metrics. Each metric tells you something different about the investment.
### Cash-on-Cash Return (CoC)
Cash-on-cash return measures annual cash flow divided by your total cash invested. For example, if you invest $100,000 and receive $8,000 per year in distributions, your cash-on-cash return is 8%. This metric tells you how much income you receive relative to your investment each year.
However, cash-on-cash does not account for the sale proceeds or refinance events. It also does not consider the timing of when your capital is returned. That means it is great for judging ongoing income, but incomplete for evaluating the full life of the deal.
### Equity Multiple
Equity multiple measures total cash received divided by total cash invested over the entire hold period. If you invest $100,000 and eventually get back $220,000, your equity multiple is 2.2x. This shows how effectively the deal multiplied your original capital.
The equity multiple is excellent for understanding the total wealth created, but it ignores how long it took to achieve that result. A 2x multiple over three years is very different from a 2x multiple over ten years. Equity multiple alone cannot tell you how efficiently those returns were generated.
### Internal Rate of Return (IRR)
IRR captures both the magnitude and the timing of all cash flows. It incorporates annual distributions, refinances, capital returns, and the sale into one annualized percentage. This makes IRR ideal for comparing deals that have different timelines or different patterns of cash flow.
The best approach is to use all three metrics together. Cash-on-cash tells you about income, equity multiple tells you about total wealth created, and IRR tells you how efficiently that wealth was produced over time.
## How IRR Changes With Different Hold Periods
One subtle feature of IRR is how sensitive it is to the length of the hold period. Shorter holds can show very high IRRs even if the absolute dollar profit is modest. Longer holds may show slightly lower IRRs but still create more total wealth and sometimes involve less execution risk.
For example, imagine you invest $100,000 and receive $130,000 back after two years. You made $30,000 in profit, which is not life-changing, but the IRR looks attractive because it happened relatively quickly. If the same $30,000 profit occurred over five years instead, the IRR would be much lower even though the total profit is identical.
This is why you should always pair IRR with the hold period and equity multiple. A very high IRR on a short flip might involve more risk, more debt, or more aggressive assumptions than a slightly lower IRR on a stable, longer-term hold. It is not just about the percentage; it is about the story behind it.
## Where IRR Can Mislead You
IRR is only as honest as the assumptions used to calculate it. Sponsors can easily make a deal look great on paper by tweaking a few key variables. As an investor, you should know the most common ways IRR can be unintentionally—or intentionally—misleading.
### 1. Overly Aggressive Exit Assumptions
If a sponsor assumes the property will sell at a very low cap rate in the future, the projected sale price—and therefore the IRR—can look amazing. However, that assumption might not be realistic for the market or economic environment. Conservative modeling usually assumes an equal or slightly higher exit cap than the entry cap to allow for softening conditions.
### 2. Unrealistic Refinance Events
Some pro formas show large refinance events that return 50–70% of investor capital in year two or three. While this can happen in certain markets, it is far from guaranteed. You should always examine the assumed loan terms, DSCR, and valuation that enable that refi, and ask what happens to IRR if the refinance is delayed or the proceeds are smaller.
### 3. Front-Loaded or One-Time Events
Occasionally, deals are structured so that early fees or one-time payouts juice the IRR, while long-term cash flow is underwhelming. The headline number looks great, but the actual passive income is disappointing. This is why you should study the year-by-year cash flow table instead of relying only on the final IRR slide.
### 4. Comparing Deals With Very Different Time Horizons
A 17% IRR on a three-year deal and a 15% IRR on an eight-year deal may sound comparable, but they represent very different risk and return profiles. The shorter deal exposes you to more transaction risk and requires you to find another good investment sooner. The longer deal may compound wealth more quietly while offering fewer taxable events and less turnover.
## What Is a “Good” IRR in Real Estate?
There is no universal “right” IRR number, because asset class, market risk, and business plan all matter. A conservative deal in a core market will naturally project a lower IRR than a heavy value-add project in a volatile area, even if both are solid investments for the right person. You always need to interpret IRR in context.
Broadly speaking, core or low-risk deals might target IRRs in the high single digits to low teens. Value-add multifamily deals often target IRRs in the mid-teens to low twenties, reflecting both the upside and the execution risk. Opportunistic or heavy lift projects may project higher IRRs, but they come with greater uncertainty and more ways for the plan to miss.
Instead of asking, “Is this IRR good?” ask, “Is this IRR realistic for the risk and story of this particular deal?” Compare it to similar offerings in similar markets, and make sure it aligns with your personal goals and risk tolerance.
## How to Use IRR When You’re Reviewing a Deal
When you understand how IRR works, you can use it as part of a repeatable review process. Instead of being dazzled by a single number, you walk through the deal with a checklist. That mindset shift alone will save you from a lot of disappointing investments.
Here is a simple way to evaluate IRR in context:
1. Check the Hold Period
Look at how long the deal is projected to run. A 3-year IRR and a 7-year IRR should not be compared blindly, because the risk and reinvestment requirements are very different.
2. Look at the Equity Multiple
Compare IRR to the total equity multiple. Ask yourself whether the projected annualized return is actually creating enough total dollars for the amount of time and risk involved.
3. Study the Cash Flow Pattern
Review the pro forma to see whether returns come from steady cash flow, a big refinance, or a large back-end sale. Make sure that pattern matches your needs for income and liquidity.
4. Stress-Test Key Assumptions
Ask what happens to IRR if the exit cap is higher, the refinance is smaller, or rent growth is slower. If a small change destroys the IRR, the deal may be too fragile.
5. Compare to Other Opportunities
Evaluate multiple deals side by side using IRR, equity multiple, cash-on-cash, and qualitative factors like sponsor track record and market quality. You are not just picking a number; you are choosing a business plan and a team.
## The Bottom Line: IRR Is a Tool, Not the Truth
IRR is one of the most useful metrics in real estate investing, especially for multifamily and longer-term projects. It helps you compare deals with different timelines, cash flow patterns, and exit strategies in a more sophisticated way than simple ROI. When used correctly, it gives you a clearer view of how efficiently your capital is working.
However, IRR is not a crystal ball and should never be treated as the single source of truth. It is only as accurate as the assumptions and cash flows behind it, and it can be easily distorted by aggressive modeling. The real power comes from using IRR alongside cash-on-cash return, equity multiple, and sound judgment.
When you combine a solid understanding of how IRR works with conservative underwriting and a strong investing framework, you move from guessing to truly measuring returns. That’s when you stop chasing shiny numbers and start building a portfolio that actually supports your long-term goals.
## FAQ: How IRR Works in Real Estate
### What is IRR and how does it work in real estate?
IRR, or Internal Rate of Return, is the annualized rate of return that makes the net present value (NPV) of all cash flows in a deal equal zero. In real estate, that means IRR looks at *every* dollar going into and out of the investment—including the timing—and solves for a single yearly return. It helps you compare deals that have different cash flow patterns and hold periods on a consistent, apples-to-apples basis.
### How is IRR different from a simple ROI?
Simple ROI usually looks at total profit divided by your initial investment and often ignores the timing of cash flows. For example, doubling your money over 2 years and doubling your money over 10 years both show 100% ROI, even though they are very different outcomes. IRR, on the other hand, bakes in *when* you get your money back, so a deal that returns capital and profit earlier will show a higher IRR than one that keeps you waiting.
### Why does timing matter so much when understanding how IRR works?
Timing matters because money you get back earlier can be reinvested into other opportunities, which increases your long-term wealth. IRR recognizes that a dollar received today is worth more than a dollar received five years from now. When you understand how IRR works, you see that deals with strong early cash flow and earlier capital return are often more attractive than deals that pay nothing until the end, even if the total profit is similar.
### What cash flows are included when calculating IRR in a real estate deal?
To understand how IRR works in a real estate investment, you need to look at the full sequence of cash flows, typically including:
- The initial equity investment (money you put into the deal)
- Periodic distributions from cash flow operations
- Refinance proceeds that return some or all of your capital
- Final sale proceeds when the property is sold
All of these flows—both negative (invested) and positive (received)—are plugged into an IRR calculation. The IRR is the discount rate that makes the present value of the positive and negative cash flows balance out to zero.
### How do I interpret a “good” IRR in real estate?
There is no single “good” IRR number because it depends on the risk level, business plan, and market. Generally, a higher IRR suggests your money is working harder, but it often comes with higher risk or more aggressive assumptions. The key is to compare IRRs within the same risk category and alongside other metrics like equity multiple and cash-on-cash return, so you are not just chasing the highest percentage without understanding the story behind it.
### How does IRR compare to cash-on-cash return and equity multiple?
Cash-on-cash return tells you how much annual income you are receiving relative to your investment, while equity multiple tells you how many total dollars you get back compared to what you put in. IRR combines both ideas by looking at total profit and the timing of all cash flows. When you know how IRR works, you use it together with cash-on-cash and equity multiple rather than relying on any single metric in isolation.
### Can IRR be misleading if I don’t know how it’s built?
Yes, it can. IRR can look fantastic on paper if the projections assume aggressive exit cap rates, optimistic refinance events, or unrealistic rent growth. If you do not understand how IRR works and what cash flows went into the calculation, you may be impressed by a high number that is built on fragile assumptions. Always look at the underlying pro forma and stress-test it before trusting the headline IRR.
### How does the hold period affect how IRR works?
Shorter hold periods can produce very high IRRs even if the absolute dollar profit is modest, because the return is compressed into a shorter timeframe. Longer holds may show slightly lower IRRs but still create more total wealth and sometimes come with less execution risk. When you understand how IRR works, you always pair the IRR number with the hold period and equity multiple to get the full picture.
### How can I use IRR to compare different real estate deals?
First, make sure each deal’s IRR is based on a realistic set of assumptions. Then compare:
- The IRR for speed and efficiency of returns
- The equity multiple for total wealth created
- The cash-on-cash for ongoing income
- The hold period and risk profile
When you understand how IRR works, you see it as one piece of a decision framework. You are not just asking “Which IRR is highest?” but “Which IRR makes the most sense given the risk, business plan, and my personal goals?”
### Do I need to know the math to understand how IRR works?
You don’t need to solve the IRR equation by hand, because spreadsheets and calculators can do that for you. What you *do* need is a conceptual understanding of how IRR works and what goes into it. If you know which cash flows are included, how timing changes the result, and how assumptions can skew the number, you’ll be able to use IRR wisely without being a mathematician.
*Disclaimer: This article was written with the help of AI and reviewed by Rod and his team. Always consult a licensed professional.*
**Categories:** Blog, Property Management, Raising Capital
**Tags:** apartment investing, how irr works, investing, investor mistakes, irr, landlord, measuring returns, motivation, multifamily, multifamily investment, multifamily property investing, multifamily real estate, real estate, real estate investing, real estate podcast, Rod Khleif
---
### [Evaluating Multifamily Expenses](https://rodkhleif.com/evaluating-expenses-tricks-of-the-trade/)
**Published:** September 15, 2025
**Author:** Rod Khleif
**Excerpt:** As part of normal due diligence, an in-depth evaluation of expenses by line item is critical in understanding the past performance, and forecasting the future expectations for the asset.
**Content:**
When you’re investing in multifamily properties, it’s easy to focus on rental income, occupancy, and appreciation. But smart investors know the real test of profitability lies in evaluating multifamily expenses. The way you analyze costs directly affects net operating income (NOI), cash flow, and ultimately the property’s valuation.
Accurately evaluating multifamily real estate expenses means distinguishing between reliable deals and financial traps. Get it wrong, and you may overpay for a property. Get it right, and you set yourself up for strong return on investment and a healthier real estate portfolio.
This guide will take you through the process step by step. It covers line items, benchmarks, red flags, and practical tips. This way, you can make better investment decisions in multifamily real estate.
## Why Expense Evaluation Matters
Every multifamily investment hinges on expenses. Strong rent rolls mean nothing if expenses eat up all the profits. Operating costs like maintenance, property taxes, payroll, and insurance determine how much money is left after bills are paid.
If you don’t dig deep into expenses, you risk:
- Overpaying due to inflated NOI.
- Missing hidden costs that tank cash on cash return.
- Accepting loan terms that don’t match real performance.
Evaluating expenses is how you protect downside risk in commercial real estate.
## The Relationship Between Expenses, NOI, and Valuation
Property values in multifamily real estate aren’t based on comparable sales like single-family homes. They’re determined by net operating income (NOI) and the capitalization rate (cap rate).
NOI = Income – Operating Expenses
A property with understated expenses looks artificially profitable, which inflates value. Even a small error in expenses can swing value by millions.
Example:
- Gross Income: $2,000,000
- Real Expenses: $900,000
- NOI: $1,100,000
- At a 6% cap rate = $18.3M value
But if expenses are understated by $100,000:
- NOI drops to $1,000,000
- Value = $16.7M
That $100K oversight costs $1.6M in value. This is why evaluating multifamily expenses is the most important part of underwriting.
## Categories of Multifamily Expenses
Expenses generally fall into these buckets:
- Fixed Expenses – Don’t change much with occupancy (insurance, property taxes).
- Variable Expenses – Fluctuate with occupancy and usage (utilities, repairs, marketing).
- Controllable Expenses – Can be managed by ownership (payroll, vendor contracts).
- Non-Controllable Expenses – Outside your control (taxes, some utilities).
Understanding which category each cost falls into helps in planning and risk assessment.
## Operating Expenses vs. Capital Expenditures
A common mistake in multifamily investment analysis is confusing operating expenses with capital expenditures (CapEx).
- Operating Expenses (OPEX): Recurring, day-to-day costs like maintenance, property management, insurance.
- Capital Expenditures: Large, non-recurring improvements like roof replacement or HVAC systems.
Separating these ensures you don’t overestimate NOI or underestimate long term repair needs.
## Key Line Items Investors Must Review
When reviewing a T12 or expense report, here’s what to focus on:
1. **Property Management Fees** – Usually 3-10% of income. Low numbers may signal underreporting.
2. **Maintenance & Repair**s – Includes routine upkeep. Too low? Likely deferred.
3. **Utilities** – Water, sewer, trash, electric, gas. Can be huge in older buildings.
4. **Insurance** – Rising fast in many markets. Always confirm with a new quote.
5. **Property Taxes** – Expect reassessment after purchase, which can significantly raise costs.
6. **Payroll** – For larger complexes, includes salaries, benefits, and bonuses.
7. **Marketing/Leasing Costs** – Ads, websites, resident referral programs.
8. **Administrative Costs** – Office supplies, legal, accounting.
9. **Contract Services** – Landscaping, pest control, cleaning, security.
10. **Reserves for Replacement** – Smart owners budget for future CapEx.
## Tools and Methods for Analyzing Expenses
- T12 (Trailing 12) Statements – The gold standard for real expenses.
- Rent Rolls – Compare income with operating costs.
- Pro Forma vs. Actuals – Brokers love pro forma optimism. Stick with actuals.
- Excel Models – Stress-test NOI by raising expense assumptions.
Third-Party Verification -Get real quotes from insurers, utility companies, and property management firms.
## Common Red Flags in Expense Statements
- Too-Low Expense Ratios: A 20% ratio when the market averages 40–50%.
- No Payroll on Large Properties: Unrealistic without outside management.
- Understated Property Taxes: Not accounting for reassessment.
- Maintenance “Miracle”: Extremely low maintenance likely means deferred repairs.
- Insurance Gaps: Numbers that don’t reflect recent premium increases.
Each of these can distort NOI and mislead your investment decision.
## Practical Example: Breaking Down a T12
Consider a 100 unit property showing:
- Gross Income: $1.5M
- Expenses: $450K (30% ratio)
On paper, this looks great. But after digging:
- Taxes: Listed at $100K → Real reassessed amount: $180K
- Insurance: Listed at $40K → Current quote: $85K
- Repairs: $50K total → Unrealistic, should be $90K
Corrected Expenses: $685K
Corrected NOI: $815K
At 6% capitalization rate, value drops to $13.6M from $17.5M.
Lesson: Broker numbers often paint a rosier picture.
## Tips for Avoiding Costly Mistakes
- Always verify taxes with the assessor.
- Get updated insurance quotes.
- Stress-test utilities and payroll.
- Review vendor contracts directly.
- Speak with third-party property management companies.
- Always budget reserves, even if the seller didn’t.
## How Expense Analysis Impacts Financing and Loan Terms
Your underwriting influences what lenders see and what terms you get.
- DSCR (Debt Service Coverage Ratio): Underestimating expenses lowers DSCR.
- Loan Proceeds: Lenders may cut loan size if expenses are higher than expected.
- Interest Rates: Higher risk can mean higher rates.
- Recourse vs. Non-Recourse: Expense assumptions can influence whether a lender demands personal guarantees.
Solid expense analysis strengthens financing and protects your downside in real estate investments.
## Conclusion & Next Steps
When investing in multifamily properties, success comes down to disciplined underwriting. Evaluating multifamily expenses ensures realistic NOI, accurate valuations, and stronger financing.
The best investors don’t just accept seller numbers. They verify, benchmark, and stress-test. They treat operating expenses with as much weight as rent growth projections.
Mastering evaluating multifamily real estate expenses will help you grow your real estate portfolio, make smarter multifamily investments, and achieve consistent cash flow and long-term cash on cash return.
If you want to learn more about multifamily real estate, join the next [Multifamily Bootcamp](/bootcamp).
## Frequently Asked Questions (FAQ)
### Why is evaluating multifamily expenses so important?
Because expenses determine net operating income (NOI), which drives property value. If you underestimate expenses, you’ll overstate NOI, overvalue the property, and risk poor return on investment.
What’s the difference between operating expenses and capital expenditures?
- Operating expenses (OPEX): Day-to-day operating costs like maintenance, property management, insurance, and utilities.
- Capital expenditures (CapEx): Big-ticket, non-recurring improvements like roof replacements or HVAC systems that extend a property’s life.
### How do expenses affect property value in multifamily real estate?
Property value in commercial real estate is based on NOI and the capitalization rate (cap rate). Higher expenses reduce NOI, which lowers valuation. A small change in expenses can reduce value by millions.
### What are the biggest red flags when reviewing expenses?
- Unrealistically low expense ratios.
- No payroll costs on larger properties.
- Understated property taxes (not accounting for reassessment).
- Low maintenance or repair costs suggesting deferred expenses.
- Insurance numbers that don’t reflect current market premiums.
### How can I stress-test expenses before making an investment decision?
Increase expense assumptions by 10-20% in your underwriting model. Test how this impacts cash flow, cash on cash return, and your ability to cover debt service. This prepares you for market fluctuations like rising interest rates or utility costs.
### How do lenders look at multifamily expenses?
Lenders evaluate expenses to confirm NOI and Debt Service Coverage Ratio (DSCR). If expenses are understated, lenders may reduce loan proceeds, increase interest rates, or require recourse terms. Strong expense analysis supports better financing.
### How does expense evaluation tie into long-term strategy?
Accurate expense analysis ensures sustainable cash flow, protects your real estate investments, and strengthens your real estate portfolio over the long term. It also helps in planning renovations, reducing turnover, and managing vacancy rates.
### Can property management help lower expenses?
Yes. Experienced property management companies often negotiate better contracts for services, improve tenant retention (lowering turnover costs), and streamline operations. While their fees add to expenses, the efficiency usually improves NOI and investment returns.
### What’s the #1 mistake investors make with multifamily expenses?
Relying too heavily on broker pro formas. Always request actual financials (T12 and rent rolls), confirm with third-party quotes, and benchmark against industry standards before finalizing your multifamily investment.
*Disclaimer: This article was written with the help of AI and reviewed by Rod’s team. Always consult licensed professionals.*
**Categories:** Blog, Due Diligence, Raising Capital
**Tags:** apartment investing, business structures, Driving Force, expenses, investing, investor mistakes, landlord, motivation, multifamily, multifamily investment, multifamily property investing, multifamily real estate, real estate, real estate investing, real estate podcast, recourse loan, Rod Khleif
---
### [Multifamily Underwriting 101: The Complete Guide](https://rodkhleif.com/multifamily-underwriting-guide/)
**Published:** April 1, 2026
**Author:** Alex Khleif
**Content:**
This guide is the definitive introduction to multifamily underwriting. The difference between investors who build generational wealth and those who get burned almost always comes down to underwriting. Not luck. Not timing. Not connections. Underwriting.
I learned this the hard way. In 2008, I lost $50 million. It was mostly because I got sloppy with my assumptions. I fell in love with deals. I should have let the numbers decide. That experience changed how I analyze every deal. It’s why I see underwriting as the most important skill in multifamily investing.
Whether you have never analyzed an apartment deal, you can learn this. If you want to refresh the basics, you can do that too. You will learn how to evaluate any property with confidence. When you’re ready to run the numbers yourself, use our [free multifamily deal analyzer](https://rodkhleif.com/deal-underwriting-tool/) to apply everything in this guide instantly.
> **What You’ll Learn**
>
> What multifamily underwriting is and why it matters.The key metrics every investor must know.How to build a complete underwriting model, step by step.How lenders underwrite your deal and what they look for.Common underwriting mistakes and how to avoid them.How to stress-test deals and protect against downside scenarios
## **What Is Multifamily Underwriting?**
Underwriting is the process of analyzing a property’s financial performance to determine whether it meets your investment criteria. It’s how you separate genuine opportunities from deals that only look good on the surface.
In multifamily real estate, underwriting answers three fundamental questions:
1. What does this property actually earn? (income analysis)
2. What does it actually cost to operate? (expense analysis)
3. What is it actually worth, and what could it be worth? (valuation)
The seller’s pro forma is a marketing document, not a financial analysis. It’s designed to make the property look as attractive as possible. Your job as an underwriter is to reconstruct reality using conservative assumptions backed by real market data.
> **Rod’s Rule**
>
> Never fall in love with a deal. Let the numbers tell you whether it deserves your attention. The spreadsheet doesn’t care about your feelings, and that’s exactly the point.
## **Why Multifamily Underwriting Is Different from Single-Family**
Single-family homes are valued by comparable sales, which means what similar houses nearby sold for. Multifamily properties are valued by income. That one difference changes everything.
Commercial and multifamily valuation is driven by [Net Operating Income (NOI)](https://rodkhleif.com/a-complete-guide-noi-in-real-estate-in-2025/) divided by the market [capitalization rate](https://rodkhleif.com/what-is-a-good-cap-rate-for-multifamily/):
**Property Value = NOI ÷ Cap Rate**
This means you, the investor, have direct control over your property’s value. Every operational improvement that increases NOI creates a multiplied increase in value. That’s the core of value-add multifamily investing, and it’s why the underwriting must be precise.
A $10,000 annual increase in NOI in a 6% cap rate market adds $167,000 in property value. Get the NOI wrong by even a modest margin and your valuation swings by hundreds of thousands of dollars.
## **The Key Metrics You Must Know**
### **1. Gross Potential Rent (GPR)**
The maximum annual rental income the property would generate if 100% occupied at full market rents. This is your starting point; the ceiling on income before any vacancy or loss is applied.
### **2. Effective Gross Income (EGI)**
GPR minus vacancy and credit loss, plus any ancillary income (laundry, parking, storage, pet fees). This is the realistic income the property actually collects.
**EGI = GPR − Vacancy & Credit Loss + Other Income**
### **3. Net Operating Income (NOI)**
The single most important metric in multifamily underwriting. [NOI](https://rodkhleif.com/a-complete-guide-noi-in-real-estate-in-2025/) is EGI minus all operating expenses (excluding debt service, depreciation, and capital expenditures). It measures the property’s profitability independent of how you financed it.
**NOI = EGI − Operating Expenses**
NOI is what lenders use to size your loan, what appraisers use to determine value, and what you use to compare opportunities across markets.
### **4. Cap Rate (Capitalization Rate)**
The ratio of NOI to property value. Use our [free cap rate calculator](https://rodkhleif.com/cap-rate-calculator/) to run this instantly on any deal. [Cap rate](https://rodkhleif.com/how-cap-rates-work-with-examples/) tells you the property’s unleveraged yield, which is what you’d earn if you bought it with all cash.
**Cap Rate = NOI ÷ Property Value × 100**
In 2026, [national multifamily cap rates](https://rodkhleif.com/what-is-a-good-cap-rate-for-multifamily/) averaged about 5.0% to 5.1% in primary markets. Secondary and tertiary markets range from 6% to 9%. The ‘right’ cap rate depends on your market, asset class, and investment goals.
### **5. Debt Service Coverage Ratio (DSCR)**
The ratio of NOI to annual debt service (mortgage payments). DSCR tells lenders whether the property generates enough income to cover its loan payments. Most commercial lenders require a minimum DSCR of 1.20x–1.25x.
**DSCR = NOI ÷ Annual Debt Service**
A DSCR of 1.25x means the property generates 25% more income than needed to cover the mortgage. If your underwritten NOI does not support the required DSCR at your target loan amount, lower your purchase price. Or, improve your value-add plan to deliver stronger results.
### **6. Cash-on-Cash Return (CoC)**
Measures the annual cash flow return relative to your actual equity invested. Unlike cap rate, CoC accounts for financing, so it reflects your real, leveraged return.
**CoC = Annual Pre-Tax Cash Flow ÷ Total Cash Invested**
Most experienced multifamily investors target 8%–12% cash-on-cash in today’s market. Below 6% and the deal may not justify the risk relative to alternatives.
### **7. Internal Rate of Return (IRR)**
The annualized total return across the full hold period — including cash flow, principal paydown, and sale proceeds. [IRR](https://rodkhleif.com/measuring-returns-understanding-how-irr-works/) is the most comprehensive performance metric for comparing deals with different timelines. Target 12%–18%+ for value-add multifamily in most markets.
### **8. Equity Multiple**
Total cash returned to you (distributions + sale proceeds) divided by your total equity invested. An equity multiple of 2.0x means you doubled your money. Simple and powerful when communicating returns to passive investors.
## **Step-by-Step: How to Underwrite a Multifamily Deal**
For a full walkthrough with worked examples and downloadable templates, see our [complete step-by-step multifamily underwriting guide](https://rodkhleif.com/how-to-underwrite-a-multifamily-deal-step-by-step-the-complete-guide/). Here’s the framework:
### **Step 1: Gather the Source Documents**
Never underwrite from the offering memorandum alone. Request:
- Rent roll (current unit-by-unit rents, lease end dates, tenant status)
- Trailing 12-month (T-12) income and expense statement
- Prior 2-3 years of operating statements
- Utility bills (to verify expense claims)
- Property tax bills and insurance certificates
- Any existing leases, especially commercial or long-term residential
> **Red Flag**
>
> If a seller won’t provide the T-12 or rent roll, walk away. There’s always a reason they’re hiding the actual performance data.
### **Step 2: Reconstruct Gross Potential Rent**
Pull the rent roll. For each unit type, record the current rent. Compare it to market rents using recent comparable lease data from CoStar, Apartments.com, or local property managers.
- Current rents below market = upside opportunity (value-add)
- Current rents above market = red flag requiring investigation
- Vacancy above 10% = confirm cause (mismanagement vs. market conditions)
Knowing how to [find and analyze multifamily deals](https://rodkhleif.com/finding-analyzing-multifamily-deals-like-a-pro/) starts with accurate rent data. Use multiple sources and never rely on the seller’s market rent claims without independent verification.
### **Step 3: Build Your Income Model**
Starting from GPR, work down to EGI:
- Apply a vacancy and credit loss rate (typically 5%-10% depending on market and asset class)
- Add verified ancillary income: laundry, parking, storage, RUBS, pet fees
- Cross-reference every income line against the T-12 actuals
- For value-add deals, model two scenarios: current NOI and stabilized NOI
**Pro Tip**Model income conservatively. Underwrite at current market rents, not the top of what you think the market could bear. Your upside is the buffer, not your baseline assumption.
### **Step 4: Model Operating Expenses**
This is where most rookie underwriters go wrong. Expense ratios for multifamily typically run 40%–55% of EGI depending on property class, age, and management quality.
Every expense category to model:
- Property taxes (verify with county assessor — reassessment at sale is common)
- Insurance (get an actual quote, not the seller’s number)
- Property management (6%–8% of EGI; include this even if self-managing)
- Maintenance and repairs ($600–$1,200 per unit annually depending on age)
- Utilities (if landlord-paid; verify with actual bills)
- Landscaping and janitorial
- Advertising and leasing
- Administrative
- Reserves for replacement ($300–$500 per unit annually minimum)
Do not include debt service, depreciation, income taxes, or capital expenditures in operating expenses. NOI is a pre-financing, pre-CapEx metric.
### **Step 5: Calculate NOI and Determine Value**
With EGI and operating expenses established, calculate [NOI](https://rodkhleif.com/a-complete-guide-noi-in-real-estate-in-2025/). Then determine value using the local market cap rate:
> **Estimated Value = NOI ÷ Market Cap Rate**
This tells you what the property is worth at its current performance. It also shows what it could be worth after you complete your improvement plan. This is critical for value-add deals.
Use our [free multifamily deal analyzer](https://rodkhleif.com/deal-underwriting-tool/) to calculate NOI, cap rate, and estimated value automatically. No spreadsheet required.
### **Step 6: Model Financing and Returns**
Once you know your NOI and estimated value, model the debt. Use the [capital stack framework](https://rodkhleif.com/financing-your-deal-understanding-the-capital-stack/) to structure senior debt, preferred equity (if applicable), and your equity position.
- Determine maximum loan amount based on DSCR requirements (1.25x typical)
- Calculate required equity (purchase price + CapEx + closing costs − loan amount)
- Project annual cash flow: NOI minus debt service
- Calculate the cash-on-cash return on your invested equity
- Model full hold period (typically 5–7 years) with projected exit value
For [syndicated deals](https://rodkhleif.com/what-is-multifamily-syndication-a-complete-guide/) where you raise LP capital, model LP returns and GP returns separately.
Include the preferred return and profit split for LPs.
Include the acquisition fee and promote for GPs.
This helps confirm the deal structure is fair to all parties.
### **Step 7: Stress Test the Deal**
The most important step that most investors skip. Run three scenarios:
- Base case: your conservative underwriting assumptions
- Downside case: vacancy 5% higher, rent growth flat, expenses 10% above baseline, exit cap rate 0.5%–1.0% higher than entry
- Worst case: full market downturn — rents fall 10%, vacancy spikes, refinancing unavailable
If the deal breaks in the downside scenario, you’re taking on more risk than the returns justify. The best multifamily investments generate acceptable returns even in stressed conditions.
## **How Lenders Underwrite Your Deal**
Understanding how lenders think about underwriting is essential to structuring deals that actually get financed. For a deep dive, read our guide to [how a lender underwrites a multifamily loan request](https://rodkhleif.com/get-your-deal-approved-understanding-how-a-lender-underwrites-a-multifamily-loan-request/).
Commercial lenders evaluate four primary factors:
### **1. The Property’s NOI and DSCR**
Lenders use your underwritten NOI, not the seller’s pro forma, to determine how much they’ll lend. If your stabilized NOI at a 1.25x DSCR supports a $2M loan but you need $2.5M to close, the deal doesn’t work at your price.
### **2. Loan-to-Value (LTV)**
Most commercial lenders cap LTV at 70%–75% for multifamily acquisitions. Agency lenders ([Fannie Mae,](https://www.fanniemae.com/) [Freddie Mac](https://www.freddiemac.com/home)) may allow up to 75%–80% on stabilized assets. The lower of the DSCR test or LTV test determines your actual loan amount.
### **3. Borrower Qualifications**
Lenders evaluate your experience, net worth, and liquidity. For larger loans, they often require net worth equal to the loan amount and post-closing liquidity of 10% of the loan. A strong [personal financial statement](https://rodkhleif.com/understanding-the-personal-financial-statement/) is your financial handshake with the lender — it should be current, detailed, and professionally prepared.
### **4. Market and Asset Quality**
Lenders assess the submarket: population trends, employment base, rent growth trajectory, and supply pipeline. A 200-unit building in a declining tertiary market faces more scrutiny than an equivalent asset in a high-growth submarket, regardless of the NOI.
**Agency vs. Bridge Financing**Stabilized deals typically use agency financing (Fannie/Freddie) with long terms and low rates. Value-add acquisitions often need bridge loans. These are short-term loans with higher rates. They fund the purchase and rehab work. Later, the loan is refinanced into permanent debt after the property stabilizes.
## **Multifamily Underwriting Value-Add Deals: The Pro Forma Model**
Value-add underwriting requires modeling two distinct financial pictures: the property as-is, and the property at stabilization. For a complete breakdown of what qualifies as a genuine [value-add opportunity](https://rodkhleif.com/value-add-opportunity-what-does-it-mean-and-should-i-consider-it/) vs. marketing hype, and proven strategies to [increase NOI](https://rodkhleif.com/the-5-best-ways-to-add-value-to-a-property-and-increase-the-noi/), those guides go deep on execution.
In your underwriting model, you need to account for:
- Current in-place NOI (what you’re buying at closing)
- Renovation costs per unit and timeline for completion
- Lease-up assumptions (how quickly can you fill vacant units and raise rents as leases turn)
- Carrying costs during the value-add period (debt service, taxes, insurance before full stabilization)
- Stabilized NOI (projected 12-month run rate after value-add execution)
- Exit cap rate (typically 0.25%–0.5% above entry cap rate to be conservative)
**Metric****As-Is (at Acquisition)****Stabilized (Pro Forma)**GPR$480,000$600,000Vacancy (7%)−$33,600−$42,000Other Income$12,000$18,000EGI$458,400$576,000Operating Expenses (45%)−$206,280−$259,200NOI$252,120$316,800Cap Rate (6.5%)Value: $3.88MValue: $4.87MValue Creation—+$990,000## **Common Multifamily Underwriting Mistakes (and How to Avoid Them)**
### **Mistake #1: Using the Seller’s Expense Ratio**
Sellers routinely present expense ratios of 30%–35% on Class B and C properties. Realistic expense ratios for these asset classes are 45%–55%. Always rebuild expenses from scratch using market data, actual utility bills, and real management quotes.
### **Mistake #2: Assuming Immediate Rent Increases**
You can’t raise every tenant’s rent on day one. Leases have terms. Underwrite rent growth at lease rollover, not immediately at closing. Model realistic lease rollover timelines and tenant retention rates.
### **Mistake #3: Ignoring Deferred Maintenance**
Deferred maintenance is often the reason a property is priced attractively. Get a full property inspection and professional systems reports (roof, HVAC, plumbing, electrical) before closing. Incomplete [due diligence](https://rodkhleif.com/a-comprehensive-guide-to-multifamily-due-diligence/) is one of the most expensive mistakes in multifamily investing.
### **Mistake #4: Underestimating CapEx**
Capital expenditures — major repairs and improvements outside of routine operations — are not included in NOI but they are very real costs. Budget $3,000–$10,000+ per unit for value-add renovations depending on scope, and maintain a CapEx reserve even for stabilized deals.
### **Mistake #5: Not Stress Testing**
Deals that only work under best-case assumptions will fail in real market conditions. Always run a downside scenario before committing. If the deal can’t survive vacancy 5% above your base case and flat rent growth, you’re taking on uncompensated risk.
### **Mistake #6: Ignoring the Exit**
Your returns depend heavily on what you sell the property for — and at what cap rate. Underwriting an aggressive exit cap rate (assuming you’ll sell at a compressed cap) is one of the most common ways investors manufacture returns that don’t actually materialize. Be conservative on your exit assumptions.
## **Quick Reference: Multifamily Underwriting Benchmarks (2026)**
[](https://rodkhleif.com/multifamily-underwriting-guide/screenshot-2026-04-01-at-11-08-54-pm/)
## **Frequently Asked Questions About Multifamily Underwriting**
### **What documents do I need to underwrite a multifamily deal?**
At minimum: the rent roll, trailing 12-month (T-12) income and expense statement, and prior 2–3 years of operating statements. Include property tax bills, insurance bills, and utility bills. For value-add deals, also request any capital expenditure records and deferred maintenance reports.
### **What is a good expense ratio for multifamily?**
Class A properties: 35%–45% of EGI. Class B properties: 45%–52%. Class C properties: 50%–58%. Any seller claiming expense ratios below 35% on a B or C asset needs careful review. The expenses are almost always understated.
### **How do I find market cap rates for my target area?**
Use CoStar, Marcus & Millichap market reports, or CBRE research for cap rate data by submarket and asset class. Our [guide to multifamily cap rates by city](https://rodkhleif.com/what-is-a-good-cap-rate-for-multifamily/) covers 2026 benchmarks across major U.S. markets.
### **How long does it take to underwrite a multifamily deal?**
A quick screening underwrite should take 15-30 minutes with a good tool. A full investment underwrite for a 50–200 unit property usually takes 4-8 hours of focused work. It includes document checks and scenario modeling.
### **Can I underwrite multifamily deals without a sophisticated spreadsheet?**
For initial deal screening, our [free multifamily deal analyzer](https://rodkhleif.com/deal-underwriting-tool/) handles the core metrics instantly — no spreadsheet required. For full investment underwriting and presenting to lenders or investors, a more detailed model (Excel-based or purpose-built software) is recommended.
### **How do lenders verify my underwriting?**
Lenders order an independent appraisal and conduct their own underwriting analysis using the T-12 and rent roll. They compare your assumptions against their internal benchmarks and market data. Read our full guide on [how lenders underwrite a multifamily loan](https://rodkhleif.com/get-your-deal-approved-understanding-how-a-lender-underwrites-a-multifamily-loan-request/). Learn what they look for. Also learn how to structure your deal package to get approved.
### **What’s the difference between underwriting and due diligence?**
Underwriting is a financial analysis. It answers, “Do the numbers work?” Due diligence is a verification process. It confirms the numbers you underwrote match reality. Both are essential. Learn more in our [comprehensive guide to multifamily due diligence](https://rodkhleif.com/a-comprehensive-guide-to-multifamily-due-diligence/).
## **Next Steps: Build Your Multifamily Underwriting Skills**
Underwriting is a skill that compounds with repetition. The investors who succeed in multifamily analyze dozens, sometimes hundreds, of deals before closing their first. Every deal you underwrite sharpens your pattern recognition and builds the instinct to spot real opportunities fast.
Here’s how to take your underwriting to the next level:
1. **Run the numbers on a live deal today:** Use the [free multifamily deal analyzer](https://rodkhleif.com/deal-underwriting-tool/) to underwrite any property in minutes.
2. **Deepen your step-by-step process:** Read the [complete multifamily underwriting guide](https://rodkhleif.com/how-to-underwrite-a-multifamily-deal-step-by-step-the-complete-guide/) for detailed examples and worked calculations.
3. **Learn how to buy your first deal:** Our guide to [buying an apartment building](https://rodkhleif.com/buying-an-apartment-building-complete-guide/) walks you through the full process. It covers everything from search to close.
4. **Train with Rod in person:** The [Multifamily Underwriting & Due Diligence Bootcamp](https://rodkhleif.com/multifamily-underwriting-bootcamp/) is a hands-on 2-day training where you analyze real deals alongside experienced investors.
5. **Get the book, free:** Download Rod Khleif’s [How to Create Lifetime Cash Flow Through Multifamily Properties](https://rodkhleif.com/lcfa-ebook/).
It is a complete playbook for beginners and advanced readers.
Get it at no cost.
**From Rod**Great underwriting isn’t about being pessimistic. It’s about being honest. When you review enough deals with clear eyes and cautious assumptions, real opportunities stand out. They still work when you stress test them. That’s the deal you want. That’s the deal that creates lifetime cash flow.
*Disclaimer: This article was written with the help of AI and reviewed by Rod and his team.*
**Categories:** Blog, Due Diligence, Multifamily Investing, Real Estate
**Tags:** multifamily underwriting, underwriting
---
### [BRRRR Method for Multifamily Investors](https://rodkhleif.com/brrrr-method-for-multifamily-investors/)
**Published:** March 31, 2026
**Author:** Alex Khleif
**Content:**
Most real estate investors know the BRRRR method from the single-family world. But here’s what few people talk about: when you apply the BRRRR strategy to multifamily real estate, the returns compound in ways that single-family investing simply can’t match.
I’ve helped thousands of students build multifamily portfolios from scratch. When done right, the BRRRR method is a powerful framework. It helps them scale fast, recycle capital, and build long-term cash flow.
In this guide, I’ll break down exactly what the BRRRR method is, how it works differently with apartment buildings, step-by-step how to execute it, and the mistakes I see investors make that cost them real money.
**What You’ll Learn in This Guide**What BRRRR stands for and how it works in multifamily | How to find the right value-add apartment deals | Step-by-step execution from acquisition to refinance | Key metrics to evaluate a BRRRR multifamily deal | Common mistakes and how to avoid them | How to scale from one BRRRR deal to a full portfolio
## **What Is the BRRRR Method?**
BRRRR stands for:
- Buy
- Rehab
- Rent
- Refinance
- Repeat
The strategy works like this: You buy a distressed or underperforming property below market value. You raise its value with renovations and better management. You stabilize it by filling it with tenants. Then you do a cash-out refinance to pull out your invested capital. You use that capital to fund the next deal.
Done well, BRRRR allows you to recycle the same pool of capital across multiple deals rather than leaving it permanently locked in a property.
> **Rod’s Take**
>
> The BRRRR method isn’t just a financing strategy, it’s a value creation strategy. The refinance only works if you’ve genuinely increased the property’s net operating income. That’s the part most people gloss over. Forced appreciation through operational improvement is what makes the whole thing work.
## **Why BRRRR Works Differently in Multifamily**
In single-family real estate, BRRRR works primarily through comparable sales (comps). You renovate to increase the property’s market value relative to neighboring homes.
In multifamily, valuation is income-based. A commercial lender doesn’t care what the house next door sold for. They care about one thing: [Net Operating Income](https://rodkhleif.com/a-complete-guide-noi-in-real-estate-in-2025/) (NOI).
Multifamily value is calculated as: **Value = NOI ÷ Cap Rate**
This means every dollar of NOI you add creates a multiplied increase in property value. In a market with a 6% [cap rate](https://rodkhleif.com/what-is-a-good-cap-rate-for-multifamily/), adding $10,000 in annual NOI increases property value by roughly $167,000. That’s the leverage point BRRRR investors in multifamily use to manufacture equity at scale.
**Example**You buy a 24-unit apartment building with below-market rents and mismanaged expenses. NOI at acquisition: $120,000. After rehab and rent increases, NOI grows to $180,000. At a 6% cap rate, the property value jumps from $2,000,000 to $3,000,000 — a $1,000,000 increase. Now you refinance against that new value and pull your capital back out.
## **Step-by-Step: How to Execute the BRRRR Method in Multifamily**
### **Step 1: Buy the Right Property**
Not every multifamily deal is a BRRRR candidate. You need a value-add opportunity — a property where the current owner has left money on the table. Look for:
- Below-market rents (existing tenants paying significantly less than market rate)
- High vacancy due to deferred maintenance or poor management
- Bloated operating expenses that can be trimmed
- Mismanaged properties owned by tired or out-of-state landlords
- Properties in markets with strong rent growth fundamentals
Your purchase price must leave enough spread between acquisition cost and after-repair value (ARV) to support a cash-out refinance. Most experienced investors target buying at 70-80% of stabilized value.
Key metric to verify before buying: **After-Repair NOI ÷ Cap Rate > (Purchase Price + Rehab Cost + Closing Costs)**
### **Step 2: Rehab to Force Appreciation**
In multifamily BRRRR, rehab has two dimensions: physical and operational.
**Physical improvements** that justify rent increases:
- Unit interiors: new flooring, appliances, cabinets, fixtures
- Common areas: landscaping, lighting, signage, laundry rooms
- Mechanical systems: HVAC, plumbing, roofing if deferred
- Curb appeal upgrades that support premium positioning
**Operational improvements** that increase NOI:
- Replace underperforming property management
- Audit and renegotiate vendor and service contracts
- Implement utility billing back to tenants (RUBS program)
- Add revenue streams: storage units, covered parking, pet fees
- Lease up vacant units to market rents
The operational side is where most BRRRR investors in multifamily leave money on the table. Physical renovations get the press, but trimming $30,000 in unnecessary expenses creates the same NOI impact — and the same value increase — as a full unit renovation program.
### **Step 3: Rent to Stabilize**
Before a lender will refinance your apartment building, they need to see stabilized occupancy. Most lenders require 90% occupancy for 90 days before they’ll order an appraisal.
During the stabilization period:
- Fill vacant units at market rate (not discounted to fill quickly)
- Renew existing leases at market rate as they expire
- Document all income and expenses with clean T-12 financials
- Maintain consistent occupancy — don’t rush the lease-up at the expense of tenant quality
**Pro Tip**Lenders look at your trailing 12-month (T-12) income statement to verify NOI. Start keeping immaculate records from day one. The cleaner your financials, the smoother your appraisal and refinance process.
### **Step 4: Refinance to Recycle Capital**
Once the property is stabilized, you order a new appraisal based on the improved NOI. A commercial appraiser will use the income approach to calculate current value. If your value creation plan worked, the appraisal will come in significantly higher than your all-in cost.
With the new appraised value established, you apply for a cash-out refinance. Most commercial lenders will lend up to 70-75% loan-to-value (LTV) on a stabilized multifamily property.
**Refinance Math Example**All-in cost (purchase + rehab + closing): $1,800,000Stabilized value at refinance: $3,000,000Loan at 70% LTV: $2,100,000Original acquisition loan payoff: $1,350,000Cash returned to you: $750,000If your original equity invested was $600,000, you’ve returned all your capital plus $150,000 — while still owning the building free and clear of personal equity.
The goal isn’t always to pull out 100% of your capital. It’s to pull out enough to fund your next deal while keeping the property cash flow positive with the new, higher loan balance.
### **Step 5: Repeat to Build Your Portfolio**
The capital you’ve recycled from the refinance now becomes the equity for your next BRRRR deal. This is how investors scale from 20 units to 200 units — not by saving more money, but by engineering deals that give their capital back.
Each completed BRRRR deal adds:
- A cash-flowing asset you own with minimal equity trapped
- Principal paydown from tenants over time
- Long-term appreciation on a stabilized, well-managed property
- Recycled capital to fund the next acquisition
## **Key Metrics for Evaluating a Multifamily BRRRR Deal**
[](https://rodkhleif.com/brrrr-method-for-multifamily-investors/screenshot-2026-03-31-at-11-43-03-pm/)
## **BRRRR Multifamily vs. BRRRR Single-Family: Key Differences**
[](https://rodkhleif.com/brrrr-method-for-multifamily-investors/screenshot-2026-03-31-at-11-44-02-pm/)
## **Common BRRRR Mistakes (and How to Avoid Them)**
### **Mistake #1: Overestimating After-Repair Value**
Investors often build their BRRRR spreadsheet backward — deciding what they want the refinance to look like, then reverse-engineering assumptions to make the numbers work. Always underwrite conservatively. Use market cap rates, not best-case scenarios. Get a broker opinion of value before you close.
### **Mistake #2: Underestimating Rehab Costs**
Deferred maintenance on a 40-unit building can be catastrophic to your budget if you miss it in [due diligence](https://rodkhleif.com/7-core-questions-to-guide-your-due-diligence/). Get a full property inspection, a systems report (roof, HVAC, plumbing, electrical), and contractor bids before closing. Add a 15-20% contingency to whatever number you land on.
### **Mistake #3: Not Accounting for Stabilization Time**
Most lenders want 90 days of stabilized occupancy before refinancing. But lease-up can take longer than planned. Budget for 6-12 months of carrying costs (mortgage, insurance, taxes, utilities) from acquisition to refinance. Running out of cash mid-execution is the most common way a BRRRR deal fails.
### **Mistake #4: Refinancing Into Negative Cash Flow**
The whole point of BRRRR is to keep a cash-flowing asset while recycling your capital. If the refinanced loan amount is so high that debt service exceeds NOI, you’ve traded equity for a liability. Your DSCR after refinance should be at least 1.25x — meaning the property generates 25% more NOI than it needs to cover debt service.
### **Mistake #5: Using BRRRR Without Understanding Financing Options**
The refinance is the engine of BRRRR. Before you buy, know exactly which lender will refinance the property, under what conditions, at what LTV, and on what timeline. Get pre-qualified for the refi before you close on the acquisition. Surprises in the financing step can strand your capital for years.
## **Is BRRRR Right for You? Who This Strategy Works For**
The BRRRR method for multifamily works best for investors who:
- Have access to capital (either personal, private lender, or bridge financing) to fund the acquisition and rehab before refinancing
- Are comfortable with value-add execution — project management, contractor oversight, property management transitions
- Have a strong understanding of commercial underwriting and NOI-based valuation
- Are willing to operate in the 12-36 month timeframe a full BRRRR cycle typically requires
- Have a clear lender relationship in place before buying
If you’re newer to multifamily investing, BRRRR is achievable — but it’s more complex than a standard acquisition. Many of my Warrior students execute their first BRRRR deal after starting with a smaller stabilized property to build experience, relationships, and credibility with lenders.
**Next Step**If you’re serious about executing a multifamily BRRRR deal, the foundation is understanding how to underwrite value-add properties accurately. Download Rod’s free Multifamily Investing book or join the next Multifamily Bootcamp to learn the full underwriting and deal execution framework.
## **Frequently Asked Questions About BRRRR Multifamily Investing**
### **Can you BRRRR a large apartment complex?**
Yes — in fact, the BRRRR method scales more efficiently with larger properties. A 50-unit building has more levers for NOI improvement than a duplex, and commercial financing is available for properties of all sizes. Many syndicators use a BRRRR-style strategy across 100+ unit acquisitions, often using bridge loans to fund the acquisition and rehab before refinancing into agency or permanent financing.
### **What type of financing do you use to buy the property initially?**
Common options include bridge loans (short-term, higher-rate commercial financing designed for value-add), hard money lenders, private equity partners, or seller financing. The acquisition financing is intentionally temporary — the refinance into long-term permanent financing is the goal.
### **How long does a multifamily BRRRR cycle typically take?**
Plan for 12-24 months from acquisition to refinance on a typical value-add multifamily BRRRR. Rehab can take 3-9 months depending on scope, and lenders typically require 90 days of stabilized occupancy before refinancing. Factor in time for the refinance process itself (60-90 days).
### **What if the appraisal comes in lower than expected?**
This is the most common BRRRR risk. If the appraisal comes in low, you may not be able to pull out as much capital as planned — or any capital at all. Mitigate this by underwriting conservatively, building in a margin of safety between your all-in cost and your projected ARV, and getting a broker opinion of value before closing on the acquisition.
### **Can you use syndication to fund a multifamily BRRRR deal?**
Absolutely. Many syndicators use investor equity to fund the acquisition and rehab, then refinance to return investor capital (or a portion of it) and extend the hold. This structure allows you to scale BRRRR deals without deploying your own capital, though it adds legal complexity around SEC regulations and investor communications.
## **Final Thoughts From Rod Khleif**
The BRRRR method is one of the most powerful wealth-building strategies in real estate — and in multifamily, the income-based valuation model makes it even more powerful than in single-family. Every dollar of NOI you create doesn’t just improve your cash flow. It multiplies into property value, which you can refinance against, which funds your next deal.
That’s the compounding engine that separates investors who own 10 units from investors who own 1,000.
The strategy requires discipline, patience, and rigorous underwriting. But for investors willing to do the work, it’s one of the fastest paths I know to building a portfolio that creates lifetime cash flow.
If you want to learn how to find, underwrite, and execute value-add multifamily deals — including BRRRR-style acquisitions — join me at my next Multifamily Bootcamp or grab your free copy of How to Create Lifetime Cash Flow Through Multifamily Properties.
*Disclaimer: This article was written with the help of AI and reviewed by Rod and his team.*
**Categories:** Multifamily Investing, Property Management
**Tags:** BRRR Multifamily
---
### [Understanding the Personal Financial Statement](https://rodkhleif.com/understanding-the-personal-financial-statement/)
**Published:** June 4, 2025
**Author:** Rod Khleif
**Excerpt:** Real Estate investing is a team sport and it’s important to leverage the collective power of the deal team to get a deal done. Whether the team is looking to finance a multifamily deal or to market themselves to potential brokers and sellers, it’s necessary to provide a thorough and accurate accounting of their individual and collective financial condition. The easiest way to do this is through the creation of a Personal Financial Statement (PFS).
**Content:**
## The Personal Financial Statement in Real Estate: A Tool for Financial Planning and Investment Success
In multifamily real estate, the numbers define your trajectory. Whether you’re trying to close your first 12-unit deal or scaling into 100+ unit acquisitions, your financial credibility is crucial. One of the most overlooked yet powerful tools in your investing toolbox is the personal financial statement.
This document communicates your financial health, discipline, and ability to close deals. In many ways, it’s your financial handshake before you even enter the room.
This guide breaks down everything you need to know about creating, understanding, and using a personal financial statement for individuals to secure financing, strengthen relationships, and grow your portfolio with confidence.
## What Is a Personal Financial Statement?
A personal financial statement is a snapshot of your financial position at a specific point in time. It outlines what you own (assets), what you owe (liabilities), and your income and expenses. In essence, it functions as both your personal balance sheet and income statement.
But in real estate, your PFS becomes your most important tool for:
- Securing financing
- Building trust with brokers and sellers
- Tracking your net worth over time
- Making strategic decisions aligned with your financial goals
Lenders use the financial statements of individuals to assess liquidity, solvency, and the capacity to weather downturns. Think of your PFS as your financial resume; the more detailed and honest it is, the more “bankable” you become.
Need a blank financial statement? [CLICK HERE](https://files.business.nj.gov/NJEDA/Emerge%20-%20Personal%20Financial%20Statement.pdf) for a sample personal financial statement template.
## Why Does The Personal Financial Statement Matter in Real Estate?
Multifamily real estate is high stakes and relationship driven. The financing is complex, and your reputation as an investor matters. Here’s why a well-prepared PFS is essential to success:
### 1. It Builds Trust With Lenders
Commercial lenders don’t lend based on emotion, they lend based on your financial situation. Your PFS helps answer:
- Do you have the capacity to support the loan?
- Do you have the savings accounts or liquid assets to cover unexpected costs?
For large multifamily loans, lenders often require:
- Net worth equal to or greater than the loan amount
- Post-closing liquidity equal to 10% of the loan amount
Your assets included in the PFS should demonstrate both net worth and liquidity.
### 2. It Builds Credibility With Brokers and Sellers
When you include a clear, professional PFS with your LOI (Letter of Intent), you:
- Establish yourself as a serious buyer
- Strengthen your offer in a competitive market
- Position yourself for off market deals
### 3. It Improves Your Financial Planning
Even if you’re not buying today, your PFS helps track:
- Net worth growth
- Income-to-expense ratios
- Asset allocation
- Your readiness for the next deal
It provides visibility into your personal finances and lets you invest from a position of clarity and strength.
### 4. It Prepares You for Bigger Partnerships
As you scale, you may partner with others to pool capital. Your PFS:
- Shows your value to the partnership
- Helps secure financing as a group
- Builds trust in your financial discipline
## How Lenders Use Your Personal Financial Statement
When applying for [financing](https://rodkhleif.com/financing-your-multifamily-purchase/), your personal financial statement gets underwritten just like the property does. Lenders assess:
- Net worth vs. loan size
- Liquidity post-closing
- Debt obligations and contingent liabilities
### Recourse vs. Non-Recourse Loans
- [Recourse loans](https://rodkhleif.com/recourse-vs-non-recourse-multifamily-financing-whats-the-difference/) require a personal guarantee; your personal assets are on the line
- Non-recourse loans don’t require a guarantee, but lenders still assess your financial health
## Core Components of a Strong Personal Financial Statement
### A. Sponsor Information
Includes your name, contact info, employer, position, and investing affiliations.
### B. Assets
#### Liquid assets include:
- Checking and savings accounts
- Stocks and mutual funds
- Cash value life insurance
#### Long-term assets include:
- Real estate holdings
- Retirement accounts
- Notes receivable
- Private business interests
### C. Liabilities
#### Outline all debts, including:
- Mortgages
- Credit cards
- Auto and business loans
- Student loans
- Personal guarantees
### D. Net Worth
> Net Worth = Total Assets – Total Liabilities
Your net worth should be equal to or greater than the loan amount you’re applying for.
### E. Contingent Liabilities
These include any obligations where you’ve guaranteed debt for others. Lenders want to ensure you’re not overexposed.
### F. Personal Income Statement
Shows income vs. expenses to help lenders evaluate cash flow and repayment ability.
### G. Financial Disclosures
Include anything that could affect your risk profile:
- Tax liens
- Legal actions
- Bankruptcy
- Divorce settlements
## A Financial Planning Tool for Every Investor
Your personal financial statement isn’t just for lenders. It helps you:
- Monitor financial health
- Identify areas for improvement
- Align actions with financial goals
- Maintain control of your financial situation
Pro Tip: Update your PFS annually or before any major deal.
## Final Thoughts From Rod Khleif
Your personal financial statement is more than a document: it’s a strategic asset. It helps you understand your financial position, present yourself as a capable investor, and plan your path toward financial freedom.
I’ve seen countless investors accelerate their success simply by gaining clarity over their numbers. A clean, updated PFS builds confidence, reduces friction in deals, and strengthens your investing foundation.
If you’re serious about taking your investing and financial planning to the next level, join me at my next Multifamily Bootcamp or grab your free copy of *How to Create Lifetime Cash Flow Through Multifamily Properties*. Let’s build something great together.
### The #1 Multifamily Investing Event!
[](https://rodkhleif.com/bootcamp/)
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**Categories:** Blog, Raising Capital
**Tags:** apartment investing, investing, landlord, letter of intent, loan, loi, motivation, multifamily, multifamily investment, multifamily property investing, multifamily real estate, real estate, real estate investing, real estate podcast, Rod Khleif
---
### [The Mindset of a Leader in Multifamily Real Estate](https://rodkhleif.com/the-power-of-becoming-an-incredible-leader/)
**Published:** April 6, 2025
**Author:** Rod Khleif
**Content:**
## **How to Lead, Inspire, and Scale with Confidence**
In real estate, the numbers matter. But the mindset behind those numbers? That’s what truly builds empires.
To grow a successful multifamily portfolio, you need more than just market knowledge. You also need to raise capital, attract top partners, and lead strong teams.
You need to **develop the mindset of a leader**.
## **Why Leadership Is the Foundation of Real Estate Success**
> “If your actions inspire others to dream more, learn more, do more, and become more, you are a leader.” – John Quincy Adams
Real estate is not a solo sport. Behind every great investor is a team: partners, property managers, brokers, lenders, contractors, assistants—and more. And without effective leadership, that team will drift, struggle, or underperform.
Whether you realize it or not, every interaction you have is either building your leadership credibility—or weakening it.
Leadership determines:
- The quality of people you attract
- The confidence others have in your vision
- How well your projects execute under pressure
- Whether you inspire action or just delegate tasks
## **The Leadership Shift Every Investor Must Make**
Most investors start out focused on deals, tactics, and spreadsheets. But as you grow, the game changes. The bottleneck inevitably becomes **you,** your vision, your confidence, your ability to lead others.
That’s the shift: From operator to orchestrator. From solo player to team-builder. From deal-chaser to visionary.
Ask yourself:
- Who am I becoming?
- How do I show up under pressure?
- Am I leading from clarity or reacting from fear?
Here’s what great leaders in real estate do consistently:
✅ They magnify the strengths of others
✅ They radiate belief and positivity
✅ They stay calm under pressure
✅ They inspire action, not just compliance
✅ They own the outcome—100%, every time
## **Traits of Highly Effective Real Estate Leaders**
You don’t have to be born a leader—you become one through choices, habits, and mindset.
Here are the foundational traits to develop:
### **1. Vision Clarity**
Great leaders paint a clear picture of the future. They know where they’re going and why—and they help their team see that same future.
**How to build it:** Write your 1-year, 3-year, and 5-year real estate vision. Share it. Repeat it. Refine it.
### **2. Emotional Discipline**
Every real estate investor will face challenges: deals falling through, renovations going sideways, tenants defaulting. What matters is how you respond.
**How to build it:** Meditate. Reflect daily. Train your nervous system to respond—not react.
### **3. Servant Leadership**
Real estate leadership isn’t about ego—it’s about empowerment. It’s about helping your partners, team, and tenants win.
> “Leadership is not about being in charge. It is about taking care of those in your charge.” – Simon Sinek
**How to build it:** Ask your team what they need. Listen deeply. Give credit freely. Take responsibility personally.
### **4. Relentless Ownership**
When something goes wrong, weak leaders blame others. Great leaders take full ownership—even for what they didn’t cause—because they know they can influence the solution.
**How to build it:** Replace “Why is this happening to me?” with “What can I do to fix this?”
> “The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy.” – Martin Luther King Jr.
### **5. Continuous Learning**
Leaders are learners. They study markets, people, negotiation, psychology, communication, and execution. The moment you stop growing, your leadership power declines.
**How to build it:** Commit to daily reading, regular podcasts, and learning from mentors.
> “Leadership and learning are indispensable to each other.” – John F. Kennedy
## **Leading Through Adversity**
Let’s be clear: Leadership doesn’t mean things get easier. It means you become stronger.
When the market softens, when partners back out, when surprises show up—leaders don’t shrink. They rise.
> “The challenge of leadership is to be strong, but not rude; be kind, but not weak; be bold, but not a bully; be humble, but not timid.” – Jim Rohn
This business doesn’t reward comfort—it rewards courage.
## **Be the Leader You’d Want to Follow**
Leadership isn’t something you do once a deal closes or a team assembles. It’s who you are **every day**:
- When you underwrite
- When you make calls
- When you fire someone
- When you inspire someone
- When you feel like giving up
- When you show up anyway
The truth? **Your team, your partners, and your investors are watching.** Not for perfection—but for conviction.
If you want to attract high-level capital, talented team members, and lasting opportunities—lead with consistency, clarity, and courage.
## **Final Thoughts from Rod**
You don’t need to be a guru to lead. You just need to be one step ahead and willing to grow. Because in this business, people don’t follow deals.
They follow people. They follow leaders.
So make the decision today: Step up. Lead boldly. Inspire action.
The mindset of a real estate leader isn’t about having all the answers—it’s about having the courage to keep asking the right questions.
Let’s build Lifetime Cashflow!
— Rod
[](https://https://rodkhleif.com/lifetime-cashflow-podcast/)
**🎧 Want to Learn from the Best in Multifamily Investing?**
Join **Rod Khleif**, one of the **top real estate investing coaches**, as he interviews industry giants, breaks down powerful strategies, and shares the **mindset secrets of top real estate investors**.
👉 **Listen Now:** [Lifetime Cash Flow Through Real Estate Investing Podcast](https://rodkhleif.com/lifetime-cashflow-podcast/)
**Categories:** Blog
---
### [How to Find & Finance Off-Market Multifamily Deals](https://rodkhleif.com/how-to-find-and-finance-off-market-multifamily-property-deals/)
**Published:** January 13, 2026
**Author:** Matt Rohde
**Content:**
Finding undervalued properties can be challenging. Traditional methods, such as browsing MLS listings, often lead to overpriced properties with limited profit potential. However, a hidden world of off-market multifamily deals exists, offering investors the opportunity to acquire undervalued properties with greater potential returns. In this article, we’ll delve into where to find off market properties, providing valuable insights into their key characteristics, strategies for finding, and financing options to secure them. I’ve also added a few timely 2026 notes (without changing your core structure) on what’s working now and how to improve your odds of getting callbacks and accepted offers.
## What Are Off-Market Multifamily Deals?
Off-market multifamily deals are multifamily properties that are not listed on the Multiple Listing Service (MLS). This means that they are not publicly available for purchase, and the seller is only interested in selling to a select group of buyers. Off-market deals can be a great way to find undervalued properties, as sellers of these properties are often motivated to sell quickly and may be willing to negotiate on the price.
In 2026, off-market deals are also where you’ll see more “quiet” problem-solving situations: owners facing refinance pressure, insurance and tax increases, deferred maintenance, or fatigue from self-management. Many of these sellers don’t want a listing process. They want a clean solution and a buyer who can actually close.
If you want a quick framework for evaluating deal viability once you get a lead, use a consistent underwriting process (and don’t skip the basics). A good starting point is Rod’s [deal underwriting tool](https://rodkhleif.com/deal-underwriting-tool/), which helps you stress-test assumptions instead of relying on optimistic pro formas.
## How to Find Off-Market Listings in 5 Steps
### 1. Network with Other Real Estate Professionals
Off-the-market real estate deals often go unnoticed by the general public, making networking with industry insiders a crucial strategy for unlocking these hidden opportunities. Building relationships with brokers, appraisers, property managers, and fellow investors with access to off-market listings can significantly expand your search radius and increase the likelihood of uncovering promising deals.
Attend industry events, seminars, and meet-ups to connect with these professionals and introduce yourself as an active investor seeking off-market opportunities. Engage in meaningful conversations, exchange business cards, and nurture these connections. Your willingness to learn, collaborate, and show genuine interest can open doors to exclusive deal flow.
2026 add-on: make your networking “useful” to the other side. Instead of just saying you want deals, bring something valuable:
- Share your buy box in one page (asset type, unit count, submarkets, condition, target basis, timeline).
- Prove you can close (proof of funds, lender contact, resume, or track record even if it’s smaller deals).
- Ask for the broker’s problem list (the deals they can’t place easily) and be willing to look.
Also, don’t ignore property managers. In 2026, managers often see which owners are frustrated, which assets are suffering from maintenance backlog, and which owners have “quietly” mentioned selling if the right buyer appeared.
### 2. Leverage Online Resources
The digital landscape offers a wealth of resources to find off-market properties. Websites like Crexi and off-market listing databases cater specifically to multifamily real estate professionals and may contain exclusive listings that haven’t yet hit the public market.
Sign up for email alerts from these websites to receive notifications of new listings that match your investment criteria. Regularly search these platforms using specific keywords and filters to narrow your search and uncover properties that align with your preferences.
2026 add-on: “off-market” online often means early, not invisible. You’ll still win by moving faster and showing certainty. Build a simple process:
- Same-day initial underwriting (even if it’s rough) to decide yes/no quickly.
- A standard offer package (proof of funds, buyer profile, timeline) ready to send.
- A follow-up rhythm: same day, 48 hours, then weekly until it’s dead.
Once you have a deal lead, your next step is analysis. If your underwriting is inconsistent, you’ll either miss opportunities or chase junk. Rod’s [guide to finding and analyzing multifamily deals](https://rodkhleif.com/finding-analyzing-multifamily-deals-like-a-pro/) is a helpful companion for building those reps and improving your assumptions over time.
### 3. Engage in Direct Mail Marketing
Direct mail marketing remains a powerful tool for reaching potential sellers of off-market multifamily properties. Identify owners of multifamily properties in your preferred investment area by scouring public records, searching local property websites, and networking with industry contacts.
Craft personalized letters expressing your interest in purchasing their property. Highlight your experience, expertise, and financial capabilities as an investor, emphasizing your commitment to preserving the property’s value and enhancing its potential.
Tailor your letters to each property, addressing specific features and potential improvements you envision. This personalized approach can pique the interest of potential sellers and increase your chances of receiving responses.
2026 add-on: direct mail works best when it feels like a real person wrote it and you reduce friction. Two small improvements that increase response rates:
- Include a simple “sell timing” prompt (e.g., “Would you consider selling in the next 6–12 months if the terms worked?”).
- Offer two options: a quick call or a text reply. Many owners will text before they’ll call.
Also consider “micro-personalization” that doesn’t require a ton of effort: reference the street name, property name, or a visible exterior feature. It signals you didn’t blast a template to 10,000 owners.
### 4. Attend Probate and Foreclosure Auctions
Probate and foreclosure auctions offer unique opportunities to acquire properties at deeply discounted prices. These properties often have underlying issues, such as financial distress or legal complications, which prompted the owners to dispose of them quickly.
Stay informed about upcoming probate and foreclosure auctions by monitoring public records, local newspapers, and specialized auction websites. Research the properties listed for auction, assessing their potential risks and rewards before participating.
Prepare thoroughly for auction bidding, understanding the auction rules and procedures. Gather necessary documents, such as proof of funds and identification, to expedite the process.
2026 add-on: the biggest underwriting mistake at auctions is underestimating hidden costs and timeline. Build buffers for:
- Title and lien cleanup risk
- Deferred maintenance you can’t fully inspect
- Insurance surprises (especially older roofs, outdated electrical, or prior claims history)
- Property tax reassessments after sale
If your deal only works with perfect assumptions, it’s not an auction deal. Auction deals need margin for chaos.
### 5. Partner with Brokers Specializing in Off-Market Deals
Collaborating with brokers who focus on representing sellers of off-market properties can provide exclusive access to deals that may not be publicly advertised. These brokers have established connections with potential sellers, providing them a steady flow of off-market opportunities.
Seek out brokers with a proven track record of securing off-market investor deals. Evaluate their experience, network, and reputation within the industry. Establish clear communication channels with your broker, providing them with your investment criteria and preferences.
2026 add-on: brokers prioritize buyers who do three things well: clarity, speed, and credibility. If you want more broker calls returned, make it easy:
- Send a one-page criteria sheet.
- Respond within hours, not days.
- Give clean feedback after reviewing a deal (not “I’ll think about it”).
## FAQ: How to Find Off-Market Multifamily Property Deals
### What is an off-market multifamily deal?
An off-market multifamily deal is a property that’s not publicly listed on the MLS. The seller may only be sharing it with a small circle of buyers (or not advertising it at all), which can reduce competition and sometimes create better pricing or terms.
### Are off-market deals always cheaper?
No. Off-market doesn’t automatically mean discounted. The advantage is usually less competition and more flexibility in terms. The best off-market deals tend to come from motivated situations (refinance pressure, management fatigue, deferred maintenance, partnership splits, estate situations) where the seller values a clean, reliable close.
### What’s the best way to find off-market multifamily deals in 2026?
Consistent relationship building plus consistent outreach. In 2026, the investors who get the most off-market looks are the ones who are easy to work with: clear criteria, fast follow-up, credible financing, and clean communication with brokers, property managers, and owners.
### Who should I network with to find off-market deals?
Brokers, property managers, appraisers, contractors, real estate attorneys, CPAs, local investors, and lenders. Property managers are especially useful because they often know which owners are tired, struggling with maintenance, or quietly considering selling.
### How do I get brokers to bring me off-market opportunities?
Make it easy for them. Send a one-page buy box, respond quickly, give clear feedback, and show proof you can close (lender relationship, proof of funds, track record, or a credible partner). Brokers prioritize buyers who reduce friction.
### What should my buy box include?
Unit count range, target submarkets, vintage/condition, value-add vs stabilized, price range, target basis, deal breakers, and timeline. Add how you plan to close (loan type or cash) and who is on your team (lender, PM, contractor, partner).
### Does direct mail still work for off-market multifamily?
Yes, especially when it’s consistent and personalized. Direct mail works best when it feels human, references the property or area, and gives the owner an easy next step (call or text). The key is volume plus follow-up, not a one-time campaign.
### What should I say in a direct mail letter?
Keep it short: who you are, what you buy, why you’re reaching out, and how to respond. If you want higher response rates, ask a simple timing question like “Would you consider selling in the next 6–12 months if the terms worked?”
### Where can I find off-market deals online?
Start with platforms where deals show up early or semi-privately (and set alerts). Also search county records, owner registries, and business entity filings to identify owners. Many “off-market” leads online are really “early” leads, so speed and credibility matter.
### Are probate and foreclosure auctions a good way to find discounted deals?
They can be, but they’re higher risk. In auctions, the discount often compensates for unknowns: title issues, deferred maintenance, legal complexity, insurance surprises, and limited inspection access. Underwrite with bigger buffers and don’t assume best-case outcomes.
### What’s the biggest mistake investors make when chasing off-market deals?
They don’t have a process. They chase everything, respond slowly, and fail to follow up. Off-market deal flow is about consistency: consistent outreach, consistent underwriting, and consistent relationships.
### How do I know if an off-market deal is actually a good deal?
Underwrite it like any other property. Verify income, expenses, and deferred maintenance. Stress-test your assumptions for vacancy, expenses, taxes, insurance, and debt terms. Off-market just changes how you find it—it doesn’t change the math.
### How do I finance off-market multifamily deals?
Common options include conventional loans, bridge loans, hard money (usually for faster repositioning), seller financing, and sometimes mezzanine or preferred equity. The right choice depends on the property’s condition, your business plan timeline, and your takeout strategy.
### Why is seller financing more common in tougher markets?
Because it can solve pricing and underwriting gaps. If bank proceeds don’t support the seller’s price, seller financing can create terms that make the deal pencil. It can also reduce friction when banks are cautious.
### What’s a simple weekly routine to generate off-market opportunities?
Each week: have 5–10 broker or owner conversations, send 25–100 direct outreach touches (mail, calls, texts, email), review new leads within 24 hours, and follow up on every warm lead. Track everything in a CRM so you don’t lose momentum.
**Categories:** Blog, Finding Deals, Raising Capital, Real Estate
**Tags:** finding multifamily deals, finding off market multifamily deals, multifamily property
---
### [How a Recession Can Be an Incredible Buying Opportunity](https://rodkhleif.com/how-reccession-can-be-incredible-buying-opportunity/)
**Published:** December 16, 2025
**Author:** Matt RK
**Content:**
# Purchasing Real Estate During a Recession (And Looking Ahead to 2026)
Let’s face it, when the press begins crying recession, most people go into freeze mode. Fear rules the day. But if you’re ready, this is your time. Some of the top investors know that purchasing real estate during a recession is a gold mine. In other words, prices are lower, debt comes due, and a motivated seller must make a quick transaction. Fewer people will be in your market. With 2026 right around the corner, this is a wide-open door.
Here’s the thing: I am going to show you why this market is a winner’s market, precisely what’s happening in this moment, and how you can put yourself in a position to seize this moment rather than witnessing it from the sidelines.
## What’s Coming in 2026: A Perfect Storm for Opportunity
Several major transitions are underway, including:
- **Refi volume is piling up.** A lot of commercial real estate debt, particularly from the low-interest-rate years of 2020-2022, is due to be refinanced in today’s higher interest-rate environment. The multifamily sector will see peak refi volume over the next two years, through 2026 & 2027.
- **The cap rate is increasing, and property prices are declining.** As interest rates have increased over the past years, cap rates have increased, leading to a decline in prices. Demand for rentals continues to be strong, especially in established neighborhoods.
- **Rental growth is decelerating but remains primarily positive.** Following massive increases in 2021-2022, rent growth decelerated, with some Sun Belt cities even witnessing stable or falling rents because of new supply entering the market. Markets in Midwestern and Northeastern cities, however, remain largely stable.
- **Loans are loosening a tad.** Banks and government agencies are adjusting their lending criteria positively, and Fannie and Freddie are increasing their multifamily lending limits in 2026. What this means is that more money is available—but not necessarily for a whole bunch of iffy investments.
In simple language: Lots of homeowners will need to refinance, sell, or cash out. Banks aren’t closing doors on good opportunities entirely. Although prices aren’t at their peak, fundamentals in local markets remain sound or are improving.
“This is it—the moment when tough times produce massive opportunities. But this can only happen if you are ready to take action.”
## Why Recessions Create Bargains
The following are the primary reasons why a downturn can bring discounts:
- **Most other buyers become paralyzed with fear.** The media screams crisis, and everybody else presses pause. They stop making offers, stop spending money, and just wait for the perfect moment that never arrives. That’s your competitive advantage.
- **Owners have nowhere to go.** In a high-rate environment, some owners can’t refinance or their revenue declines because of vacancies and tenant concessions. The alternatives? Discount sales, high-priced partners, or returns to lenders, which leads to distressed sales.
- **There are price expectations mismatches.** Vendors focused on high prices must change their approach. Buyers now have more standard expectations. This shift is due to higher interest rates, lower rent increases, and larger reserves. Soon, motivated vendors and buyers begin to meet at a price midway.
- **Here’s the thing: you don’t need to time your purchase of properties at the bottom.** Your role is simply to be ready when motivated sellers cross paths with buyers with a plan. That’s when you make your move.
## What Kinds of Deals to Watch For in 2026
Not all bargains are winners. Here are the qualities to look for:
### A. Strong Asset, Weak Financing
Think about properties in good locations with stable demand: jobs, population, and infrastructure. The building quality can be good or at least in need of an improvement plan. Then look for opportunities in which the capital is troubled: short-term debt with higher interest rates due soon, floating-rate debt without any interest-rate ceilings, or overly aggressive leverage multiples.
Pursue good properties from the owner under duress. Do not go for rubbish simply because it is cheap.
### B. Definition of Replacement Cost
In other markets, it may cost more to construct an apartment building than the existing market rate of existing apartment properties. This strongly suggests that buying and renovating is cheaper than building a new apartment. It will also attract fewer competitors later. Investing in an area below replacement cost will provide a buffer.
### C. Under-Managed, Not Poor
Great recessions tend to have messy M&A operations:
- Poor rent collection or high delinquencies.
- Rents below market with weak lease renewal programs.
- Deferred maintenance by owners just trying to survive.
“If you know how to manage them or have people with such knowledge properly, these problematic projects can be turned into a constant money-making machine. No need to have a huge renovation budget.”
## How to Get Ready Before the Deals Roll In
Waiting for news sources to tell you when a recession is underway is already too late. Use the next one/two years to prepare quietly but relentlessly.
- Create your capital stack. Have money available for earnest money payments and inspections. Network with equity investors you can trust and with whom you have a good understanding of real estate. Develop relationships with local banks, credit unions, and lending agencies so they know you before you need funds.
- Refine your buy box. Create a list of the markets and submarkets you like. Include the property types you want to focus on and their sizes. Also, note your minimum returns and the amount of risk you can tolerate. This will help brokers, lenders, and others understand what you want. It will also make it easier to say “no” to opportunities that don’t fit.
- Improve your skill set. Learn to read T-12 statements and rent rolls. Originate deals at today’s numbers, not yesterday’s. Become facile with loan docs—familiarize yourself with their covenants and prepayment terms. The more proficient you become, the quicker you’ll be able to identify a potential problem before you invest.
## How to Underwrite Deals in this Cycle
“Your underwriting has to relate to what’s really happening right now. No wishful thinking.”
- Rent revenue: Be cautious, especially in oversupplied or slowing-demand markets.
- Vacancy: Assume slightly higher vacancy than ideal.
- Expenses: Create margins in case insurance, taxes, and repairs remain high.
- Cost of debt: Set interest rates slightly higher than current market quotes.
Stress-test all your deals. Run them with a base case, a downside, and an upside. “If the numbers work when everything is going badly, you got a deal. Otherwise, you don’t need it.”
## Financing: Keep It Simple and Solid
Money lenders in 2025-26 are more receptive than in the previous years, immediately after the interest rate jump.
Experienced borrowers with a solid business plan can borrow money. They check your performance record, debt service coverage ratio, and business plan. As a beginner, you can start by learning from seasoned investors.
Make your borrowing simple. Fixed or fixed-cap interest rates, reasonable leverage, and meaningful reserves for repair and interest. Who got burned in previous recessions? Those with excessive leverage and insufficient reserves.
## How to Find These Deals
Do not waste time playing the numbers game with brokers or joining every available list. Focus your efforts. Create a strategy.
- Involunteer with lenders and special assets teams; they get notice when a problem arises with a loan.
- Build relationships with brokers dealing in class B and C properties with aggressive leverage.
- Compass your distress signals: loan defaults, debt maturity waves, and sales below previous prices in your markets.
- “Show up as the real deal. Have your criteria and your financing in place. Remember, deals go to people who get things done.”
“Deals go to people who get things done.”
## Manage Risks
First and foremost, recessions can make or break you. Here’s how you can protect yourself:
- Steer clear of investments if they appear low-cost for a reason—for instance, a poor site or old structures.
- Do not “pray and refinance,” hoping cap rates and interest rates plummet.
- Thorough underwriting of the management team; operational blunders can sink good properties.
“Rule number one: don’t lose money. I mean it,”
## **Your 12-Month Plan to Turn a Recession into Opportunity
**Months 1–3
Dial in your finances and get crystal clear on your buy box asset type, markets, deal size, and risk profile. Start building relationships with key brokers and lenders in your target markets so they know who you are and what you’re looking for.
**Months 4–6
Underwrite real deals every week so you build pattern recognition and confidence with the numbers. Have direct conversations with potential equity partners so you know who’s ready to move when a good opportunity shows up. Decide whether you’re going to be a hands-on operator or a passive investor partnering with experienced sponsors.
**Months 7–12
Start writing offers on deals that pass your stress tests and still work under conservative assumptions. Negotiate hard on both price and terms, remembering that many sellers are under pressure too. Close on the right deal, then pour your energy into executing the business plan and proving—to yourself and your partners—that you can perform.
## **The Big Picture: Purchasing Real Esate During a Recession**
In 2026, you’re likely to see:
- An increase in loan maturities.
- More distress in pockets of commercial real estate.
- Multifamily fundamentals are softer than the peak but still supported by strong rental demand.
Most people will retreat from this and wait for “certainty.” Savvy investors will lean in carefully, relying on discipline and data rather than emotion. You don’t need to be fearless; you need to be informed, well-capitalized, and ready. When the next bear market hits, this period could end up being the year you look back on as your best buying window.
**Categories:** Blog, Finding Deals
---
### [Multifamily vs Other Investment Properties](https://rodkhleif.com/how-does-multifamily-real-estate-compare-to-other-types-of-investment-properties-november-22-2023-techbullion/)
**Published:** March 21, 2026
**Author:** Matt Rohde
**Content:**
I’ve owned and managed over 2,000 properties across four decades. I’ve been through stock market crashes and real estate booms. I also faced a catastrophic personal loss in 2008. I’ve lived through one of the most volatile rate environments in a generation. Through all of it, one asset class has consistently outperformed everything else I’ve seen: multifamily real estate.
But I’m not asking you to just take my word for it. In this post, I will break down how multifamily compares to major real estate asset classes. These include single-family homes, office, retail, industrial, self-storage, mobile home parks, and REITs. This will help you decide where to put your capital and your time.
## **Why the Asset Class You Choose Matters More Than You Think**
Most new investors focus on finding a good deal. That’s important. But before you find a good deal, you need to be in the right asset class.
The wrong asset class will punish you even when you execute perfectly. The right one gives you many ways to win, i.e., cash flow, value growth, tax breaks, and scale at the same time.
Here’s how the major investment property types compare.
## **Multifamily vs. Single-Family Rental**
This is the most common comparison I get, especially from investors who already own a house or two and are wondering whether to scale up or stay the course.
Single-family rentals have real advantages. They’re easier to finance. You can use conventional or [FHA loans](https://rodkhleif.com/fha-loans-multifamily-real-estate-investors/) with low down payments. This is common for 2-4 unit properties. They’re easier to buy and sell because the buyer pool includes both investors and owner-occupants. And they’re straightforward to manage at small scale.
But single-family has a fundamental problem: one vacancy means 100% of your income disappears. One bad tenant, one month of turnover, and you’re covering the mortgage out of pocket. I learned this the hard way with 800 single-family properties in Florida. The volatility is brutal at scale.
Multifamily solves this. One vacancy in a 20-unit building is a 5% income hit — manageable. You also get economies of scale: one roof, one insurance policy, one property management relationship, one set of systems. Managing 20 units in one building is exponentially more efficient than managing 20 houses spread across a city.
The valuation model is also fundamentally different and better. Single-family properties are valued by comparable sales. Your neighbor’s bad sale price affects your equity. Multifamily properties with five or more units are valued by income. [Net Operating Income](https://rodkhleif.com/a-complete-guide-noi-in-real-estate-in-2025/) divided by the prevailing cap rate determines value. That means you can force appreciation by raising rents, adding income streams, and cutting expenses. You can do this no matter what the market does.
**The verdict:** Start with 2–4 unit properties if you need residential financing. Scale into commercial multifamily as soon as you can. Single-family is a launchpad, not a destination.
## **Multifamily vs. Office**
Office real estate looked bulletproof before 2020. Institutional quality buildings, long-term leases, investment-grade tenants — what could go wrong?
What went wrong was remote work. Vacancy rates in major U.S. office markets hit levels not seen since the savings and loan crisis. Many downtown office buildings are now trading at significant discounts to replacement cost. Conversion to residential is being explored but it’s expensive, complicated, and not always feasible.
The structural problem with office is tenant concentration. Lose one major tenant and you might lose 30–50% of your income overnight. Lease terms are long, which sounds good, but it also means when the market shifts you’re locked in — or locked out of higher rents. And the current work-from-home dynamic means demand for office space is structurally lower than it was five years ago.
Multifamily doesn’t have this problem. People always need somewhere to live. Demand for rental housing stays steady across economic cycles. When buying a home gets less affordable, more people rent. This happened sharply between 2022 and 2026. Housing is a need, not a nice-to-have.
**The verdict:** Office is in a structural correction that will take years to resolve. Multifamily demand has a floor that office simply doesn’t have.
## **Multifamily vs. Retail**
Retail has been in a well-documented long-term decline driven by e-commerce. Strip malls, regional malls, and big-box anchored centers have all faced headwinds that were accelerated by the pandemic and never fully reversed. Vacancy rates remain elevated across most retail formats.
There are niches within retail that perform well: grocery-anchored centers, well-located neighborhood retail, and experiential concepts. But identifying them requires significant market expertise, and the downside risk when a major anchor leaves is severe. A Sears or a JCPenney departure can take out 30% of a mall’s foot traffic overnight.
Retail leases involve complex structures, percentage rent clauses, co-tenancy provisions, exclusive use agreements, and CAM reconciliations that require specialized legal and accounting expertise. The learning curve is steeper, and the risks are less forgiving.
Multifamily leases are comparatively simple. Tenants sign annual leases, pay monthly rent, and either renew or vacate. The operational complexity is manageable with the right property management infrastructure.
**The verdict:** Unless you have deep retail expertise, multifamily offers a far more straightforward path to consistent returns without the secular headwinds retail faces.
## **Multifamily vs. Industrial and Flex Space**
This is the one comparison where I’ll give credit where it’s due. Industrial has been one of the best-performing commercial real estate sectors over the past decade. It has been driven by e-commerce logistics, supply chain reshoring, and last-mile delivery demand. [Industrial flex space](https://rodkhleif.com/industrial-flex-space-investing-for-beginners/), in particular, has attracted significant investor attention.
Vacancy rates for well-located industrial product have been historically low. NNN lease structures mean tenants pay operating expenses, creating landlord-friendly income with minimal management overhead. Long lease terms provide income stability.
The challenges: the industrial sector has been significantly repriced. Cap rates compressed dramatically, and in many markets the cap rate advantage over multifamily has narrowed substantially. Tenant concentration risk is real — losing one industrial tenant can be devastating. And the operational learning curve for finding and evaluating tenants is different from residential.
Industrial is a legitimate asset class, and there are experienced operators doing well in it. But for most investors without tenant ties or market knowledge, multifamily is a more practical choice. It offers easier entry points and established infrastructure.
**The verdict:** Industrial is strong but specialized. Multifamily offers comparable returns with a deeper market, more accessible financing, and a larger pool of experienced operators to learn from.
## **Multifamily vs. Self-Storage**
Self-storage emerged as a pandemic darling. People moving, downsizing, and accumulating stuff drove occupancy to record levels. Cap rates compressed and investor interest surged.
Self-storage has real advantages. It needs little maintenance. You have minimal contact with tenants. Management systems are simple. Cash flow is strong, and occupancy stays high. Small facilities can be owner-operated without significant staffing.
But the sector is maturing and the supply response has been dramatic. New self-storage construction accelerated sharply between 2019 and 2024, and many markets are now oversupplied. Occupancy rates have softened in markets where new supply has come online. The facilities that were built in 2021 and 2022 at compressed cap rates are now being tested.
Self-storage also lacks the income-based valuation advantage of multifamily in the same way. Competition from new supply directly affects your rental rates and occupancy in ways that well-located multifamily is more insulated from.
**The verdict:** Self-storage can be a solid investment in undersupplied markets with experienced operators. But it’s cyclical, supply-sensitive, and requires careful market analysis. Multifamily has more consistent demand fundamentals.
## **Multifamily vs. Mobile Home Parks**
Mobile home parks have become one of the more compelling niche asset classes in real estate, and for legitimate reasons. Residents own their homes and rent the land. Moving a mobile home is extremely expensive, effectively prohibitive for most residents. This creates among the lowest turnover rates in real estate and high tenant retention.
Supply is also constrained. New mobile home park development is rare because zoning approval is politically difficult in most jurisdictions. That creates a moat around existing parks.
The operational challenge is that parks vary widely in quality. Privately-owned and managed parks often have deferred maintenance, below-market rents, and infrastructure issues that require significant capital investment upon acquisition. The due diligence process is more complex than standard multifamily.
For the right operator with the right market and the right deal, mobile home parks can generate exceptional returns. But the skill set and market knowledge required are specific, and the quality of available inventory is inconsistent.
**The verdict:** Mobile home parks are a legitimate niche for experienced operators. For most investors getting started, multifamily offers a more standardized, better-supported path with more accessible deal flow and a larger community of experienced mentors and operators.
## **Multifamily vs. REITs**
Real Estate Investment Trusts offer exposure to real estate without owning property directly. You can buy shares in a publicly traded REIT the same way you buy a stock. No tenant calls. No maintenance. No capital requirements beyond your share purchase.
The tradeoff is control, you have none. A REIT manager makes every decision about acquisitions, dispositions, leverage, and operations. You are a passive investor with no influence over performance. REITs often track the stock market more than direct real estate.This means they may offer less diversification during market downturns.
Direct multifamily ownership gives you something REITs can’t: the ability to force appreciation through operational improvements. When you [increase NOI](https://rodkhleif.com/a-complete-guide-noi-in-real-estate-in-2025/), you directly increase property value. When you add income streams, cut expenses, or improve management, you capture that value. A REIT manager’s compensation committee does not.
The tax benefits are also significantly better with direct ownership. Depreciation, cost segregation, and [1031 exchanges](https://rodkhleif.com/using-the-1031-exchange-to-maximize-tax-benefits-in-real-estate-investing/) are available to direct property owners. REIT dividends are taxed as ordinary income.
**The verdict:** REITs are appropriate for passive capital allocators who want real estate exposure without operations. For wealth-building through active involvement, direct multifamily ownership wins decisively on control, tax efficiency, and forced appreciation potential.
## **The Full Comparison at a Glance**
[](https://rodkhleif.com/how-does-multifamily-real-estate-compare-to-other-types-of-investment-properties-november-22-2023-techbullion/screenshot-2026-03-21-at-9-11-49-pm/)
## **Why I Keep Coming Back to Multifamily**
After 40 years and over 2,000 properties, here’s the simple version: multifamily real estate sits at the intersection of necessity and scalability in a way that no other asset class does.
People will always need somewhere to live. That fundamental demand creates a floor under the asset class that office, retail, and even industrial don’t have. When the economy contracts and homeownership becomes less accessible, rental demand goes up, not down.
At the same time, the income-based valuation model helps skilled operators create value. They do not have to wait for the market to change. Add easy financing, a proven playbook, a large and supportive investor community, and major tax benefits. The case is clear.
That’s not to say every multifamily deal is a good deal, or that the asset class has no risk. Market selection, underwriting discipline, and operational execution all matter enormously. But the structural advantages are real, and they compound over time for investors who learn the business properly.
If you’re trying to decide where to focus your real estate investing energy, start with [our complete beginner’s guide to multifamily investing](https://rodkhleif.com/multifamily-investing-the-complete-beginners-guide/). If you’re ready to go deeper, the [Warrior Program](https://rodkhleif.com/rod-khleif-coaching-program/) can help. Thousands of investors used it to go from zero to hundreds of units. You get support, accountability, and a network of operators. They have made the mistakes already, so you don’t have to.
## **Frequently Asked Questions: Multifamily vs. Other Investment Properties**
### **Is multifamily real estate a better investment than single-family?**
For investors focused on scaling wealth, yes. Multifamily properties can create several income streams from one purchase. They can lower vacancy risk across your portfolio. They also gain economies of scale in management and maintenance. They are valued by income, not comparable sales. This means you can raise value by improving operations. Single-family rentals are a solid starting point, especially with FHA loans on 2-4 unit properties. Many experienced investors shift to multifamily as they grow.
### **How does multifamily compare to commercial real estate like office and retail?**
Multifamily has significantly outperformed office and retail over the past decade. Housing is a basic need. Demand stays steady across economic cycles. When buying a home costs more, more people rent. Office and retail are tied to business activity and consumer behavior patterns that have shifted structurally since 2020. Multifamily also has more accessible financing options, a larger buyer pool, and a more established operational playbook than most commercial asset classes.
### **Is multifamily better than REITs?**
They serve different purposes. REITs give passive exposure to real estate without direct ownership duties. They suit investors who want real estate in their portfolio without hands-on work. Direct multifamily ownership offers control, forced appreciation potential, superior tax benefits through depreciation and 1031 exchanges, and the ability to directly influence performance. For wealth-building, direct ownership is generally superior. For pure passive exposure, REITs are more appropriate.
### **What are the main real estate asset classes investors choose between?**
The primary real estate asset classes are: multifamily residential, single-family residential, office, retail, industrial and flex space, self-storage, mobile home parks, hospitality, and land. Each has different risk profiles, income characteristics, financing structures, and operational requirements. Multifamily and industrial have been among the strongest performers over the past decade. Office and retail have faced the most structural headwinds. The right choice depends on your experience, capital, time availability, and market knowledge.
### **Why is multifamily considered a defensive investment?**
Multifamily is considered defensive because housing demand is relatively inelastic; people need somewhere to live regardless of economic conditions. During recessions, multifamily typically sees increased rental demand as homeownership becomes less accessible. Multiple income streams across units reduce the impact of individual vacancies. These factors combine to make multifamily more resilient during downturns than most other commercial real estate asset classes or equities.
### **Can beginners invest in multifamily real estate?**
Yes. Many of the students in my Warrior Program started with no prior real estate experience and went on to build substantial portfolios. The key is education and structure. Start by learning the fundamentals, how to analyze deals using [cap rates](https://rodkhleif.com/how-cap-rates-work-with-examples/), [NOI](https://rodkhleif.com/a-complete-guide-noi-in-real-estate-in-2025/), and cash-on-cash return. Build a team around you. Analyze deals before you’re ready to buy so that when the right opportunity appears, you can move with confidence. The barrier to entry is knowledge, not capital; there are legitimate paths into multifamily at almost every capital level.
### **What is the difference between multifamily and commercial real estate?**
Multifamily properties with 1-4 units are classified as residential real estate under lending guidelines. Properties with 5 or more units are classified as commercial real estate and require commercial financing. The commercial classification means valuation is based on income rather than comparable sales, which is actually an advantage for active investors. Beyond the classification question, multifamily is one asset class in commercial real estate.This universe also includes office, retail, industrial, and other property types.
*Disclaimer: This article was written with the help of AI and reviewed by Rod and his team.*
**Categories:** Blog, Featured, Multifamily Investing, Real Estate
---
### [Is Multifamily Real Estate Commercial or Residential? The Complete Answer](https://rodkhleif.com/is-multifamily-considered-commercial-or-residential/)
**Published:** March 20, 2026
**Author:** Alex Khleif
**Content:**
*One of the most common questions I hear from new investors is: “Is multifamily real estate commercial or residential?”*
It sounds like a simple question. The real answer is “it depends.” Knowing what it depends on will change how you finance deals. It will also change how you analyze them and scale your portfolio.
I’ve owned and managed over 2,000 properties over 40 years. I’ve bought properties under residential rules and commercial rules. Here’s exactly how it works.
> *“Understanding whether a deal is classified as commercial or residential isn’t just academic. It determines your financing options, your loan terms, your due diligence process, and ultimately how fast you can scale.” – Rod Khleif*
## **Quick Answer: Is Multifamily Real Estate Commercial?**
Yes and no; it depends on the number of units:
The cutoff is 5 units. Cross that line and everything changes: how lenders evaluate the deal, what interest rates look like, how the property is valued, and what due diligence is required.
This is one of the most important distinctions in real estate investing, and most beginners don’t learn it until they’re already mid-deal. Let’s break it down fully.
## **The Official Definition: What Makes Real Estate “Commercial”?**
“Commercial real estate” (CRE) refers to any income-producing property used for business or investment purposes — not as a primary residence. This includes office buildings, retail centers, industrial warehouses, hotels, and yes, apartment buildings.
But within real estate, “commercial” is also used more specifically to describe the loan and regulatory framework that governs a deal. And that’s where the 5-unit line matters.
**Residential real estate:** properties with 1–4 units. These are governed by residential lending guidelines, which means Fannie Mae, Freddie Mac, FHA, and VA loan standards apply.
**Commercial real estate:** properties with 5+ units (plus office, retail, industrial, etc.). These follow commercial lending standards. The loan is underwritten mainly on the property’s income. It is not based only on the borrower’s personal finances.
A fourplex is technically investment real estate, but it gets a residential mortgage. A five-unit building is commercial. That one-unit difference is enormous in practice.
## **Why the 5-Unit Line Matters So Much**
The classification isn’t just a technicality. It affects almost everything about how you buy and own the property.
### **1. Financing**
With 1–4 units, you can use a **residential mortgage**.
You can even use an FHA loan. (rodkhleif.com/fha-loans-multifamily-real-estate-investors/) with as little as 3.5% down if you owner-occupy one unit. Rates are lower and qualification is based on your personal income and credit score.
With 5+ units, you need a **commercial loan**. The lender evaluates the property’s [Net Operating Income (NOI) ](http://rodkhleif.com/a-complete-guide-noi-in-real-estate-in-2025/) and Debt Service Coverage Ratio (DSCR), not primarily your W-2. Down payments are typically 20-30%.
### **2. Valuation Method**
Residential properties (1-4 units) are valued by **comparable sales,** meaning your neighbor’s sale price affects your value. You have limited control over this.
Commercial properties (5+ units) are valued by **income**. The formula is: Value = NOI ÷ Cap Rate. Learn more about how cap rates work (rodkhleif.com/how-cap-rates-work-with-examples/). This means you can directly force appreciation by increasing rents or cutting expenses, regardless of what the market does.
This is one of the biggest advantages of moving into commercial multifamily. You control the value.
## ****
### **3. Due Diligence Requirements**
On commercial deals, due diligence is more extensive. You’ll need to review rent rolls, lease agreements, trailing 12-month financials, tax returns, utility bills, and vendor contracts. See Rod’s complete [multifamily due diligence guide ](http://rodkhleif.com/a-comprehensive-guide-to-multifamily-due-diligence/)for the full checklist.
### **4. Depreciation Schedule**
Residential investment properties depreciate over 27.5 years. Commercial properties depreciate over 39 years. This affects your tax strategy, a topic worth discussing with your CPA.
## **What About Duplexes, Triplexes, and Fourplexes?**
This is where investors get confused. A duplex is a multifamily property. So is a triplex and a fourplex. But under lending guidelines, all three are classified as residential, not commercial.
That classification creates some powerful opportunities for new investors:
- You can use a conventional mortgage with 15-25% down
- You can use an FHA loan with 3.5% down if you live in one unit (house hacking)
- Qualification is based on your personal income and credit, not the property’s NOI
- Rates are typically 0.5–1% lower than commercial loans
This is why I always tell beginning investors to start with a 2-4 unit property. It’s the most accessible entry point into multifamily investing. See my guide on investing in multifamily with [limited capital](http://rodkhleif.com/how-to-get-started-with-multifamily-investing-with-limited-capital/) for more on this strategy.
> *“The fourplex is the hidden gem of multifamily investing. You get all the benefits of residential financing, like low down payments and favorable rates.Plus, you get four income streams instead of one. I’ve seen students use this as a launchpad to 100+ units.” — Rod Khleif*
## **When Does Multifamily Become Commercial Real Estate?**
The moment you hit 5 units, you’re in commercial territory. Here’s what changes:
### **Commercial Loan Types for 5+ Unit Multifamily**
- **Agency loans (Fannie Mae / Freddie Mac Multifamily):** Best rates, non-recourse, long amortization (30 years). Require stabilized occupancy (typically 90%+). Best for properties that are performing well.
- **DSCR loans:** Underwritten on the property’s debt service coverage ratio. Flexible for investors with complex income structures.
- **Bridge loans:** Short-term financing (12–36 months) for value-add deals that aren’t yet stabilized. Higher rates but fast execution.
- **HUD/FHA commercial loans (221d4, 223f):** Long-term, fixed-rate, non-recourse. Best for larger assets. More complex and slow to close.
- **Bank/portfolio loans:** Flexible terms but recourse. Good for smaller commercial deals.
## **Multifamily vs. Other Commercial Real Estate Asset Classes**
Multifamily isn’t the only type of commercial real estate. Here’s how it stacks up against other asset classes:
**Asset Class**Multifamily (5+ units)Office / Retail / Industrial**Demand driver**Housing need (always exists)Business demand (cyclical)**Vacancy risk**Lower; people always need housingHigher; tied to business cycles**Financing**Favorable agency debt availableLess standardized, bank-dependent**Management complexity**Moderate; residential tenantsHigher; NNN leases, build-outs, CAMs**COVID resilience**OutperformedUnderperformed significantly**Entry point**Can start with 5 unitsTypically higher minimums**Tax benefits**27.5 yr residential-style depreciation39 yr commercial depreciationMultifamily consistently ranks as one of the most resilient commercial asset classes. For more on whether apartment buildings make sense for your portfolio, read: [Are Apartment Buildings a Good Investment?](http://rodkhleif.com/are-apartment-buildings-a-good-investment/)
## **How to Transition from Residential to Commercial Multifamily**
Most investors start with residential properties, like a duplex, triplex, or fourplex. Later, they want to move into larger commercial deals. Here’s how that transition typically works:
1. Build a track record. Lenders and partners want to see that you can execute. Even one well-run fourplex gives you credibility.
2. Learn commercial underwriting. At 5+ units, you’re analyzing NOI, cap rates, DSCR, and vacancy, not just rental income minus mortgage. Start practicing now.
3. Build your team. Commercial deals require a commercial real estate attorney, a broker who specializes in multifamily, a commercial lender, and often a property management company.
4. Consider syndication. If you don’t have enough capital for the down payment on a larger deal, syndication lets you pool money with other investors. Learn how [multifamily syndication works](http://rodkhleif.com/what-is-multifamily-syndication-a-complete-guide/).
5. Find your market. Not all markets are equal. Research vacancy rates, rent growth, and cap rates in your target areas before committing.
If you want to learn this whole process, we can help.
We cover everything, from finding your first deal to closing a 100-unit building.
You will learn this in the [Warrior Program](http://rodkhleif.com/rod-khleif-coaching-program/) and at my [Multifamily Bootcamp](http://rodkhleif.com/bootcamp/).
## **Frequently Asked Questions**
### **Is multifamily real estate considered commercial?**
It depends on the unit count. Properties with 1–4 units (duplexes, triplexes, fourplexes) are classified as residential real estate and qualify for residential mortgages. Properties with 5 or more units are classified as commercial real estate and require commercial financing. The 5-unit threshold is the official dividing line used by lenders and regulators.
### **Is a duplex considered commercial real estate?**
No. A duplex is a 2-unit property and is classified as residential real estate. The same is true for triplexes (3 units) and fourplexes (4 units). All of these qualify for residential mortgages, including FHA loans with as little as 3.5% down if the buyer owner-occupies one unit.
### **At what point does multifamily become commercial?**
Multifamily becomes commercial real estate at 5 units. A fourplex is residential; a five-unit building is commercial. This threshold is set by Fannie Mae and Freddie Mac lending guidelines and is used consistently across the U.S. mortgage industry.
### **What is the difference between commercial and residential multifamily?**
Residential multifamily (1–4 units) is financed with residential mortgages, valued by comparable sales, and requires standard due diligence. Commercial multifamily (5+ units) is financed with commercial loans, valued by income (NOI ÷ cap rate), and requires more extensive due diligence including rent roll review and financial statement analysis. Commercial multifamily also offers more control over value through forced appreciation.
### **Is a 4-plex commercial or residential?**
A fourplex is residential. Properties with four or fewer units follow residential lending rules.This means you can finance them with conventional, FHA, or VA loans. Residential classification applies to the financing, not the investment intent. You can absolutely use a fourplex as an investment property and still use a residential mortgage.
### **Can you use an FHA loan for a 5-unit property?**
No. Standard FHA loans are limited to 1–4 unit properties. For properties with 5 or more units, you would need commercial financing. However, FHA offers a separate program called the FHA 223(f) loan for larger multifamily properties. It is mostly used for affordable housing and has a more complex approval process.
### **Why is multifamily a popular commercial real estate investment?**
Multifamily is popular among commercial real estate investors because housing demand is consistent regardless of economic cycles. People always need somewhere to live. This makes multifamily more resilient than office, retail, or hospitality during downturns. Combined with income-based valuation, you can increase the property’s value. You can do this by raising the income it produces. Multifamily properties also qualify for agency financing. They can offer strong tax benefits. Because of this, multifamily has been the top commercial real estate asset class for the past two decades.
### **Is multifamily real estate a good investment in 2026?**
Yes. With home affordability near historic lows and multifamily vacancy rates stable nationally, demand for rental housing remains strong. Investors benefit from steady cash flow, forced appreciation potential, tax advantages, and long-term wealth building. For a full breakdown, read [Are Apartment Buildings a Good Investment?](http://rodkhleif.com/are-apartment-buildings-a-good-investment/)
## **The Bottom Line**
Multifamily real estate sits between residential and commercial real estate. Knowing which side you’re on is key for financing, valuation, and scaling.
Properties with 1-4 units are residential. Properties with 5+ units are commercial. That single threshold determines your loan type, your down payment, how your property is valued, and what your due diligence process looks like.
For most new investors, the right starting point is a 2-4-unit property with residential financing backed by multifamily income. From there, the natural progression is into 5-20 unit commercial deals, and eventually into larger apartment buildings.
If you’re ready to learn the full system, from finding deals and financing them to running them at scale, that’s exactly what we teach.
*Disclaimer: This article was written with the help of AI and reviewed by Rod and his team.*
**Categories:** Multifamily Investing, Raising Capital, Real Estate
---
### [How to Calculate Cash on Cash Return?](https://rodkhleif.com/how-to-calculate-cash-on-cash-return/)
**Published:** May 9, 2025
**Author:** Alex Khleif
**Content:**
### **The Fast-Track Guide for First-Time Multifamily Investors**
Calculating returns shouldn’t feel like brain surgery. When I bought my first property back in 1981, I had a handheld calculator, a yellow pad, and a whole lot of optimism. Today you’ve got better tools—and you’ve got this guide. I’ll walk you through how to calculate cash on cash return, explain what it does (and doesn’t) tell you, and call out the rookie mistakes that can turn a “great deal” into a slow bleed.
> **TLDR;**
> Cash-on-cash return equals annual pre-tax cash flow divided by total cash invested. Start with net rental income, subtract operating costs and debt service, then divide that figure by your down payment, closing costs, and capital reserves. The result, expressed as a percentage, shows your yearly cash yield on money actually deployed.
## What is Cash on Cash Return?
Cash on cash return (CoC) is a simple way to measure the yearly cash income your investment produces. It applies to real estate or any asset that throws off cash. It’s calculated before taxes, and it answers one question: “How much cash did I get back this year based on the cash I actually put into the deal?”
## **Why Does Cash on Cash Still Matter in 2025**
Cash-on-cash tells you how hard your dollars work every year—no fancy projections, no crystal ball. When rates, rents, and regulations can change fast, cash on cash return is one of the cleanest reality checks you’ve got.
New investors love chasing flashy IRR charts. But cash on cash tells you whether the property feeds you every month. And in 2025, with borrowing still tight in a lot of places, you don’t want a deal that only works “on paper.” You want spendable cash flow and a cushion for surprises—especially as insurance and operating costs keep climbing. HUD has noted insurance costs on assisted multifamily properties have nearly doubled over the last five years on average ([HUD](https://archives.hud.gov/news/2024/pr24-323.cfm)).
## **How Do You Calculate Cash on Cash Return?**
The cash-on-cash equation is refreshingly simple—which also means if you mess it up, the mistake shows up fast. Learn it once and you’ll be able to evaluate deals anywhere.
> ***Cash-on-Cash Return = (Annual Pre-Tax Cash Flow ÷ Total Cash Invested) × 100***
Annual Pre-Tax Cash Flow = Net Operating Income (NOI) – Annual Debt Service
Total Cash Invested = Down Payment + Closing Costs + Initial Repairs/Reserves
## **A Real-World Example**
Theory is nice. Real numbers are better. Here’s a simple example that looks a lot like what beginners see in today’s market. Follow the steps and you’ll quickly spot whether a deal is solid—or a money pit.
**How to Calculate Cash on Cash Return Step-by-Step**
1. **Find NOI.** Rents $120,000; expenses $45,000 → NOI = $75,000.
2. **Subtract Debt.** Annual mortgage payments $48,000. Cash flow = $27,000.
3. **Add Total Cash In.** $250k + $25k + $25k = $300,000.
4. **Divide and Multiply.** $27,000 ÷ $300,000 = 0.09 → **9 % cash-on-cash return**.
## **5 Step Checklist Before You Buy**
Great returns start long before closing day. Run this checklist every time and you’ll sleep better, your investors will breathe easier, and your lender will treat you like a pro.
1. **Verify Rents.** Call competing properties; demand trailing-12 statements.
2. **Audit Expenses.** Insurance, taxes, and repairs creep up fast.
3. **Stress-Test Rates.** Model a 1-point interest bump on your loan.
4. **Pad Reserves.** Set aside at least $300 per unit, per year.
5. **Re-run the Math.** If cash on cash drops below 6 %, renegotiate or walk.
## **Common Rookie Mistakes**
Experience is a brutal teacher—she gives the test before the lesson. Save yourself the scars by learning where beginners usually stumble.
- **Counting appreciation as cash.** Appreciation is gravy, not dinner.
- **Ignoring capital expenditures.** Roofs leak when spreadsheets don’t.
- **Underestimating vacancy.** Budget at least 5 % even in hot markets.
- **Using fake pro-formas.** Trust real rent rolls, not broker daydreams.
- **Forgetting taxes.** Consult a CPA who understands real estate.
## **Advanced Move: Boosting Your Return**
Once you’ve got the basics down, you can start turning the dial. These tactics can improve cash flow without gambling on “hope” or unrealistic rent growth.
1. Raise below-market rents after light value-adds (paint, LED lights, smart locks).
2. Refinance once NOI jumps—pull equity, lower the payment, or both.
3. Master RUBS (ratio utility billing) so you can pass water, sewer, trash, or other utilities through when it fits your market and the property setup.
On the right property, utility bill-backs can move the NOI needle quickly—because you’re not “raising rents,” you’re reducing owner-paid expenses (or creating reimbursed income) in a way residents already expect in many markets.
## **Internal Resources to Dig Deeper**
*Knowledge compounds faster than money. Use these tools and episodes to sharpen your edge between deals.*
- Crunch numbers with my [Cap Rate Calculator](https://rodkhleif.com/cap-rate-calculator/)
- Learn *exactly* how to spot value in my [Multifamily Syndication Guide](https://rodkhleif.com/blog/what-is-multifamily-syndication)
- Hear investor success stories on the [Lifetime Cash Flow Podcast](https://rodkhleif.com/podcast)
## **Key Takeaways**
*If you remember nothing else, tattoo these points on your investing brain.*
**Cash-on-Cash Is King.** It measures real money in your pocket. If you’re investing in multifamily, you need to know how to calculate cash on cash return.
**Use Real Numbers.** Verify income, expenses, and debt terms.
**Aim for 8 % or Higher.** Anything less needs a crystal-clear upside plan.
**Protect Liquidity.** Keep reserves so surprises don’t kill returns.
**Iterate Fast.** Recalculate after every change—rent bumps, refinance, rehab, all of it.
# **Cash on Cash Return FAQ**
**What is cash-on-cash return?**
Cash-on-cash return is a metric used in real estate investing to measure the annual return an investor earns on the actual cash invested into a property. Unlike cap rate, which looks at a property’s value, cash-on-cash return focuses on how much money you’ve personally put into the deal versus how much cash flow you’re getting back each year. For example, if you invest $100,000 of your own money into a property and it generates $10,000 in annual pre-tax cash flow, your cash-on-cash return is 10%.
**How is cash-on-cash return calculated?**
The formula is straightforward:
Annual Pre-Tax Cash Flow ÷ Total Cash Invested = Cash-on-Cash Return.
Cash flow is usually calculated after all operating expenses, property management, and debt service are paid, but before taxes. Total cash invested includes your down payment, closing costs, and any renovation or upfront expenses you put into the property.
**Why is cash-on-cash return important for investors?**
It’s one of the most practical metrics because it tells you how hard your money is working right now. Appreciation and tax benefits matter, but many investors prioritize ongoing cash flow. Cash-on-cash return helps you judge whether a deal supports your income goals—especially if you’re aiming to replace a salary or reach financial independence.
**What is considered a “good” cash-on-cash return?**
It depends on the market, the property type, and your risk tolerance. In many U.S. markets, investors aim for at least 8–12% cash-on-cash return on multifamily or small rentals. In hotter, more competitive markets, you might see lower returns (5–7%), while value-add deals in emerging markets can offer 12–20% or more.
**What factors affect cash-on-cash return?**
Several variables directly influence the return:
- **Financing terms**: A lower interest rate or longer amortization can boost cash flow.
- **Operating expenses**: High taxes, insurance, or maintenance costs eat into returns.
- **Vacancy rate**: Fewer paying tenants lowers income and reduces return.
- **Rent growth**: Properties with strong demand and increasing rents tend to improve returns over time.
- **Upfront investment**: The more you invest upfront (larger down payment, costly renovations), the harder it is to achieve a higher percentage return.
**How is cash-on-cash return different from ROI?**
ROI (Return on Investment) measures total return over time, including appreciation, loan paydown, and tax benefits. Cash-on-cash return looks only at annual pre-tax cash flow compared to cash invested. It’s an income-focused metric, while ROI is a broader long-term performance measure.
**Can cash-on-cash return change over time?**
Yes. Rents can rise, expenses can shift, and mortgage payments can change if you refinance. A property might start at 7% cash-on-cash and climb to 10%+ as rents grow and the debt stays fixed. Value-add investors often target improvements that boost NOI and cash flow after renovations or repositioning.
**Is cash-on-cash return the only metric investors should use?**
No. It’s extremely useful for measuring short-term performance, but you should also consider cap rate, IRR, equity multiple, and market fundamentals. Cash-on-cash answers: “How much money is my cash making me right now?” It doesn’t capture long-term value growth, tax savings, or loan amortization.
**How can I improve cash-on-cash return on a property?**
You can increase return by raising rents, lowering expenses, refinancing into better terms, or negotiating seller concessions to reduce your upfront cash. Partnering, seller financing, or other creative structures can also lower out-of-pocket costs and increase the cash-on-cash percentage.
**Should new investors rely heavily on cash-on-cash return?**
Yes—but with context. For first-time investors, it’s a clear, tangible way to evaluate deals and avoid buying properties that look good on paper but don’t produce real income. At the same time, don’t ignore appreciation potential or tax advantages, which can justify a slightly lower cash-on-cash return if the long-term upside is strong.
*Disclaimer: This article was written with the help of AI and reviewed by Rod’s team. Always consult a licensed professional.*
## **Ready to Accelerate?**
[](https://rodkhleif.com/lifetime-cashflow-podcast/)
Subscribe to the [**Lifetime Cash Flow Podcast**](https://rodkhleif.com/lifetime-cashflow-podcast/) for weekly deep dives.
[](https://www.rodkhleif.com/bootcamp)
Seats are filling fast for my next **Multifamily Bootcamp**. Claim yours now → [**www.rodkhleif.com/bootcamp**](https://www.rodkhleif.com/bootcamp).
Let’s build lifetime cash flow together!
-Rod Khleif
**Categories:** Blog, Due Diligence
**Tags:** cash on cash
---
### [Multifamily Underwriting Bootcamp](https://rodkhleif.com/multifamily-underwriting-bootcamp/)
**Published:** February 1, 2026
**Author:** Alex Khleif
**Content:**
# Master Multifamily Underwriting: Your Path to Confident Deal Analysis
When I started investing in multifamily real estate, I made every mistake you can imagine. I overpaid for properties, missed critical red flags during due diligence, and learned expensive lessons the hard way. But here’s what I discovered: the difference between investors who build massive wealth and those who struggle comes down to one critical skill—the ability to properly underwrite and perform due diligence on deals.
That’s why I created the **Underwriting & Due Diligence Bootcamp** at [MultifamilyBootcamp.com](https://multifamilybootcamp.com/).
## Why Underwriting Separates the Winners from the Losers
In multifamily investing, your underwriting is everything. It’s the foundation of every investment decision you’ll make. Get it wrong, and you could lose hundreds of thousands (or even millions) of dollars. Get it right, and you’ll have the confidence to pull the trigger on deals that create generational wealth.
Most new investors approach underwriting backwards. They fall in love with a property first, then try to make the numbers work. That’s a recipe for disaster. Professional investors do it differently; they let the numbers tell them whether a deal deserves their attention.
## What You’ll Learn in the Underwriting & Due Diligence Bootcamp
The Underwriting & Due Diligence Bootcamp isn’t just another course that teaches you formulas. It’s a comprehensive, hands-on training that shows you exactly how to analyze multifamily properties like a seasoned pro.
### Master the Fundamentals
You’ll learn how to analyze income and expense statements, understand T-12s and rent rolls, calculate key metrics like Net Operating Income (NOI), Cap Rates, and Cash-on-Cash returns, and build financial models that accurately project your returns over time.
### Avoid Costly Mistakes
I’ll show you the red flags that amateur investors miss, how to spot seller manipulation in financial statements, the hidden expenses that destroy deals, and when to walk away from a property—even if it looks perfect on paper.
### Perform Professional-Grade Due Diligence
Due diligence is where deals are made or broken. You’ll discover how to conduct physical property inspections, review leases and identify problems, analyze the local market and submarket, verify income and expenses, and assess renovation costs and capital expenditure needs.
### Underwrite Like the Pros
By the end of the bootcamp, you’ll know how to build sensitivity analyses to test different scenarios, account for economic downturns in your projections, structure deals that maximize returns while minimizing risk, and present deals to partners and lenders with confidence.
## Why This Bootcamp is Different
I’ve been in this business for decades, and I’ve seen it all. I’ve done over 2,000 deals and learned from both massive successes and painful failures. The Underwriting & Due Diligence Bootcamp distills everything I wish someone had taught me when I started.
This isn’t theory. This is battle-tested strategies that work in real markets with real properties. You’ll work through actual case studies, analyze real deals, and develop the skills you need to compete with experienced investors.
## Who Should Attend?
This bootcamp is perfect for new investors who want to analyze their first multifamily deal with confidence, experienced single-family investors transitioning to multifamily, syndicators who need to underwrite deals for their investors, anyone who’s passed on good deals because they weren’t sure about the numbers, and investors who’ve overpaid for properties and want to avoid repeating that mistake.
## The Cost of Not Knowing
Here’s the brutal truth: every deal you pass on because you don’t trust your underwriting could be costing you hundreds of thousands in lost profits. And every bad deal you do because your underwriting was flawed could cost you even more.
I’ve seen investors lose their life savings because they didn’t know how to properly analyze a property. I’ve also seen investors build eight-figure portfolios because they mastered these skills early.
The question isn’t whether you can afford to take the Underwriting & Due Diligence Bootcamp. The question is whether you can afford not to.
## Your Next Step
If you’re serious about building wealth through multifamily real estate, you need to master underwriting and due diligence. There’s simply no way around it.
The **Underwriting & Due Diligence Bootcamp** at [MultifamilyBootcamp.com](https://multifamilybootcamp.com/) will give you the skills, confidence, and framework you need to analyze deals like a pro and build the multifamily portfolio of your dreams.
Don’t let another great deal slip through your fingers because you weren’t sure about the numbers. And don’t let another bad deal drain your bank account because you missed the warning signs.
Visit [MultifamilyBootcamp.com](https://multifamilybootcamp.com/) today and take control of your multifamily investing future. Your first multimillion-dollar deal is waiting, but only if you have the skills to recognize it and the confidence to act.
Let’s get you there together.
**Categories:** Blog
---
### [The Impact of Apartments on Property Values](https://rodkhleif.com/us-property-value-continues-to-dip-pressured-by-declines-in-apartment-sector/)
**Published:** January 28, 2026
**Author:** Matt Rohde
**Content:**
# The Impact of Apartments on Property Values: 2026 Market Insights
The impact of apartments on property values continues to reshape the US real estate landscape in ways that both challenge and create opportunities for investors. As we navigate 2026, understanding how multifamily properties influence overall market valuations has become essential for anyone serious about building wealth through real estate.
The apartment sector’s influence on property values extends far beyond the buildings themselves, creating ripple effects that touch everything from neighborhood dynamics to regional economic health. Here’s what you need to know about how apartments are impacting property values today and what it means for your investment strategy.
## How Apartments Are Reshaping Property Value Dynamics
The relationship between apartments and property values has evolved dramatically over the past few years. What we’ve learned is that apartment buildings don’t just reflect market conditions—they actively shape them.
Recent market analysis reveals that multifamily properties are exerting unprecedented influence on surrounding property valuations. When apartment values shift, they create cascading effects throughout local real estate markets, impacting everything from single-family home prices to commercial property valuations.
The data tells a compelling story. Major multifamily sales experienced significant volatility in recent years, with values swinging from robust growth to notable declines. This dramatic shift in apartment valuations has fundamentally altered how we think about the impact of apartments on property values across different market segments.
## The Apartment Value Equation: What’s Really Driving Prices
Understanding the impact of apartments on property values requires looking beyond surface-level metrics. Several critical factors are driving apartment valuations in 2026:
**Market Sentiment and Transaction Volume**
The apartment market has seen substantial shifts in transaction activity. When fewer apartment deals close, it signals investor hesitation and often precedes broader declines in property values. This hesitancy creates a feedback loop—declining apartment values lead to fewer transactions, which in turn puts further downward pressure on valuations.
Investment-grade multifamily properties have been particularly affected, with transaction volumes declining significantly compared to previous years. This reduction in deal flow impacts property values by limiting price discovery and reducing market liquidity.
**The Size Factor: How Apartment Scale Affects Value**
One of the most significant insights about the impact of apartments on property values is how property size influences valuation trends. Larger, institutional-grade apartment complexes often move differently than smaller multifamily properties, creating distinct value patterns across market segments.
Smaller multifamily properties—those typically purchased by private investors—have shown different resilience characteristics compared to major apartment complexes. This size-based divergence in how apartments impact property values creates unique opportunities for investors who understand these nuances.
**Geographic Variations in Apartment Impact**
The impact of apartments on property values varies dramatically by region. Western markets, including California, Oregon, Washington, and Nevada, have experienced different apartment valuation patterns compared to Southern markets like Texas, Florida, Georgia, and North Carolina.
In Western markets, apartment values have been influenced by technology sector headwinds and shifting population trends. These regional factors mean that apartments in these areas have had a more pronounced impact on overall property values, with declines in multifamily properties often leading broader market corrections.
Southern markets, while also experiencing apartment value fluctuations, have shown different characteristics due to continued population growth and economic diversification. The impact of apartments on property values in these regions has been moderated by strong rental demand and job market resilience.
## The Apartment-to-Neighborhood Value Connection
One often-overlooked aspect of how apartments impact property values is their influence on neighborhood dynamics. When apartment values decline in a specific area, it can signal broader concerns about that neighborhood’s economic health, school quality, or infrastructure.
Conversely, when well-managed apartment properties maintain or increase their values, they often lift surrounding property values by demonstrating neighborhood stability and rental demand strength. This symbiotic relationship between apartments and surrounding properties is crucial for understanding local market dynamics.
## What Apartment Values Tell Us About Market Health
Apartment values serve as a leading indicator for broader real estate market trends. Because multifamily properties are income-producing assets with transparent cash flows, their valuations often shift before single-family home prices or other property types.
The current apartment market reveals several key insights about overall property value trends:
**Rental Demand Remains the Foundation**
Despite value fluctuations, rental housing demand continues to support apartment property values in many markets. Urban centers and areas with strong job markets maintain robust rental demand, which provides a floor for apartment values even during broader market corrections.
This persistent demand means that well-located apartments continue to impact property values positively in markets with solid economic fundamentals. Investors who focus on locations with strong rental demand can often find apartment properties that maintain value better than the broader market.
**The Income-Value Relationship**
The impact of apartments on property values is intrinsically tied to their income-generating capacity. Unlike single-family homes, apartment values are directly linked to rental income and operating expenses. When rental rates remain strong, apartments tend to maintain property values better than other real estate segments.
Understanding this income-value connection is essential for investors trying to predict how apartments will impact property values in their target markets. Markets with rising rents will see apartment values stabilize or appreciate, while markets with flat or declining rents will see greater pressure on apartment property values.
## Strategic Opportunities in the Current Apartment Market
The shifting impact of apartments on property values has created distinct opportunities for informed investors in 2026:
**Value-Add Potential in Declining Markets**
When apartment values decline, they often create opportunities for investors with capital and expertise to acquire properties below replacement cost. These distressed or undervalued apartments can be repositioned to capture stronger rental demand and drive value appreciation.
The key is identifying markets where apartment values have declined due to temporary factors rather than fundamental structural problems. Apartments in these markets can offer outsized returns as values recover.
**Cash Flow Focus Over Appreciation**
In markets where the impact of apartments on property values has been negative, savvy investors are shifting focus from appreciation to cash flow. Well-selected apartment properties can generate strong rental income even when capital values are under pressure.
This cash flow focus allows investors to weather value fluctuations while building long-term wealth through income generation. Apartments with diverse tenant bases and stable occupancy histories are particularly attractive in this environment.
**Location Arbitrage Opportunities**
The varying impact of apartments on property values across different regions creates arbitrage opportunities. Investors can find markets where apartment fundamentals remain strong even as values have declined, creating entry points with favorable risk-reward profiles.
Markets with strong job growth, population increases, and limited new apartment supply often offer the best opportunities. In these locations, temporary declines in apartment values may not accurately reflect long-term potential.
## Risk Factors to Consider
Understanding the impact of apartments on property values also means recognizing the risks:
**Interest Rate Sensitivity**
Apartment values are highly sensitive to interest rate changes because they’re typically purchased with leverage. Rising rates increase debt service costs and cap rates, putting downward pressure on apartment values.
Investors must factor in the current rate environment and potential future changes when evaluating how apartments will impact their overall portfolio values.
**Market Timing Challenges**
Trying to time the apartment market based on value trends is notoriously difficult. While understanding the impact of apartments on property values is crucial, investors should focus on long-term fundamentals rather than attempting to perfectly time market bottoms.
**Operational Complexity**
Unlike single-family properties, apartments require professional management and have more complex operational requirements. This operational complexity can impact property values when management quality declines or when properties face deferred maintenance issues.
## Investment Decision Framework for 2026
For investors trying to navigate the impact of apartments on property values in 2026, consider these factors:
**Assess Your Risk Tolerance**
The current apartment market requires honest assessment of your ability to weather value volatility. Investors with longer time horizons and adequate reserves are better positioned to capitalize on current opportunities.
**Prioritize Location Quality**
Location remains paramount. Apartments in resilient markets with strong economic fundamentals will see less negative impact on property values and faster recovery when market conditions improve.
Focus on markets with diverse economies, strong job growth, and positive population trends. These fundamentals support rental demand and help stabilize apartment property values.
**Evaluate Property Type Carefully**
Not all apartments impact property values equally. Properties with diverse tenant bases, strong historical occupancy, and solid physical condition tend to maintain values better than alternatives.
Smaller multifamily properties in good locations may offer better value retention than larger complexes in weaker markets, despite the institutional appeal of larger properties.
**Stress Test Your Projections**
Given current market volatility, carefully analyze cash flow projections under various scenarios. Ensure that rental income can cover debt service even if rental rates decline or vacancy increases.
Understanding how apartments might impact your portfolio values under stress scenarios is essential for risk management.
## The Bottom Line on Apartments and Property Values
The impact of apartments on property values in 2026 is multifaceted and market-dependent. While some markets have seen significant apartment value declines, others maintain stability or even appreciation based on strong local fundamentals.
For investors, the key insights are:
Apartment values serve as important indicators of broader market health and often lead other property type valuations. Regional variations in how apartments impact property values create geographic arbitrage opportunities for informed investors. Income-generating capacity remains the fundamental driver of apartment property values, making rental demand analysis crucial. Current market conditions offer both challenges and opportunities, with value-add strategies and cash flow focus providing paths to success.
The apartment market’s influence on overall property values will continue evolving, but the fundamental principles remain constant: location, cash flow, and long-term demand drive sustainable value creation.
Whether you’re a seasoned multifamily investor or exploring apartments for the first time, understanding the impact of apartments on property values is essential for making informed decisions. The investors who thrive in this market will be those who look beyond short-term value fluctuations to focus on properties with solid fundamentals in markets with strong long-term prospects.
By staying informed about how apartments impact property values and maintaining discipline in your investment criteria, you can navigate the current market environment and position yourself for long-term success in multifamily real estate investing.
**Categories:** Blog, Real Estate
---
### [Are We Headed For a Recession in 2026?](https://rodkhleif.com/are-we-headed-for-a-recession-in-2026/)
**Published:** January 27, 2026
**Author:** Alex Khleif
**Content:**
The economic landscape of 2026 looks dramatically different than just a few years ago. After navigating through pandemic-era inflation, aggressive Federal Reserve rate hikes, and a shifting labor market, investors are once again asking the crucial question: are we headed for a recession?
For multifamily investors, understanding the economic environment is critical. Interest rates, employment levels, and consumer confidence directly impact rental demand, financing costs, and property values. So let’s examine where we stand today and what it means for your multifamily investments.
## How Did We Get Here?
To understand our current situation, we need to look at the economic journey of the past few years.
### The Inflation Surge and Fed Response (2021-2024)
The period from 2021 to 2023 saw inflation surge to levels not seen since the 1970s, driven by pandemic-era stimulus, supply chain disruptions, and labor shortages. In response, the Federal Reserve embarked on one of its most aggressive rate-hiking campaigns in modern history, raising the federal funds rate from near zero in early 2022 to a peak above 5% by mid-2023.
### The Tariff Impact (2025)
U.S. trade policy experienced an unprecedented shift in 2025: The average U.S. tariff rate rose to about 17%—far above the less-than 3% rate that prevailed for most of the past three decades. This dramatic change added upward pressure on prices and created economic uncertainty that businesses and consumers are still navigating.
### The Immigration Slowdown
Another major shift has been in immigration policy. The dramatic decline in immigration has fundamentally changed what constitutes healthy job growth. Average monthly employment growth has been just 17,000 since April 2025, a level that historically would signal severe economic weakness. However, with reduced immigration limiting labor supply, these numbers may represent a new normal rather than economic crisis.
## OK, But Where Are We Now?
As we enter 2026, the economic picture is mixed—showing both resilience and emerging stress points.
### Interest Rates: Finally Declining
After maintaining elevated rates throughout 2024, the Federal Reserve began cutting rates in September 2024 and has continued through December 2025. At its final meeting of 2025, the Federal Reserve cut interest rates by 25 basis points to a range of 3.50% to 3.75%; the Fed has now cut rates by 175 basis points since September 2024.
Looking ahead, most economists expect the Fed to pause in early 2026, particularly as Jerome Powell’s term as Chair expires in May 2026. Three additional cuts are expected this year, starting in June. That would bring the Fed’s target rate to a 2.75% – 3.0% range, which is considered neutral.
However, bond markets have grown skittish; investors are not buying what the Fed is selling. Bond yields have moved up since the Fed resumed its cutting cycle. The 10-year Treasury yield is expected to average around 4% throughout 2026, reflecting concerns about persistent inflation and growing federal debt.
### Inflation: Sticky But Declining
Inflation should cool to about 2.4% in 2026, according to a December forecast from the Federal Reserve. But that would still leave inflation above the central bank’s goal, creating ongoing challenges for household budgets.
Work by the St. Louis Federal Reserve revealed that consumer inflation expectations may be becoming unmoored. We tend to get the inflation we expect, and consumers are still expecting a lot more than they did a year ago. This psychological component could make it harder to bring inflation fully under control.
### The Labor Market: Cooling Considerably
Perhaps the most significant change has been in employment. Average payroll gains could rise to an average of 70,000 per month next year, more than double the 32,000 per month average in 2025, though this remains well below pre-pandemic norms.
The Bureau of Labor Statistics’ December jobs report showed the unemployment rate increasing to 4.6 percent, which — while historically still relatively low — is the highest level in four years.
### Consumer Sentiment: Deeply Pessimistic
Consumer confidence dropped to recession levels again in December. Concern about both inflation and the labor market moved up in tandem for the first time since the 1970s.
This matters because consumer spending drives nearly 70% of GDP. When people feel uncertain about their financial future, they pull back on discretionary spending, which can create a self-fulfilling economic slowdown.
## So, Are We Headed For a Recession?
The answer is more nuanced than a simple yes or no. Let’s examine both sides of the case.
### The Case For Recession
Several troubling indicators suggest economic contraction could be ahead:
**1. Bifurcated Economy Creating Demand Weakness**
Even as wealthier households keep overall consumer spending healthy, “lower-income households face intensifying pressure from elevated prices and interest rates,” Gregory Daco, chief economist at EY-Parthenon, wrote in his most recent outlook.
When a large segment of the population is struggling financially, it creates a drag on overall economic growth. The concentration of wealth at the top can mask underlying weakness.
**2. Tariff-Driven Cost Pressures**
The 2025 tariff increases have created ongoing cost pressures for businesses and consumers. “However, when you think about inflation, we’re still nowhere near the Fed’s 2% target.” Along with the tariff effect, Deloitte also projects sharply lower immigration due to the Trump administration’s efforts to slow immigration and deport undocumented immigrants, which could drive up labor costs further.
**3. Softening Labor Market**
The unemployment rate has been creeping upward, and job growth has slowed dramatically. If this trend continues, it could trigger the classic recession dynamic where job losses lead to reduced consumer spending, which leads to more job losses.
**4. Credit Stress**
Consumer delinquencies on credit card debt have remained over 7.0 percent since 2023 while delinquencies on all consumer loans were 2.8 percent in Q2 2025, the highest level since 2012, according to the Federal Reserve.
This suggests many households are financially stretched and may not be able to maintain current spending levels.
**5. Federal Debt Concerns**
Federal debt outstanding is poised to eclipse the economy in size for the first time since WWII in 2026. Expansions to tax cuts and upward pressure on spending via Social Security and Medicare will intensify.
Rising debt levels could limit the government’s ability to stimulate the economy if recession hits.
### The Case Against Recession
Despite these concerns, several factors suggest the economy may avoid recession:
**1. Most Economists Expect Slow Growth, Not Contraction**
“We actually believe that economic growth estimates for next year are probably too low,” says Scott Helfstein, head of investment strategy at Global X ETFs. “I think we’ll probably see 2.5% to 3% \[GDP\] growth in 2026.”
We anticipate that the push to build the infrastructure for artificial intelligence, including a more robust energy grid, will be the primary driver of growth for at least another year.
**2. Fiscal Stimulus in the Pipeline**
“Our base case is no recession for 2026. We think we can avoid it with the fiscal stimulus that’s coming,” says Adam Turnquist, chief technical analyst at LPL Financial. Turnquist says the tax cuts Congress passed over the summer have the potential to boost economic activity next year.
Expanded tax cuts could put more money in consumers’ pockets in early 2026, providing a temporary boost to spending.
**3. AI Investment Boom**
The artificial intelligence sector continues to drive significant capital investment. New data centers, infrastructure buildout, and technology deployment are creating jobs and economic activity that could sustain growth.
**4. Recession Probability Declining**
The probability of a recession over the next 12 months has fallen to 30%, down from the previous estimate of 40%.
J.P. Morgan Global Research sees a 35% probability of a U.S. and global recession in 2026.
While these aren’t zero, they suggest that recession is possible but not the most likely outcome.
**5. Fading Tariff Impact**
We think that the tariffs’ drag on growth of nearly 1% in 2025 will fade, helping to spur a solid reacceleration of growth in 2026.
As businesses and supply chains adjust to the new tariff reality, the economic drag should diminish.
### The Likely Outcome: Slow Growth With Risks
The consensus view among economists is that 2026 will bring slow but positive growth—not a recession, but not robust expansion either. A recent Deloitte analysis predicts economic growth of just 1.4% in 2026. Although that’s not a recession, it’s also not exactly the kind of number that makes executives and investors pop corks.
Think of it as economic “malaise”—a period of disappointing but not disastrous performance. Growth will be positive but weak, job creation will continue but slowly, and many households will continue to feel financial pressure.
## How Does This Impact Multifamily Housing?
The multifamily sector is experiencing its own unique dynamics that both reflect and diverge from broader economic trends.
### Current Multifamily Market Conditions
**Supply Challenges Easing**
After years of record construction, the development pipeline is finally contracting. Developers delivered more than 1.4 million units nationally over the past three years, yet renter demand remained strong enough to restrain vacancy. In fact, vacancy fell 130 basis points from its early 2024 peak, reaching 4.6% by Q3 2025.
However, vacancy rates vary dramatically by market. Domestic migration has cooled from pandemic-era highs, and vacancy rates in those metros are now roughly 200 basis points above the national average. Sun Belt markets that saw explosive growth are now dealing with oversupply.
**Construction Pipeline Slowing Sharply**
With multifamily starts having fallen by about 40% between 2023 and 2025, moderating development pipelines will influence vacancies and rent growth next year.
This slowdown in new construction should help markets rebalance over the next 12-24 months, particularly in previously oversupplied areas.
**Rent Growth: Modest and Regional**
Rent growth in 2025 was moderate and widely varied by region. National rent growth ended the year between 0% and 3% depending on the data source.
Several Sun Belt metros recorded flat or slightly negative rent growth as elevated supply continued to weigh on performance. In contrast, many Midwest and Northeast markets posted steady gains, supported by limited new development and tighter housing inventory.
**The Affordability Advantage**
As of late 2025, the monthly payment on a median-priced home is approximately $1,200 more than average apartment rent. This affordability gap continues to drive high lease renewal rates, currently near 55%—well above the historical average.
This massive cost difference keeps renters in apartments even when they might prefer to buy, providing a structural support to multifamily demand.
**Long-Term Fundamentals Remain Strong**
The United States has a 600,000-unit apartment shortage created by underbuilding in the wake of the global financial crisis, and needs to build 4.3 million units by 2035, according to the National Multifamily Housing Council and National Apartment Association.
Despite short-term oversupply in specific markets, the long-term structural shortage supports continued multifamily investment.
### Regional Performance Divergence
Not all markets are created equal in 2026:
**Strong Performers:**
- Midwest markets (Chicago, Milwaukee, Kansas City) with limited new supply
- Northeast cities with tight inventory
- Select gateway markets experiencing renewed demand
- Markets benefiting from AI investment and tech growth (San Francisco, San Jose)
**Challenged Markets:**
- Overbuilt Sun Belt metros (Austin, Phoenix, Nashville, Orlando, Miami)
- Markets heavily dependent on immigration that have seen population slowdowns
- Areas with excessive Class A luxury supply
## Preparing Your Multifamily Portfolio For 2026
Given the economic uncertainty and mixed multifamily fundamentals, here’s how to position your investments for success:
### 1. Underwrite Conservatively
This is not the time for aggressive assumptions. Be realistic—even pessimistic—about:
- **Rent Growth:** Assume 0-2% annually for most markets, potentially flat or negative in oversupplied areas
- **Vacancy:** Model 6-8% vacancy, higher in Sun Belt markets
- **Expenses:** Inflation may be moderating, but many operating costs remain elevated. Budget conservatively for insurance, property taxes, and maintenance
- **Exit Cap Rates:** Don’t assume significant cap rate compression. Model your exit at current or slightly higher cap rates
- **Interest Rates:** While rates are declining, they’re still well above 2020-2021 levels. Don’t stretch on variable-rate debt expecting dramatic rate drops
### 2. Focus on Cash Flow, Not Appreciation
In an uncertain market, prioritize properties that generate strong cash-on-cash returns from day one. Don’t rely on rent growth or value appreciation to make deals work. If a property only pencils with aggressive growth assumptions, pass on it.
### 3. Build and Maintain Robust Reserves
Economic uncertainty means unexpected expenses are more likely:
- **Operating Reserves:** Maintain 4-6 months of operating expenses in reserves
- **CapEx Reserves:** Budget conservatively for deferred maintenance and unexpected capital needs
- **Debt Service Reserves:** If using floating-rate debt, maintain reserves to cover potential payment increases
### 4. Be Strategic About Financing
Review your financing strategy carefully:
- **Lock in Fixed Rates:** With the Fed cutting rates but long-term yields remaining elevated, lock in financing on attractive properties while rates are in the 5-6% range
- **Avoid Over-Leverage:** This is not the time to stretch on loan-to-value ratios. Conservative leverage (65-75% LTV) provides cushion if values soften
- **Review Existing Debt:** If you have maturing loans or floating-rate debt, start the refinancing process early. Don’t wait until the last minute
### 5. Market Selection is Critical
Choose your markets wisely:
- **Avoid Oversupplied Markets:** Sun Belt metros with 4-5% inventory growth projected for 2026-2027 will continue to struggle
- **Focus on Supply-Constrained Markets:** Midwest, Northeast, and select gateway markets with limited development pipelines offer better fundamentals
- **Consider Secondary Markets:** Lower-cost tertiary markets attracting migration from expensive primary markets can offer opportunities
- **Watch Employment Trends:** Markets with diversified, growing employment bases will outperform
### 6. Asset Class Positioning
Not all multifamily product performs equally in uncertain times:
- **Workforce Housing (Class B/C):** These properties tend to be more recession-resistant as renters trade down from Class A luxury
- **Value-Add Opportunities:** Properties with operational upside but not requiring heavy capital investment can work well
- **Avoid Heavy Lift Deals:** Major renovations or lease-up deals carry more risk in uncertain markets
- **Stable, Cash-Flowing Assets:** Boring can be beautiful. Well-located properties with stable occupancy and moderate rents offer downside protection
### 7. Operational Excellence Matters More Than Ever
In a slower growth environment, operational performance becomes critical:
- **Aggressive Retention Programs:** Keeping existing tenants is cheaper than finding new ones. Focus on resident satisfaction and renewal incentives
- **Expense Management:** Review every line item. Renegotiate contracts, improve efficiency, eliminate waste
- **Technology Implementation:** Property management software, smart home features, and automation can improve both operations and resident experience
- **Proactive Maintenance:** Preventing problems is cheaper than fixing them. Don’t defer critical maintenance
### 8. Communication With Investors
If you’re syndicating deals, transparency is crucial:
- **Set Conservative Expectations:** It’s better to under-promise and over-deliver
- **Provide Regular Updates:** Monthly or quarterly investor communications build trust
- **Be Honest About Challenges:** If the property is underperforming projections, explain what’s happening and your plan to address it
- **Demonstrate Active Management:** Show investors you’re monitoring markets and making strategic decisions to protect their capital
### 9. Have Multiple Exit Strategies
Don’t lock yourself into one exit scenario:
- **Hold for Cash Flow:** If the sales market softens, can you profitably hold the property longer?
- **Refinance and Return Capital:** Consider a cash-out refinance to return capital to investors while maintaining ownership
- **Opportunistic Sales:** Be ready to sell if an attractive offer comes along, even if it’s earlier than planned
- **Extend Hold Period:** Underwrite assuming you might hold 7-10 years instead of 5
### 10. Stay Liquid and Patient
Cash provides optionality:
- **Maintain Dry Powder:** Don’t rush to deploy all your capital. Better opportunities may emerge if markets soften
- **Build Your Pipeline:** Use this time to build broker relationships and analyze deals so you’re ready when the right opportunity appears
- **Be Selective:** It’s okay to pass on deals that don’t meet your criteria. Discipline wins in uncertain markets
## The Bottom Line
Are we headed for a recession in 2026? Probably not a severe downturn, but slow growth and economic uncertainty are likely to persist throughout the year.
For multifamily investors, this environment requires a balanced approach: remain cautiously optimistic about long-term fundamentals while being realistic about short-term challenges. The structural demand for rental housing remains intact, but market selection, conservative underwriting, and operational excellence will separate winners from losers.
The multifamily investors who succeed in 2026 and beyond will be those who:
- Choose markets wisely based on supply-demand fundamentals
- Underwrite conservatively with realistic assumptions
- Focus on cash flow over speculative appreciation
- Maintain strong reserves and conservative leverage
- Execute operationally at a high level
- Communicate transparently with investors
Remember: real estate is a long-term game. Economic cycles come and go. Short-term softness often creates the best long-term buying opportunities for those with capital, patience, and discipline.
The key is positioning yourself to weather potential storms while remaining ready to capitalize on opportunities as they emerge. That’s how wealth is built in multifamily investing—not by timing perfect market conditions, but by consistent execution through all market conditions.
*Disclaimer: This article was written with the help of AI and reviewed by Rod and his team.*
**Categories:** Real Estate
---
### [10 Things to Do When Your Home Value Is Dropping](https://rodkhleif.com/if-your-home-value-is-dropping-do-these-10-things-now-gobankingrates/)
**Published:** January 15, 2026
**Author:** Matt Rohde
**Content:**
# What to Do When Home Value Is Dropping (10 Smart Moves for 2026)
If your home value is dropping, don’t panic and don’t guess. Do what smart investors do when the market shifts:
**confirm the real numbers, protect your cash position, and increase your options.** A value drop doesn’t automatically mean you made a bad decision.
It usually means the market is cycling, affordability changed, or your local area is cooling faster than the national headlines.
This 2026 playbook gives you 10 practical moves to protect yourself and make better decisions—whether you plan to sell soon, stay put, or turn your home into an asset that supports you.
(And if you want to think like an investor through any market, read Rod’s guide to
[investing through economic cycles](https://rodkhleif.com/how-to-invest-in-multifamily-properties-during-economic-cycles/).)
## Quick takeaway (read this first)
- **Verify the drop is real.** Online estimates are directional, not gospel.
- **Your timeline dictates your strategy.** Selling soon is different than holding long-term.
- **Cash buys patience.** Patience buys good decisions.
- **Optionality reduces pressure.** Pressure creates bad deals and bad sales.
## Table of contents
1. [Verify the drop is real (and local)](#step-1)
2. [Get clear on your timeline](#step-2)
3. [Build a cash moat](#step-3)
4. [Don’t “stress refinance”](#step-4)
5. [Appeal your property taxes (if it’s justified)](#step-5)
6. [Make your home more sellable without overspending](#step-6)
7. [If you sell, price like a pro (not like it’s 2022)](#step-7)
8. [Control the silent budget killers](#step-8)
9. [Create optionality: rent, house hack, or add income](#step-9)
10. [Track the right scoreboard (and stay rational)](#step-10)
## 1) Verify the drop is real (and local)
The internet loves a dramatic number. The problem is: automated home valuations can swing based on incomplete data, seasonality, or a couple of distressed sales nearby.
So step one is simple: verify reality using local comps. Look at 3-6 recent closed sales that truly match your home (same neighborhood, similar size, similar condition).
Then check current actives and recent price reductions to see what buyers are rejecting right now.
If your market is soft, the “truth” usually shows up in *days on market* and *concessions* before it shows up in the final sales price.
When you base decisions on real comps instead of vibes, you stop reacting and start executing.
## 2) Get clear on your timeline
Your timeline is the steering wheel. If you’re selling in the next 0-24 months, you need a defensive plan: protect cash, improve marketability, and avoid big projects
that won’t pay you back quickly. If you’re holding for 5–10+ years, a temporary drop is mostly a paper loss and your focus should shift to payment stability, reserves, and improvements that reduce long-term risk.
This is where most people get it wrong: they make a permanent decision (like selling) based on temporary discomfort (like a scary estimate). Don’t do that.
Decide based on your real life timeline, not a widget on a website.
## 3) Build a cash moat (because cash buys patience)
In a declining market, cash isn’t just “nice to have.” Cash is control. The homeowners who get hurt aren’t always the ones with the worst properties.
They’re the ones who have no reserves, so every repair becomes a crisis, every surprise bill creates debt, and every market dip feels like an emergency exit.
Build or rebuild a 3-6 month emergency reserve. If your income is variable, build more. Then eliminate the financial leaks you won’t even remember in 60 days: subscriptions you don’t use, “random” spending that adds up, and big discretionary purchases that can wait. You’re not doing this forever.
You’re buying stability until conditions improve.
Rod says it all the time: people get seduced by appreciation and forget the fundamentals. If you want a mindset reset, read
[why cash flow beats value](https://rodkhleif.com/3-reasons-cash-flow-beats-value-as-a-better-investment-strategy/)—because the principle is the same at the homeowner level:
stability first, upside second.
## 4) Don’t “stress refinance”
Refinancing can be smart. It can also be a very expensive emotional decision. Before you refinance, run the math like an investor:
will this materially improve your monthly payment or long-term cost after closing costs? How long until you break even? Are you trading a stable situation for something riskier?
If you already have a strong fixed rate, refinancing “to feel better” is often just paying thousands for temporary relief. Sometimes the best move is to do nothing,
keep the stable debt, and direct your energy into reserves, repairs, and income flexibility.
## 5) Appeal your property taxes (if it’s justified)
If your neighborhood cooled but your assessed value is still living in the peak, you may be overpaying. Review your assessment notice, pull comps that support a lower valuation, and file an appeal if the gap is real. In many areas, a successful appeal can reduce your monthly carrying costs—exactly what you want when affordability is tight.
The key is documentation and timing. Don’t wait. Tax appeal windows are deadline-driven, and the people who win are the ones who show up with clean comps and a clear case.
## 6) Make your home more sellable without overspending
In a down market, buyers become pickier. Homes that feel dated, cluttered, or neglected get punished harder. Your goal isn’t to do a glamorous remodel.
Your goal is to remove objections—the things that make a buyer think, “This is going to be a headache.”
Focus on simple, high-impact wins: deep clean, declutter, fix obvious deferred maintenance, improve lighting, and make curb appeal feel cared for.
When buyers are nervous, they pay more for certainty. “Move-in ready” is a confidence level.
## 7) If you sell, price like a pro (not like it’s 2022)
Here’s the brutal truth: in a declining market, denial is expensive. The biggest mistake sellers make is pricing off last year’s peak and “testing the market.”
What happens next is predictable—no showings, price cuts, a stale listing, and a weaker negotiating position.
Price based on today’s comps and today’s buyer psychology. If your market is soft, expect concessions (closing costs, repairs, rate buydowns) and build that into the strategy
so you don’t end up chasing the market down with multiple reductions. The first few weeks matter most because that’s when your listing is freshest and buyers are paying attention.
## 8) Control the silent budget killers
In 2026, homeowners get squeezed less by the mortgage and more by the “everything else”: insurance premiums that jump, maintenance costs that creep, and utilities that never seem to go down.
If your value is dropping, controlling expenses is one of the fastest ways to protect your financial position.
Do a real audit: shop insurance (or at least review coverage and deductibles), fix small issues before they become large ones (water is the enemy),
and improve efficiency where it’s cheap and obvious. This isn’t glamorous. This is how you stay in control while the market does what it does.
## 9) Create optionality: rent, house hack, or add income
If selling would lock in a loss your best move might be increasing flexibility instead of forcing a sale. Depending on your property and local rules,
you may be able to rent a room, offer a mid-term furnished rental, or restructure living arrangements to reduce the monthly burden.
Optionality is powerful because it removes pressure. Pressure is what makes people sell at the bottom, borrow at bad terms, or ignore common sense.
Even a temporary 12-24 month income bridge can buy you time for the cycle to normalize.
## 10) Track the right scoreboard (and stay rational)
Most homeowners track the wrong metrics. They obsess over a home-value estimate while ignoring the fundamentals that actually determine whether they’re safe:
cash reserves, payment stability, and options.
So here’s your new scoreboard: (1) reserves growing or shrinking, (2) housing costs stable or rising, (3) local comps every 60-90 days, and (4) your options list
(sell, hold, rent, improve, restructure). Markets cycle. The people who win are the ones who stay calm, stay liquid, and make decisions from logic instead of not fear.
## Final word from Rod
A falling market doesn’t mean you’re doomed. It means the easy years are over for now. But disciplined homeowners don’t rely on easy years.
They rely on fundamentals: cash, patience, and smart execution.
If you want to think and act like a pro (and build real wealth through real estate), check out
[Rod’s Multifamily Virtual Bootcamp](https://rodkhleif.com/bootcamp/).
The principles you learn there (how to underwrite, manage risk, and take action in any market)apply whether you’re buying apartments or simply protecting your position as a homeowner.
## FAQ: What to Do When Home Value Is Dropping
### Why is my home value dropping?
Home values commonly drop when interest rates rise, affordability tightens, inventory increases, or your local area cools faster than the national market.
Sometimes it’s also a data issue because online estimates can swing based on incomplete or outdated information.
### How do I know if the value drop is real or just a Zillow/Redfin estimate change?
Validate it with real comps: look at 3–6 recent closed sales in your neighborhood (similar size and condition), then check active listings, recent price cuts,
days on market, and seller concessions. Those signals usually reveal the true market direction faster than an automated estimate.
### Should I sell if my home value is dropping?
It depends on your timeline and financial stability. If you must move soon and the payment or upkeep is stressing your finances, selling may be the safer choice.
If your payment is stable and you can hold long-term, staying put often makes sense because markets cycle.
### Is a dropping home value a problem if I’m not planning to sell soon?
Usually, it’s more of a psychological problem than a financial one—unless it impacts your ability to refinance, borrow, or move.
If you’re holding for years and your payment is affordable, the best strategy is often to strengthen reserves and focus on long-term property upkeep.
### What’s the smartest first move when my home value is dropping?
Confirm the drop with comps, then protect your cash position. In a shifting market, cash buys patience—and patience prevents forced decisions like selling at the wrong time
or taking expensive debt.
### Should I refinance if my home value is dropping?
Only if the math works. Refinancing can be expensive, and a lower value can limit your options due to loan-to-value requirements.
Run the break-even timeline on closing costs, compare payment savings, and avoid changing a stable loan into a riskier one just for emotional relief.
### Can I lower my property taxes if my home value has dropped?
Possibly. If your assessed value is higher than what your home would reasonably sell for today, you may be able to appeal.
Check your assessment notice, pull supporting comps, and follow your local appeal deadlines closely.
### What upgrades help most in a down market?
The upgrades that remove objections: repairs, deep cleaning, decluttering, fresh paint touch-ups, improved lighting, and basic curb appeal.
Buyers pay more for homes that feel maintained and “easy,” especially when they’re cautious.
### How should I price my home if I need to sell in a declining market?
Price based on today’s comps, not yesterday’s peak. Overpricing leads to a stale listing and weaker negotiating power.
In many markets, building in concessions strategically (closing costs, repairs, rate buydowns) can be better than multiple price cuts.
### What if I don’t want to sell but my payment feels too high?
Create optionality. Depending on your situation and local rules, you can rent a room, offer a mid-term furnished rental, or restructure your living setup to reduce the monthly burden.
Even a temporary income boost can buy you time until the market stabilizes.
### What’s the biggest mistake homeowners make when values drop?
Panic decisions. Selling too fast, refinancing without running the numbers, or ignoring cash reserves.
The winners in down markets stay calm, stay liquid, and make decisions based on timeline and fundamentals—not headlines.
*Disclaimer: This article was written with the help of AI and reviewed by Rod and his team.*
**Categories:** Blog, Featured, Property Management
**Tags:** home value, home value dropping
---
### [Ways to Strengthen Landlord Tenant Relationships](https://rodkhleif.com/5-best-strategies-for-cultivating-landlord-tenant-relationships/)
**Published:** January 14, 2026
**Author:** Matt Rohde
**Content:**
Creating a positive landlord relationship with tenants is crucial for both parties. Whether you are a seasoned landlord or just entering the real estate business, these strategies can help enhance your understanding of the landlord-tenant connection.
In this article, we’ll discuss some practices to strengthen landlord and tenant relationships. By applying these strategies, you can achieve a more harmonious landlord and tenant relationship, benefiting you and your tenants.
## Why Is the Landlord-Tenant Relationship Important?
The landlord-tenant relationship is a cornerstone of successful real estate investing. Building a positive connection with your tenants is vital for long-term success in the real estate industry.
Here are 5 key elements that highlight the significance of the landlord-tenant relationship.
### 1. Mutual Respect and Trust
The relationship between a landlord and tenant should be built on a foundation of mutual respect and trust. When tenants feel respected and valued, they are more likely to take better care of the property.
As a landlord, respecting your tenants creates a positive atmosphere and encourages open communication. This, in turn, can lead to smoother transactions and fewer disputes.
### 2. Clear Expectations and Agreement
Establishing clear expectations and agreements is fundamental to a healthy landlord-tenant relationship. This involves drafting a comprehensive lease agreement outlining both parties’ rights and responsibilities.
Ensuring that all terms and conditions are well-defined reduces the likelihood of misunderstandings and conflicts, fostering a more positive and cooperative relationship.
### 3. Proactive Problem-Solving
Instead of merely addressing issues as they arise, a proactive approach to problem-solving can be a game-changer. Anticipating potential problems and addressing them before they become major concerns can create a sense of security for tenants and foster goodwill.
### 4. Property Maintenance and Upkeep
A well-maintained property is a testament to a landlord’s commitment to their tenants. Regular property maintenance ensures the tenant’s comfort and safety and safeguards the landlord’s investment. A positive landlord-tenant connection involves delivering a well-maintained living space that tenants proudly call home.
### 5. Tenant Empowerment
Empowering tenants with the tools and resources they need to thrive in their rental property is a key aspect of the landlord-tenant relationship. This could include sharing educational materials about property care, offering resources for community involvement, and creating a sense of belonging in the neighborhood.
When tenants feel empowered and connected to their surroundings, it can lead to a more harmonious and mutually beneficial relationship.
## 5 Tenant Retention Strategies
Now that you understand why the landlord-tenant relationship is crucial, it’s time to delve into specific strategies to help you maintain a strong and positive connection with your tenants.
Here are 5 essential tenant retention strategies to keep your rental properties thriving and ensure your tenants are satisfied and eager to stay.
### 1. Communication and Conflict Resolution
Effective communication is the cornerstone of any successful landlord-tenant relationship. Open and honest communication is critical to maintaining a positive relationship with your tenants. A responsive landlord creates a sense of trust and reliability, which is crucial in the landlord and tenant relationship.
In any relationship, conflicts are bound to arise. When they do, approach them with patience and understanding.
### 2. Creating a Sense of Community
Building community within your rental property can significantly improve tenant retention. A strong sense of belonging encourages tenants to stay and even recommend your property to others. Additionally, providing a communal area where tenants can meet and socialize can contribute to a stronger sense of community and enhance the overall tenant experience.
### 3. Streamlined Maintenance Reporting
Rather than focusing solely on maintenance, it’s worth considering enhancing how tenants report issues. Implement a user-friendly online platform or mobile app that allows tenants to submit maintenance requests and track their progress easily. This streamlined process reduces the hassle for tenants and demonstrates your commitment to providing efficient and hassle-free service.
### 4. Flexible Lease Terms
Offering flexibility in lease terms can be a game-changer in tenant retention. For example, consider providing more extended lease options, like 18-month or 2-year leases. This gives stability to tenants and can make your property more appealing. Also, being open to discussing lease terms and renewal options can help in maintaining a positive landlord-tenant relationship.
### 5. Incentives and Rewards
Recognizing and rewarding your tenants can go a long way in solidifying the relationship between landlord and tenant. Offer incentives for renewing leases, such as a discount on the rent or a complimentary cleaning service. Small gestures like birthday cards or holiday gifts also show your appreciation and contribute to a positive tenant-landlord connection.
## Best Property Management Practices for Increased Tenant Satisfaction
By now, it should be clear to you that the landlord-tenant relationship has a pivotal role in the success of any real estate venture. Here are some of the best practices that can help you maintain a strong and positive connection with your tenants.
### 1. Fair Rental Pricing and Policies
Setting fair and competitive rental prices and policies is crucial for maintaining a positive landlord-tenant relationship. Tenants appreciate when they feel they are getting [good value](https://rodkhleif.com/value-add-opportunity-what-does-it-mean-and-should-i-consider-it/) for their rent. Be sure to research local market rates and adjust your pricing strategy accordingly.
Additionally, having clear and reasonable rental policies that are consistently applied will help tenants understand what is expected of them, reducing potential disputes.
### 2. Respect and Transparency
Respect is a two-way street. Landlords and tenants should treat each other respectfully, understanding that they have rights and responsibilities. Landlords should be transparent about their expectations, rental policies, and any changes in terms, while tenants should be equally transparent about their intentions and issues.
Being upfront about potential rent increases, maintenance schedules, or lease renewal plans fosters trust and reduces misunderstandings.
### 3. Personalized Tenant Services
Tailoring your services to meet the specific needs of your tenants can significantly enhance their satisfaction. For example, if you have a diverse group of tenants, offering amenities or services that cater to their preferences can make their stay more enjoyable.
Understanding your tenants’ unique characteristics and requirements can help you create a more positive and lasting relationship with them.
### 4. Regular Property Inspections
Regular inspections ensure the property’s condition and show tenants that you are committed to preserving a safe and comfortable living environment. Schedule routine inspections and communicate the purpose clearly to tenants.
### 5. Flexibility and Understanding
In the relationship between landlord and tenant, flexibility and understanding can go a long way in ensuring tenant satisfaction. Life circumstances can change, and tenants may require adjustments to their lease terms, such as lease extensions or early terminations.
Understanding and flexibility in such situations can make tenants feel valued and more likely to renew their lease or recommend your property to others.
## 5 Key Metrics and KPIs for Tenant Satisfaction
Many landlords must realize the significance of monitoring and improving the relationship with their tenants. Measuring specific metrics and KPIs that reflect tenant satisfaction is crucial to achieving this.
### 1. Communication Response Time
When tenants reach out with questions, concerns, or requests, they expect that you, as the landlord, will respond promptly. Therefore, tracking and improving your response time as a critical metric is crucial. Your responsiveness sends a clear message to your tenants, showing that you value their concerns and are dedicated to promptly addressing their needs.
### 2. Maintenance Request Resolution Time
Tenants expect that when issues arise in their rented property, they will be addressed efficiently. Monitoring the time it takes to resolve maintenance requests is essential as a key performance indicator. A shorter resolution time indicates your commitment to maintaining a comfortable living environment for your tenants.
### 3. Rent Payment Timeliness
[Rent payments](https://rodkhleif.com/every-landlord-needs-know-rent-control-eviction-anti-discrimination-laws/) are a fundamental aspect of the relationship with your tenants. As a landlord, you should monitor and track the on-time payment of rent. Punctual rent payments ensure a steady cash flow and foster trust and cooperation in the tenant-landlord connection.
When tenants consistently pay their rent on time, it reflects positively on your management skills and the ability to maintain a harmonious relationship.
### 4. Tenant Feedback and Surveys
Implementing regular surveys to gather insights into their needs and concerns is a proactive approach. By doing so, you demonstrate your commitment to their well-being and gain valuable information to help you improve their living experience.
This aspect of the landlord’s relationship with tenants is a testament to your dedication to their comfort and satisfaction. It also encourages open communication and shows you’re invested in enjoying their stay.
### 5. Tenant Retention Rate
Tenant retention is the ultimate measure of a successful landlord-tenant relationship. It signifies whether your tenants are content with living arrangements and wish to stay longer. A high retention rate is a strong indicator of a positive landlord relationship with tenants.
It means that your tenants are satisfied with their accommodations and value their connection with you as their landlord. A high tenant retention rate is a win-win scenario for you and your tenants.
## Conclusion
Your relationship with your tenants isn’t just about the transaction. It’s about building a genuine connection and the key to fostering trust and ensuring your rental property operates smoothly.
By applying the principles we mentioned in the article, you can create a relationship with tenants rooted in understanding and empathy, ultimately leading to harmonious and prosperous cooperation.
Remember, a strong landlord-tenant relationship enriches your investment and creates a sense of community and shared success that benefits all parties involved.
## FAQ: Ways to Strengthen Landlord-Tenant Relationships
### Why do landlord-tenant relationships matter so much?
Strong relationships reduce turnover, late payments, and conflict. When tenants feel respected and supported, they’re more likely to renew, take care of the property, and communicate early when problems arise.
### What’s the fastest way to build trust with tenants?
Start with clear expectations and follow-through. Set the tone during move-in. Provide a simple welcome guide. Explain how maintenance requests work. Be clear about response times and policies.
### How can landlords communicate without sounding harsh or robotic?
Use clear, friendly language and stick to facts. Aim for “warm + firm”: acknowledge the tenant, explain the policy or next step, and give a specific timeline. Good communication is respectful, predictable, and documented.
### How quickly should landlords respond to tenant messages?
For non-emergencies, responding within 24 hours is a strong standard. Even if you can’t solve the issue immediately, a quick confirmation like “Got it—this is scheduled for Tuesday” reduces frustration and repeat texts.
### What’s the best way to handle maintenance so tenants feel taken care of?
Make the process easy and transparent. Use one official channel (portal, email, or form), confirm receipt, give an ETA, and close the loop after the repair. Tenants remember “communication quality” as much as repair quality.
### How do I set boundaries without damaging the relationship?
Put boundaries in writing and apply them consistently. Keep your tone calm and neutral, avoid emotional language, and reference the lease when needed. Consistency feels fair, even when the answer is “no.”
### How can landlords reduce late payments without constant tension?
Make paying rent simple (autopay, multiple payment options) and clarify consequences upfront. Send polite reminders before due dates and enforce late policies consistently. Many late payments come from confusion or friction, not malice.
### What should landlords do when a tenant violates the lease?
Address it early, in writing, and focus on the behavior and not the person. Explain what needs to change, cite the lease clause, and give a clear deadline. Early correction prevents bigger issues later.
### How can landlords show appreciation without being “too friendly”?
Small, professional gestures go a long way: a welcome note, seasonal filter reminders, a renewal thank-you message, or a small move-in checklist gift (like an A/C filter). Appreciation can be simple and still maintain boundaries.
### How do I handle complaints from tenants fairly?
Listen, summarize the issue, and confirm next steps. If it’s something you can’t change, explain why and offer alternatives. Tenants don’t always need a perfect outcome—they need to feel heard and taken seriously.
### What’s the best way to prevent conflicts between tenants in shared housing?
Set house rules upfront and put them in writing: quiet hours, guest policies, cleaning responsibilities, parking, and shared space expectations. When issues come up, address them quickly and neutrally to prevent escalation.
### How often should landlords check in with tenants?
Light-touch check-ins work best: a quick message 1-2 weeks after move-in, then occasional quarterly or semi-annual check-ins for longer-term tenants. Too frequent feels invasive; too rare feels neglectful.
### How can landlords improve renewal rates?
Keep the property well-maintained, communicate clearly, and give renewal options early (60-90 days out). Tenants renew when they feel stable, respected, and confident maintenance won’t be a battle.
### What’s one simple habit that improves tenant relationships immediately?
Close the loop every time. After any request, for example maintenance, payment question, lease clarification, send a short confirmation when it’s resolved. Reliability builds trust faster than charm.
*Disclaimer: This article was written with the help of AI and reviewed by Rod and his team.*
**Categories:** Blog, Real Estate
---
### [How Banks Are Addressing CRE Risks](https://rodkhleif.com/stricter-rules-may-edge-big-banks-out-of-cre-lending/)
**Published:** January 4, 2026
**Author:** Matt Rohde
**Content:**
If you’re watching commercial real estate in 2026 and thinking, “Why does it feel like the banks changed the rules overnight?”—you’re not imagining it. Banks are still in the business of lending. They’re just re-pricing *uncertainty*. How banks are addressing CRE risks is an important thing to consider when going into real estate investing in 2026.
Regulators and bank risk teams are pushing for tighter discipline, especially on refinance risk and collateral values. The [FDIC’s 2025 Risk Review](https://www.fdic.gov/analysis/2025-risk-review.pdf) looks at 2024 conditions. It highlights office underperformance, slow growth in CRE loans, and refinancing challenges. These issues arose as borrowing costs increased and cash flows weakened.
Meanwhile, maturities have stacked up. The Mortgage Bankers Association estimated that 20% ($957B) of $4.8T in [commercial mortgages will mature in 2025](https://www.mba.org/news-and-research/newsroom/news/2025/02/10/20-percent-of-commercial-and-multifamily-mortgage-balances-mature-in-2025). They also noted that many loans were extended as the market tried to wait for better rates. That “extend the runway” dynamic is one reason the pressure still matters in 2026.
So what are banks actually doing about it?
## **Tightening underwriting (but not uniformly)**
In 2026, “banks are conservative” doesn’t mean “banks don’t lend.” It means they’re selectively conservative:
- Higher DSCR requirements (and DSCR tested at *stressed* rates, not best-case rates).
- Lower leverage on transitional assets (especially heavy value-add or weak submarkets).
- More scrutiny on rent growth assumptions and expense growth (insurance, taxes, payroll, repairs).
- Shorter interest-only periods and more amortization to force paydown.
- Bigger liquidity requirements for sponsors (and more attention to post-close reserves).
Translation: if your deal only works in a perfect scenario, it’s not getting a “yes.”
## **Running better stress tests and using them to reshape portfolios**
A huge shift is happening inside the banks: they’re not just underwriting deals; they’re **actively managing concentrations** and scenario outcomes.
Regulators have been explicit that banks should understand “severe but plausible” downside paths, and that stress testing helps quantify exposure. For example, the OCC has highlighted how stress testing supports better understanding of a bank’s exposure.
What this looks like in the real world:
- CRE concentration limits by property type and geography
- Reduced appetite for office exposure (even “good” office can be a hard sell)
- More participations/syndications or portfolio trimming in certain categories
- Faster “no” decisions on deals that increase concentration risk
## **Getting proactive on workouts and extensions (and doing it “by the book”)**
Here’s the part most investors misunderstand: banks *can* work with borrowers—regulators are not telling banks to torch every problem loan.
The Federal Reserve (with other agencies) has an interagency policy statement that emphasizes working constructively with **creditworthy** CRE borrowers through accommodations/workouts, and says examiners should take a balanced approach when banks apply prudent risk management.
It also calls out common workout tools like renewals/extensions and restructurings, while emphasizing documentation, borrower analysis, tracking, internal controls, and proper risk grading.
So yes—extensions still happen. But they’re increasingly paired with conditions like:
- fresh equity
- principal curtailments
- additional reserves
- tighter covenants/reporting
- faster timelines to stabilization
## **Becoming more conservative on collateral values and cash flow durability**
In 2026, banks care less about what your broker says the cap rate “should be,” and more about:
- what the property’s [*actual* NOI](https://rodkhleif.com/5-ways-to-increase-the-noi-on-your-multifamily-property/) supports today,
- how stable that NOI is under higher expenses,
- and whether the sponsor has the liquidity to survive volatility.
Office remains the most obvious pressure point. The OCC has flagged ongoing issues in office and retail and noted that **office vacancy rates in major metros are projected to rise into 2026**.
## **Building loss-absorption capacity and staying inside capital guardrails**
Banks don’t lend in a vacuum—they lend inside a capital and liquidity box. Even when regulators tweak capital rules (for example, the banking agencies’ final rule modifying certain leverage capital standards, effective April 1, 2026), banks still have to manage risk-based capital constraints and internal risk limits.
This matters for CRE because when bank leadership gets nervous about portfolio loss potential, they typically respond by:
- tightening credit (especially on transitional CRE),
- demanding more equity and reserves,
- and limiting new exposure where existing exposure is already heavy.
## **What this means for multifamily investors in 2026**
If you invest in multifamily, this is the key takeaway:
Banks are funding *certainty* and *execution*, not hype.
The deals that get financed tend to have:
- realistic rent growth (or none)
- conservative expenses
- clear operational upside (not “hope” upside)
- strong DSCR under stress
- sponsor liquidity and track record
- clear takeout/refi path that doesn’t rely on miracle rates
And if you’re wondering whether lending activity improves at all: [MBA’s CREF forecast](https://www.mba.org/docs/default-source/research-and-forecasts/members-only-research/cref-forecast_8_25.pd) projected **higher total CRE lending volume in 2026 vs. 2025** (their model showed $873B in 2026 vs. $647B in 2025), with multifamily lending also rising.
That doesn’t mean “easy money.” It means capital flows to stronger deals and stronger sponsors.
## **How to get a bank “yes” in 2026**
If I were packaging a deal for bank financing right now, I’d over-deliver on what makes a credit committee relax:
- **Clean T-12 + trailing 3 months** (not just a pro forma)
- **Rent roll that matches the deposits** (banks catch sloppiness fast)
- **Stressed DSCR** (show it at higher rates and lower NOI)
- **Detailed capex plan** with bids, timelines, and contingency
- **Insurance and tax assumptions** updated to today’s reality
- **Sponsor liquidity statement** (post-close liquidity matters)
- **Exit plan** that works even if rates stay “rangebound” longer than people want
Because the truth is: banks aren’t “anti-CRE.” They’re anti-surprises.
## **FAQ: How Banks Are Addressing CRE Risks (2026)**
**Are banks still lending on commercial real estate in 2026?
Yes, banks are lending, but they’re doing it with tighter guardrails. In 2026, the “no” usually isn’t about CRE in general; it’s about *refinance risk, cash-flow durability, and concentration.* If a deal relies on perfect rent growth, low expenses, or a quick rate drop to pencil, it’s going to struggle.
**What’s the biggest CRE risk banks are worried about right now?
Refinancing. A lot of loans that were originated in a lower-rate environment are coming due or being reworked. Banks are focused on whether the property can support today’s debt cost *and* whether the borrower has the liquidity to bridge gaps if NOI is soft or expenses jump.
**Why are DSCR requirements higher in 2026?
Because banks are underwriting *downside scenarios* more seriously. Higher DSCR isn’t just a hoop—it’s how the bank protects itself if occupancy dips, concessions rise, payroll costs climb, or insurance and taxes spike. Many banks also test DSCR at stressed rates, not just the initial note rate.
**Are banks treating all property types the same?
Not even close. Multifamily and industrial generally underwrite cleaner than office. Office is still the hardest conversation in most credit committees due to structural demand uncertainty and valuation risk. Retail can be very deal- and location-specific. The property type matters, but so does the submarket, tenant quality, and lease structure.
**What are banks doing differently in underwriting compared to a few years ago?
Expect more conservative assumptions: lower leverage, more reserves, more scrutiny on expense growth, shorter interest-only periods, and more sensitivity analysis. Banks are also more likely to require clearer documentation—clean financials, matching rent rolls, verified deposits, and a realistic capex plan with bids and contingency.
**What does “stress testing” mean in practical terms for an investor?
It means the bank is looking at “what if” outcomes and making decisions based on the deal’s ability to survive them. Examples: what if NOI drops 5–10%? What if rates are higher at refi? What if vacancy takes longer? What if expenses run hot? If your deal can’t handle those, the bank may reduce proceeds, require more equity, or pass.
**Are banks offering extensions or workouts in 2026?
They can, and many do—but it’s more structured. Extensions are often paired with conditions like additional reserves, principal paydowns, fresh equity, tighter reporting, or covenants tied to performance. The bank wants a plan, a timeline, and proof the borrower can execute—not just “let’s wait for rates.”
**Why do banks care so much about liquidity now?
Because liquidity buys time and options. In 2026, banks know NOI can get pinched quickly (insurance, taxes, repairs, payroll, renewals). Liquidity tells the credit committee you can handle surprises without immediately turning a manageable issue into a default.
**What’s “concentration risk,” and why does it affect my loan?
Concentration risk is when a bank has too much exposure to a single category—like CRE overall, office specifically, or a certain metro. Even if *your* deal is solid, the bank may slow down lending in that category if it’s already overweight. That’s why the same deal can get a “yes” at one bank and a “no” at another.
**What documents do I need to make a lender comfortable in 2026?
At minimum: a clean trailing T-12, current rent roll, bank statements/operating statements that support collections, a realistic capex budget with bids, insurance quotes, tax assumptions based on today (or post-sale), sponsor financial statement, and a clear business plan. If it’s value-add, include a timeline and proof you’ve executed similar scope before.
**What’s the biggest mistake borrowers make when approaching banks right now?
Over-selling the pro forma and under-explaining the risk controls. Banks don’t get paid to believe your upside story—they get paid to believe you can survive the downside. If you lead with hype instead of risk management, you lose credibility fast.
**How can I improve my chances of getting a “yes” from a bank in 2026?
Bring a conservative package: show stressed DSCR, assume realistic expenses, include reserves, and be transparent about the plan and timeline. If the deal needs a bridge, make it known and show your takeout path without assuming a perfect rate environment. In this market, clarity and discipline beat optimism every time.
*Disclaimer: This article was written with the help of AI and reviewed by Rod and his team.*
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**Categories:** Blog, Raising Capital, Real Estate
---
### [How to Invest in Industrial Flex Space](https://rodkhleif.com/how-to-invest-in-industrial-flex-space/)
**Published:** December 9, 2025
**Author:** Alex Khleif
**Content:**
Industrial flex space has become a quiet favorite among sophisticated investors seeking durable income backed by real business demand. If you already know what flex space is and why tenants love the product type, the next question is easy: How to invest in industrial flex space?
Below, the step-by-step guide to take you through the practical side of how to invest in industrial flex: choosing your role, defining your buy box, building a team, underwriting deals, lining up financing, and avoiding the biggest mistakes. If you need a refresher on the basics of flex-what it is, who uses it, how it makes money-you can pair this with your foundational piece, “[Industrial Flex Space Investing for Beginners.](https://rodkhleif.com/industrial-flex-space-investing-for-beginners/)”
## Step By Step Guide on How to Invest in Industrial Flex Space
### Step 1: Decide How You Want to Invest: Active vs Passive
Before you think about buildings or cap rates, first decide what type of investor you want to be in this space. That decision shapes everything else.
#### **Active investor: direct owner**
- You source deals, negotiate and sign on the loan.
- You are responsible for leasing, tenant improvement decisions, and capital projects.
- You’ll control the strategy and timing, but you also own the headaches.
#### **Passive Investor via LP or REIT**
- You invest as a limited partner in industrial flex syndications or funds.
- The sponsor finds, funds, and operates the deals; you review the pitch and track performance.
- You are trading control for leverage on somebody else’s expertise and systems.
- When you have time, operational appetite, and a small business mindset, active ownership may make sense. If one seeks exposure to flex industrial without needing to learn property management and leasing, passive routes are usually a better fit: syndications, funds, or REITs.
## Step 2: Define Your Investment “Box”
Then, define your buy box. This is what you’re actually hunting for. This keeps you from wasting time analyzing every shiny listing.
#### **Your Buy Box should include:**
- Deal size:
- Purchase price range?
- How much equity can you write – alone or with partners?
- Location:
- Specific metros or corridors you like?
- Driving distance vs. planes-only markets?
- Risk profile:
- Core/Core-plus – stabilized, clean tenants, lower yield, lower risk?
- Value-add-some vacancy, below-market rents, light–moderate rehab?
- Opportunistic – heavy vacancy, major repositioning, usually not beginner-friendly?
- Tenant Mix and Lease Profile:
- Multi-tenant bays versus single-tenant buildings?
- Remaining lease terms you are comfortable with- at least 2-3 years weighted average?
Putting this onto a one-page document-your “flex investment criteria”-is incredibly powerful. The brokers, lenders, and partners will all take you more seriously because you know what you’re looking for.
### Step 3: Target Markets That Really Need Flex Space
You don’t have to become a national expert. Just start with 1-3 target markets and go deep, not wide.
#### **Key things to look for:**
- Business demand:
- Active base of trades, small distributors, e-commerce, light manufacturers, service companies.
- Ask: are new small businesses opening? Are the contractors and service companies busy?
- Logistics and Access:
- The proximity of highways, intermodal hubs, and major arterials.
- Easy in-and-out access for vans and box trucks.
- Flex Fundamentals:
- Low to moderate vacancy for similar flex buildings.
- Rent levels that make sense in comparison to industrial and office alternatives.
- Limited pipeline of competing product in your size range.
Talk to the industrial-focused brokers and property managers in those markets. Ask what’s hot, what sits, and what tenants gripe about. You’ll get a pretty quick idea of which submarkets show real, durable demand and which ones are more speculative.
### Step 4: Assemble Your Flex Investing Team
Even if you are smart and motivated, industrial flex is a team sport. You’ll move faster and avoid expensive mistakes if you assemble the right people early.
Core roles of active investors include:
- **Industrial broker:**
- Specialises in flex & warehouse, not general commercial. Brings you pocket listings, rent comps, and context on tenants.
- **Lender (or mortgage broker)**
- Comfortable with small to mid-sized industrial loans. Helps you compare bank, credit union, and agency options.
- **Property manager: (Optional but recommended)**
- Manages the day-to-day leasing, maintenance, and tenant relationships. Provides realistic operating expense and TI assumptions.
- **Real estate attorney**
- Reviews purchase contracts and lease documents. Protects you on clauses around environmental, repairs, and CAM.
For passive investors, your main “team” is the sponsor you choose. Do background checks, reference calls, and review their track record in flex industrial specifically, not just “commercial broadly.”
### Step 5: Create a Deal Pipeline and Learn to Say “No”
The key to successful investing is having a stream of incoming potential deals to evaluate—and the diligence to reject the majority of them.
**For active investors,**
- Let brokers know your specific buy box: size, location, condition.
- Sign up for industrial/flex listing alerts on major sites.
- Attend local real estate and business events where the owners may show up.
**Passive investors include:**
- Get on multiple lists of sponsors, not just one.
- Ask for past deals and monthly reports so you can see how they communicate and perform.
- Every deal you pass on still teaches you something about the pricing, rents, and realistic returns in that market. The more deals you see, the quicker your pattern recognition develops.
### Step 6: Underwrite Industrial Flex Deals the Right Way
Now the fun part: numbers. Whether you’re active or passive, you need to understand what makes a flex deal pencil out.
**In an active acquisition,** start your underwriting with the rent roll. This should include tenant names, suite sizes, rent per square foot, lease expiration dates, options, and increases.
Identify concentration risk, which could be any tenant above 30–40% of income. Review actual financials: T12 + current rent roll, which is a trailing 12 months of income and expenses. Normalize one-time costs and validate true Net Operating Income (NOI).Compare In-Place Rents to Market Rents
Decide: are you buying under-market, at-market, or above-market rents? How much realistic upside is there without losing tenants?
Estimate realistic vacancy and downtime. Assume some downtime and TI for expiring leases, not perfect continuity. Model a conservative pro forma
Look for moderate rent growth; stable, but realistic, expense growth. Buffers for TI, leasing commissions and capital reserves.
**If you’re a passive investor looking at a syndication**, you don’t need to create the model yourself. You should do a few things:
1. Read the sponsor’s summary.
2. Compare rent assumptions with market opinions or online data.
3. Check their exit cap rate.
4. Test different scenarios. What happens if cap rates go up or rent growth slows?
If returns only look good under optimistic assumptions, that’s a red flag.
### **Step 7: Understand Financing & Capital Stack Options**
How you finance the property is just as important as what you pay for it. In industrial flex, you’ll most commonly see:
**Conventional bank or credit union loans: 60–75% loan-to-value (LTV), 20-25 year amortization, 3-10 year terms
**SBA loans (for owner-users): SBA 504/7(a) may be available if your business will occupy part of the building
**[Bridge loans](https://rodkhleif.com/multifamily-bridge-loans/) (for heavy value-add): Short-term, higher-interest debt. Used to reposition or stabilize, then refinance into long-term debt
Equity can come from you, partners, or outside investors. In a syndication, the [**capital stack** ](https://rodkhleif.com/financing-your-deal-understanding-the-capital-stack/)is usually laid out as:
- Senior debt
- Investor equity (usually LPs)
- Sponsor’s equity and promote
Your job is to decide whether the leverage level and structure match your risk tolerance.
### **Step 8: Do Real Due Diligence, Not Just a Walk-Through**
Once you have a deal under contract, due diligence is where you confirm the story or kill the deal before it kills you.
Key items for industrial flex:
**Physical inspections
- Roof, structure, parking lot, loading areas, mechanical systems
- Environmental red flags: past uses, nearby uses, spills
**Lease audit
- Verify that what’s in the rent roll matches signed leases
- Confirm rent escalations, options, exclusives, and any unusual clauses
**Zoning and use
- Confirm current uses are allowed
- Make sure your future plan fits existing zoning
**Vendor and maintenance history
- Request records of roof work, HVAC replacements, and major repairs
**Market checks
- Check with local brokers and managers to confirm that your rent and vacancy assumptions still make sense today
If you find something ugly, big deferred CapEx, contaminated soil, major tenant issues, your choices are simple: renegotiate, re-trade, or walk away.
### **Step 9: Common Mistakes New Industrial Flex Investors Make**
It’s cheaper to learn from other people’s mistakes than to make them yourself. Some of the most common missteps:
**Underestimating TI and leasing costs
- Especially for larger or more specialized tenants
**Ignoring rollover risk
- Buying a building where one big tenant’s lease expires soon and assuming they’ll just stay
**Buying purely based on cap rate
- Without understanding tenant quality, building functionality, or market depth
**Skipping real market conversations
- Relying only on listing broker pro formas
- Not verifying with multiple local brokers and managers
Avoid these, and you’re already ahead of many first-time buyers.
### **Step 10: A 90-Day Action Plan to Break In**
To make this tangible, here is a simple **90-day roadmap** to thoughtfully start investing in industrial flex space.
**Days 1-30
- Choose active versus passive as your main route
- Select 1-3 target markets
- Speak directly with at least 3 industrial brokers and 1-2 property managers in each market
**Days 3-60
- Build your written buy box: size, location, risk profile, tenant mix
- Start receiving deals from brokers and/or sponsors
- Underwrite or review at least 5-10 real deals on paper
**Days 61-90
- Shortlist 1-3 sponsors (if passive) or 1-2 serious target properties (if active)
- Visit the properties or markets in person whenever possible
- Decide whether to move forward with one small, well-understood investment as your first flex deal
### **The Bottom Line**
Learning to invest in industrial flex is all about process, not luck. You don’t need to be a construction expert or logistics wizard, but you do need clear criteria, good local intel, conservative underwriting, and the humility to walk away when a deal doesn’t fit your standards.
Whether you opt for direct ownership or passive syndications, industrial flex can become a potent part of your portfolio: steady, functional space leased to real businesses with real needs. Start small, learn fast, and treat each deal as a stepping stone to the next, smarter one.
### FAQ: How to Invest in Industrial Flex Space
#### What does it really mean to invest in industrial flex space?
Industrial flex space investment involves the purchasing or financing of buildings that meld warehouse/light industrials with offices or showroom spaces. Your returns come from tenants: trades, e-commerce brands, service companies, and small manufacturers that lease bays under multi-year commercial leases. You can invest directly as the owner, or you can passively invest as a limited partner in syndications or funds focused on flex industrial.
#### Is industrial flex space a good investment for beginners?
It can be, providing you stick to a conservative strategy. Industrial flex has a tendency to be far more straight-forward as compared to complex retail or specialized medical and will often have practical tenants with real business needs. For true beginners, starting with a small, well-located deal or going in passively with an experienced sponsor is usually safer than tackling a heavy value-add flex project alone.
#### How to Choose Between Active vs Passive Industrial Flex Investing
Go with active if you desire control, are willing to learn leasing and operations, and have the time to manage brokers, lenders, and property managers. If you prefer to review only deals and sponsors while somebody else does the acquisitions and day-to-day management, then choose passive. In that case, you invest in industrial flex syndications, funds, or REITs and focus on due diligence instead of running buildings.
#### What should I look for in a good industrial flex market?
Strong flex markets typically include:
Healthy small business activity (trades, e-commerce, service firms)
Easy access to the highway and major arterials
Reasonable vacancy and stable or rising rents for comparable flex properties
Limited new, competing flex supply in your size range
Confirm what tenants really want and where demand is strongest by talking to the industrial brokers and property managers.
#### Which amenity/property features are most important when investing in industrial flex space?
Function beats flash.
Focus on:
- Loading and access: roll-up doors, turning radius, truck access
- Free height in the warehouse
- Office-to-warehouse ratio adapted to local tenant demand
- Parking, and any fenced in yard/outdoor storage options
- Power capacity, sprinklers, and HVAC suitable for typical users
If the building isn’t designed to mesh with how local businesses actually work, it will be harder to lease and keep full.
#### How do I underwrite an industrial flex deal?
Start with the rent roll and trailing 12-month financials; then
- Verify actual income and expenses to calculate true NOI
- Benchmark in-place rents to market rents for like flex properties
- Analyze lease expirations and rollover risk-who’s expiring and when.
- Model conservative assumptions for vacancy, downtime, TI and leasing commissions
- Stress test your pro forma: what if rents grow slower or a big tenant leaves?
- If the deal only looks good with aggressive assumptions, it’s probably not the right deal.
#### What kinds of financing are typical for industrial flex space?
Most investors use:
Conventional bank or credit union loans 60–75% LTV, 20–25 year amortization
SBA 504/7(a) loans if the investor’s own business will occupy part of the building
Bridging loans for heavy value-add plays with the intention of refinancing into long-term debt post-stabilization
Equity comes from you, partners, or outside investors. In a syndication, the typical capital stack is usually: senior debt + investor equity (LPs) + sponsor equity and promote.
#### What are the biggest risks associated with investment in industrial flex space?
Key risks include:
- Leasing risk if a major tenant moves out or multiple leases roll simultaneously
- Market risk in weak or oversupplied markets
- TI and capex risk due to underestimating the build-out costs, roofs, parking lots, or systems
- Sponsor risk if you’re passive and the operator over-promises or under-delivers
- You can’t avoid risk, but you can price it correctly and walk away when it’s not one that fits your criteria.
#### How much money do I need to invest in industrial flex space?
You’ll need enough for a down payment-usually between 20-35% of the purchase price-closing costs, and reserves for TI and capex, which usually runs into tens or hundreds of thousands of dollars, depending on deal size. If that’s too high, you can begin with passive investments into flex-focused syndications or funds, often offering minimums in the range of $25,000-$100,000, or into industrial REITs that trade like stocks.
#### How does a passive investor evaluate an industrial flex syndication?
Focus on two things: sponsor and deal.
**For the Sponsor:**
Track record specifically in industrial/flex
Conservative underwriting and clear communication
Personal capital in the deal and reasonable fees
**For the deal:**
Tenant mix, lease terms and rollover schedule
Market rents vs. in-place rents
Realistic TI and CapEx budget
Exit assumptions – cap rate, hold period, stress tests
If you don’t understand how they plan on creating value, or if it only works if everything goes perfectly, pass.
#### If I want to learn how to invest in industrial flex space, where do I begin?
Start with education and relationships. Learn the core terms: NNN, CAM, TI, clear height, rent roll, cap rate. Then speak to industrial brokers and property managers in one or two markets. Practice underwriting actual deals on paper; you don’t have to be ready to buy. When ready, lineup either a small well-located active deal or do a carefully vetted passive investment with a proven sponsor as your first step into the space.
*Disclaimer: This article was written with the help of AI.*
**Categories:** Industrial Flex Space
---
### [Apartment Syndication: 4 Critical Mistakes to Avoid in 2025](https://rodkhleif.com/4-mistakes-you-better-not-make-in-apartment-syndication/)
**Published:** June 9, 2025
**Author:** Rod Khleif
**Excerpt:** Syndication is a multifamily real estate investor’s chance to move from the minor league to the majors.
**Content:**
Apartment syndication has become one of the most powerful strategies for building long-term wealth in commercial real estate. But it takes more than just ambition to succeed. No matter if you are new to investing or improving your strategy, knowing how to avoid mistakes is important. It can save you time, money, and your good name.
In this post, I will explain the biggest mistakes syndicators make. I will also show you how to stay ahead in legal, financial, and operational areas.
## **Mistake #1: Overlooking Legal Compliance**
You can’t build a real business on shaky legal ground. One of the fastest ways to derail your progress is by ignoring the rules laid out by the Securities and Exchange Commission. The SEC doesn’t care how good your deal is if your paperwork is sloppy or your fundraising isn’t compliant.
### **Here’s how to protect your business and your investors:**
- Work with an SEC attorney experienced in real estate syndications.
- Understand the differences between Regulation D 506(b) and 506(c) exemptions.
- Create compliant offering documents like private placement memorandums and operating agreements.
- Know who qualifies as an accredited investor and stick to the right communication rules.
- Avoid hyped-up return projections. Underpromise and overdeliver.
Following SEC guidelines isn’t just red tape—it’s how you earn trust and attract repeat syndication investors.
## **Mistake #2: Not Having Capital Committed Before the Deal**
It can be tempting to want to lock up a property first and figure out the funding later. But that strategy can backfire fast.
**Real talk:** Getting a $5M apartment deal under contract before you have serious investor commitments can leave you scrambling. If you fall short, you might lose your earnest money or end up with a high interest rate bridge loan that eats up your profits.
### **How to fix it:**
- Build relationships with passive investors before you ever go under contract.
- Educate your audience consistently about your investment strategy, target markets, and business plan.
- Collect soft commitments ahead of time so you can act quickly when the right deal comes.
- Use backup solutions like private lenders or capital partners as a contingency.
A real syndicator doesn’t raise capital in a panic. A real syndicator is one who builds trust long before the deal shows up.
## **Mistake #3: Poor Marketing and Visibility**
If nobody knows who you are, they can’t invest with you. Syndication is about more than spreadsheets. You need to be good at storytelling, exhibiting leadership, and providing clarity.
### **Establish yourself as a credible voice in the industry by:**
- Publishing regular content on topics like investing in real estate, asset management, and tax advantages.
- Hosting webinars and speaking on podcasts to share your knowledge.
- Staying active on platforms like LinkedIn, YouTube, and email newsletters.
- Consistently highlighting new investment opportunities and past deal performance.
Visibility builds trust. Trust opens doors to capital. And capital lets you scale.
## **Mistake #4: Weak Investor Communication**
You can close a deal, but can you keep your investors coming back?
Investors want more than returns. They want transparency, professionalism, and consistent updates.
## **Here’s how to raise your game:**
- Send detailed quarterly reports outlining occupancy, cash flow, expenses, and market conditions.
- Use modern platforms like InvestNext or Juniper Square to keep your investors looped in.
- Set expectations clearly around hold periods, asset management fee structures, and what happens when the property is sold.
- Never leave your investors in the dark. Bad news is better than no news.
When syndication investors feel respected and informed, they become long-term partners who reinvest and refer others.
## **FAQ: Apartment Syndication**
**What is apartment syndication?**
Apartment syndication is when a group of investors pools money to purchase larger multifamily properties, with a general partner managing the deal and limited partners providing capital.
**Who is the general partner and what do they do?**
The general partner (GP) oversees the day to day operation, manages the property, executes the business plan, and earns a management fee and a share of the profits.
**What do limited partners do in apartment syndication?**
Limited partners (LPs) invest capital but are passive investors. Their liability is limited to their initial investment, and they receive a share of the profits when the property is sold.
**Are there tax benefits to investing in syndications?**
Yes. Syndication investors may benefit from depreciation, cost segregation, and other tax advantages that enhance returns.
**How is a syndication structured legally?**
Most apartment syndications are formed as a limited liability partnership or limited partnership (LP), which protects investors’ personal assets and outlines roles and responsibilities.
**How long is money tied up in apartment syndication?**
Most deals have a projected hold period of 5–7 years, depending on market conditions and the business plan.
**How do you evaluate a syndicator?**
Look at their track record, how they communicate, their property management partners, and how well they protect investor capital.
**Do you need to be accredited to invest in a syndication?**
It depends on whether the offering falls under 506(b) or 506(c). Many deals are only open to accredited investors as defined by the SEC.
**What happens when the property is sold?**
When the property is sold, proceeds are distributed according to the syndication agreement. LPs typically receive their initial capital plus a preferred return before profits are split with the GP.
**What are common fees in a syndication deal?**
Typical fees include acquisition fees, asset management fees, and a share of the profits (carried interest) paid to the GP.
## **Want to Learn More About Apartment Syndication?**
I put together a step-by-step guide that dives even deeper into:
- How apartment syndications work
- How to evaluate sponsors
- What to look for in your first multifamily deal
- The [biggest mistakes](https://rodkhleif.com/podcasts/the-biggest-mistakes-in-syndication/) new investors make in apartment syndications
[](https://rodkhleif.com/guide-to-multifamily-syndications/)
[**Download the Free Multifamily Apartment Syndication Guide**](https://rodkhleif.com/guide-to-multifamily-syndications/)
## **What Makes Apartment Syndication Work in 2025?**
The fundamentals haven’t changed: execute a strong business plan, stay compliant, manage your properties well, and treat your investors like gold. What has changed is the level of sophistication required.
In today’s market, you need to:
- Understand financing shifts and interest-only payment structures
- Plan for transitions from bridge loans to permanent financing
- Evaluate your asset managers just like you would your contractors
- Know how to manage risk and still grow your portfolio
Want help building your syndication business the right way? Download our **Guide to FHA Loans**, our **Cap Rate Calculator**, and the **Multifamily Syndication Guide**. Or better yet, join us at our next Multifamily Bootcamp and learn directly from the best.
*This article was created with the assistance of AI and reviewed by Rod Khleif to ensure accuracy and relevance.*
**Categories:** Blog, Finding Deals, Raising Capital, Syndication
**Tags:** apartment investing, business structures, investor mistakes, multifamily real estate, real estate investing
---
### [Assisted Living vs Independent Living for Investors](https://rodkhleif.com/assisted-living-vs-independent-living/)
**Published:** December 1, 2025
**Author:** Alex Khleif
**Content:**
When most people say “senior housing,” they’re usually talking about a whole spectrum of properties: 55+ communities, independent living, assisted living, memory care, even skilled nursing. For investors, that’s a problem, because each of these behaves very differently. If you want to [invest in senior living](https://rodkhleif.com/how-to-invest-in-assisted-living-facilities/), first understand the difference of assisted living vs independent living. They sit next to each other in the care system. However, they have different business models, risk levels, and return potential. This article breaks down those differences in plain language so you can decide which path fits your goals.
## Assisted Living vs Independent Living in Simple Terms
The easiest way to think about senior housing is as a sliding scale from “real estate” to “healthcare business.”
Independent living sits closer to traditional apartments. Residents are mostly self-sufficient. They choose to move in for convenience, community, and amenities, not because they absolutely need care. The revenue comes mainly from rent, sometimes with a light layer of services like meals or housekeeping, and the operations feel like “multifamily plus.”
Assisted living is further toward the healthcare side. Residents need help with daily activities such as bathing, dressing, taking medication, and getting meals. Families are usually involved in the decision and often in the finances. The property still matters, but the care operation is the main engine. You’re running a regulated, staff-heavy business with real estate attached.
As an investor, you’re deciding where on that scale you’re comfortable living.
## What Independent Living Looks Like from an Investor’s Perspective
Independent living communities (sometimes branded as active adult or 55+ communities) are built for seniors who are still capable and independent but want a simpler, more social lifestyle.
From a financial and operational perspective, independent living has several defining traits:
- **Revenue model:**
The core income stream is monthly rent. Some properties include or upsell services like meals, light housekeeping, transportation, or activity programs, but the bulk of the revenue is still “pay for your unit, stay as long as you like.”
- **Staffing and operations:**
The on-site team usually looks like an apartment or hotel team: property manager, leasing, maintenance, housekeeping, maybe an activities director. There is typically no clinical care staff because residents manage their own medical needs and hire outside help if needed.
- **Resident profile:**
Residents are often younger seniors or couples who are tired of home maintenance, want to be around peers, or are “downsizing without giving up lifestyle.” They have more choice and are more likely to compare your property against apartments, condos, or other lifestyle communities.
Because of this, independent living is often a natural first step for multifamily investors who want to test the senior housing waters. The underwriting and the operational structure feel familiar, with an added demographic tailwind.
## What Assisted Living Looks Like from an Investor’s Perspective
Assisted living serves seniors who can no longer live independently without regular help. They may struggle with mobility, memory, or managing daily tasks. The facility provides housing plus a range of support services, and that changes everything about the business.
Assisted living typically looks like this from the investor side:
- **Revenue model:**
Income is multi-layered. There is still a base “room and board” component, but a significant portion of revenue comes from care fees. These may be charged as bundled tiers (light, moderate, heavy care) or as à la carte services (help with bathing, medication, mobility, etc.). There may also be add-ons for items like transportation, special programs, or memory care units.
- **Staffing and operations:**
This is where assisted living diverges sharply. You need caregivers, med techs, nurses (depending on the license), kitchen staff, housekeeping, and administrative staff. Shifts must be covered 24/7. Training, turnover, and scheduling are constant realities. Operations feel like a hybrid of hospitality and healthcare, not just property management.
- **Regulation and compliance:**
Assisted living is regulated at the state level, and requirements differ by jurisdiction. Licensing, inspections, staffing ratios, incident reporting, and care documentation all matter. Poor compliance can hurt occupancy, reputation, and ultimately property value.
The upside is that assisted living can command significantly higher revenue per unit than independent living or standard apartments. The tradeoff is more complexity, more risk if operations go wrong, and a much stronger need for a skilled operator.
## Comparing Returns: Assisted Living vs Independent Living
Investors are usually drawn to senior living for two reasons: demographic tailwinds and the potential for attractive returns. But those returns come in different flavors depending on whether you’re in assisted or independent living.
With independent living, the return profile often looks similar to high-quality multifamily in strong markets. You’re aiming for healthy, stable cash flow, moderate rent growth, and long-term appreciation. The upside often comes from capturing growing demand among downsizing seniors, optimizing amenities and services, and operating more efficiently than mom-and-pop owners. It’s a relatively “steady” play if you buy well and manage well.
With assisted living, you may see higher projected returns because the revenue per unit is higher and there are more levers to pull: care fees, service tiers, specialized programs, and, in some cases, memory care expansions. However, those returns are much more sensitive to operations. A well-run facility can outperform; a poorly run one can deteriorate fast. Labor cost spikes, regulatory issues, or reputational damage can hit margins much harder than in independent living.
A simple way to think about it:
- **Independent living** = more predictable, more familiar, moderate upside.
- **Assisted living** = higher potential returns, higher operational risk and complexity.
Which one makes sense depends on your risk tolerance, your access to strong operators, and your own appetite for complexity.
## Risk Profile and Downside Protection
The risk in senior living is not just “market risk.” It’s also operational, reputational, and regulatory. That shows up differently in assisted vs independent living.
In independent living, the major risks look more like multifamily: supply and demand in the local market, competition from other communities, affordability, and general economic health. You still need to watch for overbuilding, weak locations, or poor management, but you are not running a care business. Downside protection comes from owning well-located, functional real estate in markets with growing senior populations and limited comparable supply.
In assisted living, you add two big risk layers on top of the real estate:
1. **Operational risk:** poor staffing, weak management, or inadequate systems can quickly lead to high turnover, poor care, and negative reviews. That hurts occupancy and revenue much faster than a slightly dated lobby ever will.
2. **Regulatory and reputational risk:** licensing issues, care incidents, or widely shared negative stories can damage a facility’s brand and make it hard to refill beds, even if you fix things later.
This doesn’t mean you should avoid assisted living. It means you need to be realistic about the importance of the operator. For many investors, the smart move is to partner with or invest behind a proven operator rather than trying to learn the care business from scratch.
## Active vs Passive Approaches in Each Asset Type
You can invest in either asset type actively or passively, and the choice matters just as much as the property type itself.
For independent living, active investing might mean buying and operating a community yourself or with a management company, much like you would with apartments. You’re directly involved in decisions about renovations, amenities, marketing, and staffing. Passive investing could mean taking a limited partner stake in a deal or fund that specializes in independent living, where you contribute capital and rely on the sponsor to execute.
For assisted living, active investing is only realistic if you (or your partner) have deep operational experience or are willing to hire and oversee a highly qualified operator. Many investors skip the learning curve and invest passively as limited partners in assisted living funds or syndications with a strong track record. In that model, you’re underwriting the sponsor and the business plan more than you’re underwriting the property by itself.
If you’re new to senior living altogether, starting passively in one or two deals can be a way to learn the space, see real financials, and build relationships before you decide whether you want to be more hands-on.
## How to Decide Which Strategy Fits You
Choosing between assisted and independent living as an investor is less about which is “better” and more about which is a better match for you. A few questions can clarify that quickly:
- **How comfortable am I with operational complexity?**
If you prefer straightforward business models and don’t want to be exposed to care-related issues, independent living (or passive investing in assisted living) may be a better fit.
- **What kind of team and partners do I have access to?**
If you have relationships with experienced senior living operators, healthcare professionals, or sponsors who specialize in assisted living, you can lean into that advantage. If your network is more multifamily-focused, independent living may be easier to execute.
- **What return/risk profile am I targeting?**
If you’re willing to accept more operational volatility in return for potentially higher returns, assisted living might be attractive. If you want steadier, more predictable performance, independent living can be a strong choice.
- **How involved do I want to be day to day?**
If you want to be deeply involved in strategy and operations, choose carefully and be ready to commit time and attention. If you want exposure to the demographic trend with limited day-to-day involvement, consider passive roles in either asset type.
Your honest answers to these questions will usually point you in the right direction much faster than debating spreadsheets.
## Practical Next Steps for Investors
If you’re interested in senior living and still unsure where to start, a simple step-by-step approach can help:
1. **Educate yourself on the basics.**
Learn the language: independent living, assisted living, memory care, activities of daily living, care levels, occupancy, and staffing ratios. You don’t have to be an expert, but you do need to understand the moving parts.
2. **Study a few real deals.**
Get your hands on offering memorandums, P&Ls, and rent rolls for both assisted and independent living assets, even if you’re not ready to invest. Pay attention to how revenue is structured, what the expense line items look like, and how sensitive the model is to changes in occupancy or labor costs.
3. **Talk to operators and sponsors.**
[Conversations with operators](https://rodkhleif.com/podcasts/senior-living-investing-with-ashley-carly-terradez/) will tell you more about the reality on the ground than any brochure. Ask about challenges, staffing, regulatory changes, and what separates top-performing communities from average ones.
4. **Decide your entry lane.**
Choose a first move that matches your skills and risk tolerance: a passive LP position in an assisted living fund, a small stake in an independent living project, or an exploratory relationship with a sponsor you trust.
5. **Start small, but start.**
Senior living has powerful demographic tailwinds, but the investors who benefit most will be those who start learning and building relationships early, even with modest checks.
## The Bottom Line of Assisted Living vs Independent Living Investing
Both assisted living and independent living are powerful ways to participate in the senior housing megatrend, but they are not interchangeable. Independent living behaves more like lifestyle multifamily with a senior focus. Assisted living behaves more like a regulated, staff-heavy care business with real estate attached.
If you’re clear about your comfort with operations, your access to strong partners, and your desired risk/return profile, the choice between assisted vs independent living for investors stops being confusing and starts being strategic. From there, it’s about disciplined underwriting, conservative assumptions, and aligning yourself with operators and sponsors who know this space inside and out.
## **FAQ: Assisted Living vs Independent Living for Investors**
**What’s the main difference between assisted vs independent living for investors?**
Independent living is essentially lifestyle multifamily for seniors, residents are mostly self-sufficient and you’re primarily running a rental community with amenities. Assisted living combines housing and care services. You provide a place to live and help with daily tasks. This needs more staff, systems, and rules.
**Which has higher potential returns: assisted or independent living?**
Assisted living usually aims for higher returns. This is because revenue per unit is higher. You can also charge for care levels and extra services. However, those returns are more dependent on strong operations and stable staffing. Independent living usually offers more moderate, apartment-like returns that can be steadier and easier to underwrite.
**Is assisted living always riskier than independent living?**
Not always, but it generally carries more operational and regulatory risk. Assisted living depends heavily on labor, care quality, compliance, and reputation. Independent living has risks too (oversupply, location, competition), but they’re closer to traditional multifamily risks. For most investors, assisted living is riskier unless they’re partnered with an experienced operator.
**Which is better for a first-time senior housing investor: Assisted Living or Independent Living?**
For many, independent living is the easier on-ramp, especially if they already own or understand apartments. The business model is more familiar and less clinical. That said, a first-time investor can still enter assisted living successfully by investing passively with a proven operator or sponsor instead of trying to run it themselves.
**How do operations differ between assisted and independent living properties?**
Independent living operations focus on leasing, maintenance, hospitality, and activities, similar to amenitized multifamily or light hospitality. Assisted living operations include care teams, medication management, meal service, and staff available 24/7. They also require more complex scheduling, training, and oversight. You’re managing far more people and processes in assisted living.
**How do the revenue models of assisted living vs independent living differ?**
Independent living generates income mainly from rent, with occasional add-ons (meals, housekeeping, parking). Assisted living revenue combines base rent + care fees + possible add-on services. The extra layers in assisted living create more upside but also more variables in underwriting.
**What kind of partners do I need for each strategy?**
For independent living, you primarily need a strong property management team that understands senior residents and lifestyle programming. For assisted living, you need a skilled senior care operator. They should manage licensing, staffing, clinical risks, and family relationships. In many assisted living deals, the operator relationship is the single most important factor.
**Can I invest in assisted living or independent living without being hands-on?**
Yes. You can be a limited partner (LP) in syndications or funds that specialize in either asset type. In that case, you’re underwriting the sponsor and the business plan rather than running day-to-day operations. This is a common approach for investors who want exposure to senior housing demographics without taking on operational responsibility.
**How should I underwrite assisted living vs independent living deals?**
For independent living, underwriting is similar to apartments. It includes market rents, occupancy rates, expense ratios, cap rates, and value-add potential. For assisted living, you need to evaluate both the property and the business. This includes occupancy rates, revenue per resident, care fees, labor costs, licensing rules, and past operating margins. The assumptions around staffing and care revenue are especially critical.
**How do I decide which asset type fits my portfolio?**
Start by asking:
- How comfortable am I with complex operations and regulation?
- Do I have (or can I access) strong senior living operators?
- Do I prefer steady, familiar income or am I willing to accept more volatility for higher upside?
If you want simpler living, consider independent living. It offers a lifestyle similar to multifamily living but with a focus on seniors. If you have good partners and want to gain more benefits, assisted living might be a better choice.
**Categories:** Real Estate, Senior Housing
---
### [Self Storage Investing for Beginners Guide](https://rodkhleif.com/self-storage-investing-for-beginners-guide/)
**Published:** November 25, 2025
**Author:** Alex Khleif
**Content:**
Self storage used to be the boring cousin of “sexier” asset classes like apartments and retail. Today, it is one of the most talked-about niches in commercial real estate. That is not because it is flashy, but because it has a track record of steady demand, simple operations, and resilient performance in good and bad markets. If you are just getting started, the good news is that self storage can be much easier to understand than many other commercial assets. In this self storage investing for beginners guide, you will learn what self storage actually is, how it generates income, the main ways to invest, and what to watch out for so you do not get burned.
## What Is Self Storage, Really?
Self storage facilities provide short-term or month-to-month storage space for individuals and businesses. Customers rent units of various sizes to store furniture, inventory, files, equipment, or seasonal items. The leases are simple, the build-out is straightforward, and tenant improvements are minimal compared to other asset classes.
Facilities range from small “mom-and-pop” properties in suburban or rural areas to large, climate-controlled multi-story buildings in major cities. As an investor, you are essentially buying a cash-flowing space rental business built on convenience, security, and location.
## Why Self Storage Appeals to Investors
There are a few reasons self storage has become so popular with investors over the last few decades. Understanding these drivers helps you see why capital keeps flowing into this space.
Key advantages include:
- Needs-based demand: People move, downsize, start businesses, get divorced, and inherit stuff in every economic cycle. Life transitions create ongoing demand.
- Short lease terms: Month-to-month or short-term leases allow operators to adjust rates faster than in longer-lease asset classes.
- Relatively low operating costs: No kitchens, relatively simple plumbing, and limited interior finishes mean less maintenance per square foot.
- Fragmented ownership: Many facilities are still owned by small operators, creating room for consolidation and professional management to add value.
For beginners, the blend of straightforward operations and durable demand can be very attractive—assuming you buy the right deal at the right price.
## How Self Storage Facilities Make Money
Before you write a check, you need to understand how self storage facilities actually generate income. The revenue model is simple on the surface, but there are multiple levers you can pull to improve performance.
### Core Revenue Streams
Most of the income comes from:
- Monthly unit rent: The base rent for individual storage units, often charged on a month-to-month basis.
- Administrative and late fees: One-time or recurring fees for setup, late payments, or lock cuts.
- Retail and service income: Sales of locks, boxes, packing supplies, or tenant insurance programs.
- Parking and specialty storage: Parking spaces for RVs, boats, or vehicles, and sometimes premium storage for wine, records, or climate-sensitive items.
On the expense side, you will see property taxes, insurance, utilities (especially for climate-controlled buildings), payroll for on-site or remote staff, maintenance, marketing, and management fees. The difference between total income and operating expenses is Net Operating Income (NOI), which drives facility value in the same way it does for other commercial real estate.
## Key Terms Every Beginner Should Know
As you dive deeper into self storage investing, you will see a few terms repeatedly. Knowing these will help you read offering memorandums and talk with brokers intelligently.
Important terms include:
- Physical vs. economic occupancy:
- Physical = percentage of units occupied.
- Economic = percentage of potential income actually collected after discounts, concessions, and bad debt.
- Street rates vs. in-place rents:
- Street rates = current advertised prices for new customers.
- In-place rents = what existing tenants are actually paying.
- Unit mix:
The breakdown of unit sizes and types (5×5, 10×10, climate-controlled, drive-up, etc.) and how they perform.
- Revenue management / dynamic pricing:
Systems that adjust pricing based on demand, seasonality, and occupancy to maximize income.
These concepts show up in almost every self storage deal, so they are worth understanding early.
## Active vs Passive Self Storage Investing
Like other commercial asset classes, you can invest in self storage as either an active owner or a passive investor. Your choice depends on your time, experience, and how involved you want to be.
**If you invest actively, you might:**
- Find and acquire a facility yourself or with partners.
- Oversee day-to-day operations, staff, and marketing.
- Implement value-add strategies like rent increases, unit reconfiguration, and technology upgrades.
**If you invest passively, you might:**
- Invest as a limited partner (LP) in a self storage syndication or fund.
- Place capital with an operator who specializes in self storage acquisitions and management.
- Rely on their team to execute the business plan while you collect distributions and updates.
For many beginners, starting passively with an experienced, transparent sponsor can be a smart way to learn the business before stepping into full active ownership.
## Ways to Invest in Self Storage
There are several practical entry paths into self storage. Each offers different levels of control, risk, and effort.
Common approaches include:
- **Direct ownership:** Buy an existing facility using your own capital and financing. This offers maximum control but requires the most work and learning.
- **Value-add acquisition:** Buy a struggling or under-managed facility with a plan to improve occupancy, raise rents, or add services to increase NOI.
- **Development or conversion:** Build new self storage or convert existing buildings (like retail or industrial) into storage in markets with strong demand. This is more advanced and riskier for beginners.
- **Syndications and funds:** Invest passively in deals or portfolios run by seasoned self storage operators.
- **REITs:** Buy shares in publicly traded self storage REITs for easy diversification and liquidity, similar to buying any other stock.
Your capital, risk tolerance, and desired involvement level will determine which path makes the most sense.
## How to Underwrite a Self Storage Deal as a Beginner
Underwriting is where many beginners either get overwhelmed or, worse, skip steps. You do not need to be a modeling wizard to start, but you do need a simple, disciplined process.
Here is a straightforward approach:
### 1. Analyze Current Performance
Start with actual trailing 12-month (T-12) financials and the current rent roll. Look at:
- Current physical and economic occupancy.
- In-place rents versus market “street rates.”
- Income from fees, retail, and other services.
- Operating expenses, including taxes, insurance, payroll, utilities, and marketing.
If a broker or seller will not provide real numbers, treat that as a red flag or a very early-stage look.
### 2. Compare to Market Benchmarks
Talk to brokers, property managers, or use data providers to understand:
- Market occupancy levels for comparable storage facilities.
- Typical street rates for similar unit sizes and features.
- New supply in the pipeline that could impact future performance.
You want to know if your target facility is underperforming relative to the market or if the deal already reflects full performance.
### 3. Identify Realistic Value-Add Levers
Common levers to increase NOI include:
- Raising under-market rents closer to market levels.
- Improving marketing and operations to increase occupancy.
- Adding or expanding climate-controlled units where demand supports it.
- Introducing ancillary income streams like tenant insurance or upgraded security.
Model these changes conservatively, assuming it takes time to implement and lease up, not that everything changes overnight.
### 4. Stress-Test Your Assumptions
Ask what happens if:
- Rent growth is slower than expected.
- Lease-up takes longer.
- Expenses are 5–10% higher than projected.
If the deal only works under perfect conditions, it is not a beginner-friendly investment.
## Risks and Challenges in Self Storage Investing
Self storage is not risk-free, and anyone who tells you otherwise is selling something. Knowing the major risks helps you ask better questions and avoid painful surprises.
Key risks include:
- **Overbuilding and competition:** New facilities nearby can pressure rents and occupancy, especially in hot markets where developers rush in.
- **Operational risk:** Poor management, weak marketing, or lack of revenue management can crush performance.
- **Location risk:** Self storage is highly location-sensitive; poor visibility or access can limit demand permanently.
- **Economic and tenant base shifts:** While storage is resilient, extreme local economic decline can still hurt demand and pricing.
Many of these risks are manageable with solid due diligence, conservative underwriting, and strong property management.
## Common Beginner Mistakes to Avoid
Beginners often stumble in predictable ways when they get excited about self storage investing. If you can sidestep a few big errors, you dramatically improve your odds of success.
Common mistakes include:
- **Buying on pro forma instead of actuals:** Paying today for tomorrow’s hoped-for performance instead of what the property is actually doing.
- **Ignoring new supply:** Failing to research projects under construction or in planning stages that could flood the market.
- **Underestimating management:** Assuming storage is “totally passive” and can run itself. It still requires systems, oversight, and marketing.
- **Skipping on-site visits:** Relying only on photos and spreadsheets without understanding location, access, visibility, and competition firsthand.
A disciplined acquisition process and a bit of patience go a long way here.
## Getting Started With Self Storage in 90 Days
If this self storage investing for beginners guide has you interested, you do not need to master everything at once. A simple, focused plan can get you moving in the next three months.
Over the next 90 days, you can:
1. **Educate yourself**
Read a couple of reputable self storage books, listen to industry podcasts, and study a few case studies from operators.
2. **Clarify your role and capital**
Decide whether you want to be an active owner or a passive LP. Determine how much capital you can comfortably invest and what your return and timeline goals are.
3. **Build your network**
Connect with self storage brokers, lenders, and operators in your target markets. Join online communities or attend a self storage meetup or conference.
4. **Practice underwriting sample deals**
Grab a few offering memorandums and practice building simple pro formas. Focus on occupancy, rents, expenses, and realistic value-add assumptions.
5. **Choose your first move**
That might be committing to a passive investment with a sponsor you trust, or zeroing in on a small facility in a market you understand and making offers with a solid team.
Self storage may not suit every investor. However, for many, it provides a strong mix of simplicity, growth potential, and stability. When you mix basic education, careful underwriting, and good partners, self-storage investing for beginners feels less scary. It can also be a strong part of your long-term portfolio.
## **FAQ: Self Storage Investing for Beginners**
**What is self storage investing?**
Self storage investing means buying or investing in facilities that rent storage units to individuals and businesses. Your income comes from monthly unit rents, fees, and related services like tenant insurance or packing supplies. You’re essentially running a space-rental business with relatively simple build-out and short-term leases.
**Why is self storage popular with beginner investors?**
Self storage is popular because the business is relatively simple compared to many other commercial assets. Demand is driven by life events—moving, downsizing, divorce, business inventory—so it tends to be resilient in different economic cycles. For beginners, the combination of straightforward operations and strong historical performance makes it an attractive starting point.
**How do self storage facilities make money?**
Most revenue comes from monthly unit rents charged on a short-term or month-to-month basis. Facilities also earn from late fees, admin fees, retail sales (locks, boxes, packing supplies), tenant insurance, and sometimes parking for RVs or boats. The goal is to keep occupancy healthy, manage expenses, and steadily grow Net Operating Income (NOI).
**Is self storage investing truly passive?**
Self storage can be low-touch, but it’s not completely passive if you own the facility yourself. You still need systems for marketing, collections, maintenance, and customer service, even with great software. If you want truly passive exposure, investing as a limited partner in self storage syndications or REITs is usually a better fit.
**What should beginners look for in a self storage facility?**
Beginners should focus on location, visibility, and competition first. Look for facilities with good frontage, easy access, and healthy demand in the surrounding area. You also want to understand current occupancy, in-place rents versus market rents, and whether there is room to improve operations or pricing.
**How much money do I need to start investing in self storage?**
Directly buying a facility usually requires a substantial down payment, closing costs, and reserves—often in the hundreds of thousands for quality assets. If that’s out of reach, you can start with passive investments in syndications or funds, where minimums commonly range from $25,000 to $100,000, or buy shares of self storage REITs with much smaller amounts.
**What are the main risks of self storage investing?**
Key risks include overbuilding in a market, poor management, and weak locations with low visibility or access. New competing facilities can pressure rents and occupancy, especially if your facility is older or less convenient. Operationally, sloppy pricing, weak marketing, and inconsistent collections can quickly erode returns.
**How do I analyze a self storage deal as a beginner?**
Start with the trailing 12-month financials and current rent roll to see real income, expenses, and occupancy. Compare in-place rents to market “street rates,” and check how full similar facilities are in the area. Then build a conservative pro forma that tests modest rent growth, realistic lease-up, and a buffer for higher expenses.
**Should I invest actively or passively in self storage?**
If you like operations, systems, and direct control, active ownership of a facility or joint venture might make sense. If you’d rather keep your time free and leverage a specialist’s expertise, becoming a passive LP in self storage syndications or investing through REITs is usually better. The right path depends on your time, experience, and appetite for hands-on work.
**How can I get started with self storage investing?**
Begin by learning the basics; key terms, how facilities are run, and what makes a good market. Then decide whether you want to be an active owner or a passive investor and define your budget and goals. From there, start talking to brokers and operators, review real deals, and practice underwriting so you’re ready when the right opportunity appears.
*Disclaimer: This article was written with the help of AI and reviewed by Rod and his team. Always consult a licensed professional.*
**Categories:** Blog, Real Estate, Self Storage
---
### [Mobile Home Park Investing for Beginners](https://rodkhleif.com/mobile-home-park-investing-for-beginners/)
**Published:** November 23, 2025
**Author:** Alex Khleif
**Content:**
Mobile home parks used to be the “forgotten” corner of real estate, but not anymore. As housing costs climb and affordable options disappear, more investors are waking up to the cash flow and stability that mobile home parks can provide. If you are just getting started, the niche can look intimidating, but it does not have to be. This guide will walk you through mobile home park investing for beginners in plain language. You will learn how these properties earn money. You will see what makes them different from apartments. You will discover the main ways to invest. You will also learn about the biggest risks to watch for. By the end, you will have a clear roadmap to decide if mobile home parks belong in your portfolio and how to take your first steps if they do.
## Why Mobile Home Parks Are Getting So Much Attention
Mobile home parks sit at the heart of the affordable housing conversation. They serve working-class families, retirees, and people who are priced out of traditional single-family or apartment options. That means demand for this type of housing is driven by real need, not luxury trends or speculation.
At the same time, there is a limited and shrinking supply of mobile home parks in many markets. Zoning rules and community pushback make it hard to build new parks. As a result, existing parks become more valuable over time. This combination of strong demand and constrained supply is exactly what real estate investors look for when they want durable cash flow.
## What Exactly Is a Mobile Home Park?
A mobile home park is primarily a land and infrastructure play. Residents own or rent their homes, but the park owner typically owns the land, roads, utilities, and common areas. Residents then pay monthly lot rent for the right to place their home on a pad and use the utilities and services.
There are two major types of income setups you will hear about a lot:
- **TOH (Tenant-Owned Homes):** Residents own their homes and pay you lot rent only.
- **POH (Park-Owned Homes):** The park owns some or all of the homes and rents them out like units.
For beginners, a higher percentage of tenant-owned homes is usually considered more stable and less management-intensive. You are effectively renting land instead of running a scattered-site single-family portfolio.
## How Mobile Home Parks Make Money
Before you invest, you need to understand how the revenue is actually created. The income streams are similar across many parks, but the mix can vary from deal to deal. Knowing the components helps you underwrite more intelligently.
Typical revenue sources include:
- Lot rent: Monthly rent residents pay for the pad and utilities access
- Home rent (POH): Rent from park-owned homes, if the park owns any units
- Utility bill-backs: Reimbursement from residents for water, sewer, trash, or other utilities
- Other fees: Application fees, late fees, pet fees, storage, parking, or RV/camper spaces
On the expense side, you will see costs for utilities (if not fully billed back), maintenance, repairs, property management, insurance, property taxes, and sometimes on-site staff. The difference between total income and total operating expenses is Net Operating Income (NOI). When you increase NOI or buy at a good price, you increase the value of the park.
## Mobile Home Park Investing for Beginners: Key Terms
When you start evaluating mobile home parks, you will see specific terms that matter a lot. Understanding these early will make you more confident when you read deals or talk to brokers.
### **Important MHP key terms include:**
- **Number of lots:** How many pads or spaces are in the park (both occupied and vacant).
- **Occupancy**: What percentage of lots are currently paying, and how many can be filled.
- **TOH vs POH mix:** What share of homes are resident-owned vs park-owned.
- **Infrastructure type:** Public utilities vs private systems (wells, septic, lagoons, private electric or gas).
- [**Cap rate:** ](https://rodkhleif.com/cap-rate-calculator/)The ratio of NOI to purchase price, used to compare value and returns.
- **Expense ratio:** Operating expenses divided by gross income, which shows how efficient the park is.
As a beginner, you want to pay special attention to infrastructure and utility systems. Private systems can add risk and require specialized inspections before you buy.
## Active vs Passive Mobile Home Park Investing
One of the first decisions in mobile home park investing for beginners is whether you want to be active or passive. These are very different paths, and it is important to be honest about your time, experience, and goals.
**If you invest actively, you might be:**
- Finding, negotiating, and buying the park yourself
- Arranging financing and raising capital from partners
- Overseeing management, infill of vacant lots, and park improvements
**If you invest passively, you might be:**
- Investing as a limited partner (LP) in a mobile home park syndication
- Placing capital into a fund that owns multiple parks
- Buying shares of public or private REITs focused on manufactured housing
Active investing can offer higher upside but comes with more responsibility and learning curve. Passive investing lets you leverage the experience of others while you focus on due diligence and portfolio allocation.
## Ways to Invest in Mobile Home Parks
There are several practical entry points for beginners. Each has its own pros and cons in terms of control, return potential, and workload.
### Common approaches to Mobile Home Park investing include:
- **Direct purchase:** You buy a small to mid-sized park using your own capital and financing. This offers maximum control but requires education, team building, and hands-on management.
- **Joint ventures (JVs):** You partner with experienced operators or other investors, often contributing capital, lending strength, or specific skills in exchange for equity.
- **Syndications:** You invest passively as an LP with a sponsor who finds, operates, and eventually exits the park. You benefit from their expertise while limiting your active involvement.
- **REITs and funds:** You buy into entities that own portfolios of parks, gaining instant diversification and liquidity but with less control and typically lower upside per deal.
The “right” method depends on whether you want to build a mobile home park business or simply add the asset class to your overall investment mix.
## Step-by-Step: How Beginners Can Analyze a Mobile Home Park
When you look at your first park deal, it can feel overwhelming. Breaking it into a simple checklist helps you focus on the essentials and avoid analysis paralysis. Think of it as a first-pass filter before you dive into deeper due diligence.
### 1. Check the Basics
Start with the big-picture fundamentals:
- Where is the park located, and is the market growing, stable, or declining?
- How many lots are there, and what is the current occupancy?
- Are utilities public (city water/sewer) or private (well/septic, lagoon, package plant)?
If the market is shrinking, occupancy is very low, or the infrastructure is in poor condition, you need deeper analysis or a big discount to compensate for the risk.
### 2. Review Current Income and Expenses
Ask for actual trailing 12-month (T-12) financials instead of just pro forma numbers. You want to see what the park is really doing today, not just what it could do someday.
Look at:
- Lot rent per space and whether it is below, at, or above market
- Total effective income after vacancy and bad debt
- Operating expenses and expense ratio (many stable parks fall in the ~30-45% range, but it varies)
If expenses look artificially low, or income assumes aggressive rent increases, adjust your assumptions. Conservative underwriting is your friend as a beginner.
### 3. Understand the Value-Add Story
Most mobile home park deals marketed to investors have a value-add angle. The question is: does the story make sense, and is it realistic?
Common value-add plays include:
- Raising under-market lot rents closer to market
- Filling vacant lots with new or used homes (infill)
- Converting park-owned homes into tenant-owned homes by selling them to residents over time
- Billing back utilities that the park currently pays
You want to see a clear, step-by-step plan with realistic timelines and costs. A park that is already well-run with market rents might offer more stability but fewer upside levers.
### 4. Look at Financing Options
Financing for mobile home parks depends on size, quality, location, and your experience. Smaller or turnaround parks may require local banks, credit unions, or seller financing, while larger stabilized assets might qualify for agency or conduit loans.
As a beginner, conservative leverage is usually safer. Aggressive debt with tight covenants can turn a manageable bump into a serious problem. Make sure your projected cash flow supports your debt payments with room for error.
## Risks and Challenges in Mobile Home Park Investing
Every asset class has its challenges, and mobile home parks are no exception. Understanding these risks up front will help you approach deals with clear eyes and better questions.
**Key risks include:**
- Operational risk: Poor management can lead to collections issues, high turnover, and community decline.
- Infrastructure risk: Aging water, sewer, or road systems can require expensive repairs if they were neglected by prior owners.
- Regulatory and political risk: Some municipalities are unfriendly to parks and may resist improvements, zoning changes, or infill.
- Tenant base challenges: In some parks, residents may be more financially fragile, which requires thoughtful screening, communication, and support systems.
Good due diligence, strong management, and realistic reserves can mitigate many of these risks. The worst outcomes usually happen when investors ignore problems during underwriting or assume everything will “just work out.”
## Common Beginner Mistakes to Avoid
When you are new, it is easy to make avoidable mistakes that cost you money and stress. Learning from others can help you dodge these early traps.
**Common mistakes include:**
- Buying based on pro forma instead of actuals: You should never pay tomorrow’s price for today’s performance.
- Ignoring infrastructure: Skipping thorough inspections on water, sewer, and electrical systems can lead to brutal surprises.
- Underestimating management: Mobile home parks are not fully passive, even with TOH-heavy communities. Good systems and local support matter.
- Overpaying for low-quality markets: A cheap park in a declining area can be much riskier than a fairly priced park in a healthy market.
If you can avoid just these mistakes, you are already miles ahead of many beginners who rush in without a plan.
## How to Get Started With Mobile Home Park Investing in 90 Days
If the idea of mobile home park investing for beginners feels exciting rather than overwhelming, here is a simple way to get moving in the next three months. You do not have to do everything at once; just make consistent progress.
**Over the next 90 days, you can:**
1. **Study the basics**
Read two or three reputable books or guides on mobile home park investing. Listen to a few podcasts or interviews with experienced park operators and syndicators.
2. **Define your role and budget**
Decide whether you want to be an active buyer or a passive LP. Clarify how much capital you can realistically invest and what your ideal timeline looks like.
3. **Build your network**
Join online communities, attend meetups or conferences, and start conversations with mobile home park owners, brokers, and operators. [Relationships](https://rodkhleif.com/podcasts/the-art-of-relationship-building-in-real-estate/) are a huge shortcut in this niche.
4. **Analyze a few sample deals**
Grab real or sample offering memorandums and underwrite them with conservative assumptions. This builds your pattern recognition and helps you ask better questions.
5. **Choose your first move**
That might mean committing to a passive investment with a vetted sponsor, or it might mean targeting a specific market and starting to make offers. The most important part is moving from theory to action.
Mobile home park investing is not a magic bullet, and it is not “easy money.” For investors willing to learn and work with strong partners, this opportunity can be beneficial. It offers a good combination of cash flow, resilience, and impact.
## **FAQ: Mobile Home Park Investing for Beginners**
**What does it mean to invest in a mobile home park?**
Investing in a mobile home park usually means buying the land and infrastructure—the lots, roads, and utilities—rather than the homes themselves. Residents pay you lot rent to place their homes in your park and use your services. In some cases, the park also owns homes and rents them out, creating extra income but more management.
**Why are mobile home parks popular with real estate investors?**
Mobile home parks are popular because they sit in the affordable housing space, where demand is very strong. It is hard to build new parks due to zoning and community resistance, so existing parks often enjoy limited competition. This combo of strong demand and constrained supply can create stable, long-term cash flow when the park is well managed.
**What is the difference between tenant-owned homes (TOH) and park-owned homes (POH)?**
In a tenant-owned home (TOH) setup, residents own their homes and pay you only lot rent, which usually means lower maintenance and more stable tenants. In a park-owned home (POH) setup, the park owns some or all of the homes and rents them out like units, which can increase income but also increases repairs, turns, and management intensity. Beginners often prefer parks with a higher share of TOHs because they behave more like land-lease communities.
**How do mobile home parks make money?**
Most income comes from monthly lot rent, which residents pay to keep their home on a pad and access utilities and common areas. Some parks also earn money from renting park-owned homes, billing back utilities, or charging fees for storage, pets, or RV spaces. After you subtract operating expenses from this income, the remaining Net Operating Income (NOI) is what drives the park’s value.
**Is mobile home park investing good for beginners?**
It can be, but it is not completely “hands off.” Mobile home park investing for beginners works best when you either partner with experienced operators or invest passively through syndications or funds. If you buy a park yourself, you need to be ready to learn about infrastructure, management, collections, and tenant relations, not just numbers on a spreadsheet.
**How much money do I need to start investing in mobile home parks?**
The amount varies based on your strategy. Buying a park directly usually requires a meaningful down payment, closing costs, and reserves—often tens or hundreds of thousands of dollars. If that’s too high, you can start with passive investments in mobile home park syndications or funds, where minimums are commonly in the $25,000–$100,000 range, or consider REITs that you can buy like regular stocks.
**What are the biggest risks in mobile home park investing?**
Major risks include infrastructure problems (like old water and sewer lines), weak management, and challenging tenant bases in some communities. Regulatory or political issues can also show up if the local city is unfriendly toward parks. Many painful situations come from skipping proper due diligence on utilities, market strength, and the true condition of the park.
**How is a mobile home park different from an apartment building?**
With apartments, you usually own the buildings and interiors and rent units directly. With mobile home parks, you typically own the land and infrastructure and collect lot rent while residents own their homes. That often means lower capital expenses per unit, but you must pay close attention to roads, utility systems, and community rules to keep the park functioning and attractive.
**Should I invest actively or passively in mobile home parks?**
If you want control and are willing to learn operations, direct ownership or joint ventures let you be an active investor. If you prefer to stay hands-off and leverage other people’s expertise, you can be a passive investor in syndications, funds, or REITs. The right choice depends on your time, experience, risk tolerance, and how involved you want to be in day-to-day decisions.
**How do I get started with mobile home park investing?**
Start by educating yourself on the basics of mobile home park operations, terms, and underwriting. Then decide whether you want to be active or passive and define your budget and goals. From there, begin building relationships with park owners, brokers, and experienced operators, and practice analyzing real deals so you can confidently recognize a good opportunity when you see it.
*Disclaimer: This blog was created with the help of AI and reviewed by Rod and his team. Always consult a licensed professional.*
**Categories:** Blog, Mobile Home Parks, Real Estate
---
### [How a 1031 Exchange Can Save You Thousands](https://rodkhleif.com/how-a-1031-exchange-can-save-you-thousands/)
**Published:** March 6, 2025
**Author:** Rod Khleif
**Content:**
If you’re in the real estate game, you already know that taxes can take a big bite out of your profits when you sell an investment property. But what if you could defer those taxes and reinvest the full amount into another property? That’s where a 1031 Exchange comes in. And if you use it strategically, it can save you thousands (or even hundreds of thousands) in taxes while helping you scale your portfolio faster.
I’ve personally used 1031 Exchanges to build wealth, preserve capital, and create financial freedom—and you can do the same. Let’s break down how this powerful tax tool works and how you can use it to maximize your real estate gains.
## What Is a 1031 Exchange?
A [1031 Exchange](https://rodkhleif.com/1031-exchange-faq-everything-investors-need-to-know/), named after Section 1031 of the IRS tax code, allows real estate investors to defer capital gains taxes when selling one investment property and reinvesting the proceeds into another like-kind property. Instead of [paying taxes](https://rodkhleif.com/podcasts/tax-expert-explains-how-to-reduce-taxes-legally/) immediately, you roll those gains into a new property, keeping your capital working for you.
For example, if you sell a rental property and make $200,000 in profit, you could be looking at a tax bill of $60,000 or more. But with a 1031 Exchange, you defer those taxes and reinvest the full $200,000—giving you more buying power and a bigger return on investment.
## How a 1031 Exchange Saves You Thousands
### Defers Capital Gains Taxes
When you sell an investment property, you typically owe capital gains taxes—anywhere from 15% to 20% at the federal level, plus state taxes. A 1031 Exchange allows you to defer those taxes, keeping your money invested.
#### Example:
- You sell a property with $200,000 in profit.
- Without a 1031 Exchange, you pay $50,000+ in capital gains taxes.
- With a 1031 Exchange, you defer that tax and reinvest the full $200,000.
### Avoids Depreciation Recapture Taxes
If you’ve owned a rental property, you’ve probably taken depreciation deductions. When you sell, the IRS recaptures that depreciation and taxes it at 25%. A 1031 Exchange allows you to defer this tax, keeping more money in your pocket.
#### Example:
- You’ve taken $100,000 in depreciation on a property.
- If you sell, you’d owe $25,000 in recapture taxes.
- A 1031 Exchange defers that tax, allowing you to reinvest it instead.
### Leverages Capital for Bigger Investments
By deferring taxes, a 1031 Exchange gives you more buying power. Instead of losing 30-40% of your profits to taxes, you use that money to buy a larger property, increasing your cash flow and equity growth.
#### Example:
- With $200,000 after taxes, you can buy an $800,000 property.
- With a 1031 Exchange, you keep $250,000 and can buy a $1,000,000+ property instead.
- [Creates a Tax-Free](https://rodkhleif.com/podcasts/how-the-top-1-legally-pay-0-capital-gains-tax-on-real-estate/) Legacy for Heirs
One of the biggest hidden benefits of a 1031 Exchange is that if you hold the property until you pass away, your heirs inherit it at a stepped up basis, which means all deferred taxes disappear.
#### Example:
- You 1031 Exchange into a $3 million property with $1 million in deferred taxes.
- If you sell, you owe taxes on the gains.
- If you hold until death, your heirs inherit the property tax-free.
## Key 1031 Exchange Rules You Must Follow
- Like-Kind Requirement: The replacement property must be another investment property (not a primary home).
- 45 Day Identification Rule: You must identify your replacement property within 45 days of selling your old one.
- 180 Day Closing Rule: You must close on the new property within 180 days of the sale.
- Equal or Greater Value: The replacement property must be of equal or greater value to defer all taxes.
- Qualified Intermediary (QI): You can’t touch the proceeds. A QI must handle the exchange.
## Advanced 1031 Exchange Strategies
### Reverse 1031 Exchange
Buy your replacement property first, then sell your original property within 180 days. This is great for hot markets where good deals move fast.
### Build-to-Suit (Construction) Exchange
Use exchange funds to develop or renovate a new property—perfect for value-add investors.
### 1031 into a Delaware Statutory Trust (DST)
Want passive income without managing properties? A DST allows you to exchange into institutional-quality commercial real estate managed by professionals.
### Final Thoughts from Rod
If you’re not using a 1031 Exchange, you’re leaving serious money on the table. This strategy has saved me millions in taxes and helped me build an empire in multifamily real estate.
The key is planning ahead. You need a great team, a qualified intermediary, and a solid game plan to make it work. But if you do it right, you can grow your wealth, keep more of your money, and leave a tax-free legacy for your family.
If you’re serious about building wealth through real estate, this is a tool you must master. Start planning your next 1031 Exchange today.
**Categories:** Blog
**Tags:** 1031 exchange, lifetime cashflow podcast, multifamily property investing, real estate, real estate investing
---
### [3 Reasons Cash Flow Beats Value in Real Estate](https://rodkhleif.com/3-reasons-cash-flow-beats-value-as-a-better-investment-strategy/)
**Published:** February 13, 2025
**Author:** Rod Khleif
**Excerpt:** The Biggest Mistakes In Real Estate Investing with Rod Khleif
**Content:**
## Cash Flow Beats Market Timing: Build Wealth with Predictable Income
We’ve all heard it: “Buy low, sell high.”
It sounds like a simple, surefire way to build wealth in real estate, right? Well, let me tell you, that strategy is NOT the way to long-term success in this business.
Timing the market is a gamble. No one—not even the so-called experts—can predict with certainty [what will happen to the economy](https://rodkhleif.com/podcasts/real-estate-crisis-what-the-2025-economy-means-for-investors/), interest rates, or property values in the short term. And if you’re relying on appreciation alone, you’re rolling the dice with your financial future.
Instead, let me share a proven strategy that actually works: Focus on cash flow. When you buy properties that generate consistent, predictable income, you build a portfolio that creates financial freedom, regardless of market conditions.
Let’s break down why cash flow investing is the ultimate wealth-building strategy in real estate.
1. ### Cash Flow is Predictable. Market Cycles Aren’t.
Real estate moves in cycles. We’ve seen booms, busts, and everything in between. But trying to time the market perfectly is like trying to catch a falling knife—dangerous and nearly impossible.
Look at what happened in 2008. Investors who were chasing appreciation-only deals were left with massive losses when the market tanked. But those who [invested in cash flowing properties](https://rodkhleif.com/podcasts/mobile-home-parks-explained-the-cash-flow-strategy-you-need-to-know/) could ride out the storm, continue collecting rent, and even buy more properties at a discount when the market crashed.
Here’s the truth: Market values fluctuate. Rents, on the other hand, are much more stable. People always need a place to live. If you buy the right multifamily properties, keep them occupied, and manage them properly, your income keeps flowing—even if the economy slows down.
#### Rod’s Takeaway:
I’m not saying appreciation isn’t valuable, but it’s the cherry on top, NOT the foundation of a solid investment strategy. If you want real security, invest for cash flow first—and let appreciation take care of itself.
2. ### Cash Flow Funds Your Next Deals Without Selling Anything
Let’s say you bought a property for $100,000. Five years later, it appreciates to $127,000. Great! But to access that money, you’d have to sell it. Now you’re back to square one, looking for another deal, paying transaction costs, and possibly facing a tax hit on your gains.
With cash flow investing, you don’t have that problem.
Instead of waiting years for [appreciation](https://rodkhleif.com/podcasts/how-he-created-1-8m-value-on-day-one-without-heavy-renos/), your properties generate rental income every single month. You can reinvest that income into new deals, growing your portfolio without selling a thing.
Think of it this way:
Appreciation-focused investing is like growing a tree, cutting it down, and replanting it every few years.
Cash flow investing is like growing an orchard that produces fruit for life.
Which one sounds more sustainable to you?
#### Rod’s Takeaway:
One of the biggest mistakes I made early in my career was chasing appreciation. It worked for a while, until 2008 wiped out my $50M portfolio. The investors who thrived during the crash? They focused on cash flow. Learn from my mistakes. Build your portfolio the right way, from day one.
3. ### Cash Flow Creates Financial Freedom, Not Just Net Worth
Let me ask you a question: Would you rather have $10 million in real estate equity, or $50,000 per month in passive cash flow?
I’ll take the cash flow every time.
Why? Because financial freedom isn’t about net worth, it’s about income. Your bills don’t care how much your properties are worth. They care about how much cash flow you’re generating every month.
Think about it. A high-net-worth investor who’s only holding appreciating assets still has to sell to fund their lifestyle. And when the market dips? They’re in trouble. But an investor with strong monthly cash flow? They’re secure, no matter what the economy does.
This is the key to creating lifetime wealth. If your properties generate enough passive income to cover your living expenses, you never have to work another day in your life. That’s what I want for you.
#### Rod’s Takeaway:
Net worth doesn’t pay the bills but cash flow does. If you want real financial freedom, focus on building a portfolio that puts money in your pocket every single month. That’s how you create a life on your terms.
### Final Thoughts from Rod Khleif
If you’re serious about building real wealth through real estate, stop chasing appreciation and start focusing on cash flow.
Appreciation is speculative. Cash flow is predictable.
Appreciation takes years to materialize. Cash flow happens now.
Appreciation is out of your control. Cash flow is something you can manage and grow.
The biggest investors, the ones who truly create generational wealth, they don’t gamble on market timing. They buy cash flowing properties and keep them forever.
Want to learn how to build a portfolio that generates [lifetime cash flow](https://rodkhleif.com/lifetime-cashflow-podcast/)? Join me at my next bootcamp, where I’ll show you everything you need to know to succeed in multifamily real estate. Let’s make this the year you take action and start building the life you deserve.
See you there!
### Ready to Build Your Multifamily Empire? 🚀
Join [Rod Khleif’s Multifamily Bootcamp](https://rodkhleif.com/checkouts/virtual-47/), the top event for serious investors, where expert investors answer your questions and share proven strategies. Learn directly from industry leaders and take your investing to the next level!
🎟 Reserve Your Spot Now!
**Categories:** Blog, Real Estate
**Tags:** cash flow, multifamily real estate, real estate, real estate investing, real estate strategies, Rod Khleif
---
### [Investing in Multifamily Real Estate Near Colleges](https://rodkhleif.com/what-you-need-to-know-about-multifamily-real-estate-in-a-college-town/)
**Published:** September 22, 2025
**Author:** Rod Khleif
**Excerpt:** As I often say, your success in multifamily real estate depends on one thing: cash flow.
**Content:**
## What You Need to Know About Multifamily Real Estate in a College Town (2025 Guide)
When it comes to multifamily investing, location has always been a critical factor in determining long-term success. In 2025, one of the most overlooked but promising real estate markets is multifamily real estate in college towns.
These academic-centered communities offer a unique blend of stable rental demand, reliable turnover, and institutional economic support. For savvy investors, college town multifamily real estate represents a compelling opportunity to generate consistent [cash flow](https://rodkhleif.com/how-to-calculate-cash-on-cash-return/) while benefiting from long-term appreciation.
Buying multifamily properties in a college town is like any investment strategy. It needs a clear understanding of the local dynamics. In this updated guide, we will cover what you need to succeed. We will discuss key benefits and risks. You will also find strategies to maximize returns in today’s changing market.
## Why College Towns Are Attractive for Multifamily Investors
One of the most appealing aspects of college towns is the recurring demand for off-campus housing. Each school year brings new students. Many of them prefer the freedom of renting an apartment instead of living in dorms. In addition to students, there is a steady population of graduate students, faculty members, researchers, university employees, and healthcare professionals affiliated with teaching hospitals. This diverse tenant base creates a built-in demand engine for landlords.
Unlike cyclical [vacation rental markets](https://rodkhleif.com/podcasts/short-term-rentals-for-long-term-success/) or cities heavily dependent on one industry, college towns are often anchored by large public or private universities with long-standing reputations, billion-dollar endowments, and government-backed funding. These institutions don’t just educate students—they act as major employers, research hubs, and community anchors. In some markets, the university is the single largest economic driver in the region.
This consistent economic support helps keep rental demand stable, even during national downturns. In fact, many college towns outperformed urban cores during the COVID-19 pandemic and the 2022–2023 rate hikes because they offered lower cost of living, walkable neighborhoods, and recession-resistant job markets.
## Benefits of Investing in College Town Multifamily Properties
### Predictable Tenant Demand
Few investment markets offer the level of seasonal predictability that college towns do. Leases usually begin and end with the school year. Most landlords can rent out their properties ahead of move-in dates. In some towns, students begin apartment hunting 6–9 months before the fall semester begins.
This reliable demand reduces vacancy risk and allows owners to systematize turnover processes. Unlike traditional tenants, student renters are accustomed to short-term leases, which gives owners more flexibility to adjust pricing and renovate units more frequently.
### Opportunity for Regular Rent Increases
With a high rate of annual turnover, landlords in college towns often have more opportunities to raise rents without facing [tenant retention](https://rodkhleif.com/tenant-turnover-its-costs-and-what-you-can-do-to-minimize-them/) issues. New lease cycles allow for rate adjustments aligned with market changes, cost of operations, or amenity upgrades. Since tenants are generally only staying for 1–2 years, landlords can maintain pace with inflation and capital improvement ROI without resistance from long-term renters.
### Diverse Tenant Pool Beyond Undergraduates
Contrary to the stereotype, not all renters in a college town are 19-year-old undergrads. Many areas with major universities also have:
- Graduate and doctoral students
- Medical residents and nursing students
- Visiting faculty and postdoctoral researchers
- University staff and adjunct professors
- Tech startup employees from university-affiliated incubators
These demographics often prefer quieter, higher-end housing and can be targeted with upgraded units and [amenities](https://rodkhleif.com/5-ways-to-increase-the-noi-on-your-multifamily-property/) like private parking, in-unit laundry, or proximity to public transit and research centers.
### Strong Long-Term Appreciation
Universities tend to drive long-term investment and infrastructure into their surrounding communities. As schools grow, so do local amenities suchas cafes, restaurants, coworking spaces, and public transit. Over time, this leads to increased property values, gentrification of older neighborhoods, and higher demand for well-maintained housing stock.
Some university towns have strict zoning rules. These rules limit new buildings and help keep property values high. In many cases, well-positioned multifamily units in close proximity to campus see significant appreciation over time.
## Challenges and Risks to Be Aware Of
While college towns offer many advantages, they are not without unique challenges. Investors need to be aware of the risks and have a plan to mitigate them.
### High Turnover and Frequent Turnovers
Most student tenants move annually, which increases unit turnover, cleaning costs, and maintenance demands. Even with efficient systems, the cost of repainting, cleaning, and minor repairs can add up. However, savvy landlords include cleaning and turnover fees in the lease, and staggered move-in/move-out schedules can help spread out labor needs.
### Seasonality and Leasing Cycles
Leasing windows in college towns are highly compressed. Miss the window to [market your property](https://rodkhleif.com/podcasts/real-estate-success-through-digital-marketing/) (usually late winter to early spring), and you could be left with a vacancy for the entire academic year. That’s why pre-leasing and strong local marketing are essential. Some owners partner with student ambassadors or local property managers who specialize in student housing to maintain full occupancy.
### Wear and Tear on Units
Students tend to be harder on units than traditional renters. Owners should invest in durable, easy-to-replace materials—vinyl plank flooring, quartz counters, commercial-grade appliances, and washable paint. Security deposits and parental co-signers help mitigate risk, and annual inspections keep [deferred maintenance](https://rodkhleif.com/evaluating-expenses-tricks-of-the-trade/) in check.
### Potential for Partying and Lease Violations
Concerns around noise complaints, parties, and underage drinking are common. Smart landlords combat this with:
- Clear lease language on noise, occupancy limits, and damages
- Joint and several liability clauses
- Digital surveillance in public areas (where legal)
- Communication with neighbors and local police for proactive intervention
Some investors avoid renting to undergrads altogether and focus on quieter submarkets within the same town that cater to grad students or faculty.
## How to Succeed in Multifamily Real Estate in College Towns in 2025
If you’re considering investing in multifamily real estate in a college town in 2025, here are several strategies that will give you a competitive edge:
### Study the School’s Trends
Not all universities are growing. Before investing, review enrollment data, financial reports, and master planning documents. Look for signs of growth—new dorms, satellite campuses, expanded research funding, or rising national rankings.
Also, determine the ratio of on-campus to off-campus housing. If the university is aggressively expanding dorm capacity, it could impact nearby multifamily demand.
### Understand the Local Ordinances
Some college towns have unique regulations, such as caps on rental prices, restrictions on the number of unrelated occupants, or noise ordinances. Check for local housing board rules or zoning issues before you purchase.
### Target the Right Tenant Profile
Avoid over-reliance on traditional student renters by investing in mixed-use buildings or neighborhoods that also attract professionals. Properties near hospitals, business schools, or R&D campuses often draw a higher-end demographic. Adding amenities like keyless entry, study lounges, or high-speed internet can boost your appeal.
### Hire a Student Housing-Savvy Property Manager
If you’re not local, a property manager who understands the rhythms of the academic calendar is essential. They’ll know how to time marketing, screen co-signers, handle roommate changes, and even manage furnished units if desired.
## Final Thoughts: College Towns Offer Cash Flow and Stability in 2025
In a real estate market where many investors are battling interest rates, inflation, and unpredictable tenant behavior, college towns continue to offer something unique: predictability. The student housing market may come with some operational headaches, but for the investor who’s willing to systematize and professionalize their approach, the rewards can be significant.
Whether you’re acquiring your first small multifamily near a regional college or expanding a portfolio with larger properties in a Big Ten market, college towns should not be overlooked in 2025. The opportunity for steady cash flow, long-term equity growth, and resilient occupancy makes them a powerful addition to any investor’s strategy.
### Want Help Evaluating a College Town Investment?
Join 20,000+ other investors in our free [Multifamily Facebook Group,](https://www.facebook.com/groups/multifamilyrealestateinvesting) or apply now for a free strategy session with Rod’s team. We’ll help you assess deals, run numbers, and build a plan for long-term success in multifamily real estate.
Ready to take action?
Visit:
## **Frequently Asked Questions About Investing in Multifamily Real Estate In College Towns**
### **Is it smart to invest in multifamily properties near colleges in 2025?**
Yes, college towns remain one of the most consistent and resilient rental markets in 2025. With a steady stream of students, faculty, and staff seeking off-campus housing, multifamily properties near universities often experience lower vacancy rates, reliable turnover, and above-average rent growth.
### **What are the risks of owning student housing or college town rentals?**
The primary risks include high tenant turnover, increased wear and tear, seasonal leasing cycles, and the potential for noise or property damage. However, these risks can be mitigated with smart lease terms, durable unit materials, professional property management, and tenant screening processes that include parental co-signers or guarantors.
### **How do I screen college student tenants?**
Most landlords require student renters to have a qualified co-signer—usually a parent—with sufficient income or credit. Other helpful strategies include background checks, references, and clear lease clauses outlining rules around noise, guests, and property damage. Many leases in college towns also include cleaning fees, turnover fees, and strict occupancy limits.
### **What kind of returns can I expect from a college town multifamily investment?**
Returns vary by market, but college town multifamily investments typically generate **strong cash flow due to consistent demand** and the ability to increase rents with each lease cycle. In some cases, cap rates are slightly compressed due to the low vacancy risk, but value-add opportunities and long-term appreciation still offer competitive ROI.
### **Should I rent to undergraduate students or target graduate students and faculty?**
That depends on your risk tolerance and property type. Undergraduate renters may be more transient and require higher maintenance, but there is typically more volume. Graduate students, faculty, and university staff often stay longer, take better care of the unit, and are willing to pay more for upgraded or quieter living environments.
### **Are there special property management companies for college town rentals?**
Yes. Many markets have **property managers who specialize in student housing or college town rentals**. These firms are familiar with academic leasing cycles, move-in/move-out timing, roommate matching, and handling guarantors. If you’re not local to the market, working with one of these specialists is highly recommended.
### **When is the best time to lease apartments in a college town?**
The peak leasing season typically runs from **January to April** for the following academic year, depending on the school. In some markets, students sign leases 6–9 months in advance. Missing this window could result in vacancies until the next cycle, so pre-leasing and early marketing are essential.
### **What should I look for when evaluating a college town investing market?**
Look at the school’s enrollment trends, funding levels, endowment size, dorm capacity, housing demand, and local zoning regulations. A growing or stable university with limited on-campus housing and strong local job support (e.g., medical centers or research parks) is a good sign for long-term rental demand.
*Disclaimer: This article was written by the help of AI and reviewed by Rod’s team. Always consult a licensed professional.*
**Categories:** Blog, Due Diligence, Property Management, Real Estate
**Tags:** apartment investing, business structures, expenses, investing, investor mistakes, landlord, multifamily, multifamily investment, multifamily property investing, multifamily real estate, real estate, real estate investing, real estate podcast, Rod Khleif
---
### [Why You Should Invest In Multifamily Real Estate | Rod Khleif](https://rodkhleif.com/why-you-should-invest-in-multifamily-by-rod-khleif/)
**Published:** August 24, 2025
**Author:** Rod Khleif
**Excerpt:** Why You Should Invest In Multifamily by Rod Khleif
**Content:**
## The Power of Multifamily Investing
If you’re considering real estate investing, you’ve likely thought about buying single-family homes and renting them out for cash flow. While that can be a viable option, there’s an even stronger wealth-building strategy that many investors overlook: multifamily real estate. Multifamily investing allows you to **scale faster, reduce risk, and create long-term financial security.** If you’re serious about building lasting wealth, here’s why you should invest in multifamily real estate.
## 1. Multifamily is More Scalable Than Single-Family Rentals
Many new investors start with single-family rentals, but they quickly realize how difficult it is to scale. Managing 10 rental homes in different locations is far more challenging than owning one 10-unit apartment complex in a single location.
**Key benefits of multifamily over single-family:**
- **Easier to manage:** Everything is in one place, reducing maintenance and management costs.
- **Stronger cash flow:** A single vacancy in a house means zero income, while a vacancy in a multifamily property is offset by other units still generating rent.
- **Faster portfolio growth:** Buying one apartment complex with 20 units is easier than buying 20 separate houses.
If you’re looking to build a real estate portfolio quickly, multifamily investing offers a smoother, more efficient path.
## 2. Multifamily Properties Hold Up Better in Market Downturns
Many investors don’t realize that multifamily properties are more recession-resistant than single-family homes. I learned this firsthand during the 2008 financial crash when I owned 800 houses and multiple apartment complexes in Florida.
My single-family rentals struggled. When tenants left, I still had to cover taxes, insurance, and maintenance, often at a loss.
My multifamily properties, however, kept cash flowing. While rents adjusted slightly, demand for apartments remained strong.
During economic downturns, people often downsize from homeownership or high-end rentals into more affordable apartment housing. Multifamily properties continue generating income, even in challenging market conditions.
## 3. Multifamily Properties Offer Better Financing & Tax Advantages
One major advantage of investing in multifamily real estate is better access to financing and tax benefits.
**Financing advantages of multifamily:**
- Banks focus more on the property’s income, not just your personal finances.
- You can qualify for larger loans based on the property’s cash flow.
- You can bring in partners to help meet lending requirements.
**Tax benefits of multifamily investing:**
- **Depreciation & cost segregation:** Allows you to offset rental income with tax deductions.
- **1031 Exchange:** Lets you defer capital gains taxes when reinvesting profits into a larger property.
- **Mortgage interest deductions:** Reduce your taxable income.
Many investors pay little to no taxes because of the powerful tax strategies available in multifamily real estate investing.
## 4. Multifamily Investing is a Team Sport! You Don’t Have to Do It Alone
One of the **biggest myths in real estate** is that you need perfect credit, tons of cash, or years of experience to invest in multifamily properties. The truth is, multifamily investing is a team sport.
If you have:
- **Strong credit but not enough cash:** You can bring in equity partners.
- **Cash but no experience:** You can partner with an experienced operator.
- **No credit or cash but strong networking skills:** You can find deals and bring them to experienced investors.
Banks look at both the property’s ability to generate income and the experience of your team, which means you can leverage partnerships to qualify for larger deals.
## 5. The Stability & Long-Term Cash Flow of Multifamily Real Estate
Unlike house flipping or short-term rentals, multifamily real estate investing provides predictable, long-term income.
With house flipping, every January 1st, you start from scratch.
With multifamily properties, every 1st of the month, you have rent checks coming in.
This is what makes multifamily real estate the **ultimate vehicle for financial freedom.** Instead of constantly chasing new deals, you build a portfolio that generates passive income for decades.
## How to Get Started in Multifamily Investing
If you’re considering real estate investing, the best way to get started is by learning from experienced investors who have already built successful portfolios.
**One of the most recognized names in multifamily real estate investing is Rod Khleif.** With over 40 years of experience, 2,000+ units owned, and students who collectively own over 260,000 multifamily units, Rod is one of the most respected real estate mentors in the industry.
His coaching and training programs have helped thousands of investors:
- Find & fund high-performing real estate deals
- Scale their portfolios efficiently while minimizing risk
- Achieve financial freedom through strategic multifamily investing
**Interested in learning directly from Rod?** Check out his free real estate coaching resources.
## Final Thoughts: Why Multifamily is the Smartest Way to Invest in Real Estate
If you’re serious about real estate investing, multifamily properties offer the best combination of cash flow, scalability, and long-term stability.
- Easier to manage than single-family rentals.
- More stable than flipping or short-term rentals.
- Provides better financing and tax advantages.
## **FAQ: Multifamily Real Estate Investing**
**Q: Why should I choose multifamily investing over single-family homes?
A: Multifamily allows you to scale faster, reduce risk, and manage properties more efficiently. One building with 10 units is far easier to oversee than 10 houses spread across different neighborhoods—and it typically cash flows better, too.
**Q: Isn’t multifamily investing too expensive for beginners?
A: Not at all. Multifamily is a team sport. You can partner with others to bring in capital, experience, or credit. Many of our students have closed their first deal by leveraging strategic partnerships and creative financing.
**Q: How does multifamily perform during a recession?
A: Historically, multifamily has outperformed other asset classes during downturns. When the economy dips, people still need a place to live—often downsizing from homes into apartments. That demand keeps rents relatively stable and units filled.
**Q: What financing options are available for multifamily investors?
A: Multifamily loans are based more on the asset’s income than your personal credit. That means if the deal makes sense, lenders are interested. You can also access larger loans, partner up, and take advantage of non-recourse financing options.
**Q: What are the tax benefits of multifamily investing?
A: Multifamily comes with some of the strongest tax advantages in real estate. You can use depreciation, cost segregation, 1031 exchanges, and mortgage interest deductions to reduce your taxable income—many investors pay little or no taxes legally.
**Q: How do I start investing if I have no experience?
A: Start by educating yourself, building your network, and aligning with a mentor or experienced operator. You can also start small with a duplex or fourplex, or even join a syndication as a passive investor to get in the game and learn from the inside.
**Q: Do I need a property manager for multifamily?
A: For small properties, you might self-manage in the beginning. But once you scale, hiring a professional property management company will free your time and ensure operations run smoothly. It’s a smart move that allows you to grow faster.
**Q: What’s a good first step to take right now?
A: Tune in to my podcast, “Lifetime CashFlow Through Real Estate Investing,” and download our free guide to multifamily investing. Surround yourself with like-minded people, get clear on your goals, and take that first step. You’re closer than you think.
**Q: How do multifamily returns compare to flipping houses?
A: Flipping is transactional. You get paid once, then you start over. Multifamily creates consistent monthly income and long-term equity growth. It’s the difference between a one-time check and a lifetime of cash flow.
**Q: How long does it take to see results in multifamily investing?
A: With the right guidance and massive action, I’ve seen students close their first deal in 6–12 months. The key is to stay focused, stay educated, and stay connected to a proven system.
Want to start investing in multifamily real estate?
[Check out Rod Khleif’s podcast to learn even more!](https://rodkhleif.com/lifetime-cashflow-podcast/)
*Disclaimer: This article was written with the help of AI and reviewed by Rod and his team.*
**Categories:** Blog
**Tags:** Driving Force, motivation, real estate, real estate investing, Rod Khleif
---
### [Recourse vs. Non-Recourse Multifamily Financing: What’s the Difference?](https://rodkhleif.com/recourse-vs-non-recourse-multifamily-financing-whats-the-difference/)
**Published:** September 14, 2025
**Author:** Rod Khleif
**Excerpt:** Nobody goes into a multifamily investment expecting to default on their mortgage.
**Content:**
# **Recourse vs. Non-Recourse Multifamily Financing: What’s the Difference?**
When you’re investing in multifamily real estate, the financing you choose shapes not only the deal but also your personal risk. One of the most important distinctions is whether your loan is recourse vs. non-recourse. These terms might sound technical, but they boil down to a critical question: if things go wrong, how much is truly on the line for you as the borrower?
This article breaks down the difference, the pros and cons of each, and how to decide which path fits your strategy.
## **What Is Recourse Financing?**
A recourse loan allows the lender to claim more than just the property. If the borrower defaults the lender has the right to pursue your personal assets. This means they can seize and sell items such as your bank accounts, wages, or even other properties.
Because you are personally liable, community banks and smaller lenders often prefer recourse debt. These loans may come with more flexible loan terms, sometimes even a lower interest rate than their nonrecourse counterparts.
However, the tradeoff is significant: if the property underperforms, the lender to seize your assets is a real risk.
## **What Is Non-Recourse Financing?**
A non-recourse loan is structured differently. Here, the lender’s claim is limited to the property itself. If the deal goes bad, they can [foreclose](https://rodkhleif.com/podcasts/ep-207-glenn-gonzales-from-maintenance-man-to-4000-unit-owner/), but they can’t come after your personal assets in most cases.
There are exceptions known as “carve-outs” or “bad boy guarantees.” These apply if the borrower commits fraud, mismanages funds, or files for bankruptcy in bad faith. Outside of those scenarios, your personal liability is shielded.
Non-recourse loans are usually provided by agencies like [Fannie Mae](https://www.fanniemae.com/) and [Freddie Mac](https://www.freddiemac.com/home). They can also come from commercial mortgage-backed securities (CMBS) or insurance companies. They’re common in larger, institutional-level deals.
## **Key Differences at a Glance**
- Liability: Recourse extends to personal assets; non-recourse is limited to the property.
- Qualification: Recourse loans are more accessible for smaller borrowers; non-recourse requires stronger experience, net worth, and liquidity.
- Loan size: Recourse is typical in smaller deals; non-recourse dominates larger ones.
- Risk profile: Recourse increases personal exposure; non-recourse shifts more risk to the lender.
A side-by-side comparison can make the contrast clear:
**Feature**
**Recourse**
**Non-Recourse**
Liability
Personal + property
Property only (with carve-outs)
Borrower Requirements
Lower
Higher
Common Source
Local banks
Agencies, CMBS, life companies
Typical Deal Size
Small to mid
Larger, institutional
## **Pros and Cons of Recourse Financing**
**Pros
- Easier approval process.
- Can come with better terms such as lower interest rates.
- Often used by community banks that value relationships.
**Cons
- Full personal liability if the property underperforms.
- Potentially limits growth when scaling a portfolio.
- Riskier for long-term investors who want [asset protection](https://rodkhleif.com/podcasts/ep-293-clint-coons-strategies-for-multifamily-asset-protection/).
## **Pros and Cons of Non-Recourse Financing**
**Pros
- Protects personal assets outside the deal.
- Attractive to institutional investors and equity partners.
- Frees your balance sheet, allowing you to pursue multiple deals.
**Cons
- Higher borrower requirements for net worth and liquidity.
- [Stricter underwriting](https://rodkhleif.com/commercial-real-estate-underwriting-tool/) and often higher fees.
- Carve-outs still expose you if misconduct occurs.
## **Which Option Is Right for You?**
Your choice depends on where you are in your investing journey.
For newer investors working with smaller properties or local banks, recourse loans may be the only option—and they can still make sense if the numbers are strong. The key is to weigh whether the risk to your personal assets is worth the deal.
For experienced operators, syndicators, or those raising capital, non-recourse is usually more attractive. Not only does it protect you personally, but it also reassures investors that their risk is tied to the property, not your personal balance sheet.
Ultimately, the right decision depends on experience, deal size, risk tolerance, and long-term goals.
## **Common Misconceptions**
- Non-recourse doesn’t mean zero risk. Carve-outs still exist.
- Recourse isn’t always bad. Sometimes, it’s the only way to get favorable terms on a smaller deal.
- Bigger isn’t always better. Just because non-recourse loans are used in large transactions doesn’t mean they’re right for every investor.
The difference between recourse and non-recourse multifamily financing comes down to who shoulders the risk if the deal falls apart. Recourse puts your personal assets on the line. Non-recourse ties liability to the property itself.
Both loan types have their place in the investing world. The smartest move is to understand how each impacts your personal risk and your business strategy, then choose the option that aligns with your goals.
## Want to Learn More About Multifamily?
If you want to invest in multifamily properties, you need to learn about types of loans and financing options. Recourse and non-recourse loans are just the beginning. The real difference-maker is having the right education, mentorship, and network behind you.
That’s why so many investors turn to Rod Khleif’s Warrior Program. With thousands of units closed by members, billions in wealth created, and a community that supports each other through every deal, it’s one of the most proven mentorship ecosystems in the industry.
Whether you’re just getting started or ready to scale, you don’t have to figure it out alone. Learn the strategies, connect with like-minded investors, and shorten your learning curve dramatically.
\[Learn more about the [Warrior Program](https://rodkhleif.com/rod-khleif-warrior-program/) and how it can help you grow your portfolio.\]
## **Frequently Asked Questions**
**What is the main difference between recourse and non-recourse financing?
Recourse loans allow lenders to pursue your personal assets if the property doesn’t cover the debt. Non-recourse loans limit the lender’s claim to the property itself, with carve-out exceptions.
**Are non-recourse loans risk-free?
No. While they protect your personal assets, carve-outs still apply if there’s fraud, misrepresentation, or bad-faith actions.
**Why would a borrower choose a recourse loan?
Recourse loans are often easier to qualify for, can offer better terms, and are common for smaller deals with community banks.
**Who typically qualifies for non-recourse loans?
Experienced operators, sponsors with a strong track record, and borrowers who meet strict net worth and liquidity requirements.
**Do non-recourse loans cost more?
They often come with higher fees, stricter underwriting, and sometimes slightly higher interest rates, but they can also unlock larger, institutional-level financing opportunities.
**Which loan type is better for syndicators: recourse or non-recourse?
Non-recourse is usually more attractive to syndicators and investors since it limits liability to the property, not personal assets.
**Categories:** Blog, Featured, Raising Capital, Real Estate
**Tags:** apartment investing, business structures, Driving Force, investing, investor mistakes, landlord, motivation, multifamily, multifamily investment, multifamily property investing, multifamily real estate, non-recourse loan, real estate, real estate investing, real estate podcast, recourse loan, Rod Khleif
---
### [Why Debt Free Isn’t Always Good 2025](https://rodkhleif.com/the-liability-of-equity-why-debt-free-isnt-always-the-way-to-be/)
**Published:** September 12, 2025
**Author:** Rod Khleif
**Excerpt:** The Liability of Equity: Why Debt-Free Isn’t Always the way to Be
**Content:**
# The Liability of Equity: Why Debt Free Isn’t Always Good
Most financial gurus say it over and over again: *“Debt is slavery. Get rid of it as fast as you can.” And when it comes to consumer debt, they’re absolutely right. High-interest credit cards, payday loans, and personal debt can choke out financial freedom and keep you trapped in survival mode.
But here’s the truth most people never hear: real estate debt is different.
If you’re a multifamily investor, being completely debt-free may not only slow down your growth — it can actually make you more vulnerable. In 2025, when market dynamics are shifting fast, you need to understand how equity itself can create liability.
## Why Debt Gets a Bad Rap
Debt has earned its reputation the hard way.
- Consumer debt carries sky-high interest rates and funds depreciating assets.
- It often grows faster than people can pay it down.
- It creates stress, anxiety, and limited financial choices.
That’s why gurus like Dave Ramsey preach the “pay it all off” message. And for the average American drowning in credit card balances, that’s the right advice.
But when you move into the world of investment-grade assets, the game changes.
## Real Estate Debt: A Different Animal
Unlike consumer purchases, real estate is an appreciating, income-producing asset. Tenants cover the debt service. The property grows in value over time. The tax code rewards you for using financing strategically.
Let’s take a quick example:
- If you have $100,000 in cash and buy one small property outright, you control one asset.
- But if you use that same $100K as 25% down payments, you control $400,000 in real estate.
- Those four units generate more cash flow, spread your risk, and give you multiple paths to grow.
That’s the power of [leverage](https://rodkhleif.com/product/finding-deals-course/). Used wisely, it builds wealth faster and provides layers of protection.
## The Hidden Liability of Equity
Here’s where it gets interesting but dangerous.
Imagine this: You’ve owned a multifamily property for 10 years. It’s now worth $450,000, and you’ve paid off the mortgage. You’re feeling debt-free, stress-free, and in control.
Then disaster strikes.
A tenant slips on a broken stair, suffers a serious injury, and racks up hundreds of thousands in medical bills. Yes, you have insurance but lawsuits move fast, and damages can exceed policy limits. Suddenly, that $450,000 in equity makes you a big target. Attorneys see the free-and-clear property and go after it.
Now flip the scenario:
If that same property was financed at 80% loan-to-value, you’d only have $90,000 in equity. Far less tempting for a lawsuit. Even if the tenant won, your loss would be contained. This is the paradox: sometimes equity itself creates liability.
## Structuring for Protection
So how do successful investors balance protection and growth?
### 1. Use Proper [Entity Structures](https://rodkhleif.com/quick-guide-business-structures-real-estate-investors/)
- Put each property in its own LLC.
- Keep accounting and operations completely separate.
- This prevents a court from “piercing the corporate veil” and dragging in unrelated assets.
### 2. Don’t Skimp on Insurance
- Maintain strong property coverage.
- Add an umbrella liability policy for overflow protection.
- In 2025, insurance premiums have risen, but this is not an area to cut corners. It’s cheaper than losing a lawsuit.
### 3. Carry the Right Kind of Debt
- Leverage protects your equity and spreads risk.
- Favor non-recourse loans, where the property secures the note and [lenders](https://rodkhleif.com/get-your-deal-approved-understanding-how-a-lender-underwrites-a-multifamily-loan-request/) can’t come after your personal assets.
Debt on paper may look like a liability. In practice, it can be one of your strongest shields.
## How Leverage Maximizes Growth
Beyond protection, leverage allows you to scale your portfolio faster.
- Expand your reach: Instead of tying all your cash into one property, you can own several.
- Spread your risk: A vacancy or expense on one property doesn’t sink your entire portfolio.
- Boost your returns: [Value-add](https://rodkhleif.com/the-5-best-ways-to-add-value-to-a-property-and-increase-the-noi/) improvements and refinancing opportunities multiply wealth.
In 2025, with interest rates still fluctuating and inflation pressuring operating expenses, liquidity and leverage are critical tools. Savvy investors keep their equity working and not sitting idle.
## Common Misconceptions About Being “Debt-Free”
Let’s bust a few myths.
**Myth**: Debt-free equals safer.
*Reality:* Without financing, your equity is exposed, and you miss opportunities to scale.
**Myth**: Paying down loans faster always builds wealth.
*Reality:* Paying off debt early may feel good, but it limits your buying power and reduces ROI.
**Myth**: Investors with no debt have more freedom.
*Reality:* The opposite is true. Leveraged investors often have more options, more liquidity, and more paths to growth.
## Action Steps for Investors in 2025
1. Fix deferred maintenance. The best lawsuit prevention is safe, well-managed properties.
2. Maintain optimal leverage. A 60–75% loan-to-value ratio is often the sweet spot.
3. Build relationships with lenders. [Non-recourse terms](https://rodkhleif.com/recourse-vs-non-recourse-multifamily-financing-whats-the-difference/) give you peace of mind.
4. Reposition idle equity. Consider cash-out refinances or strategic redeployment.
5. Surround yourself with mentors and peers. Join accountability groups and masterminds to stay sharp and supported.
## Conclusion
So, is all debt bad? Absolutely not.
- Consumer debt: bad.
- Strategic real estate debt: a powerful tool to grow, protect, and multiply wealth.
Being debt-free might sound attractive, but in real estate, too much equity can expose you to risk and slow your journey to financial freedom.
If you want to learn how to use financing the right way, structure your business for protection, and grow a resilient portfolio, check out my free book [*How to Create Lifetime Cash Flow Through Multifamily Properties.*](https://rodkhleif.com/lcfa-ebook/)
And if you’re ready to go deeper, join us at the next [Multifamily Bootcamp](/bootcamp/) or apply for mentorship through the Warrior Program — where thousands of investors are scaling, protecting, and thriving together.
[](/bootcamp/)
Remember: the real liability isn’t debt. It’s equity sitting idle and unprotected.
## **Frequently Asked Questions (FAQ)**
**Is all debt bad for real estate investors?
No. Consumer debt is generally harmful, but properly structured real estate debt can increase buying power, diversify risk, and protect equity while improving returns.
**Why can being debt-free increase my liability?
Equity that sits unencumbered is an attractive target in lawsuits. Moderate leverage reduces exposed equity and can make claims less appealing while keeping loss severity contained.
**What is a healthy loan-to-value (LTV) range in 2025?
For stabilized multifamily, many operators target 60–75% LTV to balance cash flow, reserves, and flexibility. Your optimal LTV depends on asset quality, DSCR, rate terms, and business plan.
**What is non-recourse debt and why do investors prefer it?
Non-recourse loans limit the lender’s remedies to the collateral, protecting your personal assets if the deal underperforms. Carve-outs (fraud, bad acts) still apply, so operate cleanly.
**Should I put each property in its own LLC?
Many investors isolate assets by holding each property in a separate LLC to prevent cross-contamination of liabilities. Keep books, bank accounts, and contracts cleanly separated to protect the corporate veil.
**How much insurance coverage should I carry?
At minimum: strong property and liability policies per asset plus an umbrella policy sized to your portfolio risk. Work with a broker experienced in multifamily; don’t skimp on limits or endorsements.
**Is it smarter to pay down my mortgage faster or buy more units?
If returns on new acquisitions exceed the after-tax benefit of prepayments (and your risk is managed), redeploying capital into more units usually compounds wealth faster than early payoff.
**How does leverage affect cash flow and risk?
Leverage boosts returns but raises debt service and interest-rate exposure. Use fixed or rate-capped debt, maintain DSCR > 1.25x, and hold ample reserves for CapEx and rate shocks.
**What financing terms matter most in 2025?
Focus on rate (fixed vs. floating with caps), amortization, IO period, prepayment penalties, DSCR covenants, and flexibility for value-add/refi. Structure terms to match your business plan timeline.
**When should I refinance or do a cash-out refi?
Consider refi after NOI growth or market cap-rate compression improves value and DSCR. Ensure new debt is accretive: post-refi cash flow remains healthy and proceeds fund durable growth, not consumption.
**Does higher leverage always mean better returns?
Only up to a point. Excess leverage can thin DSCR, limit reserves, and force capital calls in downturns. Target the LTV where risk-adjusted returns and resilience are strongest, not just IRR optics.
**How do I protect against lawsuits beyond LLCs?
Fix hazards quickly, document inspections, train vendors, keep tenant communications professional, and maintain strong insurance with umbrella coverage. Good operations are the first defense.
**What reserves should I keep in 2025?
Common practice: 6-12 months of debt service and operating expenses for stabilized assets, plus a CapEx reserve aligned to your renovation plan and asset age. Lenders may also require replacement reserves.
**Are non-recourse loans available to smaller operators?
Yes, through agency lenders, select banks, and debt funds—often with experience, net-worth, and liquidity requirements. Strong sponsors or experienced partners can help you qualify.
**Is this legal or financial advice?
No. This is for educational purposes only. Consult your attorney, CPA, and licensed loan professionals to tailor structures, entities, and financing to your situation and jurisdiction.
*Disclaimer: This post was made with the help of AI and reviewed by Rod’s team. Always do your own research and consult licensed professionals.*
**Categories:** Blog, Property Management, Psychology of Success, Real Estate
**Tags:** apartment investing, Driving Force, investor mistakes, motivation, multifamily, multifamily investment, multifamily property investing, multifamily real estate, real estate, real estate investing, real estate podcast, Rod Khleif, seller financing
---
### [San Antonio Leads the Nation in Population Growth](https://rodkhleif.com/san-antonio-number-one-in-the-us-in-population-growth/)
**Published:** March 18, 2025
**Author:** Graciela
**Content:**
## Here’s Why Multifamily Investors Should Take Notice
San Antonio is booming! According to the U.S. Census Bureau, San Antonio ranked #1 among the nation’s 35 largest cities for domestic migration in 2023, with 30,379 people relocating from other states. And, this surge is no fluke. Since 2020, the city has grown by an impressive 5.27% Now it’s the 3rd fastest growing metropolitan area in the country.
For multifamily investors, this is the kind of trend you can’t afford to ignore. A rising population means rising demand for rental housing. When you combine that with job growth, affordability, and top-tier amenities, you get a perfect storm for cash-flowing multifamily investments.
## 
## Why San Antonio Is a Magnet for Migration
San Antonio is attracting families, professionals, and businesses from across the country. But what’s driving this growth?
### 1. A Thriving Job Market
The city boasts a diverse and expanding economy, with industries such as healthcare, cybersecurity, aerospace, manufacturing, and military sectors fueling job creation. Major employers like USAA, H-E-B, Valero, and Toyota continue to expand, bringing stability and upward mobility for residents.
With strong employment opportunities, people are moving to San Antonio not just for a fresh start but for long-term career prospects and economic stability, which is a key driver for sustained rental demand.
### 2. Affordable Housing in a Major Metro
Unlike cities like Austin, Dallas, or California’s overinflated markets, San Antonio still offers affordable living. The median home price remains below national averages, making it one of the last major cities where people can live comfortably without breaking the bank.
For multifamily investors, affordability is a goldmine. High home prices push more people toward renting, increasing occupancy rates and keeping rental income strong.
### 3. Big-City Amenities Without the Big-City Hassle
San Antonio is the best of both worlds. It’s a vibrant urban lifestyle without the congestion and high costs of cities like New York, Los Angeles, or Chicago. Residents enjoy:
✔ A strong arts and culture scene with historic landmarks, museums, and theaters
✔ Premier entertainment & sports (Go Spurs!)
✔ Outdoor and recreational attractions (River Walk, parks, golf courses)
✔ Top-tier education options with excellent public and private schools
Quality of life is one of the biggest factors driving migration trends, and San Antonio delivers in every category.
## What This Means for Multifamily Investors
Now, here’s where things get really exciting for investors.
Multifamily Market Group (MMG) projects that demand will significantly outpace new supply through 2025 and 2026. That’s right, net absorption is increasing, and vacancy rates are set to drop.
✔ More people = More renters
✔ Limited supply = Higher rental rates
✔ Strong job market = Lower tenant turnover
This dynamic creates a prime opportunity for savvy multifamily investors to acquire assets in a high-growth, high-demand market.
## Our Latest San Antonio Acquisition—Why We’re All In
We’ve loved San Antonio’s multifamily market for years. Since acquiring our first asset three years ago, we’ve been actively searching for the right deal to expand our portfolio.
We’ve been patient—bidding conservatively, underwriting rigorously, and waiting for the perfect opportunity. And now, we’ve landed it.
We are thrilled to announce that we’ve secured The Regatta, a prime multifamily asset in a fantastic location. This property features large units, incredible value-add potential, and an opportunity to restore it to top-tier status.
Even better? Having another property under our management umbrella allows us to leverage our market knowledge, operational efficiencies, and local expertise.
This is exactly the kind of high-growth, high-reward opportunity we look for, and San Antonio’s booming market made it an easy decision.
## Final Thoughts: Why You Shouldn’t Sleep on San Antonio
For multifamily investors, timing is everything—and San Antonio is a market you should be watching closely. With:
✔ Nation-leading population growth
✔ A strong job market fueling demand
✔ Affordable housing that keeps rental markets strong
✔ A limited supply of new apartments, driving rent appreciation
…San Antonio is positioned to be one of the hottest multifamily investment markets in the coming years.
If you’re serious about scaling your multifamily portfolio, you need to be strategic, proactive, and ready to capitalize on opportunities before the masses catch on.
### **The #1 Multifamily Investing Event!**
[](https://rodkhleif.com/bootcamp/)
**Ready to Build Your Multifamily Empire? 🚀**
Join [**Rod Khleif’s Multifamily Bootcamp**](https://www.rodkhleif.com/bootcamp/), the top event for serious investors, where expert investors answer your questions and share proven strategies. Learn directly from industry leaders and take your investing to the next level!
🎟 **Reserve Your Spot Now!**
**Categories:** Blog, Real Estate
---
### [Office to Apartments: Realities of Conversions](https://rodkhleif.com/office-to-apartments-realities-of-conversions/)
**Published:** March 24, 2025
**Author:** Graciela
**Content:**
## Converting Offices to Apartments: Benefits and Barriers
You’ve probably noticed empty office buildings sitting idle in your city. With national office vacancy rates climbing to 18.6%, and Morgan Stanley estimating a massive housing shortage of 5-6 million units, repurposing office buildings into apartments seems like a no-brainer. These conversions not only increase housing supply but also rejuvenate downtown districts and enhance local tax revenues. Yet, why aren’t more of these conversions happening?
### Current Trends in Office-to-Apartment Conversions
Across the U.S., about 120 office-to-apartment conversions (often called O2R) are currently underway. Once completed, these will produce roughly 31,000 new apartments. Between 2016 and 2023, there were about 45 conversions per year on average, generating approximately 22,000 apartments total. Although this is an increase from previous years, when compared to the 500,000 new apartments built annually, conversions represent just around 1% of the total supply. Clearly, this strategy isn’t having the widespread impact many hoped it might.
### The Ideal Buildings for Apartment Conversion
A critical barrier limiting conversions is the lack of suitable office buildings. According to CBRE, ideal conversion candidates typically:
- Are smaller buildings, less than 14,000 sq. ft. per floor
- Were constructed before 1980
In successful conversions studied by CBRE, the median building was constructed around 1941, with approximately 13,000 sq. ft. per floor. Unfortunately, only about 1.1% of office spaces in the U.S. fit this “small, old, downtown” criteria. Modern office buildings, usually built after 1980, tend to have larger floor plates that don’t allow sufficient natural light to reach interior spaces—making apartment conversions impractical.
For perspective, in Manhattan, CBRE identified only 18 buildings meeting these specific criteria as viable conversion candidates.
### Why Office-to-Apartment Conversions Often Don’t Add Up Financially
Beyond finding suitable buildings, financial feasibility remains a significant obstacle. According to CBRE:
- New apartment construction typically costs around $588 per sq. ft.
- Converting an existing office to apartments averages $685 per sq. ft.
The higher cost of conversions primarily stems from:
- Acquisition expenses
- Architectural redesign and code compliance
- Major alterations to plumbing, electrical, and HVAC systems
- Installation of residential partitions and finishes
Moreover, office leases typically last longer than residential leases, complicating and increasing the cost of vacating these properties for conversion.
### Cities Encouraging Office-to-Apartment Conversions
Despite these challenges, several municipalities are recognizing the benefits and actively encouraging conversions. For example:
- **New York City** launched the “Office Conversion Accelerator Program,” providing guidance through complex regulatory processes and building codes. NYC is also revising zoning laws to simplify conversions.
- **San Francisco** recently passed legislation exempting office-to-apartment conversions from transfer taxes, aiming to incentivize property owners.
Yet, without more substantial government incentives, widespread conversions remain unlikely.
### Will Conversions Help Solve the Affordable Housing Crisis?
Unfortunately, conversions currently show limited potential to alleviate affordable housing shortages. High conversion costs and limited suitable properties mean developers typically target high-end apartments rather than affordable units. Unless significant financial incentives or subsidies become available, it’s improbable that conversions will significantly impact affordable housing shortages.
Converting offices into apartments holds appealing promise for cities and developers alike. Still, structural and economic challenges make broad adoption difficult. While a valuable tool in multifamily investing, office-to-apartment conversions require careful evaluation and realistic expectations.
Investors and municipalities must align incentives and regulations clearly to fully realize conversions’ potential benefits.
**Categories:** Blog, Real Estate
**Tags:** House Hacking Real Estate, multifamily investing, Real Estate Course
---
### [National Rent Control - Is Rent Control Good or Bad?](https://rodkhleif.com/national-rent-control-good-or-bad/)
**Published:** January 20, 2025
**Author:** Graciela
**Content:**
## **National Rent Control: Is Rent Control Good or Bad?**
The concept of rent control often sparks debate, particularly among investors concerned about rental property profitability and long-term sustainability. National rent control introduces uncertainty and risk for landlords, impacting the housing supply and overall rent price trends.
With the current administration proposing a nationwide 5% rent cap, it’s critical to assess the benefits, drawbacks, and economic impact of such policies. The proposal specifically targets corporate landlords with 50 or more units, requiring them to cap rents at 5% annual increases or forfeit certain tax benefits.
Although the full details of the plan are still unclear, it is expected that any national rent stabilization policy would resemble existing state and local rent control laws. This raises important questions: does rent control work? What are the effects on housing supply? **Is rent control good or bad for long-term affordability?** Let’s break it down.
## **The Advantages of Rent Control: How It Benefits Owners and Tenants**
### **Owner Perspective: Leveraging Rent Caps and Market Trends**
A 2018 study by economists Diamond, McQuade, and Qian (DMQ) analyzed the effects of a 1995 rent control policy in San Francisco. The research found that tenants were 8% less likely to move after rent stabilization was enacted.
However, this also led to a 15% reduction in available rental units as landlords converted properties into condominiums. With lower turnover rates and fewer available apartments, rental prices for non-rent-controlled units surged.
In a rent control scenario, landlords may still see advantages, including:
- **Higher occupancy rates as tenants stay longer**
- **Lower eviction rates due to tenants avoiding market-rate housing**
- **Reduced turnover costs with fewer vacancies**
- **Higher rent increases on new tenant leases, allowing for some revenue growth**
Even under national rent control, investors can capitalize on market shifts by adjusting pricing strategies and benefiting from higher lease rates on new tenants.
### **Example of Value Creation Despite Rent Caps**
Consider a multifamily rental property where:
- Operating expenses typically account for 45% of rental income
- The property generates $1M in rental income, with $450K in annual costs
- A 5% increase in expenses raises costs by $22.5K annually
- If 80% of tenants receive a 5% rent increase and new leases increase by 10%, overall rental income rises by 7% ($70K annually)
- At a 5% CAP rate, this results in a $950K increase in property value, despite rent caps
While rent control limits rental price increases, landlords may still benefit from higher rents on new leases and strong occupancy rates.
### **Tenant Perspective: The Benefits of Rent Control**
For tenants, rent stabilization policies serve as a financial safety net, limiting sharp housing cost increases and preserving affordability.
Key benefits include:
- Predictable rent prices with a 5% annual cap
- Easier long-term budgeting and reduced risk of displacement
- Protection from gentrification-driven rent hikes, ensuring more stable housing costs
For tenants who secure a rent-controlled unit, the policy provides financial security, particularly in high-cost urban markets.
## **The Downsides: Why Is Rent Control Bad?**
### **Owner Perspective: The Challenges of Rent Control Economics**
While rent control economics may benefit tenants, it presents significant challenges for rental property owners.
- Capped rental income growth limits the ability to adjust rents for rising operational costs
- Inflationary pressures and rising expenses (e.g., property taxes, insurance, and maintenance) continue to climb
- Renovation restrictions prevent property owners from repositioning units, affecting value-add investment strategies
In a rent-controlled housing market, investors must shift their focus from short-term rental price appreciation to long-term property appreciation.
### **Tenant Perspective: The Unintended Effects of Rent Control**
While rent stabilization policies provide benefits to existing tenants, they can also lead to negative housing supply issues.
- **Fewer available rental properties** – As shown in San Francisco (DMQ Study, 2018), rental supply declined as landlords converted units into condos or withdrew from the market
- **Higher starting rent prices** – Since landlords cannot freely adjust rents, they often charge higher rates for new tenants to compensate for lost revenue
- **Declining property maintenance** – The same study found that property upkeep suffered, as landlords had little incentive to reinvest in rent-controlled buildings
This raises a crucial question: what are some of the unintended effects of rent control, and how do they impact overall housing quality?
## **The National Rent Control Pros and Cons Debate**
Economists broadly agree that government-imposed price regulations can create unintended consequences. If national rent stabilization policies take effect, it could:
- Reduce new rental property investment due to lower profit potential
- Limit housing supply, causing landlords to exit the market
- Increase market-rate rents, as restricted supply makes available units more expensive
Most multifamily real estate investors model for 3% organic annual rent growth. However, value-add investment strategies often project higher rent increases post-renovation.
Under rent caps, landlords can only raise rents to market rates on vacant units. The biggest risk is low tenant turnover, which can delay renovations and reduce potential returns.
At a national level, policymakers must strike a balance between protecting tenants and incentivizing continued investment in the housing market.
## **Does Rent Control Work?**
The effectiveness of rental policies depends on various factors.
- **For tenants**, rent stabilization ensures predictability and affordability
- **For landlords**, it restricts revenue potential and discourages investment in new housing development
As debates over national policies continue, investors must stay informed and be ready to adapt investment strategies to comply with potential regulatory changes.
## **Final Thoughts: Is National Rent Control Good or Bad?**
The effects of national rent stabilization are complex. There are clear advantages for tenants, but unintended consequences such as shrinking housing supply, increased rental prices for new tenants, and declining property conditions remain concerns.
Economists frequently cite evidence that price controls often lead to housing shortages and quality deterioration.
For real estate investors, understanding rent control economics is critical when making strategic investment decisions. The key question remains: is it good for affordability, or does it discourage new investment and reduce supply?
## **Want to Learn More?**
Explore the latest insights on multifamily investing, rental property economics, and government housing policies on [Rod’s podcast.](https://rodkhleif.com/lifetime-cashflow-podcast/)
**Categories:** Blog, Real Estate
**Tags:** multifamily investing, multifamily real estate, real estate syndication
---
### [Multifamily Insurance: Coverage, Claims, and Risk Mitigation](https://rodkhleif.com/multifamily-insurance-claims-the-good-the-bad-and-the-ugly/)
**Published:** January 10, 2025
**Author:** Graciela
**Content:**
# **Multifamily Insurance: Coverage, Claims, and Risk Management**
Proper insurance coverage for your multifamily property is both essential and costly. According to a recent Yardi report, multifamily insurance costs have risen 28% year over year. On average, insurance costs $636 per unit in the U.S., though rates in high-risk areas such as Miami ($1,405 per unit) and Houston ($1,115 per unit) are significantly higher. Since commercial real estate claims are often complex and subjective, understanding your policy is crucial to ensuring adequate protection in the event of a loss.
### **Risk Mitigation and Preventive Measures**
Before facing an insurance claim, it’s vital to know your coverage details and implement proactive risk mitigation strategies. Regular property maintenance and thorough documentation can prevent costly issues. Keeping updated photos of your buildings and making simple fixes—like replacing rubber washing machine hoses every five years—can help prevent expensive disasters. Additionally, regular fire system inspections and awareness of slip-and-fall hazards can reduce liability risks. Implementing strong preventive maintenance policies can also lower insurance costs and minimize potential losses.
### **Key Components of Multifamily Insurance**
Multifamily property insurance generally includes three main components:
1. **Comprehensive Coverage** – Protects buildings and structures.
2. **Business Interruption Coverage** – Compensates for lost income due to property damage.
3. **Liability Coverage** – Protects against claims from injuries or damages on the property.
> *“The financial interests of insurance companies are best served by convincing policyholders to accept the lowest compensation possible.”* — Forbes
### **Lessons from a Real-World Claim: Fire at Avalon Property**
In April 2023, our Avalon property suffered a devastating fire that destroyed 20 units. This firsthand experience reinforced the importance of having both comprehensive and business interruption coverage. Immediately after the incident, we hired a public adjuster to guide the claims process and ensure that all losses were properly documented and justified.
Public adjusters bring expertise in pricing hidden costs—such as code compliance, engineering fees, and civil requirements—that many property owners might overlook. One critical lesson: **Never begin rebuilding before finalizing the insurance settlement.** Insurance companies frequently deny reimbursement for undocumented expenses, making it essential to agree on costs upfront.
To avoid disputes, our public adjuster compiled a **700-page** estimate using the same software insurance companies use, ensuring every detail—from nails to structural components—was accounted for. This level of documentation left no room for negotiation, securing us a substantial settlement. Additionally, negotiating the **timing of insurance payouts** allowed us to receive a large portion of the funds early in the rebuilding process, keeping our project on track.
### **Business Interruption Coverage: The Hidden Challenge**
Unlike comprehensive coverage, business interruption claims are highly subjective and often take longer to process. Insurers typically require proof of financial losses, which can delay payments. Most policies cover up to **12 months** of lost income, but with longer permitting and construction timelines, this may no longer be sufficient. Consider **extending coverage beyond a fixed period** to avoid gaps in protection.
Another critical detail is ensuring that your policy covers **“actual loss sustained”** rather than a predetermined amount. This ensures that any revenue shortfall is fully accounted for.
If your property was undergoing renovations to increase rents, trailing financials may not reflect the actual financial impact of an event like a fire. In our case, our public adjuster assembled a **forensic accounting team** to reconstruct a pro forma P&L that factored in planned rent increases, seasonal leasing demand, and market trends. This strategy helped us secure a **significantly higher** settlement based on future earning potential rather than past performance.
### **Final Thoughts: Multifamily Insurance as a Critical Investment**
Insurance is a fundamental part of multifamily investing. While you hope never to need it, if you own properties long enough, you will likely face a claim. Understanding **what your policy covers, negotiating stronger terms, and taking preventive measures** can make all the difference in securing your investment and minimizing financial risk.
**Categories:** Blog, Real Estate
**Tags:** multifamily investing, multifamily real estate, Real Estate Course, real estate syndication
---
### [Why Real Estate Investors Need More than Skill](https://rodkhleif.com/mind-over-mechanics-why-real-estate-investors-need-more-than-skill/)
**Published:** September 8, 2025
**Author:** Rod Khleif
**Excerpt:** Mind over Mechanics: Why Real Estate Investors Need More than Skill
**Content:**
## **Mind over Mechanics: Why Real Estate Investors Need More than Skill**
The mechanics of multifamily real estate investment are straightforward.
Funding, analysis, negotiation, due diligence, property management—these are skills anyone can learn. A few books, a mentor, and a willingness to roll up your sleeves are enough to grasp the basics.
So if that’s true, why isn’t everybody a millionaire investor? Why do so many would-be investors flame out before their business ever gets off the ground?
The answer is simple: **mindset.
## **Mechanics Follow Mindset**
You can study underwriting, memorize cap rate formulas, and even sit in on broker calls. But if your mindset says, “I can’t do this,” you’ll never take the leap when opportunity knocks.
Success in real estate begins in your head. A defeatist mentality kills action. A positive, determined mindset fuels it.
Henry Ford put it best: *“Whether you think you can or whether you think you can’t, you’re right.”
That’s why the top investors spend just as much time sharpening their psychology as they do their spreadsheets. The way you think shapes how you show up in the market, how you handle setbacks, and how big you’re willing to dream.
## **Visualization: Seeing Is Being**
When I first started in real estate, I drove an old, ugly Ford Granada. I hated that car. So I taped a picture of a red Corvette to the visor. Every time I sat behind the wheel, I saw that photo and imagined what it would feel like to own it.
Years later, I bought that Corvette. Since then, I’ve used visualization to grow my real estate business, build my dream home in Sarasota, and scale into multifamily properties.
This isn’t just my story. In 1985, Jim Carrey wrote himself a check for $10 million and dated it Thanksgiving 1995. Ten years later, he landed his breakout role in *Dumb and Dumber,* for exactly that amount.
Visualization works because it activates your brain’s reticular activating system (RAS). Once you program it with a vision, you begin noticing opportunities that align with it.
**Examples of powerful real estate visualizations:
- Closing on a 100-unit Class A apartment building
- Walking away from your W-2 to focus on investing full-time
- Watching passive income deposits hit your account while sitting on a beach
The easiest way to practice visualization is through a vision board. Gather photos that represent your dream future—properties, vacations, milestones. Pin them where you’ll see them every day. Over time, those images transform from fantasy into blueprint.
## **Goal Setting: Turning Vision into Action**
There’s a Hebrew proverb that says: *“Where there is no vision, the people perish.”* But vision without action is just daydreaming.
That’s why goal setting is the second half of the psychology of success.
Most people drift through life with vague ambitions. They “want to invest someday,” or “hope to quit their job eventually.” But they’ve never written their goals down, much less created a timeline.
High achievers don’t drift. They write clear, measurable goals and break them into actionable steps.
One proven framework is the **SMART method**:
- **Specific
- **Measurable
- **Achievable
- **Relevant
- **Time-Indexed**
**Example SMART goal for an investor:
“Analyze 50 properties that meet my investment criteria in the next 50 days.”
- *Specific:* 50 properties
- *Measurable:* You know whether you analyzed a property
- *Achievable:* One hour per day is realistic
- *Relevant:* Analyzing deals leads to offers
- *Time-Indexed:* 50 days creates urgency
Psychologically, goal-setting creates accountability. It takes a dream off the vision board and roots it in the real world. It also gives you momentum—every completed step builds confidence.
## **The Investor’s Mindset Playbook**
Here’s how to combine visualization and goal-setting into a repeatable success system:
1. **Define your vision.** Create a board with images of your dream lifestyle and portfolio.
2. **Write your goals.** Break the vision down into 1-year, 5-year, and 10-year targets.
3. **Set SMART action steps.** Create daily, weekly, and monthly milestones.
4. **Hold yourself accountable.** Join an accountability group, mastermind, or coaching program where peers will check your progress.
5. **Recalibrate often.** Review your board and goals monthly, adjust if life or markets change.
## **Why Mindset Wins**
The mechanics of real estate are teachable. But the psychology of success is what separates those who talk from those who take action.
If you get your mind right, the mechanics will follow. Visualization shows you what’s possible. Goal setting shows you how to get there. And accountability ensures you keep moving forward, even when things get tough.
Don’t just master the math. Master your mindset. That’s how you’ll build the real estate business—and the life—you dream about.
### **Ready to Level Up?**
- **Podcast:** Listen to the *Driving Force* episodes on [Lifetime CashFlow Through Real Estate Investing](https://rodkhleif.com/lifetime-cashflow-podcast/).
- **Bootcamp:** [Join the Multifamily Bootcamp](/bootcamp/) to surround yourself with peers who push you higher.
- **Coaching:** Explore Rod’s [Multifamily Course](https://rodkhleif.com/multifamily-investing-course/) & [Coaching Program](https://rodkhleif.com/rod-khleif-coaching-program/) for hands-on mentorship.
💡 **Quote to Remember:
*“Your mind is the steering wheel of your destiny. Wherever you focus, you’ll drive.”*
**Categories:** Blog, Psychology of Success
**Tags:** apartment investing, business structures, Driving Force, investor mistakes, landlord, motivation, multifamily, multifamily investment, multifamily property investing, multifamily real estate, NOI, real estate, real estate investing, real estate podcast, Rod Khleif, seller financing
---
### [How Lenders Underwrite Multifamily Loan Requests](https://rodkhleif.com/get-your-deal-approved-understanding-how-a-lender-underwrites-a-multifamily-loan-request/)
**Published:** June 29, 2025
**Author:** Rod Khleif
**Excerpt:** Despite the fact that the approval criteria are remarkably similar, retail banks and lenders are frustratingly inconsistent with their multifamily loan approval decisions. One bank may look at a deal and want nothing to do with it, while another may be happy to lend the money. Naturally, this begs the question, why?
**Content:**
## **Get Your Deal Approved – Understanding How a Lender Underwrites a Multifamily Loan Request**
Despite the fact that the approval criteria are remarkably similar, retail banks and lenders are frustratingly inconsistent with their multifamily loan approval decisions. One bank may look at a deal and want nothing to do with it, while another may be happy to lend the money. Naturally, this begs the question, why?
[read more](https://rodkhleif.com/get-your-deal-approved-understanding-how-a-lender-underwrites-a-multifamily-loan-request/)
To answer that question, we’re going to review 4 key elements of the loan underwriting process and provide actionable advice that’ll put you in the best position to get your multifamily deal approved. Let’s start with the key players involved in the transaction.
**Note**: Real Estate and Multifamily are specialized subjects that contain technical terms. To assist in the understanding of the subject matter contained in this article, we’ve provided a glossary of key terms (in bold) at the end.
## **Understanding the Key Players**
From the point of initial contact, your loan request will pass through several hands before a decision is made; however, only a few of those individuals have critical input into the approval decision.
As a borrower, the first, and sometimes only, person that you’re likely to encounter is the **Relationship Manager**. Their job is to bring in new deals and shepard them through the approval process. They act as your advocate and the most experienced among them know how to “play the game” to get their deals approved. Remember though, they’re sales people and sometimes they can be overly optimistic about your deal’s chances so it’s best to take their words with a grain of salt.
The **Loan** **Underwriter** is the individual responsible for taking the property documentation from the Relationship Manager and “running the numbers” to determine if the cash flow generated by the property is sufficient to repay the proposed loan. They’ll write up their findings in an approval document and forward it to the Credit Officer.
The **Credit Officer** is the decision maker. Typically, they’re a senior executive, have a deep understanding of the bank’s **Credit Policy** and the trust of the board to independently make loan approval decisions. Depending on the size of your request, the loan may have to go through several credit officers before final approval.
As a borrower, it’s unlikely that you’ll have any interaction with the Credit Officer, but they’re the most important person in the approval process. To improve your chances of getting an approval, get to know the Relationship Manager and Underwriter and establish an open dialogue so they can ask you direct questions about the deal.
## **Understanding the Credit Policy**
Whether you’re working with a traditional bank or specialty lender, everyone’s going to be making approval decisions based on a written Credit Policy. Below is an example of a major bank’s multifamily lending policy:
There are three things about this credit policy example worth highlighting:
1. The policy serves as the basis for a Credit Officer’s decision and the best Relationship Managers will know the policy inside and out and guide you towards a structure that fits within the approval framework. Conversely, if there’s no hope of shaping the deal to the approval framework, they’ll be honest and send you elsewhere.
2. There aren’t a lot of specifics with regard to the approval policy. The key aspects such as LTV, DSC, and Term are explicitly defined, but the rest of the terms are subject to interpretation. The “In the Box” column highlights the bank’s preferences, which can change at any given moment. In fact it’s the “In the Box” criteria that are responsible for much of the inconsistency between lenders.
When working with your Relationship Manager, ask them what their Credit Policy approval criteria look like. If your deal doesn’t fit, don’t waste your time.
## **Credit Approval Framework – The 5 C’s of Credit**
Let’s assume your deal makes it through the initial screen and the loan package ends up on the Underwriter’s desk. To evaluate the deal, they’re going to use a specific framework, colloquially known as “The 5 Cs.” Let’s look at each one individually and what they mean for your deal:
### ***Character***
As the borrower, your character is a critical component in the transaction. Are you trustworthy? Do you have a good reputation? Have you successfully repaid loans as agreed in the past? To determine your character, the lender will look at things like credit reports, overdraft activity, and market reputation to ensure you’re a trustworthy borrower.
\[1\] It may not be called “In the Box” with all institutions, but each lender will have some level of stated policy and preferred loan parameters, which are subject to change.
Master the Character component by working hard to get to know your Relationship Manager so that you can demonstrate your trustworthiness. If you have any hiccups in your past such as a bankruptcy or foreclosure, be open about them and be prepared to explain how this request is different.
### ***Capacity***
The Capacity of the property to repay the proposed loan may be the most critical element of the deal and it comes down to one simple question, does the property proforma generate enough cash to repay the proposed loan? To determine the capacity of the deal, the Underwriter will look at a wide array of financial metrics including rents, expenses, reserves, vacancy assumptions, comparable rents, historical performance, and future expectations. They’ll take all of these metrics and create their own repayment model, which may or may not differ significantly from your own.
Master the capacity component by using your understanding of the bank’s credit policy to create a realistic proforma that the bank will accept. Be clear about each line item and how you derived the value. Be conservative in your assumptions and detailed in your analysis. Present your findings in an easy to understand format and be prepared to answer any questions the underwriter may have.
### ***Capital***
How much of your own capital are you injecting into the deal? As a borrower and investor, you’re highly incentivized to use as little of your money as you can get away with. However, the bank wants to know that you’re invested in the deal and that you aren’t going to walk away if things get rough.
Master the capital component by clearly explaining where your equity contribution is coming from and why you’re committed to the deal for the long haul. **NOTE**: There’s an important difference between ***your*** money and investor money that you’ve pooled for an equity contribution. If you’re leading the group, demonstrate to the bank that you’re personally invested in the deal.
### ***Conditions***
This is a little more macroeconomic than deal specific, but the bank is going to carefully consider multifamily market conditions at the time the loan request is made. To assess this, they’ll look at things like rental trends, occupancy rates, job creation, migration patterns, income levels, competition and wage growth.
Master the conditions element by demonstrating to the bank a clear understanding of why the macroeconomic environment and sub-market conditions are favorable for your proposed purchase. Source your data and provide plenty of charts and graphs to support your argument.
### ***Collateral***
Lastly, the bank is going to perform detailed analysis on the proposed to collateral in an effort to answer one question, if you default on the loan and the bank has to liquidate the property, can they do it for enough to repay the outstanding loan balance? To determine this they’ll commission a 3rd party appraisal and take a close look at the intangibles that can make the property attractive to potential buyers. These include things like location, ingress/egress, parking, amenities, security, condition, recent renovations, landscaping, unit mix, and unit layout.
To master the collateral component, put together a document package on your proposed loan that outlines all possible details on the property, including each of the elements mentioned above. In addition, do the research on your competition and come to the lender with a point of view on where your property stacks up against others in the sub-market.
### **Non-deal related considerations**
In some cases, you may present the bank with a deal that meets credit policy, is “in the box” and covers all of the 5-Cs that still gets declined. How? There are two non-deal considerations completely out of your control to be aware of.
If you’re working with a retail bank, they have to abide by regulatory limits on the composition of their loan portfolio and they may not have any room left in their “multifamily bucket” at the time of your application. It has nothing to do with you or your deal, but it could still sink your chances. Be sure to ask your Relationship Manager at the outset if they currently have “appetite” for multifamily deals.
In addition, each lender subscribes to reports, newsletters, and economic forecasts that shape their view of the multifamily market. If the lender you’re working with has a negative outlook on the multifamily asset class in general, there may not be much you can do to change their mind, no matter how good the deal is.
If your deal gets declined, be sure to ask why. If it’s for one of these two reasons, don’t waste your time appealing the decision. Look for another lender to work with.
## **The Gist of Multifamily Lenders**
Remember, at the end of the day you’re dealing with people who have different opinions and institutions that have different policies and regulatory requirements. Both of these factors are at the root of the seemingly inconsistent decision making.
To put yourself in the best position to get the deal approved, invest the time to get to know Relationship Managers from multiple lenders, quiz them on their policy and “in the box” requirements, and push them to be honest. When it comes time to underwrite the deal, remember the “5-Cs” and present the lender with a loan package that is detailed, thorough, presentable, and reasonable.
## **Glossary of Key Terms**
**Relationship Manager**: A lender’s Relationship Manager is their sales person. Their primary job is to originate loans where the borrower and collateral have an acceptable level of risk. If working with a retail bank, it’s also the Relationship Manager’s job to originate new deposit accounts.
**Loan Underwriter**: The Loan Underwriter works in the lender’s credit department and their job is to analyze potential loan transactions, document their risks, and make an initial approval/denial recommendation.
**Credit Officer**: The Credit Officer is a critical role in the loan origination process as they’re the individual who has the ultimate approval/denial authority. Their job is to examine the underwriter’s analysis and decide whether or not to approve a loan request.
**NOTE**: A lender may have several credit officers with varying levels of approval authority. The bigger the deal, the more likely that it’ll have to go through multiple Credit Officers before final approval.
**Credit Policy**: A lender’s Credit Policy is a written document that defines the terms and conditions under which the lender is willing to extend credit. When contemplating their approval/denial decision, it’s the Credit Officers job to do so in compliance with the written Credit Policy.
**Loan To Value (LTV)**: The Loan to Value ratio is the percentage of a property’s appraised value that a financial institution is willing to lend. It’s calculated as the loan amount divided by the property’s value.
**Loan to Cost (LTC)**: The Loan to Cost ratio is the percentage of a property’s cost that a financial institution is willing to lend. It’s calculated as the loan amount divided by the property’s cost. It’s typically used in construction lending where the cost represents the budgeted cost to construct the property.
**Debt Service Coverage Ratio (DSCR)**: The Debt Service Coverage ratio is a metric used to indicate how a property’s cash flow relates to the annual loan payments. It’s calculated as the Net Operating Income divided by the annual loan payments.
**Net Operating Income (NOI)**: Net Operating Income is a measure of a property’s cash flow. It’s calculated as a property’s revenue minus operating expenses.
**Amortization**: Amortization is a tool used to spread a loan’s payments over time. In multifamily lending, it’s expressed as the number of years required to reduce the loan balance to $0, given a defined payment.
**Loan Term:** The Loan Term is defined as the number of months for which loan payments may be made. If a loan is “Fully Amortizing” than the Term and Amortization are the same and the loan balance will be $0 at the end of the term. Iin multifamily lending, it’s common for the Term and Amortization to be different to allow for lower payments (and positive cash flow). But, it also means that there’s a balance at the end of the Term.
**Vacancy**: In multifamily lending, Vacancy is defined as the percentage of unoccupied units and it’s calculated by dividing the number of vacant units by the total number of units in the property. For example, if a property had 100 units and 5 of them are vacant, then the vacancy is 5%.
**Recourse:** If a loan has “recourse,” it means that it requires the personal guarantee of the loan sponsor(s). If a loan is “non-recourse” than no guarantee is required.
**Reserves:** Reserves are monies set aside for future maintenance costs. In multifamily lending, it’s common for a lender to require $250 per unit, per year in reserves.
##### Join Me at
**[MultifamilyBootcamp.com](https://rodkhleif.com/bootcamp)**[](https://rodsbootcamp.com/)
##### **Related quotes to consider:**
**\[[Follow Rod on Instagram for tons of great quotes](https://www.instagram.com/rod_khleif/)\]**
[](https://www.instagram.com/p/B0dvtxCnZBl/) [](https://www.instagram.com/p/Bxu72u7nJz7/) [](https://www.instagram.com/p/Bw7fB02DFxF/)
**Categories:** Blog, Raising Capital
**Tags:** apartment investing, investing, landlord, loan, motivation, multifamily, multifamily investment, multifamily property investing, multifamily real estate, real estate, real estate investing, real estate podcast, Rod Khleif
---
### [Multifamily Property Analysis Guide](https://rodkhleif.com/everything-you-need-to-know-about-multifamily-property-analysis/)
**Published:** July 23, 2025
**Author:** Matt Rohde
**Content:**
In the world of real estate investing, knowledge is power. And it’s not just about buying properties – it’s about making informed decisions that lead to success. To do this, one of the most potent tools in your arsenal is market research.
In this comprehensive article, you’ll learn to explore the intricacies of multifamily real estate, along with actionable insights and strategies to navigate this landscape.
## Understanding the Basics
Let’s start at the very beginning. What exactly is multifamily real estate?
It’s more than just apartment buildings. It’s a dynamic real estate market sector that involves owning and managing properties with multiple residential units. From duplexes to apartment complexes, multifamily real estate offers various options for investors.
### The Importance of Market Research
It’s insufficient to rely on hunches or trends you read about online. You need concrete data and insights to make informed decisions. Real estate finance and investments risk assessment helps you identify opportunities and risks, allowing you to tailor your investments for maximum returns.
### Setting Your Investment Goals
Goal setting isn’t just for life. It’s a crucial step in your real estate journey. What do you want to achieve with multifamily investments? Are you looking for short-term gains or long-term wealth accumulation? Setting clear, achievable goals will shape your investment strategy and keep you on track as you navigate the multifamily market.
## The Foundation of Market Research
In multifamily real estate, knowledge is your superpower. But before diving into market research, you need to lay down a strong foundation.
### Property Types and Classifications
Multifamily properties come in various shapes and sizes, each with advantages and challenges. It’s essential to understand these property types, from duplexes to apartment complexes, and their classifications (core, value-add, opportunistic).
### Assessing Property Condition
You wouldn’t buy a car without checking under the hood, and the same applies to real estate. Assessing a property’s condition involves a meticulous inspection. What’s the state of the building, its systems, and its infrastructure? Is it a fixer-upper or a turnkey investment? Knowing the condition is key to gauging potential returns and risks.
### Calculating Returns and Risks
Real estate investing isn’t a guessing game – it’s a numbers game. Calculate essential metrics like the cap rate, cash-on-cash return, and internal rate of return (IRR). These numbers will help you decide if an investment aligns with your goals.
### Financing Options for Multifamily Properties
Money makes the real estate world go round. Explore various financing options, from traditional mortgages to creative strategies like seller financing. Each option comes with its own set of terms, interest rates, and requirements.
## The Art of Real Estate Market Research
Now, it’s time to put your knowledge into action. Market research isn’t just about crunching numbers. It’s a blend of art and science, requiring you to tap into valuable resources and insights to make informed decisions.
### Utilizing Online Resources
In the digital age, information is at your fingertips. Harness the power of online resources, from real estate websites to databases, to gather crucial data about properties, neighborhoods, and market trends.
### Working with Real Estate Professionals
Networking is a valuable asset in real estate. Build relationships with real estate professionals like agents, brokers, and property managers. These experts can provide insider knowledge and access to off-market deals, giving you a competitive edge.
### Population Dynamics
Understanding population dynamics goes beyond headcounts. To identify your ideal tenant base, delve into their demographics – age, income, and household composition. Are you targeting young professionals, families, or seniors? Tailoring your investment to match the population’s needs is a strategic move.
### Infrastructure Development
Infrastructure investments, like new roads or public transportation, can transform a neighborhood. Try to spot areas undergoing positive changes and harness these developments to your investment’s advantage.
### Government Policies and Regulations
Government policies can make or break your real estate endeavors. Navigate zoning laws, tax incentives, and regulations that can impact your investments. Staying informed about government decisions is like having a weather forecast for your market.
### Identifying Emerging Neighborhoods
The real estate market is ever-evolving, and knowing how to spot emerging neighborhoods with untapped potential allows you to stay ahead of the curve and lead to remarkable returns as these areas develop.
## Real Estate Investment Opportunities
In the multifamily landscape, real estate opportunities come in various flavors, and understanding the spectrum is vital to crafting your investment strategy.
### Value-Add Properties
Value-add properties are the fixer-uppers of the real estate world. They have untapped potential, and with the right renovations and management improvements, you can boost their value and income.
### Opportunistic Properties
Opportunistic properties are high-risk, high-reward ventures. They often involve substantial rehabilitation or development projects in emerging markets. While they carry more risk, the potential for significant returns is alluring. It’s similar to making bold investments in promising startups.
## Real Estate Research Tools and Resources
In your multifamily real estate journey, having the right tools and resources at your fingertips can be a game-changer. Let’s explore the essential resources every successful investor should have in their arsenal.
### Online Real Estate Platforms
- **Listing Websites:** Websites like Zillow, Realtor.com, and LoopNet are your virtual hunting grounds.
- **Real Estate Forums:** Online forums and communities can be knowledge and networking treasure troves. Platforms like BiggerPockets and Reddit’s real estate subreddits offer valuable insights and connections.
### Local Real Estate Associations and Chambers of Commerce
Building a strong local network is crucial in real estate. Try to connect with real estate associations and chambers of commerce in your target market. These organizations provide a wealth of local knowledge and networking opportunities.
### Government Databases and Reports
Government sources are goldmines of data. Learn how to tap into government databases and reports, from property records to economic development plans. This data is invaluable for making informed investment decisions.
### Real Estate Investment Software
Efficiency is the name of the game. Investment software can streamline your research and real estate analysis. Tools like property management software, financial modeling software, and market analysis platforms will make your life much easier.
### Networking
Success in multifamily real estate isn’t a solo endeavor. Building your expert network, from real estate agents and property managers to contractors and attorneys, will be your support system in the complex world of real estate.
## Action Plan for Success
With a solid foundation of knowledge, it’s time to craft your action plan for multifamily real estate success. This section provides a step-by-step guide to turning your investment goals into reality.
### 1. Defining Your Investment Strategy
Start with defining your investment strategy, whether focused on cash flow, appreciation, or a balanced approach. Your strategy will then guide your property selection and decision-making.
### 2. Setting Clear Goals and Objectives
Goals without a plan are just dreams. Set clear coals using the SMART framework to make sure they’re specific, measurable, achievable, relevant, and time-bound. This will make it much easier to stay on track as you build your portfolio.
### 3. Creating a Realistic Budget
Money matters in real estate. Create a realistic budget for acquisition costs, renovations, operating expenses, and contingencies. A well-defined budget keeps your investments on track.
### 4. Assembling Your Dream Team
Behind every successful investor is a dream team. Identify the key players in your real estate journey, from agents and property managers to contractors and lenders. Building the right team is your secret weapon.
### 5. Executing Your Investment Plan
Execution is where dreams become reality. Dive into the practical steps of acquiring, managing, and growing your multifamily properties. From due diligence to property management, you’ll confidently navigate the real estate terrain.
## Conclusion
Multifamily property research is a nuanced field that demands both expertise and a well-thought-out strategy.
Throughout this article, we’ve delved into the fundamentals, ranging from gaining a comprehensive understanding of multifamily real estate to recognizing the pivotal role that market research plays.
We’ve also discussed the quantitative aspects, such as crunching the numbers to calculate returns and investigating the diverse financing options available. Market research, a combination of art and science, involves harnessing online resources and collaborating with real estate professionals.
Lastly, we’ve touched upon the importance of grasping population dynamics, monitoring infrastructure developments, and staying abreast of government policies. We’ve explored an array of investment opportunities, spanning from value-added properties to ventures that carry a higher risk but promise substantial rewards.
Equipped with the appropriate tools and a robust network, you’re prepared to navigate the multifamily terrain. And if you want to learn more, check out my multifamily investing courses and learn the insights that took me decades to uncover. With these resources, you’ll be able to speed up your journey to success, avoid common traps, and start building a portfolio that will allow future generations to live life without having to worry where the next paycheck will come from.
**Categories:** Blog, Real Estate
---
### [Landlord Guide: Rent Control, Eviction & Fair Housing](https://rodkhleif.com/every-landlord-needs-know-rent-control-eviction-anti-discrimination-laws/)
**Published:** May 30, 2025
**Author:** Rod Khleif
**Excerpt:** What Every Landlord Needs to Know about Rent Control, Eviction, and Anti-Discrimination Laws - The landlord/tenant relationship seems simple enough: “We sign a lease. I give you keys. You give me rent.” Unfortunately, there’s a lot more to it than that.
**Content:**
**What Every Landlord Must Know in 2025: Rent Control Caps, Modern Eviction Rules & Fair-Housing Compliance
If you own or plan to own rental property this year, the rulebook you mastered in 2020 is already obsolete. State-level *rent-cap bills* are spreading, *Right-to-Counsel* programs are lengthening the eviction timeline, and HUD has begun policing AI-driven screening tools for **disparate impact**. Miss a single update and months of **Lifetime Cash Flow** can vanish—in late fees, legal bills, or mandatory rent roll-backs. This guide delivers the up-to-the-minute information—and the field-tested action steps—you need to stay profitable **and** compliant.
## **Why 2025 Is a Legal Tipping Point for Landlords**
### **2025 Rent Control Reality Check**
#### **Where Caps Already Exist**
California’s **AB 1482** holds annual rent hikes to the local CPI plus 5 percent (never to exceed 10 percent) on most units older than 15 years. Oregon’s **SB 608** applies a CPI + 7 percent formula statewide. Metro stalwarts like New York City and parts of New Jersey still enforce their own decades-old restrictions.
#### **New and Pending Caps to Watch**
- **Texas HB 2904**—awaiting Senate action—would impose a *hard* 5 percent cap on affordable units and 10 percent on all others, unless a property undergoes major renovation.
- **Pennsylvania SB 546** has cleared its first committee. If enacted, it will create a statewide Rent Control Advisory Board and limit increases to 15 percent per year, exempting buildings less than 10 years old.
- **Illinois HB 3526** (effective Jan 1, 2025) locks mobile-home park owners into a 3 percent lot-rent ceiling.
> **Investor mindset:** Underwrite every new deal at two rent-growth scenarios, **3 percent** (cap-constrained) and **historic market average**. If it doesn’t work at the lower number, the deal’s a “pass.”
#### **Four Ways to Thrive Even Under Caps**
1. **Document capital improvements:** most caps allow larger rent resets after substantial rehabilitation. Keep every receipt.
2. **Expand ancillary income**: RUBS, pet rent, tech fees, storage, covered parking; all generally outside rent-cap statutes.
3. **Target halo markets:** secondary metros 60-90 minutes from cap cities where demand is surging but legislation lags.
4. **Lease language audit:** insert a “government action” clause that lets you terminate or renegotiate if new caps arrive mid-lease.
## **Eviction Law Upgrades & the Rise of Right-to-Counsel**
#### **What Changed for Landlords This Year**
*Twenty-six U.S. jurisdictions* now guarantee free attorneys for tenants facing eviction; represented renters avoid lock out 96% of the time, often by negotiating payment plans that stretch the process an extra 30-60 days.
Florida, Colorado, and Maryland have also lengthened notice windows for non-rent breaches, while many large cities adopted “pay-to-stay” rules that let tenants halt eviction by covering arrears at any point before judgment.
#### **Rod’s Proven Seven-Step Eviction Workflow**
1. **Friendly reminder** (text + e-mail within 48 hours of missed rent).
2. **Statutory notice:** serve certified mail *and* door-post, then snap a time stamped photo.
3. **Cash-for-keys:** often cheaper than vacancy loss.
4. **File early:** e-file if your county allows; calendar the hearing immediately.
5. **Court prep:** bring ledger, lease, photos, repair logs, and proof of notices.
6. **Writ & lock-out:** coordinate the sheriff; follow state rules for storage or disposal of property.
7. **Post-mortem:** update screening criteria and communicate lessons to your team.
#### **Prevention Beats Litigation**
- Tenant benefit packages with credit reporting rewards cut delinquencies roughly 15 percent.
- AI-powered “early warning” tools can flag high risk 30 days before a missed payment. Just make sure the algorithm passes the HUD bias test (see Section 3).
## **Fair-Housing Compliance in the AI Age**
### **The Federal Baseline**
The seven long-standing protected classes, race, color, religion, sex, national origin, disability, familial status, still apply nationwide.
### **Rapidly Expanding State Protections**
Twenty-two states now add [**source of income**](https://capitol.texas.gov/tlodocs/89R/billtext/html/HB02904I.htm?utm_source=chatgpt.com) (think Section 8, gig-economy pay stubs). Others add sexual orientation, gender identity, credit-history limits, or even immigration status. Miss one and your denial letter becomes Exhibit A.
### **HUD’s 2024 AI Guidance—What It Means for You**
HUD’s April 2024 memo makes it crystal clear: if your screening software or digital ads create a “disparate impact,” you’re liable: no matter who wrote the code.
**Three-Point Audit:
1. Pull six months of approvals and denials.
2. Compare outcomes across protected classes; flag gaps above 10 percent.
3. Document fixes, then re-audit quarterly.
#### **Reasonable Accommodation Nuggets Landlords Miss**
- **Emotional support animals:** you can ask for documentation, but you cannot charge pet rent or deposits.
- **Grab bars & ramps:** installations are tenant-funded unless you receive federal subsidies; removal clauses must be in writing.
- **Reserved parking:** must be granted if medically required, even if spots are normally first-come, first-served.
## **Ninety-Day Compliance Sprint (No Spreadsheet Needed)**
*Week 1–2:* Meet with a local real-estate attorney. Red-line your lease for rent cap clauses and ESA language.
*Week 3–4:* Host a one-hour Zoom training for managers and VAs on new notice periods, Right-to-Counsel, and protected classes.
*Week 5–6:* Audit tenant screening software for algorithmic bias; switch vendors if needed.
*Week 7–8:* Update property management software to flag rent cap jurisdictions and automate cap-compliant notices.
*Week 9–10:* Add 5 percent of gross rents to legal expense reserves; upgrade insurance riders for wrongful-eviction claims.
*Week 11–12:* Conduct a mock eviction from notice to writ; time each stage, refine SOPs, and save the paperwork as templates.
## **Profit Plays That Safer, Smarter Landlords Are Deploying in 2025**
1. **Lease option conversions:** lock in purchase price, dodge future caps, slash turnover.
2. **Mid-term furnished rentals:** 30 to 90 day travel nurse or executive leases often sit outside rent-control ordinances.
3. **Utility bill back (RUBS)** and tech amenities; new revenue streams untouched by legislative caps.
4. **Delaware Statutory Trust 1031 exits:** defer taxes on capped properties and redeploy into growth markets.
5. **“Coach, Don’t Evict” partnerships:** local nonprofits pay arrears; you retain a paying tenant and stable NOI.
### **Bottom Line**
**Control what you can; prepare for what you can’t.** Laws will keep changing, but investors who follow legislation weekly and adapt quickly will earn **Lifetime Cash Flow**. Meanwhile, those who worry will fall behind.
### **Free Deep-Dive Resource**
Snag your complimentary copy of **“[How to Create Lifetime Cash Flow Through Multifamily Properties](https://rodkhleif.com/lcfa-ebook/).”** Inside, you’ll find detailed underwriting models, strong asset protection tactics, and mindset strategies. These strategies helped me recover from a $50 million loss and come back stronger.
**Categories:** Blog, Due Diligence, Property Management
**Tags:** Driving Force, landlord, motivation, multifamily, multifamily property investing, multifamily real estate, real estate, real estate investing, real estate podcast, Rod Khleif
---
### [What To Do If Your Home Value Is Dropping 2025](https://rodkhleif.com/if-your-home-value-is-dropping-do-these-10-things-now-yahoo-finance/)
**Published:** August 20, 2025
**Author:** Matt Rohde
**Content:**
## **What to Do if Your Home Value Is Dropping in 2025 (Advice from Rod Khleif)
If you are a homeowner seeing your property value drop in 2025, you are not alone. More importantly, you are not powerless.
Home values in some U.S. markets have started to slide due to rising interest rates, inflationary pressure, and affordability challenges. But just because the market is shifting doesn’t mean you need to panic.
Downturns create tremendous opportunities if you stay calm, informed, and strategic. As someone who lost $50 million in the 2008 crash and came back stronger, I can tell you firsthand that your biggest setbacks can become your greatest setups.
Here are smart, actionable steps to take if your home value is dropping in 2025:
### **1. Don’t Rush to Sell. Think Long Term.
Real estate has always been a long term game. If you’re living in your home or it’s a cash flowing rental, short term price dips shouldn’t drive your decision making. Focus on your long term goals. This is important if the property still meets your needs or makes passive income.
### **2. Get a Fresh Comparative Market Analysis (CMA)
Reach out to a trusted real estate agent or appraiser for an updated CMA. Don’t rely on online estimators. A real world analysis will help you see what is happening in your neighborhood. It will show if it is part of a larger trend or a local change.
### **3. Maximize Curb Appeal and Cosmetic Value
If you must sell or want to boost perceived value, focus on affordable upgrades: paint, landscaping, lighting, and decluttering. Buyers are emotional. A clean, well-presented property can outperform comps, even in a softening market.
### **4. Consider Renting Instead of Selling
In many markets, rental demand is holding strong. If selling feels like a loss, pivot to rental income. You can cover your mortgage, potentially cash flow, and wait for values to recover. Explore options like long-term rentals, house hacking, or short term furnished stays.
### **5. Lower Your Tax Burden
When property values fall, you may be able to appeal your property tax assessment. Contact your county assessor and present data that supports your claim. Lower taxes can ease financial strain and improve your net operating income if it’s an investment property.
### **6. Build Equity Through Value-Add Improvements
Strategic renovations can build equity regardless of the market. Focus on value-adds with high ROI—kitchen refreshes, bathroom upgrades, or energy-efficient improvements. Even if the market dips, these upgrades position your property to recover faster.
### **7. Refinance Strategically (If It Makes Sense)
If rates drop or your current mortgage is adjustable, refinancing could help you reduce payments and improve your cash flow. Just ensure the closing costs make sense given your timeline and strategy.
### **8. Explore Seller Financing or Creative Options
If you’re trying to sell and struggling with low offers, creative financing tools like seller financing, lease options, or wraparound mortgages can attract a wider buyer pool. These strategies can boost your return while helping buyers navigate affordability.
### **9. Stay Educated on Market Trends
The best investors anticipate. Follow local data, stay informed on national trends, and connect with experienced professionals. This gives you the insight to act strategically rather than emotionally.
### **10. Don’t Make Fear Based Decisions
It’s easy to get scared when values drop, but remember: emotion is the enemy of execution. Wealth is built by those who stay calm when others panic. Keep your eyes on the long-term horizon and look for opportunity in every challenge.
## **Final Thoughts
A drop in home value isn’t the end of the world. It’s a signal to adapt. With the right mindset and strategy, you can use this moment to protect your wealth, improve your property, or reposition your real estate portfolio for even bigger gains ahead.
Remember, in every economic cycle, there are those who wait… and those who win.
Stay focused. Stay informed. And take action.
For more tips on navigating today’s real estate market, download my free book *[How to Create Lifetime CashFlow Through Multifamily Properties](https://rodkhleif.com/lcfa-ebook/).* Just pay shipping.
Let’s go make it happen!
## **Frequently Asked Questions: What to Do If Your Home Value Is Dropping**
#### **Q: Should I sell my property if its value is dropping?
**A:** Not necessarily. A dip in home value doesn’t mean it’s time to panic or sell. If the property is still cash-flowing or aligned with your long-term investment strategy, holding it can lead to appreciation and equity growth down the line.
#### **Q: How do I know if my property is truly losing value?
**A:** Start by comparing recent comps in your area and reviewing your county’s appraisal data. Also track rent prices and demand. If you’re in a declining neighborhood, values may be shifting for structural reasons, not just market cycles.
#### **Q: Can I refinance if my home value is down?
**A:** Possibly, but it depends on your loan-to-value ratio (LTV) and credit profile. If your equity has dropped significantly, refinancing may be difficult, but if you’ve owned the property for several years, you may still qualify.
#### **Q: What improvements increase home value the fastest?
**A:** Focus on ROI-driven updates like kitchen and bath remodels, curb appeal upgrades, energy-efficient systems, and adding an ADU (accessory dwelling unit) if zoning allows. These can offset declining values and increase your rent or sale price.
#### **Q: What if I’m upside down on my mortgage?
**A:** First, don’t panic. Stay consistent with payments to protect your credit. Then explore options like a loan modification, forbearance (if qualified), or renting the home to offset losses while waiting for the market to rebound.
#### **Q: Does negative equity mean foreclosure is coming?
**A:** Absolutely not. Foreclosure only becomes a risk if you stop making payments. If you’re underwater but current, you’re still in control. Many successful investors have waited out downturns and emerged stronger.
#### **Q: Should I turn my home into a rental?
**A:** If you can cover your expenses and generate some cash flow, renting may be a smart move. In a high-demand rental market, this can buy you time until values rebound while building wealth through tenant-paid principal reduction.
*To read more what to do if your home value is dropping, check out this contribution article Rod Khleif wrote for Yahoo Finance! [here](https://finance.yahoo.com/news/home-value-dropping-10-things-140017020.html).*
*Disclaimer: This article was written with the help of AI and reviewed and edited by Rod and his team.*
**Categories:** Blog, Featured, Property Management
---
### [New Tax Law: Key Insights for Multifamily Investors 2025](https://rodkhleif.com/2-things-multifamily-real-estate-investors-need-to-know-about-the-new-tax-law/)
**Published:** August 19, 2025
**Author:** Rod Khleif
**Excerpt:** On December 22nd, 2017, President Trump signed the Tax Cuts and Jobs Acts of 2017 into law. This piece of legislation represents the most comprehensive overhaul of the tax code in 31 years.
**Content:**
If you’re a multifamily investor, or thinking about becoming one, there’s a powerful shift in your favor you need to understand: the current U.S. tax code. While many aspects of tax reform have evolved since the original Tax Cuts and Jobs Act of 2017, the spirit of that law remains very much alive. And in 2025, smart investors are still reaping the benefits.
Now, before I dive in, let me be crystal clear: **always consult your CPA or a seasoned syndication attorney before making tax-related decisions.** The tax code is complex and subject to change. But from a strategic investor’s perspective, here are two major areas where the law has created massive opportunity for those investing in commercial multifamily real estate.
## What Tax Changes Benefit Multifamily Investors?
### 1. Lower Taxes Through Pass Through Deductions
For most multifamily operators, especially those structured as LLCs, partnerships, or S-Corps, the pass through deduction (Section 199A) remains one of the most investor friendly benefits on the books.
Here’s what it means: You may be eligible to deduct up to 20% of your qualified business income (QBI) on your federal tax return.
Let’s break that down:
- Qualified Business Income generally includes rental income from real estate activities where there is material participation.
- The deduction does not apply to capital gains, dividends, or interest.
- High-income earners may face limitations based on income levels and W-2 wages paid.
So, if your multifamily operation produces $200,000 in qualified income, you could deduct up to $40,000 before even touching other deductions. That’s a real, bottom-line benefit that boosts your cash flow and keeps more money in your pocket.
And for those operating inside a C-Corp structure, the corporate tax rate is still a flat 21% as of 2025—down from 35% pre-2017. For some investors running larger operations or syndications, that remains a powerful lever.
Bottom line: When structured right, multifamily ownership is one of the most tax-advantaged investment vehicles in the country.
#### 2. Bonus Depreciation and Immediate Expensing
One of the best tools in the investor toolbox is depreciation. But under the tax reform rules, you don’t just have to depreciate improvements over 27.5 or 39 years. You may be able to accelerate deductions through bonus depreciation or immediately expense certain improvements under Section 179.
What changed?
- Under bonus depreciation (100% in prior years, stepping down as of 2023-2026), you can deduct the full cost of qualifying property improvements in the year they are placed in service.
- Section 179 allows for immediate expensing of up to $1.22 million (2025 threshold, indexed for inflation) of eligible improvements.
Improvements like:
- New roofs
- HVAC systems
- Alarm and security systems
- Fire protection
- Appliances and furniture (for short-term rental units)
For real estate syndicators executing value-add strategies, this is massive. Imagine buying a 100-unit apartment building, upgrading the HVAC and roofs, and being able to deduct the entire capital expense in year one.
It turns tax liability into fuel for expansion.
## What Should Multifamily Investors Do About These Tax Changes?
### Work with a Real Estate Savvy CPA:
You need someone who understands real estate, bonus depreciation, cost segregation, and current IRS guidance.
### Consider Cost Segregation:
This study breaks down your property into components so you can accelerate depreciation. Even on older properties, it could uncover hundreds of thousands in deductions.
### Revisit Your Entity Structure:
Whether you operate as a sole proprietor, LLC, or C-Corp can have a major impact on your net tax liability.
### Stay Compliant with the IRS:
When using bonus depreciation or offering syndication shares, ensure you’re in alignment with the SEC and IRS rules. Syndication attorneys can help you structure it properly.
## How Do These Laws Impact Your Multifamily Investing Strategy?
Let’s say you’re looking at a value-add deal.
- You buy a 75-unit property for $7M
- You invest $700K in roof replacements, appliances, and new HVAC
- With bonus depreciation and Section 179, you may be able to write off all $700K this year
- Combine that with your 20% pass through deduction, and you might shave six figures off your tax bill
That means more returns for you and your investors and more velocity to reinvest in your next deal.
This is how the top operators build wealth. It’s not just about cash flow or appreciation. It’s about strategy, structure, and execution.
## Final Thoughts From Rod
Tax law doesn’t build your business, you do. But if you understand how to play the game, the tax code becomes your most powerful business partner.
Multifamily investing offers unmatched advantages in today’s economic climate. These tax incentives are just the icing on the cake.
Want to go deeper? My free book, [*How to Create Lifetime CashFlow Through Multifamily Properties*](https://rodkhleif.com/lcfa-ebook/), includes a full breakdown of tax strategies and legal structures you can use to scale your portfolio.
Download it now and take your next step toward financial freedom.
And if you’re ready to go even further, join my [Multifamily Coaching Program](https://rodkhleif.com/rod-khleif-coaching-program/) where you’ll get access to world-class training, deal analysis, investor connections, and mentorship from me and my team.
## FAQs About the Tax Law and Multifamily Investing
**Q: Is bonus depreciation still available in 2025?**
A: Yes, but it’s stepped down from the full 100%. For 2025, bonus depreciation is 60% and set to phase down annually unless extended by Congress.
**Q: Can I combine cost segregation and bonus depreciation?**
A: Absolutely. Cost segregation identifies components that qualify for bonus depreciation, making it one of the most powerful tax strategies available to real estate investors.
**Q: Do these tax benefits apply if I invest passively in a syndication?**
A: Yes. As a limited partner, you can still receive the benefits of depreciation and expense write-offs passed through from the property.
**Q: What’s the difference between Section 179 and bonus depreciation?**
A: Section 179 has dollar limits and applies to specific assets. Bonus depreciation has no cap (though it’s phasing down) and covers most depreciable property with less than a 20-year life.
**Q: Should I use an LLC or C-Corp for my real estate investments?**
A: It depends on your goals and scale. Most investors prefer LLCs for flexibility, but consult your CPA and attorney to determine the best structure for your strategy.
Remember: tax law is always evolving. Stay educated, stay aligned with professionals, and always operate with integrity. When you do that, your real estate business becomes not just a source of income, but a vehicle for lasting wealth and impact.
*Disclaimer: This article was written with the help of AI and edited by Rod and his team. Always do your own research.*
**Categories:** Blog, Property Management
**Tags:** apartment investing, business structures, Driving Force, landlord, motivation, multifamily, multifamily investment, multifamily property investing, multifamily real estate, real estate, real estate investing, real estate podcast, Rod Khleif, seller financing, tax law
---
### [Why 2025 Is a Great Time to Become a Landlord](https://rodkhleif.com/7-reasons-now-great-time-become-landlord/)
**Published:** June 13, 2025
**Author:** Rod Khleif
**Excerpt:** If you ask any major league hitting coach, the secret to hitting a fastball is all in how you time your swing. As Yogi Berra said, “You don’t have to swing hard to hit a home run. If you got the timing, it’ll go.” In a sport where milliseconds matter, timing is everything.
**Content:**
Investors often ask me, “Rod, did I miss my window? Should I wait for the next correction?”
The short answer: no.
If you focus on cash-flowing assets, the current market continues to favor buy and hold landlords. You don’t need to predict the market, you need to play the long game. Here are seven research backed trends showing why 2025 is a great time to become a landlord. Learn how to take advantage of this special moment in real estate.
## 1. Homeownership Is Sliding Again
In Q1 2025, the [U.S. homeownership rate dropped to 65.1%](https://fred.stlouisfed.org/series/RHORUSQ156N), the lowest in five years. This isn’t a sign of fading demand, but instead a reflection of affordability challenges. With mortgage rates high and housing prices still elevated, more qualified households are being pushed into renting. And that’s great news for landlords.
Fewer homeowners = more long term tenants.
## 2. Rents Are Outpacing Inflation
The [March 2025 CPI report](https://www.bls.gov/news.release/archives/cpi_04102025.htm) shows that rent went up by 0.3% from the previous month. Owners’ equivalent rent rose by 0.4%. Both increases are higher than core inflation. For more than ten years, rent growth has been higher than general inflation. This means landlords keep seeing real returns increase.
Inflation protection is built into the rental model.
## 3. Rents Proved Resilient in the Last Recession
Let’s rewind to 2008… During one of the worst economic downturns in history, the [median asking rent](https://www.census.gov/housing/hvs/data/histtab11.xls) went up from $660 to $710. At the same time, the [median home sale price dropped](https://fred.stlouisfed.org/series/MSPUS) by 16%. Investors holding rental property with positive cash flow from rental income weathered the storm far better than those banking on appreciation.
**Lesson learned:** Buy for cash flow and you stay protected in any cycle.
## 4. The Service Economy Creates Lifetime Renters
Today, service-sector jobs make up [80% of U.S. employment](https://www.bls.gov/emp/tables/employment-by-major-industry-sector.htm). These jobs offer steady pay, but often not enough to afford a mortgage. That creates a growing population of renters, especially among working class families.
Many of these renters are not just short-term tenants. They’re lifelong customers seeking well-managed, affordable homes.
## 5. Family and Lifestyle Norms Are Delaying Homeownership
Family milestones are happening later. Half of Gen Z adults still live with their parents, and the average age of first-time [motherhood is now 27.5](https://www.cbsnews.com/news/average-age-moms-birth-cdc-30-years/). Add in delayed marriage and career mobility, and you have more young adults renting well into their 30s.
Landlords who own desirable, accessible properties in good real estate markets stand to benefit for years to come.
## 6. Millennials Still Prefer Leases Over Loans
Only [56% of 35-year-olds owned homes in 2024](https://www.boston.com/real-estate/home-buying/2024/11/06/millennial-homeownership-rises-falls-short-past-generations/), compared to 61% of boomers at that same age. Reasons? Flexibility, student debt, unstable incomes, and difficulty qualifying for traditional mortgages.
High-quality rentals in good neighborhoods remain in high demand and will be for the foreseeable future.
## 7. Affordable Housing Demand Never Disappears
In Q1 2025, the [median asking rent](https://www.census.gov/housing/hvs/files/currenthvspress.pdf) price hit $1,468. Yet Class B and C properties. Those providing [affordable housing](https://rodkhleif.com/most-affordable-rental-markets/) remain scarce. No matter what the market does, people always need a clean, safe, and affordable place to live.
That’s what makes workforce housing an evergreen investment strategy.
## Is Now a Good Time to Become a Landlord?
When you look at housing costs, rising rents, and changing populations, one thing is clear: 2025 will favor landlords.
Here’s what to focus on:
- Invest in cash-flowing properties
- Use conservative leverage
- Prioritize professional property management
The timing will take care of itself.
## Frequently Asked Questions About Becoming A Landlord
### Is 2025 a good year to invest in rental properties?
Yes. With fewer people owning homes, rising rents, and high demand for rentals, 2025 offers a great chance for landlords. They can earn steady cash flow and build long-term equity.
### What type of rental property is best in this market?
Class B and C multifamily properties offer the best balance of affordability and demand. Workforce housing is especially strong because of structural supply shortages.
### How do I protect my investment during a downturn?
Focus on properties with strong property management, maintain conservative leverage, and invest for cash flow instead of speculating. These fundamentals protect you across cycles.
### Should I wait for interest rates to drop?
You don’t necessarily need to wait for interest rates to drop. Waiting can mean missing prime opportunities. If a deal cash flows today, it’s worth serious consideration. You can always refinance later.
### What are the tax advantages of being a landlord?
Landlords benefit from depreciation, mortgage interest deductions, and potentially long-term capital gains treatment. Consult a tax advisor to maximize your benefits.
## Want to Learn How to Build Lifetime Cash Flow?
📘 Download my free book “[How to Create Lifetime CashFlow Through Multifamily Properties](https://rodkhleif.com/lcfa-ebook/).”
[](https://rodkhleif.com/lcfa-ebook/)
2025 favors action takers, so if you’re ready to stop waiting and start building lasting income through real estate, now is the time.
*Disclaimer: This article was created with the assistance of AI and reviewed by Rod Khleif and his team to ensure accuracy and relevance.*
**Categories:** Blog, Property Management
**Tags:** Driving Force, landlord, motivation, multifamily, multifamily property investing, multifamily real estate, real estate, real estate investing, real estate podcast, Rod Khleif
---
### [What is Commercial Bridge Financing? 2025](https://rodkhleif.com/what-is-commercial-bridge-financing-2025/)
**Published:** May 29, 2025
**Author:** Alex Khleif
**Content:**
Commercial bridge financing is the secret weapon every serious investor should keep holstered and ready to fire. When that once-in-a-decade off market deal pops up, or a tired C-class property begs for a facelift, traditional lenders shuffle paper while bridge lenders wire funds in days. A well-structured commercial bridge loan lets you seize control, pump value into the asset, and exit on your terms, whether that’s a refinance into agency debt or a profitable flip to the next buyer. In my own journey, from 2,000 units to a $50 million smack-down and back. I’ve learned this: speed equals opportunity, and opportunity equals wealth. Leveraging commercial real estate bridge lending isn’t just about plugging a financing gap; it’s about buying time to create massive appreciation and lifetime cash flow while everyone else is stuck in analysis paralysis.
## What Is Commercial Bridge Financing?
Commercial bridge financing is short term, asset backed capital. It’s usually six to 36 months. It bridges the gap between acquisition or rehab and a long-term loan or sale. A solid commercial bridge loan gives you the speed and certainty traditional banks can’t match. My friend, I’ve used this tool for decades to lock up distressed assets before the competition even hires an attorney.
## Commercial Bridge Loans vs. Business Bridge Loans
Feature
Commercial Bridge Loans
Business Bridge Loans
Collateral
Real estate (multifamily, office, industrial)
Inventory, receivables, sometimes unsecured
Typical Use
Acquisition, value-add, refi to pull equity
Working capital, payroll, equipment
Providers
Bridge lenders & debt funds
Fin-techs, SBA, private lenders
Both products solve timing gaps, but commercial bridge loan financing is laser-focused on real estate.
## Who Provides Commercial Bridge Funding?
1. **Debt Funds & Specialty Bridge Financing Companies:** Institutional pools designed for commercial real estate bridge lending; fast draws, asset-based underwriting.
2. **Private Bridge Lenders:** Family offices and hard-money players: pricier, but they can close in five days if the deal sings.
3. **Agency & Bank “Transitional” Arms:** Fannie, Freddie, and regional banks now offer commercial mortgage bridge loans that roll into perm debt once stabilized.
4. **Crowd Platforms & Syndicators:** Some bridge loan lenders commercial real estate operate online portals where accredited investors fund loans for a slice of the interest.
> Pro Tip: Keep at least three bridge lenders on speed-dial. Competition = better terms.
## Common Deal Types & Structures
Deal Use
Typical Product
Why It Works
Value-Add Multifamily
Multifamily bridge loan (LTV 80 %, 18 months IO)
Funds interiors, boosts NOI, exits to agency in yr 2.
Ground-Up Development
Commercial bridging loan for property developers
Covers land, soft costs, and vertical build until C of O.
Quick-Close Retail Re-Tenant
Commercial property bridge loan
Buyer captures rent spread, exits via CMBS.
Portfolio Cash-Out Refi
Commercial mortgage bridge loans on each asset
Unlocks equity for new acquisitions without selling.
## Underwriting & Capital Stack Essentials
- Loan-to-Cost (LTC): 70–85 %
- Interest Rate: SOFR + 4–7 % or fixed 8–12 %
- Origination Fee: 1–2 points
- Exit Fee / Prepay: 0–1 % after six months
- Rehab Advances: 100 % hard costs; reimbursed monthly
Stack a preferred-equity slice on top of commercial bridge funding to reduce common-equity dilution—just be sure DSCR still pencils at exit.
## Seven Benefits of Bridge Loan Investing
1. Speed: close in weeks, not months.
2. Forced Appreciation: funds cap-ex day one.
3. Flexibility: interest-only payments preserve cash flow.
4. Leverage: higher LTC than perm debt.
5. Equity Recycling: refi, cash-out, redeploy.
6. Creative Exits: sell, condo-convert, or refi into HUD 223(f).
7. Brand Credibility: brokers call fast closers first.
## How to Choose the Right Bridge Lender
Criterion
Rod’s Target
Track Record
100 MM+ in closed commercial real estate bridge loans last 24 months
Timeline
Term sheet to wire ≤ 14 days
Advance Rate on Rehab
100 % hard costs
Draw Process
72-hour inspections via mobile app
Prepay Flex
Step-down vs. hard lockout
Servicing
Dedicated asset manager, answers at 10 p.m.
Regulatory Fit
If you develop, verify commercial bridging finance lenders licensed in your state
Always pit at least two commercial bridge loan lenders against each other. That’s how you win.
## Case Study: 208 Unit Acquisition Turned 31 % IRR
Problem: Distressed C-class asset in Atlanta, 68 % occupancy, seller wanted 30-day close.
Solution:
- Financing: $15 M commercial real estate bridge loan from a top-tier debt fund (80 % LTC).
- Cap-Ex: $2.5 M interiors + roofs, funded through bridge draws.
- Execution: Increased rents 22 %, boosted occupancy to 94 % in 12 months.
- Exit: Refi into Fannie Mae fixed at 5.2 %, pulled $3.1 M tax-deferred cash-out.
Investors earned a 31 % IRR—all because we moved fast with bridge debt.
## FAQs About Commercial Bridge Financing
Q: Are commercial bridge lenders and bridge financing companies the same?
*A:* Yes. Both terms describe firms that specialize in short term CRE funding.
Q: Can I use a bridge loan for mixed-use property?
*A:* Absolutely. Most commercial bridge lenders love mixed use as long as you have a clear exit.
Q: Who are the top multifamily bridge lenders right now?
*A:* Arbor, Bridge Invest, Lima One, and AVANA Capital consistently rank high among multifamily bridge lenders.
Q: How fast can bridge loan lenders close?
*A:* Private groups can fund in five days; institutional commercial real estate bridge loan lenders average two weeks.
## Final Takeaways From Rod
If you’re serious about building Lifetime Cash Flow, master commercial bridge financing. Line up your bridge lender, lock the deal, force appreciation, and roll into long-term debt before the ink dries on rehab invoices.
Ready to take *massive, focused action*?
1. Short-list three bridge lenders commercial real estate pros today.
2. Underwrite deals at stabilized debt, not bridge rates.
3. Strike while other buyers “analyze.”
I’ll see you at the top, because ordinary just won’t cut it.
*This article was created with the assistance of AI and reviewed by Rod Khleif to ensure accuracy and relevance.*
**Categories:** Blog, Raising Capital
---
### [Understanding Real Estate Asset Classes- By Rod Khleif](https://rodkhleif.com/understanding-real-estate-asset-classes-by-rod-khleif/)
**Published:** June 8, 2025
**Author:** Alex Khleif
**Content:**
## **Invest with Clarity: Mastering Asset Classes for Steady Cash Flow and Growth
Investing in the real estate market without a clear asset class strategy is like piloting a jet without instruments, you may push the throttle, but you’ll never know your speed or remaining fuel until you’re in free fall. Over my twenty years in multifamily syndication, I’ve seen capable real estate investors misalign their investment strategy and capital with the wrong type of property, leading to missed opportunity and elevated risk. Understanding asset classes gives you the roadmap to calibrate risk, optimize rental income, and build a resilient portfolio that thrives through every cycle.
Whether you’re evaluating a duplex in a college town or a 300-unit garden community in a Sunbelt boom metro, you need to grasp both the broad property categories and class spectrum. In this guide you’ll learn:
- The five core commercial real estate categories
- How multifamily grades translate into risk and return
- A framework to align your capital, risk appetite, and objectives
- Key 2025 trends in the real estate market that shape opportunities
- A five step action plan to execute your investment strategy
## **Does Asset Class Really Matter?**
An asset class in real estate serves two purposes. First, it defines the type of property; multifamily, office, retail, industrial, hospitality. Second, it indicates quality and tenant profile; Class A through D. Together they reveal:
- **Risk Profile:** How stable is your cash flow and tenant roster?
- **Management Intensity:** Are you signing checks or fixing toilets at midnight?
- **Financing Costs:** Will lenders offer sub four percent leverage or demand six to seven percent plus reserves?
- **Exit Viability:** Will buyers pay a premium or will you need to engineer appreciation through value-add work?
Neglect asset classes and you’re swinging at pitches in the dark. Master them and you can underwrite every investment opportunity with precision.
## **The Five Pillars of Commercial Real Estate
### **1. Multifamily Properties
From duplexes and fourplexes to garden communities and towers, multifamily benefits from constant housing demand. Lenders offer attractive rates, depreciation boosts cash flow, and syndication unlocks large scale deals. Watch turnover in student and seasonal markets. Ideal for cash-flow seekers, syndicators, and investors in professionally managed communities.
### **2. Office Buildings
Includes single tenant properties, suburban parks, medical suites, and flex space. Specialty users like clinics or labs will pay up for power and turnkey layouts. Remote work headwinds require deep broker networks and contingency plans for vacancies. Office is best for value-add operators comfortable with tenant improvements and buildout budgets.
### **3. Retail
Encompasses strip centers, lifestyle centers, malls, and standalone restaurants or drugstores. National credit tenants anchor income, while experiential concepts drive foot traffic. E-commerce pressures demand creative tenant mixes. Retail suits hands-on investors who can curate pop-ups, food halls, and necessity retail.
### **4. Industrial
Covers warehouses, last-mile distribution, self-storage, and light manufacturing. Fueled by e-commerce and nearshoring, industrial enjoys long leases and minimal capex once built. Infill land costs and build-to-suit races can compress cap rates. Ideal for passive investors seeking predictable rent bumps every decade.
### **5. Hospitality
Includes hotels, motels, resorts, and extended stay properties. Revenue management—direct bookings versus online travel agencies—can juice RevPAR. But cyclical swings can flip full occupancy to cash burn in months. Best for nimble operators with branding power and expense controls.
## **Multifamily Deep Dive: Class A through D
Multifamily grading signals quality, amenity level, tenant profile, and location.
### **Class A Properties
- Under ten years old and pristine
- Trophy submarkets, urban cores, high-income suburbs
- Pools, fitness centers, coworking lounges, smart home features
- Executive transferees and dual income families
- Cap rates in the mid four percent range, lowest volatility
- Suited to institutions, REITs, and balance-sheet oriented investors
### **Class B Properties
- Ten to thirty years old with dated finishes
- Employment hubs, good schools, commuter corridors
- Basic gyms, business centers, on-site offices
- Working professionals, young families, teachers, nurses
- Cap rates from mid five to low six percent; value-add upside
- Ideal for sponsors targeting interior upgrades and curb appeal
### **Class C Properties
- Thirty to fifty years old, moderate capex needs
- Transitional neighborhoods near manufacturing or service hubs
- Limited amenities such as coin-op laundry or playgrounds
- Hourly wage earners, service staff, single income households
- Cap rates in the high six to mid seven percent range
- Best for hands-on operators tackling deferred maintenance
### **Class D Properties
- Over fifty years old, needs gut job or rebuild
- Submarkets with crime, declining demographics, or oversupply
- Negligible amenities; total repositioning required
- Credit-constrained renters, voucher tenants, high turnover
- Cap rates north of eight percent with outsized upside
- Demands deep expertise, local networks, and reserves for surprises
## **Choosing Your Path
Before underwriting, answer:
1. Are you chasing rental income, equity growth, or both?
2. How much equity can you deploy and what reserves do you hold?
3. Passive investor or day-to-day operator?
4. Do you prefer stability or tolerate volatility?
5. Does your target metro show job growth, incoming migration, and industry diversity?
If you value stability and minimal headaches, Class A or institutional office fits. If renovation puzzles excite you, Class B and Class C properties hold the alpha. If adversity energizes you and you have a local playbook, Class D can deliver outsized returns but demands expert execution.
## **2025 Real Estate Market Trends
- **Workforce Housing Boom:** Class B and Class C value-add deals will surge as rents outpace new deliveries.
- **Industrial On Steroids:** E-commerce and nearshoring push vacancy to record lows in logistics space.
- **Office and Retail Split:** Trophy office shines with flight to quality; retail adapts into last-mile and mixed-use hubs.
- **Selective Hospitality Recovery:** Extended stay and midscale drive leisure gains; urban business hotels lag.
- **ESG and Tech Demand:** Institutional capital insists on green certification and smart-building systems, raising capex standards.
## **Five Point Action Plan
1. Write down your cash flow versus appreciation priorities, risk tolerance, and investment horizon as the heart of your investment strategy.
2. Secure debt pre-approval, partner commitments, and set 10 to 15 percent in reserves for capital improvements.
3. Research metros with positive net migration, diverse employers, and healthy pipelines for your chosen asset class.
4. Screen deals by comparing price per door, rent growth, vacancy trends, pro forma returns, and exit multiples.
5. Close your first acquisition, track rental income, net operating income, and cap rate stabilization, then refine your approach as data accumulates.
Every deal you underwrite is a brushstroke in your financial masterpiece. Asset classes provide the palette and basic rules. How you mix leverage, management, and due diligence creates your unique edge. Specialize early, stay disciplined, and lean into market knowledge. The sharper your asset-class framework, the better you source, analyze, and execute winning investment opportunities.
Ready to see how multifamily pros build generational wealth? Grab your copy of [*How to Create Lifetime Cash Flow with Multifamily Real Estate Investing*](https://rodkhleif.com/lcfa-ebook/) for a step-by-step playbook on sourcing deals, raising capital through syndication, and scaling your portfolio fast.
*Disclaimer: This article was created with the assistance of AI and reviewed by Rod Khleif to ensure accuracy and relevance.*
**Categories:** Blog, Finding Deals, Real Estate
---
### [Top Multifamily Mistakes to Avoid in 2025](https://rodkhleif.com/7-mistakes-avoid-investing-multifamily-real-estate/)
**Published:** June 8, 2025
**Author:** Rod Khleif
**Excerpt:** 7 Mistakes to Avoid When Investing in Multifamily Real Estate
**Content:**
> “It’s good to learn from your mistakes. It’s better to learn from other people’s mistakes.” – Warren Buffett
After nearly five decades in multifamily real estate, I can tell you this work is simple, but it is not easy. Execution is everything, and a single misstep can wipe out years of effort. The advantage you hold in 2025 is the ability to learn from investors who have already stumbled, corrected course, and thrived. Study these lessons, apply them, and watch your portfolio grow.
## **1. Build an Elite Team Before You Buy**
Multifamily real estate is a team sport. Attempting a sizable acquisition without trusted specialists is like running a relay alone.
### **Key Roles to Fill
- **Real estate attorney:** Guides contract negotiations and guards against title or zoning surprises.
- **Certified public accountant experienced in real estate:** Structures your deal for maximum tax efficiency and smooth 1031 exchange potential.
- **Investor friendly mortgage broker:** Shops agency, bank, and bridge loan options so you never overpay for capital.
- **Professional property manager:** Protects Net Operating Income by optimizing rent collections and expenses.
- **Market savvy broker:** Finds opportunities and advises on true market rents, cap rates, and exit values.
**Action for 2025:** Verify each candidate by interviewing former clients, reviewing track records, and cross-checking reputations inside communities such as the [Lifetime CashFlow Facebook Group](https://www.facebook.com/groups/229962354193594). Aim for partners who already invest in your target market, not just service it.
## **2. Commit to Clear Investment Criteria**
A hot off-market opportunity can tempt even disciplined investors to drift. That temptation often ends in regret.
### **Define Your Buy Box
- Market or submarket boundaries
- Property class and vintage
- Target cap rate range and minimum cash-on-cash return
- Unit count and price per unit limits
- Value add versus turnkey preference
Review these metrics monthly. When a broker sends a shiny deal that falls outside the box, politely decline. Remember, focus equals freedom.
## **3. Treat Due Diligence as Your Firewall**
Savvy investors know that numbers on a pro-forma are only a promise. Verify every promise.
**Make Sure You Have A Comprehensive Checklist
If you don’t have one, download our [Due Diligence Checklist. ](https://rodkhleif.com/wp-content/uploads/2020/03/Multifamily-Due-Diligence-Checklist.docx)
1. **Financial:** Reconcile bank statements, tax returns, and trailing twelve-month (T12) financials with rent rolls.
2. **Physical:** Inspect roofs, foundations, mechanical systems, and every accessible unit. Order a third-party Property Condition Assessment.
3. **Legal:** Confirm zoning, environmental status, and any pending liens or code violations.
4. **Market:** Compare in-place rents to current data from tools like [CoStar](https://www.costar.com) or [Rentometer](https://www.rentometer.com).
If you want to learn more about Due Diligence, [download our free Comprehensive Guide](https://rodkhleif.com/a-comprehensive-guide-to-multifamily-due-diligence/).
## **4. Measure Economic Vacancy, Not Just Physical Vacancy**
A building reported at ninety-eight percent occupied can still bleed cash when half the residents are behind on rent.
**Quick Calculation
Economic Vacancy % = (Potential Rent – Actual Collected Rent) ÷ Potential Rent
Always request the T12, concessions schedule, and aging report. Compare those to physical occupancy. If economic vacancy exceeds seven to eight percent, dig deeper into management quality and tenant base.
## **5. Budget Realistically for Capital Expenses and Reserves**
Roofs, parking lots, and plumbing do not care about your pro-forma. They will fail on their own schedule.
**Reserve Guidelines for 2025
- Newer properties (built after 2010): at least 250 dollars per unit each year
- Mid-vintage properties (1990 – 2009): 350 to 400 dollars per unit
- Older assets (pre-1990): 450 to 500 dollars per unit
Commission a Property Condition Assessment and use it to build a line-item CapEx schedule spanning five years. Lenders like Fannie Mae already escrow reserves. Follow their lead even when equity alone is funding the deal.
## **6. Buy for Cash Flow First, Appreciation Second**
Speculation is not a business plan. If you assume rent growth will save a skinny deal, you are gambling.
### **Rule of Thumb
Seek value add assets that produce at least six to eight percent cash on cash in year one **after** reserves and asset management fees. Underwrite exit cap rates fifty to one hundred basis points higher than the going market rate. That margin shields you if interest rates creep up.
Value add improvements such as modern lighting, washer dryer rentals, and energy efficient windows should raise Net Operating Income quickly, but the property must survive day one without them.
## **7. Respect Turnaround Timelines**
Repositioning a tired asset takes more than fresh paint and optimism.
**Realistic Timeline
- **Planning and permitting:** two to three months
- **Exterior and systems upgrades:** three to six months
- **Interior turns and rent lifts:** six to twelve months
- **Stabilization and refinance:** twelve to twenty-four months
Secure at least six months of operating capital in advance and consider a bridge loan with twelve-month interest-only terms if the value add scope is heavy. This cushion lets you execute without panic selling.
## **Bonus Error: Neglecting Mindset and Education**
In multifamily investing, mechanics matter, but mindset multiplies results. Close proximity to experienced mentors compresses your learning curve.
Knowledge compounds faster than interest.
Smart investors learn from the scars of others. Build an elite team, insist on rigorous due diligence, fund generous reserves, and buy deals that cash flow from the first rent check. Follow these principles now and your future self will thank you.
Looking for an even deeper dive? Download the free guide “[29 Mistakes Most Apartment Investors Make—and How to Avoid Them,](https://rodkhleif.com/29-mistakes/)” and tune in to the [Lifetime CashFlow Podcast](https://rodkhleif.com/lifetime-cashflow-podcast/) for weekly expert insights.
*Disclaimer: This article was created with the assistance of generative AI tools and thoroughly reviewed by Rod Khleif for accuracy and voice alignment.*
**Categories:** Blog, Finding Deals
**Tags:** apartment investing, business structures, Driving Force, landlord, motivation, multifamily, multifamily investment, multifamily property investing, multifamily real estate, real estate, real estate investing, real estate podcast, Rod Khleif, seller financing
---
### [Investing Outside Your Home Market? Do This First.](https://rodkhleif.com/investing-outside-your-home-market-do-this-first/)
**Published:** June 7, 2025
**Author:** Rod Khleif
**Excerpt:** I once had a student come to me with a 40-unit property in Eden, North Carolina for an unheard-of $13,000 a unit. The seller claimed he was getting $650 per unit in rent, but when we looked closer, we found only 40% of the property was occupied. Red flag #1.
**Content:**
## **Always Start With Caution**
Several years ago a coaching student burst into my office with what looked like the deal of the decade. He had tied up a forty unit property in Eden, North Carolina for thirteen thousand dollars a door. The seller’s rent roll boasted average rents of six hundred fifty dollars, and the pro forma flashed an eight cap. On the surface that sounded like an easy win, yet something felt off.
We drove to Eden and found that barely forty percent of the apartments were occupied.
Vacant units had broken windows and kicked in doors. A quick chat with the local hardware store clerk confirmed our worst suspicion: the town’s paper mill, long the largest employer, had just closed. Three bedroom houses nearby were renting for only three hundred ninety five dollars, and many were still sitting empty.
Could we have repositioned that community and forced appreciation? Possibly.
But our mission as multifamily investors is to buy future income streams, not today’s mirage. Without credible evidence that cash flow would rise or at least hold steady, the deal no longer made sense. We walked away and never regretted the decision. That experience forged the rule I now teach every investor who dares to buy beyond city limits: rely on disciplined data analysis, not wishful thinking.
## **Why Local Knowledge Alone Is Not Enough**
Operating in your own backyard offers priceless informal intelligence. You drive past new construction on the way to work, overhear parents talking about school quality at the grocery store, and know whether downtown traffic is steadily increasing or tailing off. Cross a state line and those daily signals disappear. You are now blind unless you build a replacement system grounded in hard numbers and supported by competent boots on the ground.
Distance does not automatically equal danger. In fact, geographic diversification can reduce portfolio risk and open doors to stronger yields. The key is to turn guessing into measuring. Numbers keep emotion out of the decision. A repeatable framework keeps you from chasing shiny objects in unfamiliar zip codes.
## **Two Complementary Lenses: Asset and Area**
Think of every potential acquisition as two puzzles that must interlock.
### **1. The Asset
- Map clear value add levers. Can you install premium vinyl plank floors, pave the parking lot, or introduce washer dryer rentals?
- Measure present rents against the true market ceiling. Call competing properties and mystery shop them to verify real leasing velocity.
- Project renovation costs and timelines conservatively. Add at least a ten percent contingency for remote projects.
- Stress test exit strategies. Could you refinance in three years if interest rates rise two full points? Could you sell to a local operator at market cap rates if agency debt terms tighten?
### **2. The Area
- Evaluate durable economic drivers. A college town with multiple hospitals is more resilient than a single plant city.
- Compare current and trailing five year population growth. Consistent net in migration signals healthy demand.
- Study median household income in relation to median asking rent. The thirty percent rent to income line is still the gold standard.
- Scan the new construction pipeline. A flood of class A units can drag class C occupancy lower even when employment rises.
Only when both puzzles show upside should you advance to earnest money.
## **Reliable Data Sources That Shorten Your Learning Curve**
You do not need to be an economist to gather solid intel. Start with free public sites and layer in subscription platforms as your business scales.
- [U.S. Census Bureau](https://www.census.gov) for historic population and income data
- [Bureau of Labor Statistics](https://www.bls.gov) for unemployment trends and industry job counts
- [BestPlaces](https://www.bestplaces.net) for cost of living comparisons
- [City-Data](https://www.city-data.com) for neighborhood demographic snapshots
- [Social Explorer](https://www.socialexplorer.com) for interactive maps that display income shifts
- [Costar](https://www.costar.com) and [Colliers Market Reports](https://www.colliers.com) for professional rent surveys and construction pipelines
If you want everything on a single dashboard, subscription tools such as RealPage Market Analytics or Yardi Matrix provide rent growth forecasts, supply risk scores, and capital market comps. The fee is well justified once you regularly underwrite out of town deals.
### **Digging Deeper: Key Indicators and How to Interpret Them**
Numbers whisper stories. Your job is to listen closely. Focus on these eight metrics each time you enter a new market:
1. **Total population today and ten years ago
*Steady gains suggest employers are expanding and local leadership welcomes growth.
2. **Net migration versus natural birth growth
*High net migration often predicts rent pressure because new residents usually rent before they buy.
3. **Job creation rate
*Look for employment growth that outpaces national and state averages by at least one percent.
4. **Diversity of employers
*No single company should represent more than ten percent of metro jobs. A balanced mix of healthcare, education, government, technology, and manufacturing is ideal.
5. **Median household income trajectory
*Five year compound annual growth above three percent signals healthy wage momentum.
6. **Rent to income ratio
*Target submarkets where the average resident spends no more than thirty cents of each dollar on housing.
7. **New supply pipeline
*Check permits, units under construction, and planned communities. Compare projected deliveries to historic absorption.
8. **Crime and school rating trends
*Public safety and education quality directly impact tenant retention and renewal premiums.*
### **The Rent to Income Stress Test in Practice**
Grab local median household income from the Census website. Suppose it is forty eight thousand dollars. Divide by twelve to get four thousand dollars per month. Thirty percent of that number equals twelve hundred dollars. That is the ceiling average households can afford without becoming rent burdened. If your pro forma assumes average effective rent of fourteen hundred dollars, you are betting tenants will accept a thirty five percent burden. That may work in coastal gateway markets with limited land and strong wage earners, but it often spells trouble in secondary cities where home ownership remains affordable. Align your business plan with what the math says residents can comfortably pay.
### **Building an A Local Team**
Even perfect data will not plunge clogged drains or mediate noise complaints at two in the morning. Your on site talent matters just as much as market metrics.
- **Property Manager:** Demand a track record with assets that match your vintage and tenant profile. Verify online reviews and secret shop current clients.
- **Commercial Broker:** Choose an agent who owns rental property personally and who tours comps weekly. That insight is priceless during lease up and disposition.
- **Lender or Mortgage Broker:** Select professionals experienced with out of state borrowers. Strong banking relationships speed approval when timing is tight.
- **Contractors and Inspectors:** Confirm licenses, insurance, and local reputation. Remote owners need contractors who document progress with time stamped photos.
Visit the market at least twice before closing. Tour competing communities, drive rush hour routes to major employers, and dine where residents gather after work. Sensory impressions often validate or challenge your spreadsheet assumptions.
### **A Step by Step Due Diligence Checklist**
Below is the exact sequence my team uses whenever we evaluate a distance deal. Copy it into your project management tool and adjust to fit your workflow.
[Click here to download full due diligence checklist. ](https://rodkhleif.com/wp-content/uploads/2020/03/Multifamily-Due-Diligence-Checklist.docx)
1. Pull a demographic report for the area using [Costar](https://www.costar.com/who-we-serve/owners-investors?utm_campaign_id=7013p000002MUoNAAW&gad_source=1&gad_campaignid=8099911869&gbraid=0AAAAAD1YTcIrDp5HKeyOAJVVVqnj9Mkd_) or [BestPlaces.](https://www.bestplaces.net/find/)
2. Compare rent growth and employment growth over one, three, and five year windows.
3. Order a rent survey that lists asking rents, concessions, occupancy, and lease-up speed for the ten closest comps.
4. Obtain crime heat maps and verify trends with local police community outreach.
5. Request five year business license data from city hall to track openings and closures.
6. Walk the property, speak with tenants, and photograph every mechanical system.
7. Review trailing twelve month financials and check for seasonal income swings.
8. Conduct a lease audit to confirm real rents and delinquency.
9. Re inspect vacant units to gauge turn cost accurately.
10. Model conservative rent growth of no more than half the five year historic average.
By the end of this checklist you will either possess unshakable conviction or a clear list of deal breakers.
If you want to learn more about Due Diligence, check out our [comprehensive free guide.](https://rodkhleif.com/a-comprehensive-guide-to-multifamily-due-diligence/)
### **Monitoring the Market After You Buy**
Closing day marks the start of a deeper relationship with your chosen city. Schedule quarterly reviews of the same data points that justified your acquisition. Ask tough questions.
- Has job growth slowed below national averages?
- Are concessions rising faster than seasonal norms?
- Did a major employer announce layoffs or relocation?
- Is new construction absorbing as predicted?
When reality diverges from your original thesis, pivot early. You might delay unit interiors and focus on exterior curb appeal if absorption weakens, or accelerate premium upgrades when wage growth beats forecasts. Active asset management preserves cash flow and positions you to exit on your own terms.
### **Putting It All Together**
Buying apartments outside your familiar stomping ground is neither reckless nor heroic. It is a professional expansion that demands the mindset of a private equity analyst and the field skills of a property manager. Begin with verifiable data, layer in thoughtful stress tests, and surround yourself with a team that treats your building like their own. If you do those things faithfully, distance becomes just another line item in the underwriting, not a deal killer.
When you encounter a puzzling data set or want feedback on a new market, post your question inside our [**Multifamily Mastery Facebook Community**](https://www.facebook.com/groups/multifamilycommunity). Thousands of investors share lessons learned every week, and you will sharpen your instincts faster than working alone.
RodKhleif.com hosts dozens of free articles, videos, and downloadable checklists that expand on every concept mentioned here.
We may never predict the future with perfect clarity, yet by reading the story hidden in reliable numbers and verifying it through local partners, we can stack the odds heavily in our favor and create income that endures.
*This article was created with the assistance of AI and reviewed by Rod Khleif to ensure accuracy and relevance.*
**Categories:** Blog, Property Management
**Tags:** business structures, investing, investor mistakes, landlord
---
### [Home Equity Co-Investment; The HELOC Alternative](https://rodkhleif.com/how-to-tap-your-home-equity-without-the-loan-payments/)
**Published:** April 15, 2025
**Author:** Rod Khleif
**Excerpt:** It is a simple fact of real estate investing that cash is needed to get deals done. Yet, cash always seems to be in short supply. For many individual investors, one of the most logical places to find it is in the equity of their primary residence.
**Content:**
Cash is the lifeblood of real estate investing, but many investors feel like access to liquid capital is the biggest hurdle. The irony? Millions of Americans are sitting on significant untapped equity in their primary residence and don’t realize it can be used creatively to fund new investment opportunities.
Traditionally, the main way to access home equity has been through a home equity line of credit (HELOC). While those tools can work, they also come with trade offs. i.e. interest payments, monthly obligations, and increased financial exposure.
Now, a newer option is emerging that offers the benefits of tapping equity without the monthly payments. It’s called home equity co-investment, and it may offer a more flexible alternative for investors looking to unlock capital.
## What Is Home Equity Co-Investment?
Home equity co-investment is exactly what it sounds like, you bring in an investor to share in your home’s equity, not a lender to create new debt.
Instead of borrowing money against your home, you sell a portion of your equity in exchange for a lump cash payment equal to the HELOC loan amount. There are no interest charges and no monthly payments. You do not have to repay anything until something happens, like refinancing or selling your home.
Unlike debt, this structure gives homeowners immediate access to cash, without taking on monthly obligations.
## How Does Home Equity Co-Investment Work?
Here’s how it typically works:
- A homeowner with equity enters into a legal agreement with an investor.
- The investor provides an upfront payment (often based on a share of the current equity).
- A lien is placed on the property, usually subordinate to the mortgage.
- The agreement is repaid when a “qualifying event” occurs (sale, refinance, etc.).
- At that time, the investor receives their share of the appreciated (or depreciated) equity.
Let’s say you own a home worth $250,000 and have a mortgage balance of $150,000. That gives you $100,000 in equity.
Now imagine you’re eyeing a multifamily investment and need $50,000 to fund your share of the deal. Instead of using a HELOC or refinancing your main mortgage, you could choose a home equity co-investment agreement.
You receive $50,000 upfront in exchange for giving up 50% of your home equity.
Then five years later, the home appreciates to $350,000 and the mortgage balance drops to $90,000. Your total equity is now $260,000. Since the investor owns 50% of the equity, they get $130,000. This amount is more than double their original investment.
The upside for you? You didn’t have to make loan payments along the way. The trade-off? You gave up a portion of your home’s future equity gains.
## Pros and Cons
### Benefits:
- No monthly payments or interest
- Access to significant cash without new debt
- Quick closings. (Sometimes in as little as 10 days)
- More flexible approval criteria than a HELOC
- Investor shares in downside if the home loses value
This structure can be especially appealing for investors who are self-employed, have variable income, or want to deploy capital without increasing leverage on their primary residence.
### Drawbacks:
- You give up a share of future home appreciation
- The investor typically has a say in major decisions (e.g., sale, refinance)
- If your home appreciates significantly, the cost of capital could be high
- Contractual terms can be restrictive so make sure you read them carefully
In essence, you’re taking on a partner in your home. Like any partnership, that comes with power and responsibility.
## Is Home Equity Co-Investment A Good Idea?
For investors looking to fund a down payment, cover renovation costs, or participate in a syndication, home equity co-investment can offer a no debt alternative to traditional financing.
Still, this strategy isn’t for everyone.
If you’re confident your home will appreciate substantially, or you want full control over decisions like when to sell, you may prefer to retain 100% equity and consider other capital options.
That said, in a market where home values have risen sharply and financing is becoming more restrictive, home equity co-investment can be a powerful tool when used strategically.
## A Growing Market with Untapped Potential
While still a niche financial product, home equity co-investment is gaining traction among investors who want to stay nimble and reduce their monthly obligations.
Several private companies now offer these agreements, and as demand grows, so does the flexibility and availability of the product.
> “Like any financing strategy, home equity co-investment has pros, cons, and fine print. It’s your responsibility to do the homework.
>
> But as an investor, one of your biggest advantages is creativity. And in today’s market, finding new ways to access capital can be a game-changer.
>
> If you’re considering this path, talk to professionals, read every line of the contract, and always consider the long-term cost of giving up equity.
>
> That said, if you’re sitting on untapped equity and have a great deal in front of you, this could be a bridge between where you are and where you want to be.”
>
> — Rod
**Categories:** Raising Capital
**Tags:** apartment investing, investing, landlord, loan, motivation, multifamily, multifamily investment, multifamily property investing, multifamily real estate, real estate, real estate investing, real estate podcast, Rod Khleif
---
### [Multifamily Bridge Loans](https://rodkhleif.com/multifamily-bridge-loans/)
**Published:** June 6, 2025
**Author:** Alex Khleif
**Content:**
## Multifamily Bridge Loans: What Real Estate Investors Need to Know
In today’s competitive market, real estate investors often need fast, flexible finance solutions to secure deals. That’s where multifamily bridge loans come in. These commercial bridge loans are designed to bridge the gap between the time a property is acquired and when long term financing is secured. While they typically come with a high interest rateand shorter repayment terms, they also provide speed and adaptability that can be crucial in hot markets.
If you’re looking to invest in multifamily properties and want to understand how a bridge loan works, this guide is for you.
### What Is a Multifamily Bridge Loan?
A bridge loan is a short term loan that provides immediate capital to real estate investors. These loans are typically used to acquire, renovate, or stabilize a multifamily property before refinancing into permanent financing like an [FHA](https://rodkhleif.com/fha-loans-multifamily-real-estate-investors/) or agency loan.
Unlike a traditional mortgage, bridge loans are quicker to close, offer more flexible underwriting, and often allow interest only payments to help investors maintain cash flow during the transition period.
### How Does a Bridge Loan Work?
Bridge loans are offered by bridge loan lenders who specialize in asset-based lending. These lenders prioritize the property’s potential and exit strategy over your credit score or debt-to-income ratio.
The process works like this:
- You identify a multifamily property with potential upside
- You apply for a commercial bridge loan to fund the purchase or rehab
- You operate and improve the property to stabilize it
- You refinance into long term financing (like an FHA or Freddie Mac loan) once the asset is performing
Bridge loans typically fund 70 to 80 percent of the purchase price and may also cover some renovation costs. Once the improvements are completed and the property is stabilized, you exit the bridge loan through permanent financing.
### Pros and Cons of Multifamily Bridge Loans
#### Benefits:
- Fast approval and funding (often within 10 to 30 days)
- Less emphasis on borrower credit and more focus on asset value
- Ideal for distressed or value-add properties
- Allows for interest only payments during the holding period
- Provides flexibility while you work toward long term financing
#### Drawbacks:
- High interest rate compared to traditional loans
- Prepayment penalties may apply
- Short repayment terms (typically 6 to 36 months)
- Higher closing costs
Learn more from this podcast, “[How Bridge Debt Killed the Commercial Real Estate Space.](https://www.youtube.com/watch?v=wi8eYfV2J20)”
### When Should You Use a Bridge Loan?
- You’re purchasing a property that doesn’t yet qualify for permanent financing
- You need to act quickly to secure a deal before it hits the wider market
- You’re repositioning a property with a value-add strategy
- You’re waiting for a more favorable financing environment or market condition
Bridge loans allow you to move quickly and seize opportunities without waiting on slow traditional mortgage approvals. Just be sure to have a clear exit strategy.
### Key Terms to Know
- Loan amounts: Range from $500,000 to over $50 million
- Closing costs: Can include origination fees, legal fees, and more (typically 2 to 5 percent)
- Interest only payments: Helps preserve cash flow during renovation
- Prepayment penalties: Common if you refinance or repay early
- Repayment terms: Typically 6 to 36 months with balloon payments
### Bridge Loan vs Traditional Mortgage
FeatureBridge LoanTraditional MortgageSpeedFast (10–30 days)Slower (30–60+ days)TermShort (6–36 months)Long (15–30 years)Interest RateHigherLowerPayment StructureOften interest onlyPrincipal and interestIdeal ForValue-add and time-sensitive dealsStabilized, long-term investments### Our Recommended Resources
[**👉FREE Guide for Funding Your Multifamily Purhcase**](https://rodkhleif.com/financing-your-multifamily-purchase/)
Download our in depth financing guide to learn how you can finance your multifamily investing deals.
[**👉FREE Complete Guide to FHA Loans**](https://rodkhleif.com/fha-loans-multifamily-real-estate-investors/)
Want to refinance out of a bridge loan into long term financing with great tax advantages? Download our in depth FHA loan guide to learn how these loans work, their requirements, and why they’re a go to option for many multifamily investors.
**[👉FREE Complete Guide to Multifamily Syndications](https://rodkhleif.com/guide-to-multifamily-syndications/)**
If you’re a passive investor or looking to raise capital to fund a project using a bridge loan, our syndication guide is your must read manual. Learn how investors receive profits, how asset management fees work, and what separates good deals from risky ones.
**[👉FREE Cap Rate Calculator](https://rodkhleif.com/cap-rate-calculator/)**
Need to evaluate a deal before applying for a bridge loan? Use our free Cap Rate Calculator to instantly calculate cash flow and potential returns.
### Frequently Asked Questions (FAQ)
**What is a bridge loan in real estate investing?**
A bridge loan is a short term, asset-based loan used to quickly acquire or renovate a property before securing permanent financing.
**Are commercial bridge loans risky?**
They can be if you don’t have a clear exit strategy. They carry a high interest rate and short repayment terms, so planning is essential.
**How long does a bridge loan take to close?**
Most bridge loan closes happen in 10 to 30 days depending on the lender.
**What are typical bridge loan interest rates?**
Rates range from 7 to 12 percent, depending on the lender and risk level.
**Can you refinance a bridge loan?**
Yes. That’s the goal. Most investors exit the bridge loan using long term financing like FHA, agency, or bank loans.
**Do I need a good credit score for a bridge loan?**
Not necessarily. Bridge lenders focus more on the asset and business plan than on your personal credit score.
### Final Thoughts
Multifamily bridge loans are powerful tools when used correctly. They allow investors to move fast, reposition assets, and unlock long-term value. But they’re not for every deal. Understand the risks, costs, and timelines involved—and make sure your exit strategy is airtight.
Whether you’re buying your first value-add deal or scaling a portfolio, having a solid grasp of bridge financing can give you a serious edge.
**Ready to get started fast?**
Check out [Rod’s Warrior Coaching Program](https://rodkhleif.com/rod-khleif-coaching-program/) that has over 260,000 student owned units.
**Categories:** Raising Capital
**Tags:** bridge loans, financing deals, funding deals, loans
---
### [GP vs LP: What You Need To Know](https://rodkhleif.com/gp-vs-lp-what-you-need-to-know/)
**Published:** June 5, 2025
**Author:** Alex Khleif
**Content:**
## Before You Invest in Real Estate Syndications
If you’re exploring real estate investment opportunities, especially in multifamily syndications or private equity structures, you’ll quickly come across the terms GP vs LP, or general partner vs limited partner.
Understanding the differences between these roles is essential if you want to invest wisely, protect your personal assets, and maximize your return on investment. In this blog, we break down everything you need to know about limited partnerships (LP) and general partners (GP), from day to day operation responsibilities to carried interest, personal liability, and how each partner receives a share of the profits.
## What Is a General Partner (GP)?
The general partner is the person or entity that takes the lead in a real estate syndication or limited liability partnership. GPs are responsible for:
- Finding the deal and securing financing
- Creating and executing the business plan
- Managing the day to day operations
- Overseeing property managers, renovations, and lease-up
- Reporting to investors
Because GPs actively manage the asset, they often earn a management fee and a carried interest—a share of the profits for their work and risk.
But there’s a catch: GPs typically assume unlimited liability. That means if something goes wrong and the partnership is sued, the GP’s personal assets could be at risk.
## What Is a Limited Partner (LP)?
A limited partner, on the other hand, is a passive investor. LPs contribute capital but have no responsibility for managing the property or executing the day to day operation.
In most limited partnership (LP) structures:
- The LP’s liability is limited to their initial investment
- LPs receive a share of the profits through distributions (e.g., cash flow and proceeds from a sale)
- LPs can invest in portfolio companies or syndications without being involved in the day to day
Because of their passive role and protection through limited liability, LPs are a popular choice for those who want to invest in private equities or real estate without being operators.
## What is GP vs LP?
GP vs LP refers to the roles of **General Partner (GP)** and **Limited Partner (LP)** in real estate partnerships. The GP is the active partner. They manage daily operations and carry out the business plan. The GP also has unlimited liability. They often earn a management fee and a share of the profits, known as carried interest.
The LP is a passive investor. They put in money and have limited liability. This means they only risk their initial investment. The LP gets a share of the returns but does not manage the investment. This structure allows both parties to benefit from real estate investment opportunities while clearly defining risk and responsibility.
## GP vs LP: A Quick Comparison
## How Do GPs and LPs Work Together?
In a limited liability partnership, the general partner brings the expertise and does the heavy lifting, while limited partners provide the capital. Both benefit when the deal goes well.
- GPs receive carried interest and fees
- LPs receive passive income and long-term gains
This alignment of interests creates a powerful engine for scaling investment opportunities; especially in real estate syndications.
## Key Legal and Financial Considerations
### 1. Liability
- GPs have unlimited liability, meaning they are personally responsible for debts and lawsuits.
- LPs enjoy limited liability, so their risk is capped at their initial investment.
### 2. Control
- GPs control all decision-making and operational responsibilities.
- LPs have no decision-making power and cannot legally get involved in management without losing their limited liability status.
### 3. Profit Distribution
- LPs receive a share of the profits based on their investment terms (often after preferred return thresholds are met).
- GPs receive a management fee and performance-based carried interest.
### 4. Taxes
- Both LPs and GPs receive a K-1 for tax purposes.
- LPs benefit from tax advantages like depreciation, mortgage interest deductions, and possibly 1031 exchanges.
## Why LPs Are Ideal for Passive Investors
If you want to invest in real estate without being involved in day to day operations, the LP role is likely your best fit.
Benefits include:
- Limited liability and low risk exposure
- Professional management from experienced GPs
- Access to institutional-grade deals
- Powerful tax benefits
- Ability to diversify across multiple portfolio companies
Many busy professionals and retirees choose the LP route to earn passive income, preserve their personal assets, and grow wealth through long-term investing.
## Bonus: Get Our Free Tools
Want to dig deeper into syndication investing?
📘 Download our [FREE Complete Guide to Multifamily Syndications](https://rodkhleif.com/guide-to-multifamily-syndications/) – Learn the full lifecycle of a real estate deal, plus insider tips to vet sponsors and analyze deals like a pro.
📊 Use Our [Free Cap Rate Calculator](https://rodkhleif.com/cap-rate-calculator/) – Evaluate deals quickly and compare opportunities with ease. Perfect for LPs and GPs alike.
## Frequently Asked Questions (FAQ)
**What is the difference between GP and LP?**
GPs are active managers who handle the operations and take on unlimited liability. LPs are passive investors who contribute capital and enjoy limited liability.
**Is a GP liable for losses?**
Yes. GPs assume unlimited liability and can be held personally responsible for debts and lawsuits.
**Can an LP lose more than they invested?**
No. In a properly structured limited partnership (LP), an LP’s liability is limited to their initial investment.
**Do LPs pay taxes on distributions?**
Yes. LPs receive a K-1 tax form and must report income. However, they also benefit from tax advantages like depreciation.
**Can an LP be involved in management?**
No. If an LP becomes involved in day to day operations, they risk losing their limited liability status.
**What is a management fee?**
The management fee is paid to the GP for overseeing the day to day operation of the asset. It’s typically a percentage of revenue or assets under management.
**What is carried interest?**
Carried interest is the GP’s share of the deal’s profits, earned after certain return benchmarks are met.
Understanding GP vs LP is essential for anyone looking to invest in private equities or real estate syndications. Each role offers unique benefits and risks.
- Want to roll up your sleeves and actively manage? The GP route could be for you.
- Prefer a hands off, passive investor approach? LP is likely the better fit.
Either way, knowing your rights, responsibilities, and risks can help you build a smarter, safer investment strategy.
➡️ Ready to start? [Get tickets to the multifamily bootcamp to skyrocket your success! ](https://rodkhleif.com/bootcamp/)
**Categories:** Raising Capital
---
### [Is Multifamily Recession Proof?](https://rodkhleif.com/is-multifamily-recession-proof/)
**Published:** June 4, 2025
**Author:** Alex Khleif
**Content:**
## **Is Multifamily Real Estate Recession Proof? Exploring Its Stability in 2025**
With rising interest rates, inflation concerns, and economic uncertainty looming over the real estate market in 2025, one question has gained renewed attention: **Is multifamily recession proof?** While no investment is completely immune to market downturns, multifamily real estate continues to prove itself as one of the most resilient and recession resistant asset classes available today.
In this article, we’ll explore why multifamily real estate performs well during economic downturns, compare it to other asset types, and answer popular questions about investing in multifamily properties during a recession.
### 
## Why Multifamily Real Estate Is More Recession Resistant Than Other Investments
Unlike single family homes, commercial office space, or retail properties, **multifamily housing meets a basic human need: shelter.** Regardless of economic conditions, people still need a place to live. During a recession, homeownership often declines, increasing the demand for rentals. This is especially true for affordable and workforce housing.
Here are several reasons why **multifamily investing holds up well in recessions**:
### 1. **Consistent Demand for Housing**
Even during economic downturns, people prioritize rent payments. If anything, demand for rental units tends to rise when homeownership becomes less attainable due to high interest rates, job loss, or stricter lending requirements.
### 2. **Diversified Income Streams**
Multifamily properties typically have multiple tenants, which spreads out the risk. Losing one tenant doesn’t result in 100% vacancy, unlike a single family home or small commercial space.
### 3. **Cash Flow and Cap Rate Stability**
Properly managed multifamily assets generate steady cash flow and tend to retain stronger [cap rates](https://rodkhleif.com/cap-rate-calculator/) even in a down market. Investors can maintain profitability while waiting out the downturn.
### 4. **Government Support Programs**
In times of economic stress, renters and landlords often benefit from government aid such as rent subsidies, tax incentives, and emergency assistance. These measures help maintain occupancy and rental income.
### 5. **Increased Flexibility with Lease Terms**
Multifamily leases are typically shorter (6-12 months), allowing landlords to adjust rent rates faster than office or retail leases, which may be locked in for 3-10 years. This flexibility is crucial in responding to market conditions.
## FAQs: Multifamily Real Estate and Recession Risk
Let’s address some of the most common questions people ask in 2025:
### **Is multifamily real estate safe in a recession?**
While no investment is completely safe, multifamily real estate is considered one of the most recession resistant options. The combination of rental demand, stable cash flow, and risk diversification makes it safer than many other sectors.
### **Do rents go down during a recession?**
In some luxury markets, rents may decrease. However, in Class B and C housing (workforce and affordable housing), demand often increases during a recession as people downsize or delay buying homes.
### **Is now a good time to invest in multifamily real estate (2025)?**
Yes. While the economy may be shifting, 2025 presents opportunities to buy distressed or undervalued properties, especially from over leveraged owners. Locking in assets with strong fundamentals can position you for long-term success.
### **How does multifamily compare to commercial real estate in a recession?**
Commercial real estate, particularly office and retail, is more volatile in downturns. Businesses close, tenants default, and vacancies rise. Multifamily assets, by contrast, typically maintain higher occupancy and require less leasing effort.
### **Can you get financing for multifamily properties in a recession?**
Lenders are generally more cautious during recessions, but **multifamily is still viewed as a low risk asset**. Government backed loans (like Fannie Mae and Freddie Mac) remain available for well qualified buyers.
Download our [FREE Financing Your Multifamily Purchase Guide](https://rodkhleif.com/financing-your-multifamily-purchase/) to learn more.
## What Types of Multifamily Properties Perform Best in Recessions?
Not all multifamily assets are created equal. The ones most likely to outperform during a recession include:
### **Class B and C Workforce Housing**
These properties serve working-class tenants who need affordable living options. During recessions, tenants from Class A (luxury) buildings often downsize into Class B/C housing, increasing demand.
### **Properties in Growing Secondary Markets**
Cities with steady job markets, diverse economies, and population growth (e.g., Charlotte, Tampa, Phoenix) see stronger performance even in downturns. Investors should focus on location fundamentals.
### **Smaller Apartment Buildings (5-50 units)**
These assets are more agile and often less exposed to institutional competition. They’re ideal for newer investors looking to build recession-resistant portfolios.
### **Value Add Properties**
Recessions provide opportunities to buy underperforming assets at a discount. Investors can renovate, reposition, and raise rents post-recovery, resulting in strong equity growth.
### 
## Strategies to Recession Proof Your Multifamily Portfolio
To thrive during uncertain times, multifamily investors should implement strategic risk-management tactics:
### 1. **Stress Test Your Deals**
Underwrite conservatively. Assume lower rent growth, higher vacancy, and increased operating expenses. If the deal still cash flows under stress conditions, it’s worth pursuing.
### 2. **Maintain Healthy Reserves**
Set aside 6-12 months of operating capital per property. This helps cover unexpected repairs, shortfalls, or tenant turnover.
### 3. **Focus on Tenant Retention**
Happy tenants are more likely to renew leases. Improve communication, offer renewal incentives, and respond promptly to maintenance requests.
### 4. **Improve Operational Efficiency**
Adopt technology like property management software, online payments, and digital leasing tools to streamline operations and reduce costs.
### 5. **Stay Educated and Connected**
Join investor groups, attend webinars, and learn from mentors like Rod Khleif. The more informed you are, the better your decisions during tough times.
Want to learn more about how to recession proof your multifamily asset? [Check out this article here. ](https://rodkhleif.com/how-to-recession-proof-your-multi-family-portfolio/)
## Multifamily vs. Other Real Estate in a Recession: A Quick Comparison
Asset ClassRecession ResilienceVacancy RiskCash Flow StabilityDemand SourceMultifamilyHighModerateHighConstant (housing)OfficeLowHighLowBusiness-basedRetailLowHighLowConsumer spendingIndustrialModerateLowModerateLogistics/manufacturingSingle-Family RentalModerateHighModerateIndividual tenants
## Final Verdict: Is Multifamily Recession Proof in 2025?
While no investment is entirely recession-proof, **multifamily real estate is about as close as it gets**. It offers diversified income, strong rental demand, and adaptability that make it far more stable than other asset types in tough economic times.
Whether you’re buying your first 4-unit or managing a 300-door portfolio, now is the time to lean into the strategies that make multifamily thrive, even when the economy doesn’t.
**Interested in building your recession proof multifamily portfolio?** Explore Rod Khleif’s [coaching program](https://rodkhleif.com/rod-khleif-coaching-program/) or download the free book [*How to Create Lifetime Cash Flow Through Multifamily Properties*](https://rodkhleif.com/lcfa-ebook/) today.
Stay focused, stay prepared, and remember fortune favors the bold, especially in real estate.
**Categories:** Featured, Real Estate
**Tags:** depression, multifamily investing, recession, recession proof
---
### [4 Steps to Jumpstart Your Multifamily Investment Business](https://rodkhleif.com/4-things-jump-start-multifamily-investment-business/)
**Published:** June 1, 2025
**Author:** Rod Khleif
**Excerpt:** Do These 4 Things to Jump Start Your Multifamily Investment Business
**Content:**
If you’re a 45- to 65-year-old entrepreneur, physician, engineer, or small business owner who already earns solid W-2 or 1099 income, but wants dependable, tax-advantaged cash flow, multifamily real estate is the smartest way to compound your wealth. The problem? Information overload stalls even the most motivated professionals. Below you’ll find four field-tested steps that slice through the noise, replace guesswork with clarity, and launch your multifamily business in record time.
## **Hit the Books: With Surgical Precision**
> **Outcome:** Master the 20 percent of concepts that drive 80 percent of your investing success.
Most new investors binge content randomly and end up drowning in contradictory advice. Instead, zero in on the core pillars that matter in every market cycle:
1. **Deal Analysis Fundamentals:** Learn [cap rate](https://rodkhleif.com/what-does-the-capitalization-rate-really-tell-you/), cash-on-cash return, internal rate of return, and debt-service-coverage ratio.
2. **Financing Structures:** Compare agency debt, local banks, bridge loans, and syndication splits; know when each is optimal.
3. **Due Diligence & Asset Management:** Understand rent audits, expense reconciliations, and renovation budgets so you don’t buy a money pit.
**Rod-Recommended Resources
- **Free books library** Download my guides on *Due Diligence*, *Financing*, and *Property Management* from the [**Books Page**](/books/).
- **Starter podcasts** – Queue these episodes on your commute:
- “Leading a Multifamily Company” with Maureen Miles
- “Titans of Multifamily” (500th Episode)
- “Real Estate Entrepreneur at 23”
Stream them via the [**Lifetime Cash Flow Podcast**](/podcast/) hub.
**Fast lane learning hacks
- Skim the table of contents first; highlight sections that fill your knowledge gaps.
- Summarize each chapter in a 3-bullet takeaway; teaching yourself locks in retention.
- Schedule one local **NREIA** or meetup event every month—nothing accelerates learning like proximity to seasoned owners.
## **Kick Some Tires. Turn Knowledge into Muscle Memory**
> **Outcome:** Build real world reps analyzing and touring properties, so underwriting becomes second nature.
Book smarts without ground experience equals paralysis. Within the next seven days:
- **Draft your “buy box.”** Identify preferred asset class (B or C), unit count (20 – 80), and price range.
- **Call two commercial brokers.** Explain your criteria and ask for three listings today.
- **Run the numbers.** Use my free [**ROI calculator**](https://rodkhleif.com/commercial-real-estate-underwriting-tool/) to evaluate rents, expenses, and financing scenarios.
- **Walk at least one property.** Even if you’re months from closing, treat every tour like a live deal: drive the neighborhood, snap photos, ask tenants polite questions about parking, utilities, and management responsiveness.
**Broker-relationship etiquette
- Be upfront about your timeline; brokers respect honesty more than bluster.
- Provide written feedback on every deal they send. That way you’ll stay top of mind for true off-market gems.
Real-world reps beat spreadsheet theory every time. After five site visits and twenty underwriting reps, you’ll glide through analysis that once took hours.
## **Define Clear Buying Criteria: Your Decision Filter**
> **Outcome:** Eliminate analysis paralysis by knowing exactly what you will, and won’t, buy.
Four factors create crystal-clear focus:
**Criterion**
**How to Nail It**
**Price & Leverage**
Meet a lender for pre-approval so you know your max loan amount, DSCR, and required down payment.
**Unit Count**
2- to 4-unit deals qualify for 30-year residential financing; 5 + units unlock commercial upside but demand stronger underwriting chops. Pick one lane for year one.
**Condition & Renovation Scope**
Decide whether you want turnkey, light-value-add (cosmetics), or heavy repositioning (structural + systems).
**Property Class**
A (luxury), B (solid workforce), C (older workforce with upside), D (distressed). Match class to your risk tolerance and schedule.
Write your criteria on a single-page PDF. Email it to every broker you meet, reference it on underwriting calls, and adjust quarterly as your competence grows.
## **Pick Your Target Markets: Where the Math Makes Sense**
> **Outcome:** Focus your deal hunting on markets that align with your lifestyle, network, and growth goals.
Four market types cover almost every scenario:
- **Backyard:** Perfect for first deals; short drive, easy oversight.
- **Hometown:** Leverage deep familiarity and family contacts.
- **Partner Boots-on-the-Ground:** Tap reliable friends or colleagues who can inspect units and manage contractors.
- **Future Retirement Hub:** Buy where you plan to live later; you’ll visit often and track local trends effortlessly.
**Data points that matter
- Job and population growth > 1 percent annually
- Diverse employment base; no single employer over 20 percent of jobs
- Landlord-friendly legislation (reasonable eviction timelines, no rent caps)
Double-check assumptions with [**Finding the “Perfect” Deal ,**](https://rodkhleif.com/finding-perfect-deal/)a deep dive into macro and micro-market analysis.
### **Pulling It All Together (The Flywheel Effect)**
Learning, tire kicking, refining criteria, and evaluating markets aren’t sequential, they’re a continuous loop. Each pass through the flywheel:
1. **Strengthens expertise** (books & podcasts)
2. **Sharpens instincts** (property tours & underwriting)
3. **Clarifies focus** (buy box refinement)
4. **Expands opportunity** (new brokers + better markets)
Momentum compounds fast. Give yourself 90 days of disciplined cycles and you’ll evolve from cautious onlooker to confident offer-maker.
### **Common Roadblocks & Rapid Fixes**
- **“I don’t have time.”** Block two 60-minute real-estate sessions per week (early morning and one evening). Protect them like board-room meetings.
- **“What if the market crashes?”** Underwrite with conservative rent growth (2 percent) and 10 percent exit cap rate. Deals that pencil under pessimistic assumptions thrive in good times.
- **“I’m nervous about talking to brokers.”** Draft a 30-second positioning statement: “I’m actively searching for 20- to 50-unit B-class assets in North Tampa with light-value-add upside. We’re pre-approved for $3 million and can close in 60 days.” Confidence comes from clarity.
### **Next Action**
Download my free *Due Diligence* guide, then grab a seat in the upcoming [**Multifamily Bootcamp**](https://rodkhleif.com/bootcamp/). In one weekend we’ll underwrite live deals, tour properties, and hand you a proven blueprint to build *Lifetime Cash Flow*. Let’s transform knowledge into keys in/multifamily-bootcamp/ hand!
**Categories:** Blog, Finding Deals
**Tags:** apartment investing, business structures, Driving Force, landlord, motivation, multifamily, multifamily investment, multifamily property investing, multifamily real estate, real estate, real estate investing, real estate podcast, Rod Khleif, seller financing
---
### [What Does the Capitalization Rate Really Tell You?](https://rodkhleif.com/what-does-the-capitalization-rate-really-tell-you/)
**Published:** May 2, 2025
**Author:** Rod Khleif
**Content:**
## **Why Cap Rate Still Matters in 2025**
If you’re serious about **multifamily investing**, you can’t skip the capitalization rate. Cap rate is your lightning-fast snapshot of a property’s income potential. Think of it as the *pulse check* before you dig into deeper underwriting like cash-on-cash return or internal rate of return (IRR).
But does it tell the whole story? What does the capitalization rate really tell you?
## **How to Figure a Property’s Cap Rate**
Before we discuss what the cap rate tells you about an investment, we need to first discuss how to figure out the rate. The formula is as follows:
–> Check out our [Cap Rate Calculator](https://rodkhleif.com/cap-rate-calculator/) to find out your cap rate instantly!
## **What Does the Cap Rate Tell You?**
The capitalization rate can be useful in analyzing an investment in several areas.
## **Return on a Cash Investment**
The cap rate helps an investor determine the percentage of return they can anticipate if they purchased the investment property for cash assuming the income and value remain constant.
## **Investment Comparison**
It can also be a useful tool to compare different types of investment properties. For example, if an apartment building is listed for $1,250,000 and has a NOI of $92,500 the cap rate would be 7.4%. Whereas if a mobile home park is listed for $435,000 and is generating a NOI of $37,500, the cap rate is 8.6%. The higher the cap rate the better the return on the investment making the mobile home park a more appealing option – at least at this point in the analysis.
**Cap rate is a quick comparison tool.**
Two deals, two cap rates—instant apples-to-apples:
Higher cap = greater projected return (all else equal). In this snapshot, the park wins—time to dig deeper.
## **Risk Assessment**
The cap rate has a risk return buried in the rate. If an investor has $1,000,000 to invest, they could place it all in 10-year treasury bond and be guaranteed a 3% return on their investment.
If they purchased an apartment building that generates a $100,000 annually, they would get a 10% return on their investment. The 7% difference reflects the additional risk associated with managing an apartment building compared to the bond investment.
## **What a Cap Rate Does Not Tell You?**
There are limitations to the capitalization rate. Just as a simple blood pressure test can give a doctor a general idea of your health, so the cap rate is only a generalized indicator. There are factors than can alter the accuracy. In actuality, there are times when the cap rate should not be used at all.
### **Irregular Income**
The capitalization rate assumes that the NOI will remain constant. If the property’s net operating income stream is complex – such as with percentage based rent rates – the cap rate will not be able to provide an accurate picture. The more complex Discounted Cash Flow (DCF) analysis will need to be completed.
### **Cash-on-Cash Return**
A cap rate assumes a cash purchase. An investor buys an apartment complex for $8,500,000 cash and it generates an NOI of $725,000 creating a cap rate of 8.5%. But what if the investor needs financing? Financing will affect the investors ROI. The cap rate will then need to be split between the return on the lender’s investment and that of the investor.
If the investor puts 25% down and finances the rest ($6,375,000) on a 25 year amortization at 5.05% it creates an annual debt service of $449,448. The lender’s return on this property investment (known as the mortgage constant) is 7.1% ($449,448 / $6,375,000).
The NOI to the investor after the mortgage would be $276,897 creating an investor’s equity return of 13.0% ($276,897 / $2,125,000 down payment). This is also known as the cash-on-cash return.
When weighted based on the loan-to-value/equity position, the cap rate is verified.
- Loan-to-Value 75% x 7.1% mortgage constant = 5.3%
- Equity Position at 25% x 13.0% equity cap rate = 3.2%
- Capitalization Rate (5.3% + 3.2%) = 8.5%
This splitting of the cap rate into the lender’s cap rate and the investor’s cap rate is called the Band of Investment Method. It can be used to back into a purchase price once the lending terms are set and the investors desired ROI is known.
The cap rate is a very useful investment analysis tool but investors must realize its limitations. Inaccurate income or expenses will dramatically affect the capitalization rate. So you will need to verify any Profit and Loss statements first.
Additionally, remember that the Cap Rate reflects a one year return on a stable income with a cash purchase. Knowing what the capitalization rate really tells you will help you to make better investment decisions.
## **When to Lean on Cap Rate (and When to Toss It)**
## **Cap Rate Best Practices**
1. **Verify the Books** – Scrutinize every P&L line item; garbage in, garbage out.
2. **Benchmark Locally** – A “good” cap in Dallas differs from Tampa. Study recent trades.
3. **Layer Your Metrics** – Pair cap rate with DCF, cash-on-cash, IRR, and sensitivity analysis.
4. **Stress-Test Your Assumptions** – Bump vacancy, tax, and insurance line items 10–15 % to see if the deal still works.
## **Bottom Line**
Cap rate is an indispensable starting point**, not a final diagnosis**. Use it to filter deals fast, gauge relative risk, and negotiate price, but always backstop with deeper underwriting before you wire earnest money.
[Click here to learn more about finding and evaluating deals. ](https://rodkhleif.com/finding-analyzing-multifamily-deals-like-a-pro/)
### **Want More Hands-On Cap Rate Training?**
At my[ **Multifamily Bootcamp**](https://rodkhleif.com/bootcamp/), we run real case studies—financing structures, DCF models, exit scenarios—so you leave ready to pounce on great deals. **Tickets are limited, grab yours [here](https://rodkhleif.com/bootcamp/).
🎧 Prefer audio learning? Subscribe to **“[Lifetime Cash Flow Through Real Estate Investing](https://rodkhleif.com/lifetime-cashflow-podcast/)”** and master these metrics on the go.
**Categories:** Blog, Real Estate
**Tags:** CAP Rate, real estate, real estate investing, Rod Khleif
---
### [17 Reasons Multifamily Investing Beats Single Family (still in 2025)](https://rodkhleif.com/17-reasons-multifamily-investing-beats-single-family/)
**Published:** May 1, 2025
**Author:** Rod Khleif
**Excerpt:** 17 Reasons Multifamily Investing Beats Single Family
**Content:**
Investing in real estate is one of the best ways to build wealth, but not all real estate investments are created equal. While many new investors start with single family homes, experienced investors know that multifamily properties offer greater scalability, stability, and profitability. That’s why multifamily beats single family still in 2025.
## Why Listen to Me?
I’ve owned and managed thousands of doors through four economic cycles, so I’ve seen what performs when the market zigzags. In 2025, the evidence is clearer than ever: multifamily beats single-family hands down.
Let’s dive into the 17 biggest reasons.
## **1. Bigger, Safer Cash Flow**
A single-family rental leans on one paycheck; miss that check and your income drops to zero. In a 20-unit property, one vacancy only trims 5 % of your revenue, leaving 95 % intact.
That cushion matters today: the national rental-vacancy rate just ticked up to [**7.1 %**.](https://www.census.gov/housing/hvs/current/index.html?utm_source=chatgpt.com) Having multiple options smooths out the ups and downs of income. This is great for lenders, partners, and your stress levels.
## **2. Rapid, One-Shot Scaling**
Want 10 new doors? You could chase 10 separate houses, ten sets of inspections, ten closings—and ten chances for a deal to blow up. Or you can close one apartment building and be done by Friday. Larger properties lead to fewer transactions. You only need one insurance policy and one set of vendor relationships. This gives you more time to find the next deal instead of managing many small tasks.
## **3. Vacancy Doesn’t Equal Zero**
With single-family, a vacancy wipes out 100 % of rent until you re-lease. In multifamily, even a couple of empty units leave plenty of cash coming in to cover debt service and expenses. That resilience shows up in values: buyers will pay more for predictable cash flow, even in softer markets.
## **4. Friendlier Financing**
Why are banks fighting for your apartment loans? Because they’re safer. The [Mortgage Bankers Association](https://www.mba.org/news-and-research/newsroom/news/2025/02/10/cref-forecast--commercial-multifamily-borrowing-and-lending-expected-to-increase-16-percent-to--583-billion-in-2025?utm_source=chatgpt.com) expects **multifamily lending to jump 16 % to $361 billion in 2025** as capital rotates away from shakier asset classes. Lower perceived risk = sharper rates, longer amortizations, and bigger loan proceeds.
## **5. Turbo-Charged Tax Advantages**
Apartments are depreciation machines. A cost-segregation study can accelerate write-offs on components like roofs, HVAC, and even parking lots, wiping out years of taxable income. Stack that with bonus depreciation (still 60 % in 2025), mortgage-interest deductions, and a 1031 exchange, and Uncle Sam becomes your silent partner.
## **6. Economies of Scale**
Roof goes bad on a fourplex? One roof solves four problems. Mow one lawn, insure one structure, pull one set of permits—every per-unit cost drops as your door count rises. That widening spread between rent and expenses is pure NOI, the metric that drives property value.
## **7. Higher Net Operating Income (NOI)**
Because expenses scale down and rents stack up, apartments routinely post **NOI margins 10–15 points higher than scattered single-family portfolios**. Every extra dollar of NOI is worth $15–$20 in equity at today’s cap rates—forcing appreciation even when market values stall.
## **8. Affordable Professional Management**
A third-party manager that costs 10 % on a single-family house might drop to 3–4 % of collected rents on a 100-unit. Better yet, onsite teams can handle leasing, maintenance, and resident retention, freeing you to focus on acquisitions and investor relations.
## **9. Value Based on Income, Not Comps**
Single-family values ride the whim of your neighbor’s sale price. Multifamily uses the income approach: boost rents or trim expenses and the valuation formula does the rest. You control appreciation by operating better, not by praying for a hot market.
## **10. Predictable, Durable Income Streams**
[Freddie Mac](https://freddiemac.gcs-web.com/news-releases/news-release-details/freddie-mac-multifamilys-2025-outlook-forecasts-increased?utm_source=chatgpt.com) pegs 2025 rent growth at a steady **2.2 %** with vacancy settling near **6.2 %**, even after the recent construction boom. Translation: modest but reliable growth—exactly what pension funds and life-companies target, and exactly why they’ll pay premium prices when you sell.
## **11. Recession-Resilient Demand**
High mortgage rates mean more people rent longer. Roughly **31.4 % of Americans—over 102 million people—now live in rentals**. During downturns, that renter pool swells as would-be buyers sit out the market, propping up occupancy in well-located apartments while single-family flippers sweat.
## **12. Smoother Exit Strategies**
You’re not limited to retail buyers who need a mortgage and a white-picket-fence dream. Institutions, REITs, family offices, and 1031 exchangers all hunt stabilized multifamily in any cycle. A larger buyer pool means more competitive offers and shorter time on market when you’re ready to cash out.
## **13. Lower Tenant Turnover**
Single-family renters often bolt once they can buy. Workforce-housing residents in B and C-class apartments typically renew to avoid moving costs and rising house prices, slashing make-ready expenses, leasing commissions, and vacancy downtime.
## **14. Built-In Value-Add Plays**
Upgrade units with vinyl-plank floors, add smart locks, bill back utilities, stripe the parking lot. Each improvement can raise rents $50–$150 per door. Multiply that by many units, and you can increase NOI by six figures in one year. Then, refinance and take out cash without paying taxes.
## **15. Syndication & Partnerships Are Easier**
Big deals need bigger checks, which attracts passive investors dying for yield. Structure a syndication: limited partners bring capital, you bring the hustle. Earn an acquisition fee, asset-management fee, and a promote on the backend—all while everyone shares upside.
## **16. Cheaper Insurance per Door**
Commercial carriers write master policies that bundle liability, property, and umbrella coverage. Spreading the premium across 40 units often halves (or better) the per-door cost you’d pay insuring 40 separate homes.
## **17. Truly Passive Options Abound**
Don’t want to swing hammers or field 2 a.m. leak calls? Buy into a private apartment syndication or a multifamily-focused REIT. You collect distributions while professionals handle operations—perfect for busy professionals chasing mailbox money.
## **Bottom Line**
Whether you’re eyeing your first duplex or your hundredth unit, 2025’s fundamentals still favor multifamily: steadier demand, friendlier financing, scalable operations, and value you can force—not hope for. **Single-family is a stepping-stone; apartments are the bridge to lasting wealth.
## **Take Action**
Ready to make the leap? [**Join my next Multifamily Bootcamp**](https://rodkhleif.com/bootcamp) and learn, step-by-step, how to find, fund, and operate deals that create *lifetime cash flow*. Spaces disappear fast—secure yours now.
🎧 **Prefer audio learning?** Subscribe to “[The Lifetime Cash Flow Podcast](https://rodkhleif.com/podcast)” for weekly tactical deep dives and real-world success stories.
**Categories:** Blog, Real Estate
**Tags:** Driving Force, motivation, multifamily real estate, real estate, Rod Khleif, single family real estate
---
### [What Do Successful People Have in Common?](https://rodkhleif.com/successful-people-common/)
**Published:** May 4, 2025
**Author:** Rod Khleif
**Excerpt:** I wanted to share something compelling from my travels last week. I am a member of several high level (and very expensive) masterminds. I attended our quarterly meetings for two of them last week in California.
**Content:**
## **What I Learned from Millionaires, a Billionaire, and a Skateboarding Legend**
Last week, I had the privilege of attending two high-level masterminds in California—both focused on digital marketing and business storytelling. These aren’t your typical networking events. They’re **elite gatherings of high performers.** And yes, they’re incredibly expensive.
But here’s the kicker…
Despite the fact that most of the attendees were multi-millionaires, and one even a billionaire, they still showed up to learn, share, and grow. That’s what struck me the most.
I snapped a few photos with some of them (check them out below), but what I really want to share is the common thread that ran through each of their stories. These weren’t just talks about tactics or success hacks. They were deep insights into how greatness is built.
## **Here’s what every one of them had in common:**
✅ **A clear, compelling vision
They didn’t just dream big—they defined those dreams with specific, measurable goals.
✅ **Laser-sharp focus
Distractions didn’t stand a chance. These people had tunnel vision on what mattered most.
✅ **The grit to overcome adversity
Every story included a setback, a challenge, or a rock-bottom moment—but none of them quit.
✅ **Relentless perseverance
When plans didn’t work, they didn’t abandon the goal. They adjusted the strategy and tried again.
✅ **A powerful mindset
No victim mentality. Just **ownership, optimism**, and the belief that they could figure it out.
## **Success Is Not a Destination. It’s a Journey**
Listening to these leaders reminded me of something powerful:
> **Happiness doesn’t come from achievement. It comes from progress.
Success isn’t a box you check. It’s a way of life.
It’s the consistent movement toward your vision—even when things get hard. Especially when they get hard. It’s waking up every day and asking, *“How can I get just a little better today?”
## **A Few Standout Leaders Who Inspired Me:**
📌 **John Assaraf
Featured in *The Secret* and a pioneer of the vision board movement. He helped millions—including me—visualize a better future.
📌 **Tony Hawk
The Birdman himself. Legendary pro skateboarder and founder of Birdhouse. His story is one of passion, reinvention, and long-term impact.
📌 **Leroy Dixon
World champion sprinter and gold medalist. His journey is a masterclass in discipline, speed, and mindset under pressure.
📌 **Sara Blakely
Founder of Spanx and self-made billionaire. A beacon of resilience, creativity, and commitment to purpose.
📌 **Dr. Robert Cialdini
Author of *Influence* and *Pre-suasion*. One of the greatest minds in behavioral psychology and persuasion—his work has shaped how millions think and sell.
Their backgrounds? Wildly different.
Their industries? All over the map.
But their principles? **Strikingly similar.
So if you’re chasing a goal right now, whether it’s your first deal, financial freedom, or a better version of yourself, take this to heart:
- **Get clear on what you want.
- **Build the habits to stay consistent.
- **Surround yourself with people who inspire you.
- **And keep showing up.**
## **🎧 Want to Build a Winning Mindset?**
If this resonated with you, don’t miss my *Own Your Power* clips on the [**Lifetime Cashflow Podcast**](https://rodkhleif.com/lifetime-cashflow-podcast/)—short, powerful bursts to keep your head and heart in the game.
And if you haven’t grabbed my bestselling book yet:
[](https://www.lcfabook.com/core-book/)
[**How to Create Lifetime Cashflow Through Multifamily Properties – Get It Free Here**](https://www.lcfabook.com/core-book/)
Stay focused, stay hungry, and keep moving forward.
**With love and passion,
**Rod Khleif**
**Categories:** Blog, Psychology of Success
**Tags:** Driving Force, motivation, real estate, real estate investing, real estate podcast, Rod Khleif
---
### [How to Succeed – The 7 Steps To Success By Rod Khleif](https://rodkhleif.com/how-to-succeed-the-7-steps-to-success-by-rod-khleif/)
**Published:** May 5, 2025
**Author:** Rod Khleif
**Excerpt:** How to Succeed - The 7 Steps To Success By Rod Khleif
**Content:**
> *“It’s not one big leap. It’s small, consistent steps that build empires.”* — Rod Khleif
If you’ve ever wondered what it really takes to succeed in multifamily real estate—or in life—this is for you. I’m breaking down the **7 steps to success** I’ve used not just to build a massive portfolio but to rebuild after losing it all and come back stronger.
Whether you’re launching your first deal, scaling to hundreds of units, or chasing a dream outside of real estate altogether, these principles will serve you well.
Let’s dive in.
## **Step 1: Get Crystal Clear on What You Want—and Why**
Success always starts with clarity. You’ve got to **know your destination before you chart the course**.
Ask yourself:
- What do I want to achieve?
- Why is it a must?
- What will it feel like once I’ve achieved it?
Then write it down. Turn that dream into a measurable goal with a clear timeline. Clarity turns wishful thinking into action. And don’t just write your goal—**visualize it daily**. See it, feel it, live in it. This isn’t woo-woo; it’s neuroscience. Your mind needs to believe it’s possible before it commits to the journey.
## **Step 2: Love the Journey, Not Just the Outcome**
Success isn’t a destination—it’s a **daily decision**. If you only associate happiness with the final result, you’ll burn out long before you get there.
Reframe your mindset to find **joy in the process**:
- Learn to love the hustle.
- Get addicted to progress.
- Celebrate movement, not just milestones.
When you love what you do, **work becomes play**. Whether you’re underwriting deals, networking with brokers, or analyzing market data, find fulfillment in the reps.
## **Step 3: Embrace Sacrifice to Accelerate Growth**
Success always requires **temporary discomfort for long-term freedom**.
Back when I was building my empire, I lived in a one-bedroom apartment—even though I already owned over 100 properties. Why? Because I prioritized investing in my future over short-term luxuries.
This isn’t about deprivation—it’s about **delayed gratification**:
- Skip the new car to build your down payment fund.
- Delay the vacation to reinvest in your business.
- Say no to distractions so you can say yes to your dreams.
This mindset separates dabblers from doers.
## **Step 4: Build a Plan—and Ruthlessly Prioritize**
Hope is not a strategy.
You need a written plan. Not just what you want—but how you’ll get there:
- What’s your first step?
- What are your top 3 priorities this quarter?
- What’s the 20% of action that’ll drive 80% of the results?
This is where the **Pareto Principle** becomes your best friend. Don’t confuse busy with productive. Focus on the actions that actually move the needle—networking, analyzing deals, raising capital, building relationships.
## **Step 5: Take Relentless, Consistent Action**
Once the plan is clear, it’s time to move.
**Massive action is the great equalizer**. You don’t need to be the smartest person in the room. But if you’re the most consistent—if you show up daily—you will win.
Here’s what that looks like:
- Make calls even when you don’t feel like it.
- Send offers even when you’re unsure.
- Attend meetups even when you’re tired.
Progress = momentum. And momentum compounds.
## **Step 6: Celebrate Every Small Win**
It’s easy to get discouraged when you’re still miles from your big goal. That’s why you’ve got to **pause and acknowledge the progress**:
- Got your first LOI accepted? Celebrate it.
- Closed on a duplex? Pop the champagne.
- Hit 30 days of consistent lead gen? High five yourself.
These micro-wins build **positive reinforcement**, which strengthens your habits and keeps your confidence high—especially when setbacks show up.
## **Step 7: Stay Flexible. Change Your Approach, Not Your Goal**
Success is rarely a straight line. You’ll hit walls. You’ll face rejection. You’ll have moments when it feels like nothing’s working.
But here’s the secret:
> *If the path gets blocked, change your approach—not your outcome.
Learn. Adapt. Try something else. And then try again.
Stay focused on your goal and why it matters. That clarity will carry you through uncertainty.
### **Success in 2025 Demands More Than Skill—It Demands Grit**
We live in an age of distractions, instant gratification, and easy excuses. But none of those things build wealth or freedom.
**You will get knocked down. You will question yourself. You will have “seminars”—aka failures.
But if you stay committed, persistent, focused—and above all, generous—you will build a life beyond what you thought was possible.
### **🎧**
### **Fuel Your Mind Every Day**
Want to stay focused on your journey?
Check out my podcast **“[Own Your Power](https://www.youtube.com/watch?v=rHUEwr4i_YU&list=PLKbOlB6GWTy3Nbw_KTZeis7iRlLgD-P9Y&index=1)”** for short, powerful mindset boosts that will keep you taking action every day.
And remember: **It’s 20% mechanics, 80% mindset.
Start with one small step—today.
**Categories:** Blog
**Tags:** Driving Force, motivation, real estate, real estate investing, Rod Khleif
---
### [How to Self Manage Multifamily Property Like a Pro in 2025](https://rodkhleif.com/how-to-manage-your-own-multi-family-property/)
**Published:** May 3, 2025
**Author:** Rod Khleif
**Excerpt:** When it comes to property management, multi-family investors split into two camps. On one side, many investors will tell you to hire a property management company. Why?
**Content:**
When you own apartments, every dollar saved on operating cost flows straight to the bottom line. In 2025, tech, regulations, and tenant expectations have all evolved—but the core question remains: **hire a manager or run the show yourself?** I’ve done both. One “professional” manager once siphoned over **$100,000** from my properties before I caught the fraud. That pain pushed me to master self‑management—and today my teams operate thousands of doors with tight control and happy residents.
> ***TLDR:** Self‑managing multifamily starts with rock‑solid legal compliance, data‑driven tenant screening, and tech‑enabled rent collection. Hire a trusted on‑site manager, automate maintenance, and incentivize performance. Track every dollar in accounting software, review KPIs monthly, and enforce policies consistently. Do that, and you’ll outperform most third‑party managers—while keeping 4‑8 % of gross rent in your pocket.*
## Why 2025 Is the Perfect Year to Take Back Control
- **PropTech explosion:** Cloud platforms like RentManager and AppFolio automate rent, renewals, and work orders from your phone.
- **Tenant preference shift:** 78 % of renters under 40 now expect instant text responses ([NMHC 2025 survey](https://www.nmhc.org/research-insight/the-nmhc-50/)). Direct control lets you meet that demand.
- **Fee inflation:** Average third‑party management fee climbed to **7.1 %** of gross rents in Q1 2025 ([Freddie Mac Market Lens](https://mf.freddiemac.com/research/outlook/20231219-2024-multifamily-outlook)). Self‑managing preserves margin. The 6‑Step Self‑Management Blueprint
### 1. Master Your Legal Environment
Know federal, state, and municipal rules **before** the first lease. Bookmark [HUD’s Fair Housing handbook](https://www.hud.gov/program_offices/administration/hudclips/handbooks/fheo/80251) and your state landlord‑tenant code. Take screenshots of key pages and save them in your “Compliance” folder for quick reference.
> *Pro tip:* Walk your local courthouse’s eviction filings. You’ll spot patterns in what trips landlords up.
### 2. Assemble Your PropTech Stack
- **Accounting:** [QuickBooks Online](https://www.googleadservices.com/pagead/aclk?sa=L&ai=DChcSEwiDxeKKi4eNAxWcploFHbY4E1cYABADGgJ2dQ&co=1&ase=2&gclid=Cj0KCQjw_dbABhC5ARIsAAh2Z-QuwGhtQ0_97fDsvAC9rZsBqt1nrMZJgI15WVlUY6kEsJ5wjl0OkZoaAteLEALw_wcB&ohost=www.google.com&cid=CAESeOD2-8sT-ZgLdOjqFDmDZ_mtLCS76yLLlwvcRWsr8uokGF0Hf5Lw_Q-DEgWyuh234PeJqYuJikb0obXLcw6pSiCJgvWgBj30h6Lnd9LXVsTkRjBpmnH0w-_4QVlMQymNyzNQMhhyz5y1thpx5mju_zqdG3JRmxGZEA&sig=AOD64_1f9o6ngOzNsyrq8bNXIMKebMH6sw&q&nis=4&adurl&ved=2ahUKEwiz0N6Ki4eNAxViSzABHbXjGg8Q0Qx6BAgLEAE) + custom chart of accounts
- **Rent collection:** [Apartments.com](https://www.googleadservices.com/pagead/aclk?sa=L&ai=DChcSEwjR1Z6Ri4eNAxVMoloFHX4COEkYABAAGgJ2dQ&co=1&ase=2&gclid=Cj0KCQjw_dbABhC5ARIsAAh2Z-ToAVItC28D1cQJHGPpYu_Dqv4QnNCE_TYF4xBptc0GRgV6q_kxxnUaAhFoEALw_wcB&ohost=www.google.com&cid=CAESeOD2XxNAW7A8NyCUTOagIi9PmrC-12OvldgmPlctJWJNQY9U-vpi0MCjHUUolp9Jjh5IQotOi7S33-oUiJDiiLt3_YYl1--Gcz-8jemdLVh7k-LMDa0AS97uIBlZbhPiB29GQAi64AG8wcn3D_KeYy_MJHB1Fs2iEw&sig=AOD64_0eaUfBiUbZ0CqTFpIZruKayBbp1w&q&nis=4&adurl&ved=2ahUKEwjKgJqRi4eNAxWsTTABHdP7F0sQ0Qx6BAgKEAE) or [Buildium](https://www.googleadservices.com/pagead/aclk?sa=L&ai=DChcSEwjUiKCWi4eNAxVfs1oFHSVvPF0YABAAGgJ2dQ&co=1&gclid=Cj0KCQjw_dbABhC5ARIsAAh2Z-Ss7lHAucbMiBfXf1NWu_gCXGcsWaeLDe056-HT0gTwUKzTP-P_TmwaAjNYEALw_wcB&ohost=www.google.com&cid=CAESVeD2e9YVLKjm9xB_cVJCm7dspeIpfGE91FOp-RnuFVIaMYAIycdsYAlpCrYgu8T9Zlfb_pP_kBqNTWcxj4xKWzeKAPowYOqfs3SR6xm-ELlfk7EPb_A&sig=AOD64_3dASYGlRpWNGYAwrA9e_3pn2h6QA&q&adurl&ved=2ahUKEwjT45uWi4eNAxVlSjABHUAlLNgQ0Qx6BAgLEAE) auto‑pay
- **Maintenance:** [Latchel](https://latchel.com/) or [Property Meld ticketing](https://propertymeld.com/)
- **Inspections:** [RentCheck](https://www.getrentcheck.com/) video templates
- **Communication:** [Community SMS](https://community.com/) or [WhatsApp Business](https://business.whatsapp.com/)
These tools cost **<$15/unit/month**—far less than a manager’s cut.
### 3. Build a Tenant Acquisition Funnel
1. List vacancies on [Zillow](https://www.zillow.com/), Apartments.com, and Facebook Marketplace—add 3D tours to cut in‑person showings by 40 %.
2. Require a **single online application** that pulls credit, criminal, and eviction data.
3. Pre‑screen income at 3× rent; verify employment stubs via Plaid.
4. Approve or deny within 24 hours—speed wins great tenants.
### 4. Write Bulletproof Leases
Your lease sets expectations and protects cash flow. Include:
ClausePurpose**Rent Due**Due 1st, late fee 5th, file eviction 15th**Maintenance Split**Tenant handles items <$100; owner Larger repairs**Right of Entry**24‑hour notice except emergencies**No Cash Payments**Digital only—easier audit trail**Internal link:** For my downloadable *Lease Template Kit*, check the resources page on RodKhleif.com.
### 5. Hire and Motivate an On‑Site Manager
A reliable resident manager handles eyes‑on‑the‑ground tasks so you stay strategic.
*Ideal profile:* Retired couple, military veteran, or handy college grad with hospitality skills.
**Compensation Options**
ModelTypical 25‑Unit CostProsFree 2‑bed unit$0 cash + $1,200 lost rentStrong loyaltyHalf‑rent + $500$1,100/moGood for newer assetsSalary $1,500$1,500/moWorks for 50+ unitsCompare that with **third‑party fees:**
Unit Count7 % FeeAnnual Cost25$2,625/mo$31,50050$5,250/mo$63,000### 6. Track Performance Like a Hawk
- Review rent‑roll weekly.
- Run P&L monthly—flag variances >3 %.
- Conduct quarterly video inspections; store clips in Google Drive.
- Benchmark KPIs (occupancy, delinquency, maintenance tickets/time‑to‑close) against NMHC averages.
## First‑Hand Story: From Chaos to 98 % Occupancy
In 2023, I acquired a 32‑unit in Kansas City with 22 % delinquency. After firing the manager and self‑managing:
- Installed AppFolio, automated late fees.
- Hired a retired Navy Chief as resident manager.
- Held “pizza with the owner” nights to rebuild trust.
Result? **98 % paid‑on‑time rate within 90 days** and $180K added value at refi. Screenshots of the before/after rent roll are in my latest webinar replay.
## Bullet List: Top Mistakes Rookie Self‑Managers Make
- Weak tenant screening
- Cash rent collections (no paper trail)
- Ignoring preventive maintenance
- Overlooking local inspection deadlines
- Hesitating to file evictions
Avoid these and your path gets smoother.
## Key Takeaways
> **• Control equals profit:** Every 1 % cut in expenses raises equity value 5‑7 ×.
> **• Systems beat stress:** Use tech and checklists to handle 90 % of tasks.
> **• People matter:** A great on‑site manager is cheaper and better than any distant firm.
## Ready for the Next Level?
1. **Download my free e‑book** *“[How to Create Lifetime CashFlow Through Multifamily Properties.](https://www.lcfabook.com/core-book/)”*
2. **Subscribe** to the [Lifetime CashFlow Podcast](https://rodkhleif.com/lifetime-cashflow-podcast/) for weekly power tips.
3. **Reserve your seat** at the next hands‑on [Multifamily Bootcamp](https://www.rodkhleif.com/bootcamp) and compress decades of learning into three days.
## FAQ
**Q1. Does self‑management work for out‑of‑state owners?**
Yes—combine a trusted resident manager with cloud dashboards and monthly video walk‑throughs.
**Q2. How much time will I spend weekly?**
With the right systems, under three hours for a 20‑unit. Larger assets scale with team help.
**Q3. What about insurance requirements?**
Alert your carrier. Many require liability addenda and proof of regular inspections.
**Q4. Can I switch back to third‑party later?**
Absolutely. Keep your records clean and any manager can step in.
**Categories:** Blog, Property Management
**Tags:** Driving Force, motivation, real estate, real estate investing, real estate podcast, Rod Khleif
---
### [How To Invest In Real Estate With No Money By Rod Khleif](https://rodkhleif.com/how-to-invest-in-real-estate-with-no-money-by-rod-khleif/)
**Published:** February 5, 2025
**Author:** Rod Khleif
**Excerpt:** How To Invest In Real Estate With No Money By Rod Khleif
**Content:**
# **How to Invest in Real Estate With No Money: Proven Strategies That Work**
Today, I want to talk about how to invest in real estate with no money… or very little money. I’ve owned over 2,000 houses that I rented out long-term, as well as multiple apartment communities throughout my career. I strongly believe in buy-and-hold investing, and that the best properties for long-term investment are multifamily properties.
If you’ve listened to my real estate podcast or read my book, you know that my focus is on multifamily investing. That said, I want to break down exactly how I bought 500 single-family homes in Denver with none of my own money, and how you can start investing in real estate with no money as well.
## **How to Buy a Property With No Money**
The bottom-line secret to buying any investment property with no money down is to have a system in place to find great deals.
I’ve always said, and many other real estate investors agree, that if you find the deal, you’ll find the money. While that sounds simple, let’s break it down further.
The **two key components** to **investing in real estate with no money** are:
1: **Finding great off-market deals**
2: **Building credibility to attract money loans and investors**
## **Finding Off-Market Deals to Start Investing in Real Estate**
You won’t find the best real estate investment opportunities listed on the MLS. The best single-family home or multifamily deals are off-market properties that require direct outreach and creative sourcing strategies.
**Ways to Find Great Investment Properties With No Money Down**
- **Driving for Dollars**: Look for rundown or vacant single family homes in desirable neighborhoods.
- **Pre-Foreclosures & Auctions**: Approach homeowners before they lose their homes.
- **Direct Mail Marketing**: Send personalized letters to absentee owners and distressed property owners.
- **Wholesalers & Bird Dogs**: Partner with professionals who find off market deals.
- **Networking**: Build relationships with other real estate investors, brokers, and property managers.
- **Online Lead Generation**: Use Google Ads, Facebook Ads, and Craigslist to attract motivated sellers.
I personally **bought hundreds of houses** by knocking on doors of homeowners in foreclosure. I’d introduce myself and say:
*“Hey, I saw you’re having some trouble with XYZ mortgage company. I help people in these situations—would you like to chat about it?”*
If you’re willing to do **what most people won’t**, you will find great investment properties that others miss.
## **How to Buy Property With No Money and No Credit Score**
Once you find a great deal, the next step is funding it using creative financing. If you don’t have a perfect credit scoreor cash for a down payment, don’t worry—there are still ways to acquire property.
### **Creative Strategies to Buy an Investment Property With No Money**
- **Seller Financing**: The seller acts as the lender, allowing you to make payments directly to them instead of a bank.
- **Subject-To Deals**: You take over the seller’s existing mortgage without applying for a new loan.
- **Lease Options**: You rent the property with an option to buy later, allowing you to generate rental income while delaying the actual purchase price.
- **Private & Hard Money Loans**: Private lenders and hard money lenders provide short term money loans based on the property’s value rather than your credit score.
- **Joint Ventures & Partnerships**: Partner with **real estate investors** who fund the deal while you manage it.
## **How I Bought 500 Single-Family Homes in Denver With No Money**
Here’s exactly how I built my real estate portfolio with **no money down**.
1: **Find deeply discounted investment properties** through off-market deal sourcing.
2: **Negotiate seller financing** or raise private capital from investors.
3: **Use lease options or subject-to financing** to take control of the properties.
4: **Generate rental income** to pay for the properties.
5: **Refinance or sell properties** for long-term wealth.
I never used my own money. I simply found great deals, structured creative financing, and brought in money from private investors.
## **How to Buy Multifamily Properties With No Money Down**
If you want to scale faster and build wealth through rental income, multifamily properties offer more financing options than a single-family home.
### **Steps to Buying a Multifamily Property With No Money**
#### 1: **Find a Distressed Property**
- Look for under-market rents and mismanaged buildings.
- Target tired landlords who want to sell.
#### 2: **Use Creative Financing**
- **Seller Financing**: Convince the seller to finance the deal.
- **Syndication**: Raise capital from investors who fund the deal while you manage it.
- **Joint Ventures**: Partner with experienced real estate investors to acquire and manage the property.
- **BRRRR Strategy**: Buy, Rehab, Rent, Refinance, and Repeat to pull cash out of the deal.
#### 3: **Increase Rental Income**
- Improve the property to justify higher rents.
- Reduce vacancies and streamline management.
## **How to Leverage Credit Score to Secure Real Estate Loans**
Even if you’re using no-money-down strategies, improving your credit score can help you qualify for better money loans with lower interest rates.
### **Ways to Improve Your Credit for Real Estate Investing**
- Pay down high-interest debt to improve your debt-to-income ratio.
- Establish business credit to separate personal and investment finances.
- Use secured credit cards or small business loans to build a better credit score.
## **Final Thoughts on How to Invest in Real Estate With No Money**
If you want to start investing in real estate but don’t have money, the key is finding great deals and leveraging creative financing strategies.
By focusing on cash-flowing properties, improving your credit score, and networking with other real estate investors, you can build long-term rental income and wealth through real estate.
### **Want to Learn More?**
If you’re serious about buying investment properties with no money down, check out my real estate podcast and coaching resources for in-depth strategies.
**Categories:** Blog
**Tags:** Driving Force, motivation, multifamily real estate, real estate, real estate investing, Rod Khleif
---
### [How To Quickly Analyze An Investment Property By Rod Khleif](https://rodkhleif.com/how-to-quickly-analyze-an-investment-property-by-rod-khleif/)
**Published:** May 3, 2025
**Author:** Rod Khleif
**Excerpt:** How To Quickly Analyze An Investment Property By Rod Khleif
**Content:**
## **Why Speed Matters in Multifamily Investing**
In today’s tight market, the best apartment deals vanish in hours—sometimes minutes. If you can’t separate winners from losers **fast**, you’ll watch cash‑flow monsters disappear into someone else’s portfolio. The good news? You don’t need a 40‑tab spreadsheet to get a thumbs‑up or thumbs‑down.
## **Step 1. Pull the High‑Impact Numbers**
Spend **no more than three minutes** gathering this data. Time yourself—you’ll be shocked how often you over‑research early junk.
## **Step 2. Run the “30‑Second NOI Snap”**
> **Quick rule:** If expenses aren’t provided, assume **45 %** of gross rents for 50+ unit properties and **50 %** for 5–49 units.
Example:
- Gross Rents = $85,000/mo ($1,020,000/yr)
- Expenses (45 %) ≈ $459,000
- **NOI ≈ $561,000**
## **Step 3. Calculate the As‑Is Cap Rate**
If comparable Class B assets in the market trade at 6 %, and your quick calc spits out **5.1 %**, you’re over‑paying—or the broker’s numbers are “pro‑forma fluff.” Toss or renegotiate.
## **Step 4. Hit the 1 % / 2 % Zen Check**
- **1 % Rule (Stabilized Assets):** Monthly rents ≥ 1 % of purchase price? Good mid‑tier cash flow.
- **2 % Rule (Heavy Value‑Add):** After reno rents should hit 2 % of all‑in cost—otherwise your rehab budget may crush returns.
These heuristics flag overpriced deals long before you dive into lender quotes.
## **Step 5. Verify Debt Coverage in 60 Seconds**
- Quick plug‑in: Use **7 % interest**, 25‑year amortization, 70 % LTV.
- If DSCR < 1.25, banks balk or slash proceeds—pass unless you can raise more equity or bump NOI fast.
## **Step 6. Gauge Value‑Add Upside (Two Questions)**
1. **“Loss‑to‑Lease?”** If in‑place rents trail market by 10 %+, upside is real.
2. **“Light or Heavy Lift?”** Paint‑and‑flooring rehabs under $10k/unit move quick; heavy cap‑ex ($25k+) can break timelines and budgets.
If the answers are “yes” and “light,” move to full underwriting; if “no” and “heavy,” next deal, please.
## **Step 7. Green‑Light Checklist**
Use this checklist to determine if its a good idea to move forward on a property or not.
## **Common Pitfalls to Dodge**
Don’t let these common mistakes trip you up
1. **Broker Pro‑Forma Traps** – Verify actual T‑12 income, not fantasy “projected” rents.
2. **Tax Reassessment Shocks** – Recalculate taxes at purchase price; many counties revalue day‑one.
3. **Insurance Surprises** – Coastal or hail markets can spike premiums 30 % in a year. Lock quotes early.
4. **CapEx Blind Spots** – Roof, HVAC, and plumbing stacks can nuke your first‑year cash flow. Walk every building.
## **Tools to Shave Hours Off Your Workflow**
- **Free Cap‑Rate & DSCR Calculator** – Download on my site (no opt‑in hoops).
- **90‑Second Deal Screener Google Sheet** – Autofills DSCR and 1 % rule—perfect on your phone at live tours.
- **Market Heatmap PDF** – Shows 2025 cap‑rate ranges for 40+ metros.
## **Final Word: Speed + Precision Win Deals**
You don’t need an MIT model out of the gate; you need **speed** to lock LOIs and **precision** to preserve equity. Master the Five‑Minute Deal Filter™, then layer in deep underwriting once a property passes the sniff test.
> **Remember:** The most successful investors aren’t the smartest—they’re the fastest to act on solid intel.
## **Take the Next Step to Master Quick Underwriting**
[](https://rodkhleif.com/bootcamp/)
Ready to underwrite like a pro and scale to 1,000+ doors? [**Join my Multifamily Bootcamp**](https://rodkhleif.com/bootcamp/) for hands‑on deal analysis, live market case studies, and the scripts I use to negotiate millions off asking prices.
[](https://rodkhleif.com/lifetime-cashflow-podcast/)
🎧 Prefer audio? Subscribe to **“[Lifetime Cash Flow Through Real Estate Investing](https://rodkhleif.com/lifetime-cashflow-podcast/)”** and learn on your morning jog.
**Take decisive action—your future net worth depends on it!**
**Categories:** Blog
**Tags:** analyze real estate, Driving Force, investment property, motivation, Rod Khleif
---
### [The 2025 Playbook for Finding Off Market Multifamily Deals](https://rodkhleif.com/the-5-best-ways-to-find-off-market-deals-today/)
**Published:** April 30, 2025
**Author:** Rod Khleif
**Excerpt:** The 5 Best Ways to Find Off Market Deals Today
**Content:**
Finding great apartment deals **before** they ever hit LoopNet remains the fastest path to explosive cash-flow and massive equity. But not everyone knows the best ways to find off marketing multifamily deals. Below is my battle-tested, **2025-specific** blueprint packed with actionable tactics you can deploy today.
## **1. Start With Data-Powered, Predictive Targeting**
Old-school “spray-and-pray” lists are out. In 2025, you can pinpoint owners *most likely* to sell by layering machine-learning sell-signals (equity, loan maturity, tenant reviews, code violations). Platforms like **IntellCRE, Reonomy, Offrs, and CINC** scour 150 million U.S. parcels and surface sellers months before competitors even know a property is in play.
**Action step:
Export the top 200 flagged owners in your target market, skip-trace phone/email, and create a 30-day multi-touch cadence (call → text → LinkedIn DM).
## **2. Deploy Direct Mail 2.0 (Yes, It Still Works!!!)**
Direct mail response rates keep climbing because inboxes are noisy and physical mailboxes are empty. **82 % of CMOs increased their 2025 mail budgets**, and real-estate investors report CPMs as low as $0.45 when combining variable-data letters with QR codes that launch Calendly.
**Pro tip:
Use oversized 6”×11” postcards (they dodge postal automation, so they land on top of the stack) and headline with the owner’s property address in 36-pt font: *“Thinking of cashing out 123 Oak St.?”
## **3. Unlock “Pocket” Inventory With Broker-Plus Relationships**
Brokers still control roughly 70 % of $5M-plus multifamily sales—*but* they quietly shop plum deals to select buyers before filing an exclusive. In 2025, the fastest way onto those short lists is to:
1. Bring proof-of-funds and a track record slide.
2. Offer a full-fee “quick-close kicker” on your first deal.
3. Share your buy box in a single sentence: “100-200 units, 1980s-plus vintage, value-add, secondary markets.”
Back it up with insights from Crexi’s February 2025 national report so brokers know you’re watching the same data they are.
## **4. Drive for Dollars 2.0 With Drones & CV**
The classic Saturday drive is now a *tech run*. Investors are strapping 4K drones to scan rooftops for deferred maintenance and feeding footage into computer-vision APIs that flag cracked parking lots and peeling paint at scale—perfect distress indicators for bigger assets. Pair that with the “idle-car lot” technique: map complexes where more than 15 % of spaces sit empty at 7 p.m. (tenant churn = motivated owner).
## **5. Mine Public Records No One Else Reads**
Probate filings, eviction dockets, and *expired* low-income housing tax‐credit (LIHTC) covenants create time-sensitive triggers. Scrape your county clerk’s weekly XML feeds, then cross-reference against your predictive list from Step 1. You’ll engage heirs and exhausted landlords *before* wholesalers blast them.
## **6. Tap PropTech & Marketplace “Hidden Filters”**
Crexi, Ten-X, and LoopNet now offer **“Make an Offer”** and **“Unlisted”** toggles that reveal owners testing price quietly. Combine those with keyword hacks—search “handyman special,” “below pro-forma,” or “lender REO”—to surface soft listings other buyers skip. Crexi alone shows 16,935 multifamily assets nationwide as of April 2025.
## **7. Harvest Deals Through Community & Vendor Intel**
Your best scouts already walk the property every week:
- **Vendors:** landscaping crews, pest-control techs, HVAC contractors know which landlords cut service, a red flag for financial strain.
- **Tenants:** pay $500 referral bonuses for tips on owners exploring a sale.
- **Warrior Program Alumni:** fellow multifamily operators often trade “scratch-my-back” leads at meetups and mastermind calls.
## **8. Leverage Social & Content Magnet Marketing**
Be the expert owners *call first*:
1. Post a bi-weekly LinkedIn carousel titled “Tuesday Turnaround: How I boosted NOI 22 % in 90 days.”
2. Host a 15-minute YouTube live Q&A on rent-cap work-arounds.
3. Syndicate each clip to Instagram Reels and TikTok (yes, TikTok—landlords scroll too).
When sellers see you as the authority on value-add, they’ll *seek you out* rather than list publicly.
## **9. Stack Multiple Channels for Consistent Deal Flow**
> **“Success in multifamily is consistency over complexity.”
> —Rod Khleif
The real winners run **all** pillars—data, direct mail, broker intel, prop-tech, public records—simultaneously. Each channel compounds the others, giving you five shots at the same owner before your competition even finds the address.
## **10. Your 30-Day Action Sprint**
## **Want to Learn More?**
### **Join The #1 Multifamily Investing Event!**
[](https://rodkhleif.com/bootcamp)
**Ready to Build Your Multifamily Empire? 🚀**
Join [**Rod Khleif’s Multifamily Bootcamp**](https://rodkhleif.com/bootcamp), the **top event for serious investors**, where **expert investors** answer your questions and share proven strategies. Learn directly from **industry leaders** and take your investing to the next level!
🎟 [**Reserve Your Spot Now!**](https://rodkhleif.com/bootcamp)
**Categories:** Blog
**Tags:** Driving Force, motivation, multifamily real estate, real estate, real estate investing, Rod Khleif
---
### [The Power of Taking Action in Real Estate (and Life)](https://rodkhleif.com/the-power-of-taking-action-with-rod-khleif/)
**Published:** April 30, 2025
**Author:** Rod Khleif
**Excerpt:** The Power of Taking Action With Rod Khleif
**Content:**
# **The Power of Taking Action in Real Estate (and Life)**
There’s a simple truth that separates dreamers from achievers.
**Action.
Knowledge without execution is just potential. Action turns that potential into progress—and progress compounds into results.
If you’ve ever read a book, attended a seminar, or listened to a podcast that fired you up, only to do… nothing, you’re not alone. Most people don’t fail because they lack information. They fail because they hesitate.
Let’s change that.
## **Action Builds Momentum**
Momentum doesn’t come from thinking harder. It comes from **doing** something—especially when it’s uncomfortable.
- Make the call.
- Walk the property.
- Underwrite the deal.
- Book the flight.
- Submit the offer.
Action sends a signal to your brain (and the universe): *I’m serious about this.
## **Action Beats Perfection**
Perfection is just procrastination wearing a mask. If you’re waiting for the “right time,” the perfect deal, or the green light from everyone around you—you’ll still be waiting a year from now.
Start messy. Start small. Just start.
Every successful investor I know made mistakes. What separates them is they **acted anyway**—and learned on the move.
## **Action Creates Clarity**
You’ll never figure it all out from the sidelines. Only through real engagement do you start to understand the way things work.
Experience creates clarity. Clarity builds confidence. Confidence accelerates action.
It’s a feedback loop, but it doesn’t start until you move.
## **Action Attracts Opportunity**
People follow momentum. When you’re in motion, others notice. You attract partnerships, funding, and mentorship not by wishing—but by doing.
Whether you’re:
- Raising capital
- Building a team
- Sourcing deals
…your energy becomes contagious when backed by action.
## **What’s Holding You Back?**
Fear? Doubt? Overthinking? Here’s how to break through:
1. **Simplify the step.** Don’t try to build the empire in a day. Just send one email. Analyze one deal. Take one small risk.
2. **Set a deadline.** Give yourself 24 hours to do the thing you’ve been avoiding.
3. **Declare it publicly.** Tell your accountability group or post it in your investor circle.
4. **Take imperfect action.** You can refine later. Execution is what matters now.
## **Final Thoughts from Rod**
Real estate rewards the bold. Not the reckless—but the intentional action-takers who stop waiting and start moving.
You don’t have to know everything. You don’t have to be fearless. You just have to step forward—consistently, deliberately, and with purpose.
The power is in the doing.
Let’s build Lifetime Cashflow.
— Rod
[](https://rodkhleif.com/lifetime-cashflow-podcast/)
**Ready to Take Your First (or Next) Step?
🎧 Listen now: [Lifetime Cash Flow Through Real Estate Investing Podcast](https://rodkhleif.com/podcast/)
Where top investors share how they turned action into success.
**Categories:** Blog
**Tags:** Driving Force, motivation, Rod Khleif
---
### [Mitigating Regulatory Risk in Multifamily Investment](https://rodkhleif.com/mitigating-regulatory-risk-in-multifamily-investment-2/)
**Published:** April 16, 2025
**Author:** Rod Khleif
**Excerpt:** When an investor allocates capital to a real estate investment, they implicitly accept some level of risk with the expectation of achieving a positive return. The best of them have an uncanny ability to maximize return while managing or mitigating risk.
**Content:**
Every real estate investment carries risk—and experienced investors don’t ignore it. They manage it. When you invest in multifamily real estate, you naturally accept certain risks: market fluctuations, rising interest rates, or property deterioration. Most investors account for these in their underwriting. But there’s one risk that often flies under the radar—and it can do just as much damage to your returns: **regulatory risk**.
If you plan to hold and operate multifamily property in any U.S. market, you need a clear plan for managing this growing threat.
## **What Is Regulatory Risk?**
Regulatory risk refers to the possibility that new laws or changes to existing regulations will make your investment less profitable—or more difficult to manage. This includes ordinances related to rent control, eviction policies, tenant screening, and landlord responsibilities.
To make things more complicated, real estate regulations can vary widely from city to city and state to state. That means investors must not only understand today’s local laws—they also need to consider how quickly the rules can change.
Ignoring this risk can jeopardize your income, limit your decision-making, and reduce the overall value of your property.
## **Real-World Examples: Regulatory Risk in Action**
Here are a few examples from the multifamily world in early 2020. These show how quickly laws can change and affect your cash flow.
### **California – Assembly Bill 1482**
This law, effective January 1, 2020, introduced statewide rent control and “just cause” eviction protections. Key components included:
- A cap on rent increases: 5% plus inflation (or 10%, whichever is lower)
- A limit on rent increases to no more than two per year
- Prohibition on terminating a tenancy without just cause
### **Seattle – Winter Eviction Ban**
In February 2020, Seattle passed a moratorium on evictions between December 1 and March 1. It applied to low- and moderate-income tenants and excluded landlords with four or fewer units. This unprecedented restriction affected how and when owners could respond to non-payment or lease violations.
### **Jersey City – Expanded Rent Control Proposal**
A 2020 draft ordinance aimed to:
- Increase tenant protections
- Mandate the inclusion of rent control disclosures in leases
- Expand oversight from the city’s landlord-tenant office
### **Berkeley, CA – Background Check Ban Proposal**
In late 2019, Berkeley suggested banning criminal background checks when screening tenants. This would remove a common safety measure for landlords and add new risks for owners of multifamily properties.
These cases reflect a broader trend. As tenant advocacy expands across the U.S., cities and states continue to propose and pass new regulations aimed at shifting power toward renters. And while some reforms address genuine concerns, others add significant friction to the business of multifamily ownership.
## **How to Mitigate Regulatory Risk in Multifamily Investing**
You can’t control legislation, but you can reduce your exposure. Here’s how we proactively mitigate regulatory risk across our own portfolio—and how you can do the same.
### **1. Diversify Your Portfolio by Location**
Don’t overexpose yourself to one city, one state, or one political climate. Just like you diversify your property types and prices, you should also spread your investments across different regions. These regions should have different levels of rules and regulations.
We avoid cities or states that consistently pass landlord-unfriendly legislation. Instead, we prioritize high-growth, landlord-friendly markets with strong job fundamentals and reasonable legal frameworks.
This strategy reduces the chance that one sweeping policy change will materially impact our entire portfolio.
### **2. Stay Involved in the Local Community**
We make it a point to engage with local stakeholders—because being involved means staying informed.
We attend planning board meetings. We join local apartment associations. We build relationships with real estate attorneys, city council members, and small business leaders. These connections let us know about possible regulatory changes early. Sometimes, we can speak up before a vote.
Staying plugged into the business and political community keeps us ahead of change, not behind it.
### **3. Operate with Integrity and Empathy**
Above all, we believe that responsible ownership is the best defense against political blowback.
We treat tenants with respect. We respond to maintenance requests quickly. We offer fair leases. And when financial hardships arise, we work with residents, long before lawyers get involved.
That doesn’t mean we sacrifice standards. But it does mean we operate in a way that builds goodwill with our tenants, our neighbors, and local leadership. In a world where reputations spread fast, good relationships can buy you time, trust, and options.
## **Due Diligence: Include Regulatory Climate in Your Deal Analysis**
When you underwrite a deal, don’t just look at the rent comps, the value-add potential, or the cost of capital. Add **local regulatory risk** to your checklist.
Here’s how to start:
- Review current rent control laws and eviction procedures
- Research past and pending legislation on tenant rights
- Talk to local landlords or property managers about what’s changing
- Contact local government offices to verify policies or pending initiatives
- Join a local real estate investors association for intel from active operators
We often speak directly with city council members, local attorneys, and fellow operators to gauge the climate before we move forward on a deal.
## **Final Thoughts from Rod**
Multifamily investing has always involved risk. That’s part of the game. But smart investors don’t just accept risk—they manage it with discipline and foresight.
When buying or operating in today’s climate, you must add regulatory risk to your toolbox. Study your markets, choose your locations carefully, and always operate in a way that earns trust, not tension.
Because when policies shift—and they will—you’ll want to be in a position where your business is built to adapt, not collapse.
— Rod
**Categories:** Blog, Property Management
**Tags:** apartment investing, investing, landlord, loan, motivation, multifamily, multifamily investment, multifamily property investing, multifamily real estate, real estate, real estate investing, real estate podcast, Rod Khleif
---
### [The Secrets to Self-Mastery by Rod Khleif](https://rodkhleif.com/secrets-self-mastery-rod-khleif/)
**Published:** January 28, 2025
**Author:** Rod Khleif
**Excerpt:** The height that a man or woman can take their success is dictated by their self-mastery. Lao Tzu said mastering others is strength mastering you is true power
**Content:**
# **Self-Mastery: The Foundation of True Power and Lasting Success**
The height of your success will never exceed your level of self-mastery.
Lao Tzu said, “Mastering others is strength. Mastering yourself is true power.” I couldn’t agree more. If you want to lead, grow, and build an extraordinary life, you must first lead yourself.
Self-mastery isn’t about being perfect. It’s not about arriving at some final destination. It’s about progress. Discipline. Courage. It’s about committing to growth—day after day, month after month, year after year.
## **What Is Self-Mastery?**
Self-mastery is the discipline of developing yourself—your mindset, your habits, your decisions—with intention and consistency. It’s about showing up as the best version of yourself, not once in a while, but consistently over time.
Every high-achieving individual I’ve ever known—whether in business, real estate, or life—has made self-mastery a priority. They study, train, and grow. Not occasionally. Daily.
They know that results follow personal transformation.
## **Self-Mastery Isn’t Easy—And That’s the Point**
Mastery tests you. It demands courage, honesty, focus, and willpower. It asks you to do what you said you would do, even when you don’t feel like doing it.
It’s about saying yes to the things that move you forward, and no to distractions, drama, and doubt. It’s about having a vision, setting clear goals, and showing up for them with full commitment.
Leonardo da Vinci said, “One can have no smaller or greater mastery than mastery of oneself.”
Socrates said, “An unexamined life is not worth living.”
And Aristotle taught, “Knowing yourself is the beginning of all wisdom.”
Different words. Same truth.
## **How to Build Self-Mastery**
Here’s how to begin mastering your life—one decision at a time:
### **1. Create a Vision That Pulls You Forward**
You need a vision that excites you—one that challenges you, motivates you, and stretches you. From that vision, set clear, specific goals. Break them into actionable steps and track your progress.
### **2. Build Empowering Habits**
Repetition is the mother of skill. Create daily rituals—morning routines, planning blocks, exercise, reflection—that build consistency and momentum.
### **3. Expect Setbacks and Keep Going**
Self-mastery doesn’t mean you won’t fall. It means you don’t stay down. When life tests you, choose growth. Choose the next step. Choose to move forward.
### **4. Train Your Focus**
Your energy flows where your attention goes. Focus on what you want—not what you fear. Visualize success. Speak it. Move toward it.
### **5. Choose Your Circle Intentionally**
Surround yourself with positive, like-minded people who are committed to excellence. Eliminate negativity from your life—whether it comes from others or from inside your own head.
### **6. Practice Solitude and Reflection**
Spend time alone. Get still. Listen to your thoughts. Journal. Meditate. Clarity is found in quiet. The more you know yourself, the more powerful you become.
### **7. Create a Personal Mission Statement**
Define the values you want to live by. Decide what you stand for and who you’re becoming. Then live in alignment with that mission daily.
## **Mastery Is a Journey, Not a Finish Line**
You don’t have to master your entire life in a day. You just need to start. Choose one area—your health, your mindset, your goals—and begin refining it.
Mastery is less about talent and more about time. More about showing up than showing off. More about consistency than perfection.
If you stay on the path, growth becomes your default. The obstacles don’t stop you—they shape you. And eventually, you’ll find yourself in a state of flow: that beautiful space where everything seems to click, and you’re operating at your highest level with effortless energy.
## **Final Thoughts from Rod**
Self-mastery is the root of all greatness. It’s not easy—but neither is living below your potential.
If you want to build wealth, impact lives, and leave a legacy, start with you. Master your mind. Master your habits. Master your focus. Everything else will rise with it.
Let’s build something great.
— Rod
**Categories:** Blog, Psychology of Success
**Tags:** Driving Force, motivation, real estate, real estate investing, real estate podcast, Rod Khleif, self-mastery
---
### [Strategies for Maximizing Profit in Real Estate](https://rodkhleif.com/proven-strategies-for-optimizing-profitability-in-multifamily-properties-big-news-network/)
**Published:** April 14, 2025
**Author:** Matt Rohde
**Content:**
If you’re looking to build lasting wealth in real estate, multifamily properties offer one of the most powerful paths—**but only if you know how to optimize your profit**. Whether you’re a new investor or scaling your portfolio, implementing the right strategies can make a huge difference in your returns.
Here are key **multifamily profit strategies** every serious investor should know:
### **1. Understand the Market Before You Buy**
Success starts with **market research**. Understand local rental demand, property values, neighborhood growth trends, and tenant demographics. Location is still king, but micro-trends (like proximity to schools, transit, and job hubs) can give you a massive edge.
### **2. Choose the Right Property with Strategy**
When acquiring a multifamily property, consider:
- The property’s current condition and renovation potential
- Financing options that lower your monthly costs
- The surrounding area’s long-term outlook
The right property in the right market sets the stage for profitability.
### **3. Focus on Tenant-Centric Improvements**
Tenants are your income stream. Keeping them happy is key.
- Offer flexible lease options (month-to-month or short-term)
- Bundle utilities or offer rent discounts for longer terms
- Target your ideal tenant (young professionals, families, students) and tailor amenities accordingly
Happy tenants stay longer, reducing turnover costs and vacancies.
### **4. Use Rent Optimization Techniques**
Don’t leave money on the table. Adjust your rents regularly based on:
- Local market trends
- Competing properties
- Upgrades you’ve made
Simple tweaks like including parking or offering high-speed Wi-Fi can justify a rent increase while improving tenant experience.
### **5. Increase Efficiency Through Tech and Systems**
Streamlining operations helps cut costs and boost income:
- Use **property management software** for rent collection and maintenance tracking
- Set up **online tenant portals** for communication
- Automate processes to save time and reduce human error
Modern tenants appreciate the convenience, and your team operates smoother.
### **6. Invest in Energy-Efficient Upgrades**
Small improvements can lead to big savings:
- Switch to LED lighting
- Upgrade appliances to energy-efficient models
- Improve insulation or install smart thermostats
Lower utility bills improve NOI (Net Operating Income), and eco-conscious features attract quality renters.
### **7. Maintain Proactively, Not Reactively**
Regular property inspections, fast repairs, and preventative maintenance reduce long-term costs and improve tenant retention. Budgeting for ongoing upkeep protects both cash flow and property value.
### **8. Learn From the Best**
If you’re looking to fast-track your success, having a trusted guide matters.
**Rod Khleif** is a proven expert in multifamily real estate with decades of experience. His insights have helped thousands of investors avoid costly mistakes and scale their portfolios with confidence.
---
### **Ready to Dive Deeper?**
Want the full breakdown of proven strategies for maximizing profitability in your multifamily investments?
👉 Read the full article here: *Proven Strategies for Optimizing Profitability in Multifamily Properties
---
The most successful multifamily investors don’t rely on luck, they rely on **systems, strategies, and support**. By focusing on tenant satisfaction, tech integration, rent optimization, and market analysis, you’ll not only improve profitability but build lasting financial freedom.
**Categories:** Blog, Featured, Property Management, Real Estate
---
### [How to Invest in Properties During Economic Cycles](https://rodkhleif.com/how-to-invest-in-multifamily-properties-during-economic-cycles/)
**Published:** January 30, 2025
**Author:** Matt Rohde
**Content:**
Multifamily real estate has long proven to be one of the most reliable investment vehicles—especially during uncertain economic times. Why? Because no matter what’s happening in the markets, people need a place to live.
That said, understanding economic cycles and how they affect multifamily investing isn’t just helpful—it’s essential. When you understand how markets move, you gain the power to protect your downside, uncover opportunities others miss, and build a portfolio that performs through every phase of the cycle.
Let’s break it down.
## **Why Economic Cycles Matter in Real Estate**
An economic cycle refers to the natural fluctuation of the economy between periods of growth and contraction—also known as boom and bust. These cycles are predictable in pattern but not always in timing, which is why being prepared matters.
By understanding where we are in the cycle, investors can:
- Time acquisitions strategically
- Identify undervalued opportunities
- Diversify across locations and asset types
- Protect against localized volatility
- Position themselves for outsized long-term gains
## **The 4 Phases of the Economic Cycle (and What They Mean for Multifamily Investors)**
Let’s look at each phase through the lens of real estate:
### **1. Expansion**
Economic activity is rising. Jobs are plentiful, wages are climbing, and consumer spending is strong.
- **Multifamily Impact**: Increased demand, rising rents, higher property values
- **Strategy**: Great time to raise rents, refinance, or dispose of assets at top dollar
### **2. Peak**
This is the high point—growth slows but hasn’t reversed yet.
- **Multifamily Impact**: Market sentiment is strong, but competition peaks
- **Strategy**: Lock in long-term debt, stabilize occupancy, prepare reserves
### **3. Contraction**
This is the downturn. Job losses increase, consumer spending drops, and demand softens.
- **Multifamily Impact**: Rents may flatten or decline; vacancy rises in overbuilt areas
- **Strategy**: Focus on retention, tighten expenses, watch for distressed buying opportunities
### **4. Trough**
The economy hits bottom before beginning to recover.
- **Multifamily Impact**: Prices stabilize at lower levels; opportunity begins to emerge
- **Strategy**: Ideal time to buy undervalued assets and reposition for the next expansion
## **How Economic Cycles Affect Multifamily Performance**
The multifamily sector doesn’t crash the way volatile markets do, but it does ebb and flow.
During expansions, multifamily rents and values rise. During contractions, occupancy and cash flow can tighten—but not vanish. That’s because housing is a basic need, and rental housing often sees increased demand when people can’t qualify for or afford homeownership.
Understanding this dynamic is critical for smart investing.
## **Build a Strong Foundation First**
To thrive through all phases of the cycle, you need a rock-solid investment foundation.
### **Set Clear Investment Goals**
Before you invest, ask:
- Do I want cash flow, appreciation, or both?
- Am I looking for long-term passive income or shorter-term equity upside?
Your goals shape everything from your deal criteria to your financing approach.
### **Define Your Acquisition Criteria**
Your criteria should include:
- Location
- Property class and unit mix
- Minimum cash-on-cash return
- Occupancy threshold
- Physical and financial condition
By filtering deals with clear criteria, you avoid wasting time—and avoid emotion-driven decisions.
## **Do Your Market Research**
Smart investing is rooted in knowledge. Get to know your market inside and out.
### **Study Local and Regional Economic Trends**
Look at:
- Job growth and industry diversification
- Unemployment rates
- Population migration
- Housing supply and construction pipeline
Strong economies support stronger rental markets.
### **Watch Demographic Shifts**
Identify who’s moving where—and why.
- Are young professionals flooding in?
- Is the retiree population growing?
- Are average household sizes shrinking or expanding?
These shifts affect demand for unit sizes, amenities, and pricing.
## **Know Your Financial Readiness**
Economic cycles test your ability to hold, manage, and grow through uncertainty.
### **Assess Your Risk Tolerance**
Ask yourself:
- How much capital am I willing to invest—and potentially lose?
- Can I carry a property through a downturn?
- Am I financially and emotionally prepared to hold long-term?
### **Maintain Reserves**
This is non-negotiable. Keep 6–12 months of operating reserves on hand to cover:
- Vacancies
- Repairs
- Unexpected expenses
- Loan payments during slow periods
Liquidity gives you time and control—two things every investor needs.
## **Buying and Holding During Downturns**
Downturns aren’t disasters—they’re discounted buying seasons for prepared investors.
### **Identify Undervalued Opportunities**
Look for assets that are:
- Below market rent
- Poorly managed
- In strong locations with short-term issues
- Owned by motivated sellers
These are the properties you can reposition and refinance once the market rebounds.
### **Analyze Market Conditions**
Use data to determine:
- Where pricing is overcorrected
- What interest rate trends are signaling
- Which metros have strong fundamentals long-term
Use real estate analysis tools—not gut feelings—to spot opportunity.
## **Negotiate Like a Pro**
When the market shifts in your favor, use it.
- Be patient
- Use comps and cash flow analysis to justify your offer
- Don’t be afraid to ask for seller concessions, credits, or financing
- Be prepared to walk away
In downturns, confidence and data are your greatest tools.
## **Secure the Right Financing**
Financing is critical—and it becomes even more so when rates fluctuate.
### **Lock In Long-Term Debt**
Where possible, secure long-term, fixed-rate financing during low-rate windows. This provides stability and predictability.
### **Get Creative With Financing**
In uncertain markets, seller financing, private lending, or bridge loans can be powerful tools to acquire deals others can’t touch.
Just be sure you have an exit plan.
## **Active Management Through the Cycle**
Owning is easy. Operating well is what builds wealth.
### **Reduce Costs Without Sacrificing Quality**
During downturns, review every line item. Renegotiate vendor contracts, reduce unnecessary expenses, and improve efficiency—but keep tenant satisfaction high.
### **Build Strong Relationships With Property Management**
Your managers are your frontline. Keep communication open, set expectations clearly, and make sure they’re executing your plan.
## **Improve Tenant Experience to Maximize Retention**
- Host resident events
- Provide timely communication
- Handle maintenance requests fast
- Show that you care
Retention is more profitable than turnover—always.
## **Use Renovations to Add Value**
Well-planned renovations can drive up rents and valuations, even in flat markets.
- Focus on high-ROI upgrades like flooring, lighting, and appliances
- Modernize amenities that align with your tenant profile
- Don’t overbuild—build strategically
Track every dollar to ensure you’re getting returns on your improvements.
## **Always Manage Risk**
Risk isn’t avoidable—but it is manageable.
### **Keep a Contingency Fund**
Your reserves protect you from:
- Market dips
- Extended vacancies
- Capital expenses
- Lender or regulatory shifts
Aim to keep at least 6–12 months of operating expenses set aside.
### **Hedge Against Rate Spikes**
Use fixed-rate loans when possible. If you must use adjustable financing, plan to refinance or exit before the rate reset hits.
## **Define Your Exit Strategy**
Don’t wait until you’re forced to sell to figure out your plan.
- Know your desired timeline
- Track market cycles
- Watch interest rates
- Always be ready with a Plan A and B
The best time to plan your exit is the day you buy.
## **Final Thoughts from Rod**
Multifamily investing isn’t about predicting the future—it’s about preparing for it.
Economic cycles come and go. But if you’ve got the right mindset, the right strategy, and the discipline to act, you can thrive through all of them.
Build your foundation. Stay informed. Keep cash on hand. And don’t be afraid to lean in when others are backing away.
That’s how real wealth is built.
Let’s go.
— Rod
**Categories:** Blog, Real Estate
---
### [Why Are Mortgage Rates Rising as the FED Cuts Rates?](https://rodkhleif.com/fed-cuts-rates/)
**Published:** December 10, 2024
**Author:** Matt RK
**Content:**
When the FED alluded to potential rate cuts starting mid-year, the real estate industry was elated with the prospect of lower rates. The FED followed through with two rate cuts (highlighted with circles on the chart below), first in mid-September, then again in mid-November. Despite the early optimism, mortgage rates have not fallen, which has left many scratching their heads.
Before we try to answer that question, let’s first look at how mortgage rates are determined. The FED Funds Rate is the interest rate that banks charge each other to borrow money overnight. Mortgage rates are not tied to the FED Funds Rate, but changes in the rate can influence mortgage rates indirectly. In general, fixed rate mortgages are based on the 10-year Treasury plus a risk spread. For lenders, the risk spread is higher when they are worried about the economy and lower when they feel like the economy will perform well. Variable rate commercial mortgage rates are tied to SOFR (Secured Overnight Financing Rate) plus a risk spread. Historically, when viewed on a long-term basis, the 10-year and SOFR are fairly correlated (0.86), so changes in the FED Funds Rate will impact floating commercial mortgages more than 30-year home mortgages.
In the chart you will notice that the 10-year Treasury note (yellow line at the bottom) has trended higher despite the FED rate cuts. The reason for this is that the 10-year is a barometer for what the market anticipates for the future. When the economy shows strength, investors are less likely to be interested in Treasuries, so to attract buyers, rates need to rise. Over the past few months, economic data was mixed but in general the economy has been showing signs of strength. Strong job and productivity data and higher inflation expectations have led some to believe that the FED may pause future rate cuts. In the November FED minutes, the committee said that future interest rate cuts were likely but to expect them to come gradually. Some economists even now think we will not see any more rate cuts in 2025.
Freddie Mac is currently offering fixed 10-year mortgages for multi-family properties in the range of 5.6% to 5.9% based on the 10-year of 4.25% plus a spread of 135bps to 165bps depending on a number of factors, including loan to value for the deal. If you look at the chart, you can see that the 10-year has drifted lower recently, and that is good news for multi-family investors. For the average homeowner, rates have continued to rise despite rate cuts and have recently leveled off just below 7%.
The message for buyers is, do not expect any extreme mortgage rate changes over the next few years unless we see the economy collapse or overheat. To keep things in perspective, over the past 50 years, the average 30-year mortgage rate has been 7.75%. We most likely are in a period where mortgage rates for commercial multi-family and single-family homes will move between 5%-7%, so buyers need to plan accordingly.
**Categories:** Blog, Real Estate
---
### [DC Affordable Housing Debacle](https://rodkhleif.com/affordable-housing-debacle/)
**Published:** December 10, 2024
**Author:** Matt RK
**Content:**
The old adage, “No good deed goes unpunished”, is rearing its ugly head in Washington DC. Policies implemented to help struggling families avoid eviction during Covid are still impacting property owners and tenants in the city, particularly those providing and living in affordable housing. Future affordable housing projects have ground to a halt, and many existing housing complexes are on the verge of foreclosure.
Currently, 14% of residents reside in city-supported affordable housing, but leaders say much more is needed. The problem is that 25% of residents are not paying their rent, and it takes over a year to evict anybody due to the residual effect of Covid-era eviction moratoriums. Owners of affordable housing are owed $100M in back rent, and many are teetering on bankruptcy. They can’t afford to properly maintain the properties, either. Tenants are complaining about deteriorating living conditions that are not being addressed. Cash flow to business is like oil to an engine; without it, the engine will seize.
Several owners have tried to sell their properties, but there are no buyers due to the delinquency problem. The market has shut down. One big concern for the city is that if a property is foreclosed on, all the covenants related to renting as affordable housing most likely will be lost. This would reduce affordable housing stock when demand is growing. The mayor just made the decision to divert a fund set aside for future affordable housing projects to shore up the struggling properties. And now, all the funds that were going to support building over the next few years are gone, and so are the developers.
This is an example of government interfering with the free markets, resulting in unintended negative consequences for those they were trying to help. It also highlights the danger of investing in areas that are not landlord-friendly. Property owners need to collect rent, and the court system owes them and paying tenants a quick and fair resolution.
**Categories:** Blog, Real Estate
---
### [Who is Going to Buy all this US Debt?](https://rodkhleif.com/who-is-going-to-buy-all-this-us-debt/)
**Published:** December 12, 2024
**Author:** Graciela
**Content:**
Bloomberg recently estimated that interest expense on the United States’ $33T debt just crossed $1T on an annualized basis. Federal receipts are $4.4T, which means almost a quarter of all revenue is consumed by interest. Interest expense has doubled over the past two years and will probably move higher with 2024 auction activity!
“Rather go to bed without dinner than to rise in debt.”
– Ben Franklin
We certainly have come a long way from the frugal beginnings of the country. The chart below shows how rapidly and seemingly out of control the US debt has skyrocketed to around $100K for every person in the country.
In 2024, 33% of our outstanding public debt matures ($7.6T) and must be reissued in a higher rate environment. On top of this $7.6T, the federal deficit could hit $2.0T in 2024, which means the Treasury would have to issue nearly $10T of new debt. The question is: where is this money going to come from and what impact will this have on interest rates and taxes?
Of the $33T of debt, roughly 78% is owned by the public (70% US vs 30% International). The major US public owners include the FED ($6T, but they are no longer buyers), mutual funds, banks, states, pension funds and insurance companies. The international buying appetite has been falling over the past 10 years (dropping from 40% to the current 30%). The major international owners of US debt include Japan ($1.1T), China, UK, Belgium, Switzerland, Cayman Islands and smaller amounts from the rest of the world. After the recent weak treasury auction, US government officials warned that they are seeing waning demand from international buyers. China has been a net seller and Japan seems tapped out. The strong dollar is also working against the Treasury. The US dollar strength versus other currencies makes it attractive for international owners to sell US debt and use the dollars to buy their own currency, boosting the value.
The remaining debt (22%) is owned by inter-government agencies including Social Security and Medicare. If you believe that Social Security and Medicare are bleeding off their surplus, then logically they will be net sellers over time as they use reserves to pay recipients.
The auctions will come down to simple supply and demand. We know the supply is increasing and the demand is falling, which is bad for pricing. If the rates on Treasuries are attractive (higher) relative to other options, then we should be able to reissue the debt. In the most recent auction, the FED had to pivot to shorter term notes to entice buyers. Today, the 6-month treasury note yields 5.25% versus 4.0% for the 10-year, so clearly interest costs will increase in the short term if the US government is forced to issue short-term debt to attract buyers. If we don’t get our deficits under control, the situation will only grow worse.
There is evidence, however, that higher interest rates on US debt are attracting new buyers. Two European money managers, Rathbones and Pictet, both recently announced an increase in their holdings of US Treasuries due to the attractive rates. Currently the US 10-year (4.0%) is higher than in the UK (3.8%), Spain (3.2%), Germany (2.2%) and Switzerland (0.8%), so it seems attractive relative to these options.
We are not sure how this will all shake out, but at some point, something has to give because the trajectory we are on is unsustainable. At the end of the day, someone will have to pay for the sins of the past. Taxes need to move higher, and spending needs to be cut; both moves would hurt the economy. A weakening economy would have a ripple effect across all businesses and commercial real estate. We do not think the tax and financing benefits awarded to multi-family would be impacted during the “balance the budget phase” that is coming, due to the core nature of our product. However, the cloudy outlook reinforces our conservative thinking when evaluating deals.
**Categories:** Blog, Real Estate
---
### [Managing Multifamily Occupancy in Off Season](https://rodkhleif.com/managing-occupancy-in-the-off-season-to-maximize-noi/)
**Published:** April 9, 2025
**Author:** Graciela
**Content:**
In the multifamily game, there’s a critical balance between pushing rents and keeping your occupancy high. Get too aggressive with rent bumps, and you could create unnecessary vacancy. Play it too safe, and you leave cash flow on the table.
This balance becomes even more delicate during the slow leasing season—typically winter—when demand naturally cools. And in today’s market, that challenge is amplified by new supply and shifting tenant behavior.
Understanding how to manage occupancy in the off season is essential if you want to protect your Net Operating Income (NOI) and maximize long-term value.
Let’s walk through how seasoned operators get it right.
## **The Economics Behind Rental Pricing**
Economists have a name for the tension between rent growth and vacancy: **price elasticity of demand**.
It measures how sensitive consumers (in this case, renters) are to price changes. When demand is elastic, even a small price increase can lead to significant drop-offs in interest. When it’s inelastic, renters stay put despite increases.
So, what about apartments?
Apartment demand is **less elastic** than something like groceries because moving is inconvenient, disruptive, and expensive. But that doesn’t mean it’s immune. Especially during slower seasons, tenants are far more likely to push back—or walk—if the pricing gets too aggressive.
## **Seasonal Leasing Cycles Are Back**
During COVID, rental demand was strong year-round. But now, **seasonality has returned**.
Winter months—particularly Q1—are slower across most markets. And at the same time, we’re seeing a surge in **new apartment supply** across the country.
In Q3 2023 alone, we saw over **400,000 new units delivered**—the highest since the 1980s. This trend will continue into 2024 and beyond.
That means one thing for apartment owners and operators: increased competition. And many new builds are offering aggressive lease-up pricing, driving down rents in overbuilt markets like Austin and Phoenix.
You cannot manage pricing in a vacuum. You have to be aware of both **market conditions** and **seasonal patterns**.
## **What the Data Tells Us About Rent Increases**
Let’s talk numbers.
In one case study, we observed that rent increases of **up to $40 per month** had little impact on renewals. But the moment pricing crossed the **$50 threshold**, vacancy jumped. That’s price elasticity in action.
Now apply that to a real property.
Say you own a **240-unit complex**. You’re evaluating renewal options in January—a slow month.
Option A: modest $15 increase
Option B: aggressive $50 increase
If that $50 increase causes just 10–15% of tenants to move out, the cost of turns, lost rent, and leasing commissions can **wipe out months of gains**. Worse, it can create persistent vacancy if your pricing is no longer competitive in a cooling market.
## **Protecting NOI in the Off Season**
The goal isn’t to avoid raising rents—it’s to do it strategically.
There’s a time to push. There’s a time to hold.
Winter is typically the time to **defend occupancy**, even if it means tempering your rent growth goals temporarily. Maintaining high occupancy and avoiding turnover during slower months protects your income and your long-term returns.
Remember: vacancy doesn’t just hurt cash flow. It impacts property valuation, investor distributions, and your ability to refinance or sell.
## **Strategies for Smarter Lease Management**
So how do experienced operators stay one step ahead?
### **1. Watch the Data Like a Hawk**
Monitor lease-up pricing on comps, track showing-to-lease conversion rates, and keep an eye on new inventory hitting your submarket.
Your pricing decisions should be informed by what’s happening **now**, not what worked six months ago.
### **2. Use Expiration Management**
This is one of the most powerful (and underutilized) strategies in property management.
**Expiration management** means strategically setting lease end dates so that the bulk of your vacancies come due during **peak leasing season**—typically spring and summer.
Example: Instead of letting a lease end in December, offer a 10- or 14-month term that ends in April or May. This gives you a better chance of filling the unit quickly and at a higher rent.
### **3. Incentivize Renewals**
If you’re operating in a competitive market or slow season, consider adding incentives for renewals—like carpet cleaning, minor upgrades, or small gift cards.
Even a $100 renewal bonus is often cheaper than a turn and 4 weeks of vacancy.
### **4. Avoid “One-Size-Fits-All” Increases**
Blanket rent increases are risky, especially in a volatile market.
Instead, **segment your renewal strategy** based on unit type, tenant history, and market data. A well-performing long-term tenant in a two-bedroom corner unit might warrant a lower increase to ensure retention, while a studio in high demand can be pushed more.
## **Final Thoughts from Rod**
In this business, every point of occupancy matters. Every dollar of rent matters. But knowing **when to push** and **when to hold the line** is what separates average operators from exceptional ones.
Managing occupancy in the off season isn’t about fear—it’s about strategy.
Use the data. Know your market. Plan your lease expirations. And always protect your NOI like your future depends on it—because it does.
If you want to maximize long-term value in your multifamily portfolio, it’s not just about buying right. It’s about operating with excellence.
You’ve got this.
— Rod
**Categories:** Blog, Property Management, Real Estate
---
### [1031 Exchange FAQ: Everything Investors Need to Know](https://rodkhleif.com/1031-exchange-faq-everything-investors-need-to-know/)
**Published:** March 6, 2025
**Author:** Alex Khleif
**Content:**
A 1031 Exchange is one of the most powerful tax-deferral strategies in real estate. Whether you’re a new investor or a seasoned pro, understanding how to legally defer capital gains taxes can help you build wealth faster and scale your portfolio.
Below, I answer the most frequently asked questions about 1031 Exchanges, so you can maximize your investment while staying compliant with IRS regulations.
## What is a 1031 Exchange?
A 1031 Exchange (named after IRS Section 1031) allows investors to sell an investment property and reinvest the proceeds into another like-kind property without paying capital gains tax. Instead of handing over money to the IRS, you defer the tax and use that money to grow your portfolio.
### Who Qualifies for a 1031 Exchange?
To qualify for a 1031 Exchange, you must be an investor or business owner. Eligible entities include:
- Individuals
- LLCs
- Corporations (S-Corp and C-Corp)
- Partnerships
- Trusts
The key requirement is that the property must be held for investment or business purposes, not for personal use.
### What Types of Properties Can Be Exchanged?
The IRS defines like-kind properties as those used for investment or business purposes. This means you can exchange almost any type of real estate for another.
- Multifamily properties
- Commercial properties
- Retail centers
- Industrial buildings
- Vacant land
- Office buildings
Primary residences do not qualify.
### How Does a 1031 Exchange Work?
A 1031 Exchange follows strict IRS rules:
1. Sell your investment property
2. Proceeds go to a Qualified Intermediary (QI), not you
3. Identify up to three replacement properties within 45 days
4. Close on a new property within 180 days
5. Defer capital gains taxes and reinvest 100 percent of the proceeds
Failing to meet these deadlines will disqualify your exchange, meaning you will owe capital gains tax on the sale.
### Can You Do a 1031 Exchange on a Primary Residence?
No. A 1031 Exchange is only for investment or business properties. However, you may be able to convert a rental property into a primary residence after holding it for investment purposes. The IRS Section 121 Exclusion may allow for partial tax benefits.
### Can You 1031 Exchange a Second Home or Vacation Rental?
Possibly. To qualify, the property must be used primarily as an investment. The IRS requires:
- The property must be rented out for at least 14 days per year
- Personal use must be limited
If you primarily use the property for personal vacations, it does not qualify for a 1031 Exchange.
### What Are the Deadlines for a 1031 Exchange?
The IRS sets two strict deadlines:
- **45 Days:** Identify your replacement property within 45 days of selling your old one
- **180 Days:** Close on the new property within 180 days of selling your original property
Missing these deadlines means losing your tax deferral.
### What is a Reverse 1031 Exchange?
A Reverse 1031 Exchange lets you buy a new property first before selling the old one. This is useful in competitive markets where you need to secure an investment quickly.
However, you must pay for the new property upfront before selling your current one. Many investors use bridge loans to fund the purchase.
### Can You Do a 1031 Exchange Into Multiple Properties?
Yes. The IRS allows you to exchange one property for multiple properties, but there are rules:
- Three Property Rule: You can identify up to three properties, regardless of value
- 200 Percent Rule: You can identify more than three properties, as long as the total value does not exceed 200 percent of the sold property
- 95 Percent Rule: You must acquire at least 95 percent of the total identified properties
### What is Boot in a 1031 Exchange?
“Boot” is any cash or non-like-kind property received during the exchange. Examples include:
- Taking cash out at closing
- Debt reduction (buying a cheaper property)
- Receiving personal property in the exchange
If you receive boot, you will owe capital gains tax on that portion of the transaction.
### How Much Does a 1031 Exchange Cost?
Costs vary, but a basic 1031 Exchange typically costs $1,000 to $3,000 in Qualified Intermediary fees. A Reverse 1031 Exchange is more complex and can range from $5,000 to $7,500.
### What Happens if a 1031 Exchange Fails?
If you miss deadlines or do not reinvest all funds, your exchange will fail. That means:
- You owe full capital gains tax
- You may also owe depreciation recapture tax
To avoid this, work with a Qualified Intermediary and stick to IRS rules.
### Can You Use a 1031 Exchange to Pay Off a Mortgage?
No. The IRS requires that 100 percent of the proceeds from your sold property must be reinvested into new real estate. Paying off a mortgage with exchange proceeds will disqualify the exchange and trigger taxes.
### How to Report a 1031 Exchange on Your Tax Return?
You must file IRS Form 8824 with your annual tax return. This form reports:
- The properties involved
- Sale and purchase prices
- Any boot received
- Deferred capital gains
Consult a tax professional to ensure compliance.
Will 1031 Exchanges Be Eliminated in 2024 or 2025?
While proposed tax changes have targeted 1031 Exchanges, they remain legal in 2024. However, future tax reform could impact this strategy.
### Final Thoughts
A 1031 Exchange is one of the most powerful tax strategies in real estate investing. It allows you to defer taxes, scale your portfolio, and build long-term wealth.
If you are planning to sell an investment property, consider a 1031 Exchange to avoid a massive tax bill and keep your money working for you.
Want to dive deeper into 1031 strategies? Join my Multifamily Bootcamp and learn from top investors who have mastered tax-deferral strategies to build generational wealth.
**Categories:** Blog, Raising Capital
---
### [10 Ways to Find Good Real Estate Deals in 2025](https://rodkhleif.com/10-ways-find-good-real-estate-deals/)
**Published:** February 8, 2025
**Author:** Rod Khleif
**Excerpt:** When it comes to finding deals, I often refer to the 150-15-5-1 formula. For every 150 properties you look at, 15 will be worth pursuing. Out of those 15 properties, you’ll submit an LOI or a contract on 5, and out of those 5, you’ll probably only close on 1.
**Content:**
## **10 Ways to Find Good Real Estate Deals and Build a Strong Investment Portfolio**
**Finding** **good real estate deals** is the foundation of building long-term wealth in multifamily investing. If you’re serious about acquiring investment properties, you need a consistent deal flow to uncover opportunities that will yield strong returns.
I often refer to my 150-15-5-1 formula when it comes to finding deals. Out of every 150 properties you analyze, 15 will be worth pursuing. You’ll submit offers on 5, and in the end, you’ll only close on 1.
The bottom line? You need multiple strategies to consistently find and acquire profitable real estate investments. Below are 10 proven strategies that will help you source, evaluate, and secure the best real estate deals.
### **1. Build Strong Relationships with Brokers**
One of the fastest ways to find off market deals is by working with the right commercial real estate brokers. A good broker can be a game-changer because they have inside access to multifamily properties that may never hit the public market.
To build strong broker relationships:
- Identify the most active brokers in your market by searching LoopNet, CoStar, and brokerage websites.
- Call or meet brokers and clearly communicate your investment criteria, including your target property size, location, and budget.
- Follow up consistently, even if they send deals that don’t fit. Let them know why a deal doesn’t work so they can refine their recommendations.
- Be professional, reliable, and decisive. Brokers work with serious buyers. You must prove that you are one.
When a broker has an **exclusive listing or pocket deal**, you want to be the **first investor they call**.
### **2. Tap Into Pocket Listings**
A **pocket listing** is a property that a broker has been hired to sell but is not being publicly marketed. These opportunities often arise when a seller wants to avoid public exposure or test the market before formally listing.
To access pocket listings:
- Build trust with brokers so they bring you deals before they go public.
- Be clear about your ability to close quickly and make fair offers.
- Stay in constant communication so brokers think of you first when a motivated seller emerges.
The best real estate investors rarely rely on publicly listed properties alone. They get access to deals before the competition.
### **3. Utilize Online Real Estate Listings**
Many investors overlook **online listing platforms**, but they can still be an excellent source of real estate deals, if you know how to use them strategically.
Key platforms to monitor include:
- **LoopNet** ([www.loopnet.com](https://www.loopnet.com/))
- **CoStar** ([www.costar.com](https://www.costar.com/))
- **CREXi** ([www.crexi.com](https://www.crexi.com/))
- **CityFeet** ([www.cityfeet.com](https://www.cityfeet.com/))
- **Marcus & Millichap** ([www.marcusmillichap.com](https://www.marcusmillichap.com/))
- **CBRE** ([www.cbre.com](https://www.cbre.com/))
- **Cushman & Wakefield** ([www.cushmanwakefield.com](https://www.cushmanwakefield.com/))
To maximize results:
- Set up automatic alerts for properties that meet your investment criteria.
- **Act fast,** good deals get taken quickly.
- Reach out to listing agents to inquire about additional off-market opportunities.
Many investors assume great deals aren’t on LoopNet, but that’s not true. The right approach can uncover hidden investment opportunities.
## **4. Find Overlooked Listings That Have Been on the Market Too Long**
Many real estate investors ignore listings that have been on the market for several months or even years. However, these properties often present strong investment potential.
**Why do properties sit on the market?**
- The seller overpriced the property initially.
- The listing description lacks important details, turning off potential buyers.
- The property is mismanaged, with high expenses and below-market rents.
One of my best deals was a 24-unit property near Tampa that sat on LoopNet for three years. The rents were far below market, and the owners were overpaying for maintenance. We quickly increased cash flow by renegotiating contracts and adjusting rents to market rates.
**Pro-Tip:** Always dig deeper, sometimes **the best deals are the ones others ignore.**
### **5. Leverage Craigslist for Off-Market Deals**
Craigslist remains a **powerful but underutilized tool** for finding **motivated sellers**. Many **mom-and-pop property owners** use Craigslist instead of listing their properties with a broker.
To find real estate deals on Craigslist:
- Search for listings using **keywords** like:
- “Must sell”
- “Investor special”
- “Owner financing available”
- “Handyman special”
- Post **“We Buy Multifamily” ads** to attract sellers looking for a quick sale.
- Reach out to **FSBO (For Sale by Owner) sellers** and negotiate **off-market purchases**.
Craigslist works particularly well for **small and mid-sized multifamily properties** (2–30 units).
### **6. Call “For Rent” Ads to Find Motivated Landlords**
Landlords with vacant units are often **motivated to sell,** especially if they’re tired of **tenant turnover, maintenance issues, or rent collection hassles**.
**Steps to find deals through rental listings:**
- Call landlords advertising units for rent on Craigslist, Zillow, and Facebook Marketplace.
- Ask if they’ve considered selling instead of renting.
- Focus on self-managed properties, these landlords are often more motivated.
Many **frustrated landlords** are open to offers, they just haven’t **actively listed their property yet**.
### **7. Send Direct Mail to Property Owners**
Direct mail remains one of the **most effective ways to find off market multifamily deals.**
Key steps to launching a successful direct mail campaign:
- **Build a targeted list** of multifamily property owners in your market.
- **Write simple, effective letters** highlighting why you want to buy their property.
- **Mail consistently:** follow up every 6–8 weeks.
Direct mail works because **most property owners won’t list their properties online,** but they might sell if the right offer comes along.
### **8. Follow Up with Every Property Owner You Contact**
Finding **great real estate deals** is all about persistence. Most sellers won’t say yes immediately, but many will sell eventually.
- Keep track of every owner conversation in a CRM.
- Schedule regular follow-ups every 2–3 months.
- Stay top of mind so when they are ready to sell, you’re the first person they call.
Successful investors **don’t give up after the first call**—they build long-term relationships.
### **9. Contact Banks for Foreclosed REO Properties**
When banks foreclose on multifamily properties, they often want to unload them quickly. Banks aren’t in the business of property management—they prefer cash buyers who can take properties off their hands.
How to access bank REOs:
- Build relationships with local bank asset managers.
- Ask for a list of their real estate-owned (REO) properties.
- Negotiate below-market pricing since banks want these properties gone.
REO properties often require renovation and repositioning, but they can be incredible value-add opportunities.
### **10. Work with Wholesalers and Birddogs**
Some investors specialize in finding off-market properties but don’t buy them themselves. These individuals—wholesalers and birddogs—can be a valuable source of deals.
- Wholesalers find distressed properties, put them under contract, and assign them to investors.
- Birddogs scout properties and send investor leads in exchange for a finder’s fee.
Building relationships with wholesalers and birddogs expands your deal flow and saves you time.
## **Final Thoughts from Rod Khleif**
The best **real estate investors** don’t sit around waiting for deals to come to them. They **actively build pipelines**, follow up relentlessly, and **stay persistent**.
Choose **2–3 strategies** and **execute them consistently**. Over time, these efforts will create a steady flow of **high quality investment opportunities**.
Take action today, because you only need ONE deal to change your financial future.
**Categories:** Blog, Finding Deals
**Tags:** apartment investing, business structures, Driving Force, landlord, motivation, multifamily, multifamily property investing, multifamily real estate, real estate, real estate investing, real estate podcast, Rod Khleif, seller financing
---
### [Pressure Building to Drop Rates](https://rodkhleif.com/pressure-building-to-drop-rates/)
**Published:** December 16, 2024
**Author:** Graciela
**Content:**
The markets have priced in a soft landing, and most people were beginning to believe it was possible. Then New York Community Bancorp threw cold water on the party after they reported large losses due to failing CRE loans. At the same time, the FED removed from its statements that, “It was certain the banking system was sound.” Piling onto this negative news was a report from Aozora, a Japanese bank, that said it was building loss reserves due to failing US commercial real estate loans and will now lose money for the year. And the bad news is spreading to Europe, where Julius Baer in Switzerland reported $700M in bad CRE loans.
At the same time the market is celebrating strong job reports, they are de-emphasizing the mounting layoffs. ADP reported 107K new private employer jobs in January, which was offset by over 100K new announced layoffs, and the layoffs are accelerating. Hasbro is laying off 20% of its workforce, Levi’s 15%, Spotify 17%, Xerox 15%, PayPal 9%, Schwab 6%, Citigroup 20K workers, UPS 12K workers and on and on.
“The office market has as existential crisis right now”
Barry Sternlicht — CEO Starwood Capital
Barry Sternlicht estimates that in the office sector, someone somewhere has lost $1.2T over the past two years, but no one is sure where those losses are. We believe the regional banks like New York Community are the ones holding many of these bad loans, and if interest rates remain elevated, many of these loans will fail. We believe with mounting federal deficits, corporate layoffs and bank failures, the FED will be forced to reduce rates, which will be a boon for multi-family investments.
We expect distressed opportunities like our new asset in San Antonio will continue to grow as time works against compromised owners hanging on by a thread. We will continue to evaluate deals and make offers at attractive prices for our investors.
**Categories:** Blog, Real Estate
---
### [Growing Deficits, Inflation and Multifamily](https://rodkhleif.com/growing-deficits-inflation-and-multi-family/)
**Published:** December 30, 2024
**Author:** Graciela
**Content:**
If you want to protect and grow your wealth in today’s economy, you can’t just react—you need to anticipate.
The numbers coming out of Washington right now are clear: we’re heading into a decade defined by **soaring deficits, rising interest costs, and persistent inflation**. And while some investors are tightening up or pulling back, others are leaning in and strategically allocating capital to inflation-resistant assets like multifamily real estate.
Let’s break down what’s happening, what it means for your portfolio, and why real estate is one of the smartest hedges you can own right now.
## **The U.S. Deficit Is Getting Worse—Fast**
The Congressional Budget Office (CBO) is forecasting that annual federal deficits will grow from **$1.6 trillion in 2024 to $2.6 trillion by 2034**.
That’s not just a projection—it’s a warning. Even though tax revenues are expected to rise (from $4.4 trillion to $7.5 trillion), it still won’t come close to closing the gap. The federal government is spending far more than it’s bringing in, and that imbalance is growing.
Now, when deficits balloon, two things usually follow:
1. Increased pressure on interest rates
2. A higher risk of inflation
You can’t ignore either if you’re serious about investing.
## **Interest Payments on U.S. Debt Are Skyrocketin**g
Right now, the government is spending about $900 billion per year just on interest payments. By 2034, that number is expected to rise to $1.63 trillion.
That’s a 78% increase—and it doesn’t even factor in unexpected rate spikes or market resistance.
The CBO is projecting these costs based on modest assumptions: rates rising from 4.0% to 4.25%. But here’s the catch—**what if demand for U.S. debt dries up?**
If investors (domestic or international) start to walk away, the Treasury has two options:
- **Raise rates further** to make bonds more attractive (which would worsen the deficit), or
- **Rely on the Federal Reserve** to buy up debt, which would increase the money supply and, yes, inflation.
We’re already seeing early signs of this. The Treasury has reported weaker demand in recent auctions. That’s not just noise—it’s a flashing red light.
## **What Happens If the Fed Starts Printing Again**?
If the Federal Reserve reverses course and starts buying bonds to ease the supply glut, it will effectively be injecting more money into the system.
And when the money supply increases faster than productivity?
You get inflation.
That means the dollars in your savings account, the yields from your bonds, and the returns from growth stocks all start losing purchasing power—fast.
And here’s the truth: even if the Fed manages inflation *on paper*, the cost of real goods—food, rent, gas, services—continues to rise. That’s where the squeeze hits.
## **Where Do You Invest When Inflation Won’t Go Away?**
You don’t beat inflation with hope. You beat it with **strategic allocation**.
Historically, the best-performing asset classes during inflationary cycles include:
- **Real estate** (especially with fixed-rate debt)
- **Commodities** (like oil and gold)
- **Consumer staples** (companies that sell what people always need)
And the worst performers?
- Retail stocks
- Tech companies with high burn rates
- Durable goods (cars, electronics, etc.)
In short: inflation punishes anything that relies on cheap debt, low margins, or discretionary spending.
But it rewards real assets that generate predictable income and can adjust with rising prices.
## **Why Multifamily Real Estate Is Built for Inflation**
Multifamily isn’t just another form of real estate—it’s one of the most reliable, durable, and **inflation-resistant** assets available.
Here’s why:
### **1. Fixed-Rate Debt = Locked-In Costs**
When you buy a multifamily asset with **long-term, fixed-rate financing**, your interest expense stays the same—even as everything else rises. This creates a **natural arbitrage** between increasing income and fixed costs.
### **2. Rents Adjust With the Market**
Unlike triple-net retail leases or long-term commercial contracts, **multifamily rents can reset frequently**—often every 12 months. That means as inflation pushes up wages and housing costs, your income can rise too.
### **3. Apartments Are a Core Need**
In tough times, people may stop buying tech gadgets or upgrading their SUVs—but they won’t stop paying for a place to live.
That built-in demand makes apartments a **defensive asset** in volatile markets.
### **4. Value Appreciation Through NOI Growth**
Inflation can lift gross income, and if you keep operating expenses in check, you grow your Net Operating Income (NOI). Since commercial properties are valued based on NOI, this leads directly to **increased property value**—and real wealth creation.
## **Your Next Move: Hedge the Right Wa**y
I believe every investor should hold a diversified portfolio. But in this environment, it’s not just about diversification—it’s about **intelligent allocation**.
Cash and stocks alone won’t cut it. You need **assets that grow with inflation**, protect capital, and generate income.
Multifamily real estate—especially in growth markets and with solid operators—is one of the most strategic positions you can take right now.
### **Rod’s Final Thoughts**
We’re heading into a future where **debt is rising, inflation is sticky, and traditional strategies won’t be enough**.
But there’s always opportunity—for those who are informed, prepared, and decisive.
Multifamily real estate has helped me and countless others not only preserve wealth—but multiply it. And it can do the same for you.
So here’s the question: Are you positioned for what’s coming next?
Because the decisions you make now could define your financial future for the next decade.
Let’s make them count.
— Rod
**Categories:** Blog, Real Estate
---
### [Exciting News - Regatta has Closed Escrow](https://rodkhleif.com/exciting-news-regatta-has-closed-escrow/)
**Published:** January 6, 2025
**Author:** Graciela
**Content:**
We’ve got big news—our team has officially closed escrow on our newest multifamily asset: **The Regatta Apartments** in San Antonio, Texas.
This acquisition represents a powerful value-add opportunity with significant upside potential—and we’re already hitting the ground running.
## **Why We’re Excited About Regatta**
The Regatta Apartments aren’t just a beautiful property. They’re a smart investment—strategically located, attractively financed, and positioned for strong returns.
Here’s what makes this deal so compelling:
### **✅ Locked-In Low Interest Debt**
We’re assuming a **4.05% fixed-rate loan** with **7 years remaining**. In today’s environment, that kind of debt is a rare advantage. It gives us predictable cash flow, reduces interest-rate risk, and increases our flexibility as we renovate and reposition the property.
### **✅ Renovations Already Underway**
Our contractors are already on-site beginning strategic upgrades. These improvements are designed to increase tenant satisfaction, improve retention, and drive rent growth—adding value right from the start.
## **Built-In Equity from Day One**
We purchased the Regatta at **$100K per unit**. To put that in perspective, a **comparable property right next door sold for $137K per unit**.
That’s an immediate **40% discount** on the purchase price—before any renovations are complete.
This isn’t just a good deal—it’s an example of how we identify underpriced assets with upside potential in proven markets.
## **A Market We Know (and Love)**
The Regatta is just a **mile away from another 296-unit property** we currently own. That means:
- We know this submarket extremely well
- We have management and contractor relationships already in place
- We understand tenant needs, rent comps, and leasing trends intimately
This kind of local expertise isn’t just convenient—it’s a strategic edge. And this new property? It’s actually a step up from the last one.
## **Why Regatta Is a Standout Asse**
Beyond pricing and location, the Regatta offers several unique advantages:
- **Larger floorplans** than nearby comps
- **Washer/dryer hookups** in every unit
- **Fireplaces** in all residences
- **Waterfront views**—the property sits directly on a scenic lake
These are the types of features that create long-term tenant demand and justify rent premiums in both up and down markets.
## **San Antonio: A Top Multifamily Market**
We’ve said it before, and we’ll say it again—**San Antonio is one of the strongest multifamily markets in the U.S.** right now.
- **Population growth** is setting records
- **Job creation** is outpacing national averages
- **Business relocation and infrastructure investment** are booming
These trends aren’t short-term hype. They’re long-term fundamentals that make San Antonio one of the best places to purchase commercial property right now.
## **Want to Invest Alongside Us?**
We still have **a few limited investor spots open** in this deal.
If you’re looking to grow your capital through recession-resilient, cash-flowing multifamily assets—backed by real equity and operated by a team that knows the area inside and out—this is your chance.
📩 [Click here to request more info or schedule a call.](https://creecapital.com/)
**Ready to grow your wealth through smart multifamily investing?**
Don’t sit on the sidelines—this opportunity won’t last long.
Let’s build something great,
— Rod
**Categories:** Blog, Real Estate
---
### [Where did the 2% Inflation Target Come From?](https://rodkhleif.com/where-did-the-2-inflation-target-come-from/)
**Published:** December 17, 2024
**Author:** Graciela
**Content:**
The 2% inflation target in the news every day was not determined by super computers or artificial intelligence it all began in New Zealand in 1989. The New Zealand government wanted to codify the independence of its central bank, so they passed legislation that required the Head of the Central Bank to establish a target inflation rate. The law also said not hitting the target was grounds to be fired. The Central Bank then announced the target rate would be 2%- it was a number that felt appropriate but not based on mathematical calculations. This triggered other countries including the US to start thinking about setting a target.
In the US, Alan Greenspan thought the target should be between 0% and 1%. Janet Yellen (yes, the same Janet Yellen) argued for a higher return saying that going into a recession with low inflation could lead to deflation. From 2000 to 2007 the target rate was increased to 1.5% and after the Great Financial Crisis, Ben Bernanke codified the 2% target that we have today.
“In a healthy economy, prices tend to go up- a process called inflation”
Professor Richard Warr
In a healthy growing economy, the demand for goods and services increases which drives prices higher and creates demand for more labor which increases wages. With higher wages and employment, the demand continues to rise in a virtuous upward direction- inflation is good! However, too much of a good thing can lead to stagflation where unemployment increases, and inflation moves higher. The FED is trying to maintain this delicate healthy balance.
The opposite of inflation is deflation and economists consider this much worse than inflation. The US suffered deflation of 7% a year during the first 3 years of the Great Depression. With deflation the value of money increases if you do nothing because prices are falling, and your dollar will go farther the longer you wait. In this scenario the velocity of money decreases, investing slows, GDP falls, and unemployment follows. Japan in the 1990s suffered a deflationary cycle that led to decades of stagnation. China today is facing a similar challenge.
In multi-family inflation is a good thing because we have fixed debt and rising income which creates value over time. We will need to see inflation in control before meaningful rate cuts are implemented. The only question is how much damage “will higher rates for longer” do to commercial real estate and businesses in the US and will it lead to a recession. We are monitoring this situation very closely.
**Categories:** Blog, Real Estate
---
### [Arbor Realty- Peak Behind the Curtain](https://rodkhleif.com/a-peak-behind-the-curtain/)
**Published:** December 27, 2024
**Author:** Graciela
**Content:**
Arbor Realty (stock symbol ABR) is a public company that is focused on lending to multi-family development and value add projects. As a public company, they are required to report their results and give investors some insight as to what is going on behind the scenes. They recently reported results that highlighted a startling increase in loan delinquencies.
Background:
Arbor Realty is one of the largest lenders of floating rate debt loans to multi-family investors. Unlike Agency debt that required investors to put up 30-40% equity in a deal, Arbor only required 20%, and they were known to lend to syndicators with very little experience. Many of the borrowers were multi-family turn-around projects where the plan was to fix up the property and resell before the rate cap expired. A three-year rate cap on a $100m loan in 2021 cost $51k. Today, the same rate cap costs $5.4M; anyone that was unable to execute their plan within 3 years could be in serious trouble. The Wall Street Journal reported that of the 4,500 rate caps sold in 2021, 65% have expired and 30% will expire by the end of 2024. One of Arbor’s borrowers was Jay Gajavelli, who somehow managed to acquire loans to purchase over 7,000 units in the Houston area with very little real estate experience. Gajavelli went belly up last year, and Arbor ended up having to sell the properties in foreclosure.
*“We are in a period of peak stress and expect the next two quarters to be challenging.”* – Arbor CEO Ivan Kaufman
In Q4 2023, Arbor reported a net increase of $115M in delinquency and increased loan loss reserves from $132M to $196M. Arbor’s CFO noted that if rates remain elevated, the problem will persist through 2024. Many analysts think that Arbor is glossing over the problem. Banco Santander said that Arbor had over 16% of loans past due. Viceroy Research pointed out that in 2021, Arbor listed 61% of loans had a “pass” rating (which means no credit concerns) versus only 1.7% in Q4 2024. Arbor now lists over half of their loans as “special mention”, which means they are a potential credit problem. The longer rates remain elevated, the more multi-family properties with floating rate debt will slip into trouble.
Where are rates heading?
FED Chairman Jerome Powell announced on March 20th that rates would remain unchanged for now. However, the FED still is maintaining that there will be 3 rate cuts in 2024, which would bring the rate down to 4.6%. Powell also said that “Strong hiring in and of itself would not be a reason to hold off on rate cuts.” It really comes down to inflation. If inflation persists, then rate cuts could be in jeopardy.
Opportunity:
We expect more and more distressed multi-family properties to come to market in 2024 due to over leverage, higher interest costs and lack of revenue growth. Many investors will be forced to sell as they simply run out of cash. We should be able to find very attractive assets with solid returns utilizing very conservative fixed debt financing and moderate rental income growth assumptions. This is a game of patience. As Warren Buffet says, “Be fearful when others are greedy, and be greedy when others are fearful.”
**Categories:** Blog, Real Estate
---
### [San Antonio Apartment Demand Outstrips Supply](https://rodkhleif.com/san-antonio-apartment-demand-outstrips-supply/)
**Published:** December 20, 2024
**Author:** Graciela
**Content:**
I wanted to share the details of a deal my CREE acquisition team recently tried to acquire to illustrate how small adjustments in assumptions have a material impact on return projections and, ultimately, offer price. For this deal, the “whisper price” from the broker was $17M, and after reviewing the property and T12 financials, we underwrote the deal and submitted an offer of $14M. Our offer was quickly rejected after they received a full price offer. This left us scratching our heads. What is the winning buyer modeling for key assumptions? What could we have changed to hit the same returns at a full price offer? From the table below, you can see that simply changing the exit cap to 5% from our assumed 5.6% doesn’t get the IRR up to our minimum 15% as it only increases to 9.7%. What else could we have changed?
Also, unlike some areas of the country facing declining rents, San Antonio continues to see rising rents. In our Sedona asset, we are still seeing rents rise 4-5% on an annualized basis.
Despite this promising outlook, San Antonio is seeing very few transactions in multi-family, with volume down 60% year-over-year. Of those deals that closed, the average price per unit was $152K, which is up 12% YOY. The only deals happening are distressed opportunities like The Regatta, which we are currently raising capital for and plan on closing by the end of the month. We believe we are acquiring a gem (in need of TLC) for a steep discount at $100k per door.
**Categories:** Blog, Real Estate
---
### [Sub-Market Analysis - Athens, GA](https://rodkhleif.com/sub-market-analysis-athens-ga/)
**Published:** January 8, 2025
**Author:** Graciela
**Content:**
As part of our ongoing series of sub-market analysis, today we will discuss Athens, Georgia. This is an area that we have been actively scouting for investment opportunities over the past few years.
What we look for in a sub-market:
Athens Statistics:
Athens is a growing city of predominantly upwardly mobile, educated individuals. In fact, 11% of the population is employed in computer and math fields, which places it in the 95th percentile of all US cities. 48% of the residents have at least a bachelor’s degree versus only 22% for the US average per city. The population today is 130k and growing consistently. Median income has grown from $43.5k in 2021 to $50.5k in 2023.
The University of Georgia is located in the city center and has a huge impact on the job and housing market. The university draws in wealthy students from across the country, and developers have been building luxury student housing while affordable housing has been ignored. The university will continue to grow jobs, pushing income and rental demand higher.
The median single family home costs $400k, which means with mortgage payments, taxes and insurance, the monthly payment would be around $3,442. To afford this home, the family income would have to be $132K per year. The average rent in the city is $1,680, which would require an income of $67K to not be rent burdened. From these numbers, it is clear that many in Athens lack affordable housing, and buying a house is out of the question for most. But it also points to very strong apartment demand for class C and B apartments.
Athens is a very diverse city where location, location, location really matters. As you can see from the above crime chart, the safest and most desirable areas are in the southern half of the map. And as you would expect, the income levels also gravitate to the safer neighborhoods. We are focused on finding deals in the higher-income, lower-crime neighborhoods.
Athens checks most of our boxes for an attractive sub-market for investment. It is critical to invest in an area that will not be battling against you as you try to implement your plan. It’s like planting the perfect tomato plant in rocky soil with no water: certain disaster! Now the hard part is to find a property that meets our strict requirements for IRR and cash-on-cash returns utilizing conservative assumptions. If we find an investment in Athens, we will be comfortable knowing the area will nurture our investment.
**Categories:** Blog, Real Estate
---
### [Sub-Market Analysis - Houston Texas](https://rodkhleif.com/sub-market-analysis-houston-texas/)
**Published:** January 9, 2025
**Author:** Graciela
**Content:**
A few weeks back, we highlighted Athens, Georgia as a submarket that we thought was very attractive and today, as part of our ongoing series of sub-market analysis, we are going to discuss Houston, Texas.
What we look for in a sub-market:
**Houston Statistics:**
Houston is the fourth largest city in the country and growing fast. In 2023, the city grew by 1.9% to 6.8M people. The city also is experiencing strong job creation. From November 2023 to March 2024, the city increased new jobs by an annualized rate of 2.8%! Houston is known as the “energy capital” of the US but is also home to the most manufacturing companies (6,000), a strong healthcare system, and many jobs in technology. Housing is very affordable in Houston. The city scores a 96.9 in the “Cost of Living Index Score” where 100 is the US average. The median household income is $60.4K with the average rent of $1,372, and the average home costs $262K (at 30%, an income of $55K could afford an apartment). At first glance, Houston looks like a great place to invest. It has a booming population, a diverse job base, the median income can afford the median rent, and the rent versus own favors apartments by $900 a month. So, Houston checks many of the boxes we look for but as always, the devil is in the details.
Houston is very vulnerable to an energy downturn. In the early 1980s when oil prices collapsed, the city lost 57% of all energy-related jobs. The reality is that the city is overly dependent on oil and gas, and that is an industry with a target on its back. In terms of housing supply, in 2024 there are 17.8K new apartments coming to market, which is higher than the trailing 10-year average of 16.3K. Apartment vacancy is trending higher and today is 8.1%, which is stifling rent growth to 0.7% YOY. In addition, new housing building permits in 2023 increased 10.6% while non-residential (job-related) permits decreased 36%. And finally, yes population is growing, but while San Antonio is growing from US residents moving from other states, Houston ranks 3rd behind Miami and NY for international migration. This is a red flag because we do not know how this population matches the current employment needs or what their income potential is.
Houston’s insurance costs are exorbitant when compared to the US and other Texas cities because of the risk of flood. In terms of single-family home insurance, the average cost for a $300K home is $6,600 in Houston, $3,590 in San Antonio and $2,600 for the US on average. Property taxes are also higher than in other Texas cities. The reality is that Houston is vulnerable to a hurricane, and flooding is a problem. This fact will probably keep insurance costs moving higher.
CREE also likes safe, low-crime areas. The above graph indicates the high-crime areas in dark blue. Houston has one of the highest violent crime rates in the country with 57/1000 a victim. The reality is that 20% of the population lives below the poverty line, and crime generally follows poverty. There are very nice areas in Houston where properties could be found, but you have to be aware of the adjoining areas because crime can spill over.
We are not saying we wouldn’t invest in Houston, but it is not a target for us due to the factors listed above, many of which are out of our control. We have many other submarkets that meet our criteria, and we will continue focusing our efforts on them.
**Categories:** Blog, Real Estate
---
### [Smart Money Jumping into Multifamily](https://rodkhleif.com/smart-money-jumping-into-multifamily/)
**Published:** January 15, 2025
**Author:** Graciela
**Content:**
KKR, the fourth largest private equity firm in the world with over a half a trillion AUM, is moving into multi-family in a big way. They just announced the acquisition of a portfolio of 18 mid- and high-rise apartment complexes owned by Quarterra (multi-family development arm of Lennar). They paid $2.1B for the portfolio, or around $400k per unit. And they aren’t alone. Blackstone and Brookfield have also recently invested billions into multi-family investments.
**What is going on?**
At the end of 2023, Lennar owned 36K apartments that they had developed over the past decade. In their 2023 annual report, they indicated that their multi-family portfolio lost $51M. Lennar, like many class A developers, are facing stiff competition from the post-pandemic flood of new supply. They are looking for buyers to offload more properties and cut their losses.
**What opportunity does KKR see?**
KKR is pouncing on favorable pricing, rapidly slowing new construction and a forecast for rents and occupancy to begin to climb in the coming years. KKR believes the challenges facing MF today are cyclical and not secular, and they see today as a good entry point. In their analysis of the MF industry, they see opportunity from distressed owners selling at cap rates of 5.5% or better. The distress will come from $253B of MF loans maturing through 2026 with a loan to value greater than 80%, and 58% of loans maturing in the next 18 months with a debt coverage service ratio (DCSR) less than 1.25X. Properties trying to operate at this DCSR will have a hard time funding debt and operational expenses. In simple terms, KKR sees an opportunity to generate a 14.5% IRR by purchasing at a +5.5% cap rate, growing rents at 3% per year and ultimately selling at a 5.0% cap down the road.
**What does my acquisitions team see?**
We are not hunting for the same properties as KKR, but the opportunities they see in class A are evident in class B properties as well. In addition, class B properties, in some cases, offer the opportunity to increase valuations through value added strategies. Currently, we still are witnessing some operators overpaying for properties by underwriting with unachievable rent growth and expense assumptions. Hopefully through education, investors will be able to spot overly ambitious underwriting and starve them of capital. Over the longer term, it will become apparent which syndicators have done a good job with underwriting. In the meantime, we will continue to be patient and scour the market for deals with less competition.
**Categories:** Blog, Real Estate
---
### [Columbia SC - Deal Lost!](https://rodkhleif.com/columbia-sc-deal-lost/)
**Published:** January 20, 2025
**Author:** Graciela
**Content:**
In June, we wrote about the Columbia, SC market and how much we liked the area. We have pursued several deals but only made it to best in final in one. Today we are going to talk about this very attractive opportunity to acquire 165 units in a good location. Unfortunately, we didn’t get the deal, and actually, no one did as the buyer decided not to sell at the offered prices. Below, we will detail how we underwrote the deal and contrast it to how the broker presented the opportunity. It is important to understand that the selling broker’s Offering Memorandum (OM) is a sales tool with a mix of good nuggets of information and also large amounts of wishful thinking.
**The deal as presented:**
The property was built in 1970 and occupancy was good at 97%, with an average in place rent of $1,183 (avg for Columbia is $1,100), The current owners invested $6.5M over the past few years to renovate all the units and repair the exteriors. When you are evaluating a property that doesn’t have upside from renovation, you have to focus on strategies to increase NOI from small value-added changes, organic rent growth and operational efficiency. In the T12, rents increased 8% YOY as a result of the ongoing renovations and organic rent growth. The whisper price on the property came in at $20.5M, which, based on the broker’s NOI, was a 5.97% purchase CAP rate. The broker claimed that the rents were significantly below the average comparable rents of $1,413. The OM listed 7 nearby apartment complexes that they were calling comparable to support their number. They also floated the idea that an additional $300K of CAPEX for modest interior upgrades could boost the rents by an additional $50, bringing the achievable rent to $1,463. In the OM, the broker claimed, “There is headroom to market of $475 per month per unit.”
**CREE’s sanitization of the numbers:**
The first thing we focused on was market rents and the 7 properties listed as comparable. Three had average rents above our target, and four were below. The three properties with higher rents were significantly newer (2020, 2014,1993) and had average rents of $1,933, $1,856 and $1,661, respectively. Below are pictures of the property we were looking to buy (left) and the three newer properties.
Clearly, these newer properties shouldn’t have been included in the comparable rental market, and they pulled the average market rent up significantly. The four properties with lower rents were all built in the late 1960s and early 1970s and were true rent comps. Our target property rents were about $50 higher than the true competitors already, which makes sense due to the recent renovations. The statement that there was “plenty of headroom” to raise rents was not valid. After studying the apartments and comparable properties, we did believe rents could be increased to $1,285 over time, a far cry from what the brokers were projecting, with improvements ($1M of CAPEX) and organic rent growth.
The OM listed economic vacancy as 10.7% in year one, and we projected 19% and then moderating to around 10% for the balance of the hold period. We factored in more lost rent while renovating units and wanted to err on the side of caution.
After firming up our top-line assumptions, we moved on to the expenses. The T-12 as presented (remember you have to sanity check these numbers based on experience, industry averages, location and age of the property) listed operating expenses as $105K per month. The broker estimated that expenses could be reduced to $99K per month. The OM projected repairs, insurance and payroll could all be reduced, and taxes would remain flat. Given the uncertainty of inflation and the surge in insurance costs, this projection seemed wildly unrealistic. The OM listed turn costs of $300 per unit, which we also believed to be unrealistic. We adjusted each number based on our quotes and experience and underwrote to $117k per month of expenses.
We ended up offering $18.7M in the best and final. With our numbers, we were buying the property at a 6.55% CAP rate. At this offer price, the deal would have generated 7.7% cash-on-cash return, a 16.7% IRR and an equity multiple of 2.05X. These numbers were based on conservative achievable assumptions, and we thought it would be attractive to investors. Unbeknownst to us or the seller’s broker, the seller was not going to let the property go for less than $19.5M, so they walked away. In summary, if you are evaluating deals, you have to make sure the key assumptions as presented are correct and apply judgment and experience to come up with a realistic plan. You also have to be patient and understand that the process for acquiring properties can be long and frustrating.
**Categories:** Blog, Real Estate
---
### [Sub-Market Analysis - Phoenix AZ](https://rodkhleif.com/sub-market-analysis-phoenix-az/)
**Published:** January 27, 2025
**Author:** Graciela
**Content:**
As part of our ongoing series of sub-market analysis, today we will discuss Phoenix, AZ. We have not bid on any deals in the city due to a number of factors detailed below.
What we look for in a sub-market:
**Phoenix, AZ Statistics:**
Phoenix has turned into the “darling of the US innovation elite.” City leaders for decades have courted tech and auto manufacturers to invest in the city. Their efforts have paid off as Taiwan Semiconductor and Intel are currently building new semiconductor plants set to open by 2028. The $40B in investments tops all other states in the US, and it is expected to add 20K new jobs. The city also has an active EV manufacturing footprint, including autonomous vehicle developer Waymo. And the city boasts more computer and math workers than 95% of all other US cities, so the brain power exists to support the new businesses. With these announcements, Phoenix checks the “job growth” box big time!
Phoenix is the 5th largest city in the US, with 1.6M people. The greater Phoenix MSA boasts 4.7M people. A few years back, Phoenix was the fastest growing city in the country, but more recently population growth has been falling (1.6% in 2020 to 1.3% in 2023). The median household income is $72K (versus $75K nationally), while the median house costs $422K. To afford a home in the area, you would need to earn ~ $134K per year. And the average rent is just over $1,350 a month. Tenants would need to earn $54K to afford the typical apartment, so this indicates that rental housing is affordable for the average family while starter homes are out of reach for many.
Over the past few years, construction of new apartments has skyrocketed, leading to concessions and increased vacancy. From the graph below, you can see that rents increased over 60% from 2018, which attracted capital and development of new apartments. However, since Q4 2022, rents have been falling.
In Q1 2024, 6,100 new units were completed and a record 5,600 were leased. In the pipeline, there are 131K new apartments either under construction or in the planning stage. Through 2026, it is estimated that an additional 6.4% of existing apartment stock will come to market. Vacancy is projected to rise from the current 8.7%, and rents are projected to continue to fall through 2024 and beyond. In seven Phoenix submarkets, new construction is over 20% of existing housing supply, which may be hard to lease up.
**Other Concerns:**
**Evictions:**
As mentioned above, rents in the $1,350 range appear to be relatively affordable for the average person. However, evictions in Maricopa county are leading the nation and are up 21% YOY. When compared to pre-pandemic levels, evictions are up 36%, which indicates affordability is a real issue for many tenants. The tried-and-true metric of keeping rent levels at 30% or lower of income may be outdated, with inflation eating into tenant’s purchasing power.
**Water:**
Phoenix has been experiencing a record 15-year drought and currently gets 60% of its water from the Colorado River (40M people rely on the river for water), which also is experiencing a similar drought. Today, the river’s flow is only 65% of normal levels. The city has done an excellent job of promoting water conservation and despite massive population growth, the water usage is less than what was consumed 2 decades ago. The city is working hard to find other ways to supply safe drinking water and admit that they can’t conserve their way out of the problem. Water is an existential threat that investors should consider before investing.
**CRIME:**
Phoenix has the highest crime rate in Arizona, and only 6% of cities in the US have a higher crime rate. It is a large city and, like any city, there will be higher crime areas, so it is important for investors to understand the crime in the area surrounding their investment.
In summary, Phoenix will continue to experience growth pains for real estate investors as excess supply will continue to outstrip demand for the foreseeable future. Investors should plan on muted rent growth and increasing vacancy for the next few years. Longer term, the potential for a lack of water supply could limit population growth. For these reasons, we are not currently looking for opportunities in Phoenix.
**Categories:** Blog, Real Estate
---
### [Prayers for Florida and the Southeast](https://rodkhleif.com/prayers-for-florida-and-the-southeast/)
**Published:** February 3, 2025
**Author:** Graciela
**Content:**
Our hearts and minds are focused on all of the people suffering from hurricane Helene and now those being threatened by hurricane Milton. Some models have Milton hitting Florida from the west. The damage from the storm surge and wind could devastate an area still cleaning up. Hurricane Helene wreaked havoc well inland across Georgia, the Carolinas, Tennessee, Kentucky and Virginia with massive rain and flooding. Helene highlighted how vulnerable wide swaths of the country are to flooding even those that aren’t in a designated flood zone. And it isn’t just hurricanes, wildfires, tornados, excessive rain, hailstorms and earthquakes are also in the news.
The loss of life and property are the primary concern as we face these weather events. But after the storm hits and the cleanup begins the financial impact rears its ugly head. Marcus & Millichap just issued a special report on rising insurance rates, and they noted that in some parts of Florida multi-family insurance costs have risen over 200% since 2019. The cost of rebuilding and the frequency and severity of the storms continues to push rates higher. On average insurance accounts for 9% of operating expenses for multi-family operators. In areas prone to natural disasters insurance can run as high as 16%. Higher insurance costs are pressuring net operating income and ultimately valuations and with these two storms it will only get worse.
We are working with our insurance brokers to combine policies across properties to lower overall premiums and have had some success, but it is critical to underwrite insurance costs conservatively. Also, as part of your due diligence, evaluate the property for vulnerability to natural disasters. We can’t avoid a black swan event but as investors we should be aware of all the risks we are taking and appropriately factor them into our business plan.
**Categories:** Blog, Real Estate
---
### [Unlocking Financial Freedom: The Mindset Shift You Need](https://rodkhleif.com/unlocking-financial-freedom-the-mindset-shift-you-need/)
**Published:** March 28, 2025
**Author:** Alex Khleif
**Content:**
Have you ever wondered why financial freedom seems elusive, even to those who diligently follow traditional financial advice? The secret doesn’t lie in complicated strategies or insider tips—it’s rooted in your mindset. In this eye-opening article, we explore the fundamental shift required to break free from financial limitations and embrace true wealth-building opportunities.
Discover why an investor’s mindset is the single most significant factor determining your financial future, and learn practical steps you can immediately implement to start your journey toward abundance and financial independence.
[Read the full article here.](https://www.luxurytravelmagazine.com/news-articles/the-investors-mindset-why-most-people-never-achieve-financial-freedom)
**Categories:** Blog
---
### [What Is Multifamily Real Estate?](https://rodkhleif.com/what-is-multifamily-real-estate-november-30-2023-digital-journal/)
**Published:** April 2, 2025
**Author:** Matt Rohde
**Content:**
**What is Multifamily Real Estate? A Beginner’s Guide to Building Wealth**
If you’re new to real estate investing, there’s one strategy you’ve probably heard about a lot—and for good reason: multifamily real estate.
But what exactly is it? And why do so many successful investors swear by it?
Let’s break it down step by step.
### What Is Multifamily Real Estate?
Multifamily real estate refers to properties that house multiple separate units within one building or complex. Unlike single-family homes, these are designed to accommodate more than one tenant under the same roof.
**Examples include:**
- Duplexes (2 units)
- Triplexes and Fourplexes (3–4 units)
- Apartment buildings (5+ units)
- Townhouse or condo complexes with shared ownership structures
Whether you’re starting with a duplex or scaling into large apartment communities, the model stays the same: multiple income streams from one asset.
### Why Is Multifamily Real Estate So Popular?
Here’s why this strategy is a favorite among wealth builders:
### 1. **Cash Flow from Day One**
Each unit brings in rental income, which means more stability. Even if one tenant moves out, others are still paying rent.
### 2. **Scalability**
Instead of managing ten single-family homes across ten locations, you manage ten units under one roof. Bigger deals, more efficient operations.
### 3. **Easier Financing (Surprisingly)**
Lenders often prefer multifamily properties because they generate consistent income. That cash flow makes loans less risky.
### 4. **Tax Advantages**
Depreciation, cost segregation, and 1031 exchanges, all tools investors use to legally reduce their tax burden.
### 5. **Forced Appreciation**
Increase the value of your property by increasing its income. Renovate units, raise rents, cut expenses. It’s a formula that works.
### Who Should Consider Investing in Multifamily?
New investors looking for cash-flowing assets
Busy professionals who want passive income
Aspiring full-time real estate entrepreneurs
Retirees wanting predictable income with appreciation upside
This model works for almost anyone willing to learn, take action, and build smart partnerships.
## Action Steps to Get Started
1. **Educate Yourself** – Books, podcasts, and blogs are your best friend. (Hint: you’re in the right place!)
2. **Analyze Local Markets** – Where are rents growing? Where is job growth strong?
3. **Build Your Team** – Broker, lender, property manager. Relationships matter.
4. **Start Small or Partner Up** – A duplex can teach you the fundamentals. Or go bigger with the right people.
Multifamily real estate isn’t just about buying buildings—it’s about building freedom. If you’re serious about creating long-term wealth, few vehicles are more powerful.
The best time to start learning is now. The best time to take action? Also now.
---
Want to learn more? Check out this article that focuses on the intricacies of multifamily real estate as a dynamic and resilient asset class, providing insights and strategies for success in this field. It emphasizes the unique advantages and opportunities the multifamily sector offers seasoned real estate tycoons and budding investors looking to diversify their portfolios.
Rod Khleif is recognized as an industry expert in multifamily real estate. The article highlights his wealth of experience and commitment to empowering investors. Check out the full article [here](https://www.digitaljournal.com/pr/news/cdn-newswire/what-is-multifamily-real-estate-).
**Categories:** Blog, Featured, Real Estate
---
### [Value Add We’re Creating at Regatta San Antonio](https://rodkhleif.com/checkout-the-value-we-are-creating-here-at-regatta-in-san-antonio/)
**Published:** January 3, 2025
**Author:** Graciela
**Content:**
Owning an apartment complex is a business. And just like any business, you must look for ways to enhance your customer experience to reduce turn costs and attract new tenants. But in some cases, enhancements can be offered to tenants for a fee, and this provides the property with significant additional revenue. Over the past few months of our due diligence period for our new acquisition in San Antonio, The Regatta, the GP team has been planning property renovation projects but also evaluating potential services to offer tenants to increase revenue.
**Leasing Office Before and After Planned Renovation:** First impressions are critical, so we are planning on revamping the leasing office inside and out.
We hired a design firm to help us update the property color scheme and amenities desired by tenants today. We recognize that all our planned work to renovate the interiors to increase the rents significantly would fail if the exterior hadn’t also been upgraded. Once renovations are completed, we will be able to attract higher-valued tenants with the means and desire to purchase additional services that we will be offering. Upgrading the property is like building a stool; you need to complete all three legs to make it work.
The above picture is from a year ago at the Regatta. Our design team has come up with a plan to make the area a fun gathering spot with a fire pit, cornhole boards, a barbeque area with high bar seating, and new pickleball courts to replace the non-functioning tennis courts. All of this will be visible to prospective tenants in the adjoining leasing office.
**Additional Revenue Opportunities that we have identified:**
**WIFI package** – We have negotiated a contract with Google to provide internet service throughout the property, which we can offer to tenants at a lower price than they are currently paying. As part of this deal, we are paid $35/month per participant. Due to current participation rates, we anticipate that this will be a significant cash generator for the property, and this was not in our original plan. This alone will increase the value of the property by over $1M if we hit our projections.
**Package Locker** – In our Sedona asset, we installed a package locker that tenants can pay $5 a month to utilize, and our experience has shown that a large % of tenants take advantage of this to keep their packages secure. We also anticipate that most tenants will opt in for this service, and this wasn’t in our original budget.
**Reserved Parking** – By numbering the parking spots, we can reserve those spots closest to the doors and allow tenants to pay for the spot. We do this in Sedona, and based on that experience, we believe we can get somewhere between 20-40% participation at $25 per month per space. This should generate between $12-$24K per year, which increases the value of the property by almost $500K.
**Covered Parking** – At Regatta, we have 85 covered parking spaces, which are highly desired, yet there is no premium currently charged to park there. We anticipate that we will be able to charge between $25 to $70 per month per spot for the convenience of parking out of the sun and rain. This additional revenue is not in our current plan.
**Lakeview** – 38 of the units have a beautiful view of the lake and all the wildlife it holds. Currently, these residents do not pay extra for the view. Our property manager believes that we should be able to garner a premium of between $50-$100 for these apartments. This is not in the initial plan.
**Enclosed Patios** – Many first-floor units have a grass area behind their unit that could be fenced in for privacy. Our property manager has examples of other properties getting anywhere from $25 to $40 a month additional for installing a fence in the back yard. This potential income is not included in our original numbers.
**What could this enhancements mean for returns:**
As you can see by the sensitivity analysis in the table, adding additional revenue and reducing the exit cap assumption to a level that many others are using today in their underwriting, the projected performance for our investment in The Regatta could easily surprise on the upside. Our approach is to be conservative in projections but strive to enhance the NOI with thoughtful revenue opportunities that bring value to tenants.
**Categories:** Blog, Real Estate
---
### [Sub Market Analysis - Cincinnati OH](https://rodkhleif.com/sub-market-analysis-cincinnati-oh/)
**Published:** January 31, 2025
**Author:** Graciela
**Content:**
As part of our ongoing series of sub-market analysis, today we will discuss Cincinnati, OH. We have looked at a few opportunities in the area recently.
What we look for in a sub-market:
**Cincinnati, OH Statistics:**
Cincinnati is a relatively small (310K population) Midwest city that has a very young and educated population. Seventy eight percent are below 55 years of age, and 48% have a college degree. The area has a very diversified employment base, with the largest employer being healthcare at 17%, followed by manufacturing at 10%. The city claims it is home to more Fortune 500 companies per capita than any other city in the US. The population and available jobs are growing, albeit slowly. Since 2000, the city has added on average 11K new residents per year and is currently growing at 0.16% annually.
Cincy boasts affordable housing, with the median home costing $269K and the average rent standing at $1,041. The median household income of $49K allows a family to afford $1,225 per month for housing. The typical house would cost $2,185 for mortgage, taxes and insurance, which explains why over 60% of residents rent. There are currently 140K single family homes and apartments in the city. Vacancy is relatively low, at 4.9% (top 5 in country), which implies supply is constrained. Rents in the area are up over 40% since the pandemic but, due to new supply, are now growing at less than 1% year. The city believes they are still short 7,500 housing units, so they are looking at ways to make it easier for developers to build in some neglected areas. In 2024, there are 1,811 new units available to lease, 3,611 under construction and another 6,005 in the planning pre-permit stage. If the 6K in planning come to fruition, the housing stock will increase 8% over the next 4 years. With modest population growth and an increase in supply, rent growth will most likely remain tepid.
Cincinnati has a high level of poverty and crime. The city ranks a 3, with 100 being the safest. 46 out of 1000 residents are victim of a violent or property crime per year. Twenty five percent of the residents live below the poverty line. This makes the old real estate adage, “location, location, location” especially critical when evaluating a deal in the city. You have to worry about where the new supply is being built and where the crime is concentrated.
From the map, you can see that the northwest and southeast parts of the city are the safest. By cross referencing this map and the map of where the new development is taking place, you can determine if the deal you are looking at is in a good spot.
In summary, Cincinnati has many of the attributes that we like in a submarket, but there are a few red flags that need to be considered as part of the underwriting. We pull the crime statistics from the neighborhoods to make sure we are not buying into a problem area. We also look at the construction pipeline for a few miles around the target property to ensure we are not buying into an oversaturated market. Also, with the city loosening building constraints, you have to assume more competition is coming, so the deal has to make sense with moderate rent growth assumptions.
**Categories:** Blog, Real Estate
---
### [Houston Multifamily Foreclosures - Risk or Opportunity?](https://rodkhleif.com/houston-multi-family-foreclosure-study/)
**Published:** February 26, 2025
**Author:** Graciela
**Content:**
### **Houston Multifamily Foreclosures: A Growing Concern in a Strong Market**
Houston has been making commercial real estate headlines, but not for the reasons you might expect. Despite being one of the strongest economic markets in the country, multifamily foreclosures in Houston are on the rise. This trend is surprising given the city’s booming job market, stable construction pipeline, and steady rent growth.
Houston is currently the second-highest city for job creation in the U.S., and it remains the only major Texas market where new construction aligns with long-term demand trends. Rental growth sits at 1.3% annually, and vacancy rates are a manageable 7.1%. Yet, a dozen marquee multifamily properties have slipped into foreclosure.
So what’s causing this spike in distressed assets? Let’s break down the key factors driving multifamily foreclosures in Houston and what investors should be watching.
### **Rising Interest Rates and Debt Pressures**
The recent wave of multifamily foreclosure filings in Houston shares a common thread: rising interest rates. Many of these properties were financed during the low-interest-rate environment of 2020-2021, when SOFR (Secured Overnight Financing Rate) was near 0%.
As SOFR climbed to 5.3% in July 2023, the cost of debt for properties with floating-rate mortgages (SOFR + spread)skyrocketed. While we don’t have the exact loan terms for each foreclosed property, it’s clear that some, if not most, were variable-rate loans.
For owners who failed to secure interest rate caps or refinance, the impact has been devastating. Higher monthly debt payments, coupled with rising insurance premiums, increasing operating costs, and maintenance expenses, have created a perfect storm of financial distress.
### **Crime and Property Management Issues**
While interest rate spikes explain many of Houston’s multifamily foreclosures, there’s another factor at play—poor property management and crime-related tenant turnover.
Two recently foreclosed properties, The Village at Piney Point and Pecan Square, tell a different story. These assets were acquired more recently, meaning their financing costs haven’t changed significantly. Instead, tenant reviews paint a grim picture of deteriorating conditions:
- High crime rates
- Poor maintenance
- Unresponsive and rude property management
When tenant satisfaction drops, lease renewals decline and attracting new residents becomes difficult. This leads to higher vacancies, reduced rental income, and ultimately, financial distress. A bad reputation online can trigger a financial death spiral, making it nearly impossible for an owner to recover.
### **Lenders & The “Extend and Pretend” Strategy**
Despite the spike in foreclosure filings, many of these properties may not actually reach foreclosure. Banks and lenders use foreclosure filings as leverage to pressure owners into negotiations.
Most lenders don’t want to take ownership of these properties—doing so forces them to recognize loan losses, which could destabilize their financials. Instead, many are pursuing a strategy known as “extend and pretend”, where they delay formal foreclosure and work behind the scenes to find well capitalized buyers willing to step in.
However, this approach isn’t sustainable. As more distressed multifamily loans pile up, banks will be forced to offload these assets, often at a loss. For opportunistic investors, this presents a unique buying opportunity.
### **Opportunities for Distressed Asset Investors**
For savvy investors, the Houston multifamily foreclosure wave could create prime opportunities to acquire properties at deep discounts. However, not all distressed assets are worth pursuing. Here’s what to consider before making an offer:
✔ **Understand the Cause of Distress** – If high-interest rates are the issue, refinancing or restructuring the debt may solve the problem. However, if the property has serious management issues or crime problems, recovery could take years.
✔ **Make Conservative Offers** – Houston’s market is strong, but distressed properties often require significant capital investment. Factor in **operating reserves, deferred maintenance, and rebranding costs** before committing.
✔ **Read Tenant Reviews** – Online reviews can reveal **operational issues, security concerns, or maintenance failures**that could impact long-term profitability.
✔ **Secure Rescue Capital** – Investors with **strong capital reserves** or access to **rescue capital** will have a major advantage in acquiring and turning around struggling assets.
### **The Bottom Line**
Houston’s multifamily market is still fundamentally strong, but rising interest rates, poor management, and lender pressure are driving an increasing number of properties into distress.
For well-prepared investors, this presents a rare opportunity to buy distressed multifamily properties at steep discounts. However, it’s critical to conduct thorough due diligence to ensure the underlying problems are fixable and that the timeline for recovery aligns with your investment strategy.
With the right approach, investors who navigate this market wisely can turn today’s distressed assets into tomorrow’s high-performing multifamily investments.
### **Rod Khleif’s Final Thoughts on Houston’s Multifamily Market**
Listen, I’ve been in this business for decades, and if there’s one thing I’ve learned, it’s that real estate is cyclical. Markets rise and fall, and the smartest investors know how to capitalize on both sides of the cycle.
Right now, what’s happening in Houston’s multifamily market is not a sign of market weakness—it’s a sign of opportunity. Interest rate hikes, poor management, and lender pressure are exposing properties that weren’t well-positioned to weather the storm. That means savvy investors who understand value and have the right capital reserves can step in and take advantage of this moment.
But here’s the thing—not all distressed assets are good deals. Too many investors get emotional about “buying cheap” instead of focusing on buying smart. If you’re looking at foreclosed multifamily properties, you need to ask yourself the right questions:
- Is the issue fixable? If the only problem is financing, a new loan structure or capital injection could solve it. If the issue is crime, tenant turnover, or management failure, fixing it will take time, effort, and cash reserves.
- Does this deal fit your strategy? I always say, “You don’t get rich on your first deal, you get rich on your last deal.” Focus on long-term gains, not just a quick discount.
- Do you have the right team in place? If you buy a distressed asset, you’re signing up for a turnaround project. Make sure you have property managers, leasing teams, and renovation crews ready to execute.
I truly believe that Houston will remain a strong multifamily market, and the investors who act strategically now will be incredibly well-positioned when the market stabilizes.
So here’s my advice: Do your homework, stay conservative, and take action when the right opportunity comes along. Because in real estate, fortunes aren’t made when the market is hot—they’re made when others are too scared to step in.
[](https://rodkhleif.com/lifetime-cashflow-podcast/)
**🎧 Want to Learn from the Best in Multifamily Investing?**
Join **Rod Khleif**, one of the **top real estate investing coaches**, as he interviews industry giants, breaks down powerful strategies, and shares the **mindset secrets of top real estate investors**.
👉 **Listen Now:** [Lifetime Cash Flow Through Real Estate Investing Podcast](https://rodkhleif.com/lifetime-cashflow-podcast/)
**Categories:** Blog, Real Estate
---
### [US Job Growth & Real Estate Outlook 2025](https://rodkhleif.com/us-job-growth-real-estate/)
**Published:** February 18, 2025
**Author:** Graciela
**Content:**
## **What It Means for the Economy & Real Estate**
The US Labor Department recently reported that the economy added 256,000 new jobs in December. This news affected the financial markets. This surge in US job growth prompted the Federal Reserve (FED) to signal a more cautious approach to future rate cuts, aiming to prevent inflation spikes.
The stock market and real estate investments reacted poorly to the news. Both had been counting on lower interest rates in 2025. Job creation is often viewed as a good sign for the economy. However, it is important to know where these jobs are being added. Understanding the long-term effects is crucial for investors, business owners, and property markets.
Last year, public perception of the economy often conflicted with government reports. While many Americans felt financial strain, officials pointed to strong job numbers as proof of economic growth. However, where these jobs are created matters, and a deeper analysis raises concerns about the long term stability of the labor market.
## **US Job Growth: Private Sector vs. Government-Funded Sectors**
Job Growth: Private Sector vs. Government-Funded SectorsPrivate sector job growth is a positive economic indicator because it reflects business expansion and consumer demand. In contrast, excessive growth in government and publicly funded sectors, such as healthcare and social assistance, can signal an economy that is overly reliant on taxpayer dollars rather than sustainable business profits.
The data over the past two years highlights this trend:
- Healthcare, social assistance, and government jobs accounted for 60% of all new jobs created.
- Private sector job growth has lagged behind, raising concerns about long-term economic productivity.
The question remains: Are new jobs driving economic expansion, or are they simply increasing the tax burden and healthcare costs? Higher taxes and rising healthcare expenses reduce the capital available for business growth, slowing the economy in the long run.
## **The Hidden Stress in the System**
Despite the administration’s optimistic outlook, underlying economic indicators suggest growing financial strain. The Senior Loan Officer Opinion Survey (SLOOS), a report by the Federal Reserve, tracks trends in private lending markets. The latest survey reveals that:
- Banks report weak demand for commercial and industrial loans across all business sizes.
- Lending standards for small businesses are tightening due to an uncertain economic outlook.
When businesses struggle to access capital, expansion slows, job creation weakens, and economic momentum declines.
### **Consumer Debt & Rising Delinquencies**
Another key concern is the increasing financial distress among consumers. Credit card delinquency rates have been rising, reflecting financial hardship for many Americans.
- Banks are tightening lending standards for lower-credit borrowers, limiting access to additional funds.
- More consumers are taking out higher credit card loans and requesting limit increases, signaling financial strain.
At the property level, this financial pressure is evident. Some tenants in multifamily properties are struggling to pay rent, as they lack the savings to handle unexpected expenses. Lael Brainard, Director of the American Economic Council, recently noted, *“All Americans are confronting higher prices, but the burden is particularly great for households with more limited resources.”*
## **What This Means for Interest Rates & Real Estate Investments**
Despite the strong headline job numbers, the broader economic picture remains fragile. As the Federal Reserve evaluates the economy beyond just job reports, it is likely that interest rates will continue to decrease in 2025.
- SOFR (Secured Overnight Financing Rate) is expected to drift lower from its mid-4% range.
- Lower interest rates should increase transaction activity in the multifamily real estate sector.
For real estate investors, this shift could provide opportunities to secure lower financing rates, drive investment activity, and boost property values.
While job numbers dominate headlines, the true economic landscape is more complex. Understanding the interplay between employment trends, lending conditions, and interest rates is essential for making informed real estate investment decisions in 2025.
**Categories:** Blog, Real Estate
---
### [Where are Rents Still Rising? US Growth Trends 2025](https://rodkhleif.com/where-are-rents-still-rising/)
**Published:** January 30, 2025
**Author:** Graciela
**Content:**
# Where are Rents Still Rising? US Growth Trends
## **Why U.S. Rent Growth Trends Matter for Investors**
The U.S. rental market is shifting, with the Northeast and Midwest leading in rent growth, while Sunbelt cities struggle with oversupply. Investors, property owners, and renters alike need to understand these regional rent growth trends to make informed decisions.
In markets like New York City, New Jersey, Columbus, Kansas City, and Chicago, low housing supply and strong demand are pushing rents higher. Meanwhile, in Austin, Charlotte, Miami, and other high-development cities, a surge in new apartment construction is leading to declining rents and prolonged lease-up periods.
This multifamily market analysis will break down the top rent growth cities, the impact of oversupply, and the outlook for 2025, helping investors evaluate where to focus their real estate strategies for the best returns.
## **Northeast & Midwest See Highest Rent Growth While Oversupply Hits Sunbelt Markets**
### **Understanding U.S. Rent Growth Trends**
The Northeast and Midwest are experiencing the highest rent growth in the country, driven by a favorable supply and demand balance for property owners. Limited new construction in key markets has pushed rents upward, while areas with high development activity are facing rent declines due to oversupply.
## **Where Are Rents Still Rising?**
Despite overall market shifts, some U.S. cities continue to see strong rent growth, primarily due to a limited housing supply and high demand.
#### **Top Cities for Rent Growth (YoY Increase %)**
📍 **New York City** → **+5.4%**
📍 **New Jersey** → **+3.8%**
📍 **Columbus, Ohio** → **+3.6%**
📍 **Kansas City, MO** → **+3.3%**
📍 **Chicago, IL** → **+3.1%**
In these cities, rent growth is being driven by constrained new supply, ensuring that demand keeps pushing prices upward.
Among them, Columbus is unique—while it has seen a surge in new apartment construction, strong job growth continues to outpace supply, keeping rents on the rise.
Meanwhile, New York, New Jersey, Kansas City, and Chicago are seeing rent increases due to a shortage of available housing, which forces renters to compete for fewer units.
## **Why Affordability Supports Rent Growth Trends**
A key factor sustaining rent increases in these areas is affordability. While Manhattan’s average rent is $4,800 per month, the rent-to-income ratio remains relatively low for high-income earners.
Other cities like Kansas City offer significant affordability advantages, with an average rent of $1,165 per month—7% lower than the national average. With a median household income of $78,000, Kansas City renters have room for further rent growth before affordability becomes a constraint.
## **Sunbelt Cities Face Rent Declines Due to Oversupply**
While the Northeast and Midwest benefit from constrained supply, Sunbelt cities are facing the opposite problem—overbuilding is driving rents down.
### **Cities with the Largest Rent Declines:**
- **Austin, TX** → **-6.2%** due to overbuilding
- **Charlotte, NC** → **37K new apartments under construction**
- **Miami, FL** → **28K units in development**
- **Salt Lake City, UT** → **21K units in progress**
- **Raleigh-Durham, NC** → **30K apartments set for completion**
Austin, TX, is the most extreme case, with 65,000 apartments under construction, set to increase the city’s apartment stock by 22% in the next two years. At current absorption rates, it will take years to fill these units, creating ongoing rental price pressure.
Similar oversupply issues are developing in Charlotte, Miami, Salt Lake City, and Raleigh-Durham, where apartment stock will increase by 17% in the coming years. Until demand catches up, rents in these markets will continue to struggle.
## **Future Outlook: When Will Rent Growth Stabilize?**
Projected supply and demand trends are a reliable indicator of where rents and occupancy rates will head over the next few years. Cities with overbuilt rental markets will continue to experience flat or declining rents until absorption catches up.
However, construction starts are already slowing, which means that in areas where population growth remains strong, the oversupply will eventually be absorbed. By mid-2025, markets that are currently seeing rent stagnationwill likely begin to recover, with rents climbing again.
## Key Takeaways for Investors
When evaluating new markets for multifamily investment, it’s crucial to analyze supply pipeline data, construction trends, and population growth. Investing in areas with limited new supply and sustainable demand growth can lead to higher long-term rent appreciation.
Underwriting must reflect accurate supply data, ensuring that rental growth projections align with market fundamentals. A miscalculation in supply-demand dynamics can lead to lower-than-expected returns and prolonged periods of rent stagnation.
**Categories:** Blog, Real Estate
---
## Pages
### [Homepage](https://rodkhleif.com/)
**Published:** January 10, 2020
**Author:** Rod Khleif
**Content:**
# Master Multifamily Real Estate To Create Generational Wealth & Freedom
## So You Can Finally Enjoy The Time, Fulfillment and Lifestyle You’ve Always Wished For.
[ work with rod ](/work-with-rod/)
[  ](https://rodkhleif.com/podcasts/ep-129-dean-graziosi-author-millionaire-success-habits/)
### [Featuring Dean Graziosi #129](https://rodkhleif.com/podcasts/ep-129-dean-graziosi-author-millionaire-success-habits/)
#### [Author of Millionaire Success Habits talks about success](https://rodkhleif.com/podcasts/ep-129-dean-graziosi-author-millionaire-success-habits/)
[  ](https://rodkhleif.com/podcasts/ryan-pinedas-path-to-100m-in-real-estate/)
## [Featuring Ryan Pineda #976](https://rodkhleif.com/podcasts/ryan-pinedas-path-to-100m-in-real-estate/)
## [Path to $100M in Real Estate](https://rodkhleif.com/podcasts/ryan-pinedas-path-to-100m-in-real-estate/)
[  ](https://rodkhleif.com/podcasts/ep-183-grant-cardone-controls-4000-apartments-worth-half-billion-dollars/)
## [Featuring Grant Cardone #183](https://rodkhleif.com/podcasts/ep-183-grant-cardone-controls-4000-apartments-worth-half-billion-dollars/)
## [Controls Over 4,000 Apartments Worth Over a Billion Dollars ](https://rodkhleif.com/podcasts/ep-183-grant-cardone-controls-4000-apartments-worth-half-billion-dollars/)
## Lifetime Cashflow Through
Real Estate Investing Podcast
## With Rod Khleif
20M+
## NUMBER OF TIMES DOWNLOADED
[  ](https://podcasts.apple.com/us/podcast/lifetime-cash-flow-through-real-estate-investing/id1097449598)
[  ](https://www.youtube.com/RodKhleif)
0
## Coaching Student Success Stories
[  ](https://rodkhleif.com/podcasts/single-mom-to-massive-success-in-multifamily/)
## [Featuring Elsa Nguyens #682](https://rodkhleif.com/podcasts/single-mom-to-massive-success-in-multifamily/)
## [Immigrant Mom To Massive Success In Multifamily](https://rodkhleif.com/podcasts/single-mom-to-massive-success-in-multifamily/)
## [Featuring Oliver Fernandez #721](https://rodkhleif.com/podcasts/from-7-to-1000-units-in-3-years-2/)
## [From 7 to 1000 units in 3 years](https://rodkhleif.com/podcasts/from-7-to-1000-units-in-3-years-2/)
## [Featuring Rasool Mutawakkil #715](https://rodkhleif.com/podcasts/10mm-in-multifamily-assets-under-management-in-one-year/)
## [$10MM in Multifamily Assets Under Management in One Year](https://rodkhleif.com/podcasts/10mm-in-multifamily-assets-under-management-in-one-year/)
[ LISTEN ](https://podcasts.apple.com/us/podcast/lifetime-cash-flow-through-real-estate-investing/id1097449598)
[ Watch ](https://www.youtube.com/RodKhleif)
## Meet Rod Khleif
### The Multifamily Mentor Behind 305,000+ Student Owned Units
Rod Khleif is one of the **most respected multifamily real estate coaches in the world**, with a track record that speaks for itself. As a best selling author, long time multifamily investor, speaker, and mentor, Rod has helped thousands of people take their business to the next level and create lifetime cashflow investing in multifamily.
### Unmatched Experience. Proven Results.
- **Best Selling Author** of “*How to Create Lifetime CashFlow Through Multifamily Properties”
- **305,000+ Multifamily Units** owned by his Students
- **Hundred of millions of dollars in Capital Raised** by Students
- **Coached Thousands** of Investors to Financial Freedom
- Host of **\#1 Real Estate Podcast** *Lifetime Cashflow Through Real Estate Investing* with 20M+ Downloads
- Leader of the **Largest Online Multifamily Investing Community**
- **Personally Owned & Managed** Over 2000 Properties and an active real estate investor for over 40 years.
Rod’s passion isn’t just teaching. He’s about providing value and creating real, life changing results. His mentorship and coaching programs have helped investors go from zero to thousands of units, replace their income, and lifetime cashflow.
[ read rod's story ](/about)
## Join The Next Virtual Multifamily Bootcamp
Rod Khleif’s Multifamily Bootcamp is widely regarded as the best live training event for beginner multifamily investors and is the most recommended starting point for anyone looking to learn multifamily real estate.
[ Get Your Ticket ](https://rodkhleif.com/checkouts/virtual-47/)
## Raving Fans of Multifamily Investing
[ meet more successful students ](/warriorwins)
## The Warrior Program
## Rod's Best Selling Multifamily Investing Coaching
Real estate success isn’t just about finding deals, it’s about leveraging the right relationships, accessing the best opportunities, and following a proven system to create lifetime cash flow. Rod Khleif’s exclusive mentorship program is designed for investors who are ready to take action and scale with confidence.
## What you'll gain:
** Unlimited 1 on 1 Coaching with Expert Multifamily Investor**
** Structured Group Coaching & Q&A’s**
** High-Performance Coaching**
** Access to A Community of High-Performing Investors**
** Unlimited Deal Reviews**
** A Step-by-Step Investment System**
** Proven Strategies for Scaling Fast**
** Exclusive Off-Market Deal Access**
** Capital Raising & Syndication Strategies**
** Access to AI-Powered Investment Tools**
** Access to Private, Warrior-Only Events**
If you’re ready to take your investing to the next level, mentor with Rod and fast track your success.
[ Apply For Mentorship ](/strategy-call/)
"One of the best real estate decisions I’ve made was to join Rod's Warrior program. It's really taken my investing career to the next level. I now have over 1,000 units and I'm sure that number will jump significantly very soon."
**POWELL CHEE**
(Powell now has 6,600 units as of 2026)
## Rod’s Best-Selling Books To Help You
Master Real Estate
## How To Create Lifetime
Cashflow Through
Multifamily Properties
### The New Rules of
Real Estate Investing
[  ](https://www.lcfabook.com/core-book/?sl=rksite)
[ get the book ](https://www.lcfabook.com/core-book/?sl=rksite)
## Multifamily
Property
Toolbook
## Comprehensive
Checklist
[ get the book ](/multifamily-property-toolbook/)
## How To Find Off
Market Deals
In A Hot Market
## Strategies To Find Off Market Properties
[ get the book ](/how-to-find-off-market-deals-in-a-hot-market/)
## 29 Fatal Mistakes
Many Apartment
Buyers Make
## And how to avoid
them…
[ get the book ](/29-mistakes/)
** Rated 5 out of 5
## Multifamily investing from A-Z
Rod, long time follower. I got a digital copy of your multifamily book before you officially released it. Amazing info and it helped me score my first property right in my backyard. You set me on path to financial freedom. Thank you for being such a great teacher and mentor.
**– Cody Dove**
## Keep Up With Rod
& Stay Up To Date On Everything Multi-Family
[ Join my tribe ](https://www.facebook.com/groups/multifamilyrealestateinvesting)
[ get free video training ](https://www.youtube.com/RodKhleif)
[ connect & network ](https://www.linkedin.com/in/rodkhleif/)
[ follow me around @rod\_khleif ](https://www.instagram.com/rod_khleif/)
[ Follow my activity @RodKhleif ](https://twitter.com/RodKhleif)
[ Follow my activity @RodKhleif ](https://www.tiktok.com/@rodkhleif)
## Apply To The
Warrior Program
Rod Khleif’s Warrior Program is widely considered the most successful multifamily mentorship program in the country, with members collectively controlling over 305,000 units.
- Company
This field is for validation purposes and should be left unchanged.
- First Name\*
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- Message frequency will vary. Message and data rates may apply. Reply STOP to opt out.
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By providing your number, you consent to receive marketing call or texts.
---
### [Rod's Virtual Multifamily Bootcamp](https://rodkhleif.com/bootcamp/)
**Published:** May 6, 2026
**Author:** Alex Khleif
**Content:**
[What’s Included](#whats-included)
[Results](#results)
[Reviews](#fb-reviews)
[Panel](#panel)
[FAQ](#faq)
[ Get your ticket ](#elementor-action%3Aaction%3Dpopup%3Aopen%26settings%3DeyJpZCI6IjM1NjM5IiwidG9nZ2xlIjpmYWxzZX0%3D)
Live Virtual Event | August 29 & 30, 2026
# Rod Khleif's
Virtual Multifamily Bootcamp:
Two Days That Will Change Everything!
[ Get your ticket ](#elementor-action%3Aaction%3Dpopup%3Aopen%26settings%3DeyJpZCI6IjM1NjM5IiwidG9nZ2xlIjpmYWxzZX0%3D)
**2 Full Days of Live Training
+ Rod's Deal Analyzer Software**
--
Days
--
Hours
--
Mins
--
Secs
Widely regarded as the **best live training event for multifamily investors** and the most recommended starting point for anyone looking to learn multifamily real estate.
305K+
Student Owned Units
2,000+
Properties Owned by Rod
20M+
Podcast Downloads
Hundreds
of Closed Student Deal Case Studies
Retired in Under 1 Year 81 Unit Portfolio Under Contract Dream Home at 39 First Deal Ever $130K Assignment Fee Quit W2 Within 18 Months $20K/Mo Cash Flow After Bootcamp 16 Units in 6 Months 26-Unit Deal Closed 70+ Unit LOI Signed Net Worth Quadrupled Retired in Under 1 Year 81-Unit Portfolio Under Contract Dream Home at 39 First Deal Ever — $130K Assignment Fee Quit W2 Within 18 Months $20K/Mo Cash Flow After Bootcamp 16 Units in 6 Months 26-Unit Deal Closed 70+ Unit LOI Signed Net Worth Quadrupled
## What's Included
### Everything You Need to Analyze, Fund & Close a Multifamily Deal
- 2 full days of live training with Rod
- Scripts for talking to lenders
- Panelists with $Billions in assets combined
- Due diligence checklists & templates
- Sample seller agreements & deal packages
- Mindset & goal-setting training
[ Get your ticket ](#elementor-action%3Aaction%3Dpopup%3Aopen%26settings%3DeyJpZCI6IjM1NjM5IiwidG9nZ2xlIjpmYWxzZX0%3D)
## Why It Matters
### This Weekend Isn’t Just About Apartments,
It’s About The Life on the Other Side Of Them.
### Time & Freedom
Cash flow that works while you travel, rest, and live. A portfolio that doesn't need you chained to it.
### Real Scale
One multifamily deal can replace years of single-family grind. Scale is a math problem, we teach the math.
### Early Retirement
Quit the W2 on your terms, not when you're forced to.
### Legacy & Giving
Build generational wealth your kids inherit. Give back to what matters to you.
[ Get your ticket ](#elementor-action%3Aaction%3Dpopup%3Aopen%26settings%3DeyJpZCI6IjM1NjM5IiwidG9nZ2xlIjpmYWxzZX0%3D)
## Real Results
### What Students Did Right After The Bootcamp
Not hypotheticals. Every result came from someone who started here.
Retired Under 1 year · From zeroWent from bootcamp attendee to fully retired investor in under 12 months. Now travels while his portfolio works.
Loren Jacobs
Dream home 61 unit close · 5,000 sq ft home"Since your event my partnership has bought a 61 unit. In addition, you taught me to reward myself. At 39, I bought my wife and four children her 5,000 square foot dream home."
Nic Evans
First deal 26 units · First multifamily"I invested in a 26 unit since the bootcamp. Thanks for the boost to get started!"
Trent Reynolds
70+ units LOI signed post-event"Signed an LOI on a 70+ project. Thanks for the education Rod Khleif. The bootcamp was the foundation I needed."
Aaron Silverman
Partnered 12 units · With fellow attendee"After I attended your event last April, I ended up partnering with another attendee. We closed on a 12 unit in Toledo."
Lor Vang
81 units Portfolio deal · Weeks later"The bootcamp in January really gave me a boost to get into gear! February I actually went under contract with two partners on an 81 unit portfolio deal."
Matthew Dunn
*These are verified Multifamily Bootcamp Testimonials. Results are not guaranteed. Real estate investing involves risk and requires work.*
[ Get your ticket ](#elementor-action%3Aaction%3Dpopup%3Aopen%26settings%3DeyJpZCI6IjM1NjM5IiwidG9nZ2xlIjpmYWxzZX0%3D)
## Stop Trying To Do This Alone
### Don’t Waste Years Trying To Figure This Out
Sure, you could learn it on your own. But that will take time and you’ll likely make costly mistakes that this good education would have saved you from.
[ Get your ticket ](#elementor-action%3Aaction%3Dpopup%3Aopen%26settings%3DeyJpZCI6IjM1NjM5IiwidG9nZ2xlIjpmYWxzZX0%3D)
## Stop Trying To Do This Alone
### Don’t Waste Years Trying To Figure This Out
Sure, you could learn it on your own. But that will take time and you’ll likely make costly mistakes that this good education would have saved you from.
[ Get your ticket ](#elementor-action%3Aaction%3Dpopup%3Aopen%26settings%3DeyJpZCI6IjM1NjM5IiwidG9nZ2xlIjpmYWxzZX0%3D)
## Who This Is For
### Built For Investors At Every Stage
**Brand New**
Never bought a deal. You’ll get step-by-step blueprints, scripts, and support so you can take action without guessing or feeling alone.
**Stuck in Single-Family**
Barely cash flowing on rentals. Ready to make the jump to multifamily? This is the on-ramp designed for you.
**Ready to Scale**
Already investing. You’ll learn how to systemize, raise more capital structure deals better, and plug into an active operator network.
[ Get your ticket ](#elementor-action%3Aaction%3Dpopup%3Aopen%26settings%3DeyJpZCI6IjM1NjM5IiwidG9nZ2xlIjpmYWxzZX0%3D)
## Your Host
### Rod Khleif
Rod is an entrepreneur, real estate investor, author, and mentor who has personally owned over 2,000 properties across 45+ years of investing. Rod is the country’s top multifamily trainer, his students have collectively acquired well over 305,000 units and raised hundreds of millions in capital.
Rod believes success in this business is 80% psychology and 20% mechanics, blending proven multifamily tactics with high-performance mindset work. He hosts the #1 Commercial Real Estate Podcast, “Lifetime Cash Flow Through Real Estate Investing,” with over 20 million downloads, and leads the largest multifamily investing community in the world.
## Your Host
### Rod Khleif
Rod is an entrepreneur, real estate investor, author, and mentor who has personally owned over 2,000 properties across 45+ years of investing. Rod is the country’s top multifamily trainer, his students have collectively acquired well over 305,000 units and raised hundreds of millions in capital.
Rod believes success in this business is 80% psychology and 20% mechanics, blending proven multifamily tactics with high-performance mindset work. He hosts the #1 Commercial Real Estate Podcast, “Lifetime Cash Flow Through Real Estate Investing,” with over 20 million downloads, and leads the largest multifamily investing community in the world.
## What Attendees Say
Real Reviews From Real People
⭐️⭐️⭐️⭐️⭐️
*“This weekend at Rod’s Multifamily Bootcamp has been amazing! Took massive action and got under contract with two homes, 5 doors total. First Real Estate Investments Ever!”* – Timothy Eng⭐️⭐️⭐️⭐️⭐️
*“Great content and learned a ton from the Bootcamp today!!! Totally worth it!!! Rod you rock!!!”* – William Tam
⭐️⭐️⭐️⭐️⭐️
*“This was a fantastic two day session of 19 hours but delivered 100’s of hours worth of knowledge. Thank you Rod!!”*
– Sri Sarnath
⭐️⭐️⭐️⭐️⭐️
*“Since the bootcamp I have purchased 8 units and currently have LOIs on another 6 units.”* – Michael Lefavor
⭐️⭐️⭐️⭐️⭐️
*“I was initially hesitant and skeptical about your intentions. However, I’m genuinely pleased to discover your genuine commitment to making a difference in people’s lives.”* – Amy Broadnax*⭐️⭐️⭐️⭐️⭐️
“I attended the Bootcamp with 0 units and not even six months later I’m up to 16 Units! IT WORKS!”* – Brandon Henderson
*These are verified Multifamily Bootcamp Testimonials. Results are not guaranteed. Real estate investing involves risk and requires work.*
## 2 Day Curriculum
### Everything You Need to Analyze, Fund & Close Your First Multifamily Deal
### How to Buy an Apartment Building
Step-by-step action guide covering exactly what to do, and in what order.
### Millionaire Mindset
Get crystal clear on your goals and develop the psychology that drives action.
### Building Your Team
How to assemble brokers, lenders, attorneys, appraisers, and partners.
### Deal Analysis & Due Diligence
What information to request, how to analyze it, and when to walk away.
### How to Raise All the Money
Step-by-step action guide covering exactly what to do, and in what order.
### How to Fund Your Deals
Bank financing, bringing in investors, and creative capital strategies.
### Business Structure & Growth
Legal structures, networking strategies, and how to scale your cashflow.
### Property Management
Self-manage vs. hiring a PM, red flags to watch for, and what to negotiate.
[ Get your ticket ](#elementor-action%3Aaction%3Dpopup%3Aopen%26settings%3DeyJpZCI6IjM1NjM5IiwidG9nZ2xlIjpmYWxzZX0%3D)
## Learn From Investors Who've Done It
### $Billions in Assets
Collectively Controlled By The Panelists
**Every Bootcamp, Rod is joined by different panels of his Warrior mentorship students. Real operators, not theorists, who share exactly how they built their portfolios from scratch and the lessons they learned along the way.**
## Questions?
### Frequently Asked Questions
Is this bootcamp for complete beginners?
Absolutely. Rod starts with the fundamentals and builds from there. Whether you’ve never bought a property or you own dozens, the bootcamp is structured to meet you at your level. Beginners get the step-by-step roadmap; experienced investors get advanced strategies and networking.
What exactly do I get with the ticket?
Two full days of live training with Rod and his panelists, $3,000 worth of bonuses including Deal Evaluator Software, access to the document library with done-for-you templates, scripts for talking to lenders, due diligence checklists, and sample deal packages.
Is this going to be a sales pitch for a coaching program?
No.
Rod does offer an opportunity to speak to his team for people want deeper support, but nothing is sold at this event.
This bootcamp stands on its own. You’ll walk away with a complete action plan, templates, and the knowledge to analyze and close your first deal. Whether or not you purchase anything else. Ever.
What if I can't attend live?
We do not offer recordings because this is an immersive event that builds on itself.
Who are the panelists?
The panels are different members of Rod’s Warrior community who collectively control $Billions in Assets. Each bootcamp has different panels. They’re real operators, not theorists, who share how they got started, how they scaled, and the mistakes they made along the way.
*Disclaimer: Real estate investing involves significant risks, including the potential loss of principal, lack of liquidity, and market fluctuations. Past performance does not guarantee future results. Investors should conduct independent due diligence and consult professional advisors before investing.*
## Don't Miss This!
Start Your Multifamily Journey
2 days. Expert panelists. Deal Evaluator Software. Done-For-You templates.
A complete system for buying apartment buildings.
[ Get your ticket ](#elementor-action%3Aaction%3Dpopup%3Aopen%26settings%3DeyJpZCI6IjM1NjM5IiwidG9nZ2xlIjpmYWxzZX0%3D)
[ Get your ticket ](#elementor-action%3Aaction%3Dpopup%3Aopen%26settings%3DeyJpZCI6IjM1NjM5IiwidG9nZ2xlIjpmYWxzZX0%3D)
[ Get your ticket ](#elementor-action%3Aaction%3Dpopup%3Aopen%26settings%3DeyJpZCI6IjM1NjM5IiwidG9nZ2xlIjpmYWxzZX0%3D)
---
### [Rod Khleif Warrior Program](https://rodkhleif.com/rod-khleif-warrior-program/)
**Published:** May 12, 2026
**Author:** Alex Khleif
**Content:**
## The Most Successful Multifamily Mentorship program in the world!
# Rod Khleif's
Warrior Program:
Multifamily Investing Coaching
## A proven system to fast track your path to the freedom no matter what level.
[ Apply For Mentorship ](#form)
305K+
Student Owned Units
$747M
Capital Raised
1.8K+
Active Warriors
Hundreds
Real Deal Case Studies
8+ Asset Classes
Across 150+ Markets Globally
**Powell Chee** 6,600 Units **Anthony Metzger** 218 Units (1st Deal) **Mike Mannino II** $180k in 1 Day**Alice & Doris NG** 1,050 Units **Bharat Kona** 6,505 Units **Jennifer Barner** 2,014 Units **Colette Jones** 475 Units (1st Year) **Chris Wooten** 6,266 Units **Steven Menzel** $130k from 1 Deal **Hillary Graves** 2,273 Units **Zane Wagner** 200 Units (First Deal) **Eric Upchurch** 4,872 Units **Roberto Carabetta** 500 Units in 18 Mo **Erik & Jeffrey Freeman** 168 Units (First Deal) **Powell Chee** 6,600 Units **Anthony Metzger** 218 Units (1st Deal) **Alice & Doris NG** 1,050 Units **Mike Mannino II** $180k in 1 Day **Bharat Kona** 6,505 Units **Erik & Jeffrey Freeman** 168 Units (First Deal) **Jennifer Barner** 2,014 Units **Chris Wooten** 6,266 Units **Jonathan Wells** 3,857 Units **Steven Menzel** $130k from 1 Deal **Hillary Graves** 2,273 Units **Jens Nielsen** 2,000+ Units **Oliver Fernandez** 1,000+ Units **Atil Gulf** 900+ Units / $100M AUM **Erik & Jeffrey Freeman** 168 Units (First Deal) **Roberto Carabetta** 500 Units in 18 Mo **Colette Jones** 475 Units (1st Year) **Eric Upchurch** 4,872 Units
## You’re probably asking...
## Is Rod Khleif's Warrior Program really worth it?
Let us show you…
Since launch, Rod Khleif’s **students now own over 305,000 apartment units**, raising hundreds of millions in investor capital while transforming their mindsets from *“someday”* to *“done.”* This makes the Warrior Program **the most successful multifamily mentorship program in the world**. Below you’ll find verified reviews, deal breakdowns, and in depth interviews with real people.
## The Proof is in the Results
[ Click to see hundreds of real deal case studies ](https://rodkhleif.com/warriorwins/)
**305k +** Student Owned Units
**Hundreds** of Real Deal Case Studies
**1,800 +** Private Network of Investors
*Last updated 04/26. Verified internal records.*
 
⚔️## Close Your First Deal.
Earn Your Sword.
Every Warrior who closes their first deal receives a custom-engraved Warrior Sword; a symbol of commitment, courage, and action.
[Apply & Earn Yours](#form)
## The Investment is Worth it
"We made $180,000 in a single day double closing this self storage facility. Since this first deal I have done another $235,000 in wholesale fees."– Mike Mannino II
"We went from $8,500/mo to $20,000/mo cash flow after we became a warrior. His program gave us the confidence and knowledge to scale."– Nathaniel & Valeri Kolwyck
"I mailed 350 letters using Rod's template, got a 15-unit under contract, assigned it, and earned just under $130K from one deal. Largest deal in 20 years."– Steven Menzel
"Since joining, I have GP ownership in 82 units total with no capital in."– Trina Picero
"The past year: 900+ multifamily units acquired, $100M+ AUM. You don't need to know everything to start. You just have to start."– Atil Gulf
"Rod's coaching helped me scale from a few smaller properties to syndicating large apartment complexes and quit my W2 job. Now over 2,000 units."– Jens Nielsen
"The Warrior Program changed my career. I went from 0 to 80 doors as GP. I tried before, but it was so hard without support."– Elsa Nguyen
"Joining his Warrior program completely changed my trajectory. In 18 months, I acquired 500 units across the U.S."– Roberto Carabetta
"Rod's coaching program is by far the best decision of my life! IT.IS.WORTH.EVERY.PENNY. I'm living proof."– Mike Olson on Reddit
*Verified testimonials 04/26. Results are not guaranteed. Real estate investing involves risk and requires work.*
## Real Students
Real Success
The Multifamily Rockstars Podcast features unfiltered interviews with Warrior Program students who have found great success in multifamily investing. Hear from hundreds of Warriors what worked, what didn’t, and what they learned on their journey.
[
](https://rodkhleif.com/podcasts/creative-multifamily-financing-harvey-lockhart/)### [ How a Music Teacher Landed a $3.5M Apartment Deal ](https://rodkhleif.com/podcasts/creative-multifamily-financing-harvey-lockhart/)
July 31, 2026
[ See full case study » ](https://rodkhleif.com/podcasts/creative-multifamily-financing-harvey-lockhart/)
[
](https://rodkhleif.com/podcasts/multifamily-asset-management-jay-tana-boersma/)### [ They Raised Rents Without Renovating a Single Unit ](https://rodkhleif.com/podcasts/multifamily-asset-management-jay-tana-boersma/)
July 24, 2026
[ See full case study » ](https://rodkhleif.com/podcasts/multifamily-asset-management-jay-tana-boersma/)
[
](https://rodkhleif.com/podcasts/distressed-senior-housing-investing-ali-choucri/)### [ Why Smart Investors Are Leaving Multifamily for Senior Housing ](https://rodkhleif.com/podcasts/distressed-senior-housing-investing-ali-choucri/)
July 17, 2026
[ See full case study » ](https://rodkhleif.com/podcasts/distressed-senior-housing-investing-ali-choucri/)
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[ Browse All Warrior Interviews ](https://rodkhleif.com/warriorwins/)
## Ready to break free from the 9-to-5
and build the life of your dreams?
**Rod Khleif’s Warrior Program** is the most successful multifamily real estate coaching program in the world.
Whether you’re starting from scratch or looking to syndicate 100+ unit deals, the Warrior Program gives you everything you need to thrive:
- **1-on-1 Mentorship** with a successful Warrior student who has done real deals, not a professional coach reading from a script
- **Unlimited Coaching Sessions** with purchase of our 1-on-1 Mentorship
- **Live Group Coaching** so you never feel stuck, get answers fast, and stay accountable to your goals every single week
- **High Performance Coaching** because success is 80% mindset, we'll help you perform at the highest level in every area of your life
- **Free Comprehensive CRM** a powerful, easy-to-use CRM to track your leads, manage your investor pipeline, and close more deals
- **Unlimited Deal Analysis** have all your deals evaluated to make sure you have a good deal
- **Step-by-Step Deal Training** everything you'll need to know and more to help you become an expert
- **Underwriting Tools** and templates that take the guesswork out of deal analysis
- **DFY Investor Documents** PPMs, email templates, pitch decks, and more
- **Warrior Only Mastermind Events** with Rod and top operators for exclusive peer networking
- **1,800+ Private Group of Active Investors** and syndicators working in Multifamily and other asset classes
- **Rod's Private Phone Number** to get immediate access to him anytime you need. This is no joke.
### Think you’re the right fit?
[ Apply to the Warrior Program ](#form)
## Don't Waste Years Trying to Figure it Out Alone
**This isn’t a course. This is your fast track to freedom.**
Sure, you could learn it on your own, but that will take time and you could make costly mistakes. Instead, join a group of active investors who are there to teach and support you through every step of your journey to Lifetime Cashflow!
"One of the best real estate decisions I’ve made was to join Rod's Warrior program. It's really taken my investing career to the next level. I now have over 2,000 units and I'm sure that number will jump significantly very soon."
**POWELL CHEE**
(Powell now has over 6,600 units)
[ Apply to the Warrior Program ](#form)
## What Our Students Say About the Coaching Program
***“The people I have met are all fantastic and have been extremely generous with their time. The coaching has been amazing. Rod is also so generous with his time especially making an appearance on my Monday night zoom call.”** – Alex Love Li*
***“Every Warrior is a go-getter and winners and leaders in their own right and you want to be surrounded by like minded people to become the winner and achieve success.”** – Chat Sarmiento-Steinwald*
***‘This program has exceeded my expectations. I have loved every minute and every person that I have met.”** – Carrie Zatelli*
***“The Warrior Program changed my career. I tried getting into multifamily prior to joining the program but it was so hard. I had no support and couldn’t take the deal down on my own. Since joining the program, I went from 0 to 80 doors as GP.”** – Elsa Ngyen*
***“Rod has been my real estate mentor for the past couple of years, and joining his Warrior mentorship program completely changed my trajectory.***
***In just 18 months, I’ve been able to acquire 500 units across the U.S.”** – Roberto Carabetta*
***“The Rod Khleif Warrior Program is truly a remarkable journey into the realm of commercial real estate. It offers a comprehensive curriculum that spans all critical aspects of the industry.”** – Atif Gul*
***“I’ve bought 7 single family deals, GP on 212, LP on 575, and we have SO many in the pipeline it’s hard to keep count.”** – Eric Upchurch*
***“I have been overwhelmed by the amount of support I’ve received from fellow Warriors along the way. I’m not sure how long it would have taken me to accomplish what I have in two years if it were not for the support of fellow Warriors.”** – Karl Schlobohm*
***“It has been life-changing. It has been an honor to learn from some the best operators out there, and to join them in taking down amazing deals, not to mention offering these opportunities to investors. The network has been the most amazing part.”** – Hilary Graves*
## For Beginners and Experienced Investors
## Whether you’re brand new to real estate or looking to scale fast…
**The *right guidance* doesn’t just save you money,
it saves you years.**
**New?**
Stop guessing and take action with confidence, even if you’ve never done a deal before.
**Experienced?**
Scale faster, raise more capital, and build the portfolio you’ve been stuck trying to reach on your own.
**And with Rod’s coaching, you won’t be doing this alone.**
You’ll be surrounded by a tribe of like-minded action takers who are closing deals and creating Lifetime Cashflow.
[ Apply For Mentorship ](#form)
## Frequently Asked Questions:
How is the Rod Khleif Coaching Program different from others?
Rod’s multifamily coaching program is the most successful mentorship program in the world (as measured by [student success](https://rodkhleif.com/warrior-community-dashboard/)) because its a unique blend of in depth, tactical training, high performance mindset coaching, and an empowering group of action takers to work with inside the Warrior group.
This is not just education, it’s mentorship, accountability, deal flow, investor training, and a built in network of top operators. Most deals are done within the Warrior network making the community one of the most valuable parts of the program.
**Rod’s goal is the help you build the life of your dreams in all areas.**
He is constantly searching for ways to add value and improve the Warrior Program.
Do I need experience to join?
No. Multifamily real estate investing program is designed for students of any level. There is a lot of beginner material to help you learn how the business works inside and out.
There is also highly technical training for experienced investors who want to grow their business significantly through methods like syndication.
Do I need a real estate license or background to succeed?
No license is required. Most coaching students come from non-real estate backgrounds, including engineers, veterans, doctors, teachers, business owners, and IT professionals. Many successful students have are stay-at-home parents, also have full time jobs or are recent immigrants; this program was designed for anyone and everyone.
Is there ongoing support or is it just a one-time course?
The Warrior Program includes TONS of support including but not limited to: **unlimited deal evaluation,** **weekly live coaching, mentorship, and private groups, private local and national events and more!**
The Platinum Membership includes UNLIMITED 1-on-1 coaching so you can get as much support as you need.
I don't have the money to invest in deals. Do I need a lot of capital to get started?
No. One of the biggest misconceptions in this business is that you need to bring a big check to the table. In multifamily syndication, your ability to find deals, underwrite them, and build relationships is often worth more to an experienced team than cash. We teach you how to add value to teams so that capital finds you, not the other way around. Some of our Warriors have closed their very first deal with no money and no prior real estate experience, simply by bringing the deal and the competence.
**Everyone has a superpower. We’ll teach you how to find yours.**
Do I need to start with single-family properties and work my way up?
This is one of the most expensive myths in real estate. The idea that you need to buy duplexes and triplexes before you can touch a commercial property keeps people busy for years without building real wealth. With the right education, mentorship, and team around you, you can go directly into commercial multifamily. The return per hour of effort doesn’t scale in single family.
**Warriors have gone from zero real estate experience straight to 100+ unit deals as their first transaction; no single-family “training wheels” required.**
I work full-time. Do I realistically have time for this?
Most of our Warriors build their portfolios while working demanding jobs, like surgeons, engineers, sales professionals, and military members. The key is time-blocking: carving out dedicated hours each week for underwriting, broker outreach, and networking, the same way you’d protect time for anything else that matters. We’ll help you find those hours in your existing week and build a realistic action plan around your schedule.
**The question isn’t whether you have time. It’s whether you’re willing to protect time for something that could eventually replace your income entirely.**
I'm introverted and not good at networking. Can I really do this?
At every event Rod hosts, the room is full of engineers, IT pros, accountants, and doctors. They are analytical and introverted people who are not naturally social. Here’s what they discover: investors give their money to people they trust, not people who are the loudest in the room. Your thoroughness, credibility, and reliability are more valuable than charm.
**You don’t need to be a networker, you need to be someone worth networking with.**
I have no idea how I'd raise money for a deal. Where would I find capital?
Here’s what surprises most people: finding the money is the easy part. Finding the right deal is what’s hard. There is more capital sitting on the sidelines right now than there are quality deals to put it into. When you bring a well-underwritten, compelling deal to the table, money finds you. People in your network, friends, family, colleagues, and professional contacts, want better returns than the stock market offers. They just need someone they trust to show them a real opportunity.
**We teach you how to find and package those deals so that raising capital becomes the natural next step, not the impossible first one.**
Isn't this a bad time to buy with current market conditions?
This is one of the best times because the interest rates have created discounted properties to buy. That and people always need somewhere to live and that demand often increases during downturns as fewer people buy homes.
Multifamily is not a bet on a good market. It’s a hedge against a bad one.
The investors who wait for the “perfect” time miss the buying window every single cycle. Smart operators buy through cycles and create value through operations, not market timing.
**The question isn’t whether the market is perfect, it’s whether you have the skills to find and create value regardless of the cycle. That’s what we teach.**
These deals are huge… hundreds of units, millions of dollars. Isn't that way too big for a beginner like me?
Every successful operator felt exactly what you’re feeling before their first deal. The deal stops being scary once you have a team and a community around you who have seen it before. You don’t shrink the deal to fit your fear; you grow your capacity to fit the deal. That’s what education, mentorship, and community do: they normalize what felt impossible. For big deals, you’re usually not doing this alone.
**The truth is, a 100+ unit building with professional management is often less stressful than managing 10 scattered houses yourself.**
Banks require experience and net worth I don't have. How do I get financing?
You don’t need to qualify alone. Lenders need net worth, liquidity, and experience on the deal team, but one person can satisfy all those requirements as a Key Principal. When you’re new, you find an experienced partner who brings the balance sheet, and you bring the deal and the effort.
**This isn’t a workaround, it’s exactly how the business is designed to work.**
Experienced operators want new people bringing them deals. That’s the exchange, and we show you how to build those partnerships inside the Warrior community.
## The first step is applying to see if you are a fit.
[Privacy Policy](https://rodkhleif.com/privacy-policy-terms-of-use/) | [Terms Of Service ](https://rodkhleif.com/privacy-policy-terms-of-use/)By providing your number, you consent to receive marketing call or texts.
## Ready to Take the First Step?
## Apply for the Warrior Program!
### You’ll be Joining the Private Warrior Facebook Community of Extremely Active Investors Constantly Posting Wins and Helping Each Other Grow!
[ Apply For Mentorship ](#form)
[ Apply For Mentorship ](#form)
[ Apply For Mentorship ](#form)
---
### [Multifamily Investing Course - Rod Khleif](https://rodkhleif.com/multifamily-investing-course/)
**Published:** April 9, 2025
**Author:** Alex Khleif
**Content:**
## Rod Khleif's
# [Multifamily
Investing Course ](https://rodkhleif.mykajabi.com/offers/Cmy5uuoo/checkout)
## Learn How to Buy, Fund, and Scale Apartment Deals
Whether you’re brand new to real estate or ready to scale into 100+ unit deals, this Multifamily Investing Course gives you the roadmap to build lasting wealth through apartments.
Taught by Rod Khleif, top real estate investor, best-selling author, and mentor behind over 300,000 student owned doors. This course breaks down everything you need to confidently succeed in multifamily real estate.
[  ](https://rodkhleif.mykajabi.com/offers/Cmy5uuoo/checkout)
** Rated 5 out of 5
$ 2495.00
[ Buy Now ](https://rodkhleif.mykajabi.com/offers/Cmy5uuoo)
## What You'll Learn
### Inside Rod Khleif's Multifamily Investing Course
**✔** Picking a Multifamily Market
**✔** Finding Deals
**✔** Setting Up Multifamily Systems
**✔** Habits for Success in Multifamily
**✔** Business Mindset
**✔** Essentials of Syndication
**✔** Multifamily Financing
**✔** Multifamily Inspection
**✔** Property Management
**✔** Property Value-Add Strategies
**✔** 90 Day Action Plan
[ Buy Now ](https://rodkhleif.mykajabi.com/offers/Cmy5uuoo)
## Why this multifamily course works?
### Rod's students now own 305,000 units!
These aren’t theory-based.
These are step-by-step instructions, real examples, and all you need to take action and start investing in multifamily real estate like a pro!
Learn the same systems and frameworks Rod and his students have used to own approx. **30****0,000 multifamily units** and create lifetime cash flow.
- **Step by Step Video Modules**
- **Backed by Insane Results**
- **Taught by One of the Most Respected Multifamily Mentors in the World**
- **Proven Strategies for Success**
- **Same Systems Used by Rod’s Warrior Program Students**
### Get StartedNow
### **The #1 Multifamily Investing Course Backed by Real Results**
** Rated 5 out of 5
$ 2495.00
[ Buy Now ](https://rodkhleif.mykajabi.com/offers/Cmy5uuoo)
***“Purchasing the ‘Multifamily Investing Course’ was the thing that pushed me over the edge and got me in the game!”***
*-Edward Lowell (Closed 2 Deals After Taking the Course)*
–
***“Investing in Rod’s course and attending the boot camps completely changed my life. Between the knowledge I gained and the incredible people I’ve connected with, it’s been a game changer.”***
***–** Brian Fay*
### Check Out Rod's Other Courses
[  ](https://lifetimecashflowacademy.clickfunnels.com/finding-deals-course)
** Rated 5 out of 5
$ 1495.00
## Finding
Deals
Course
[ Learn More ](https://lifetimecashflowacademy.clickfunnels.com/finding-deals-course)
[  ](https://lifetimecashflowacademy.clickfunnels.com/c-c-course)
** Rated 5 out of 5
$997.00
## Courage & Confidence Course
[ Learn More ](https://lifetimecashflowacademy.clickfunnels.com/c-c-course)
[  ](https://rodkhleif.com/multifamily-wholesale-real-estate-course/)
** Rated 5 out of 5
$2495.00
## [Multifamily Wholesaling Course](https://rodkhleif.com/multifamily-wholesale-real-estate-course/)
[ Learn More ](https://rodkhleif.com/multifamily-wholesale-real-estate-course/)
---
### [Reviews](https://rodkhleif.com/reviews/)
**Published:** June 26, 2025
**Author:** Alex Khleif
**Content:**
# Rod Khleif
Reviews
## Real Testimonials.
Real Success Stories.
## Wondering if Rod's programs are legit?
### You're right to.
With decades of experience, thousands of students, and one of the top real estate podcasts and coaching programs in the world, Rod Khleif has become a trusted name in multifamily real estate
**But let’s face it… the real estate space if full of hype.**
So, we created this page to give you real, unfiltered reviews from real people who’ve worked with Rod through his coaching, courses, investing, podcast and more.
[ Click HERE to see hundreds of deal case studies ](https://rodkhleif.com/warriorwins/)
## What Make's Rod Different?
Unlike other programs, Rod blends proven real estate strategies with powerful mindset training to fuel confidence and action. The results speak for themselves.
 (Rod Khleif standing in front of hundreds of thank you notes.)
1,404+
5 Star Reviews
305k +
Student Owned Units
343 +
Real Deal Case Studies
20 M+
Podcast Downloads
[ Click HERE to see hundreds of deal case studies ](https://rodkhleif.com/warriorwins/)
*Records verified internally 06/25. Results are not guaranteed. Real estate investing involves risk and requires work.*
## Interested in a specific program?
### Check out the reviews that matter most to you.
**[Warrior Program Reviews](https://rodkhleif.com/reviews/warrior-program/)👈**
See real feedback from students who have changed their lives.
**[Deal Case Studies👈 ](https://rodkhleif.com/warriorwins/)**
Check out hundreds real case studies of deals done by Rod Khleif’s students.
**[Warrior Interviews👈 ](https://rodkhleif.com/reviews/warrior-interviews/)**
Hear directly from real students of the Warrior Program as they talk about lessons, success and multifamily.
## Success Stories & Testimonials
## Hear From People Who Took Action
These aren’t paid actors or polished testimonials. These are real entrepreneurs, investors, and first timers who used Rod’s tools to close deals, create cash flow, and change their lives.
[
](https://rodkhleif.com/podcasts/creative-multifamily-financing-harvey-lockhart/)### [ How a Music Teacher Landed a $3.5M Apartment Deal ](https://rodkhleif.com/podcasts/creative-multifamily-financing-harvey-lockhart/)
July 31, 2026
[ See full case study » ](https://rodkhleif.com/podcasts/creative-multifamily-financing-harvey-lockhart/)
[
](https://rodkhleif.com/podcasts/multifamily-asset-management-jay-tana-boersma/)### [ They Raised Rents Without Renovating a Single Unit ](https://rodkhleif.com/podcasts/multifamily-asset-management-jay-tana-boersma/)
July 24, 2026
[ See full case study » ](https://rodkhleif.com/podcasts/multifamily-asset-management-jay-tana-boersma/)
[
](https://rodkhleif.com/podcasts/distressed-senior-housing-investing-ali-choucri/)### [ Why Smart Investors Are Leaving Multifamily for Senior Housing ](https://rodkhleif.com/podcasts/distressed-senior-housing-investing-ali-choucri/)
July 17, 2026
[ See full case study » ](https://rodkhleif.com/podcasts/distressed-senior-housing-investing-ali-choucri/)
[
](https://rodkhleif.com/podcasts/multifamily-capital-raising-with-erin-frigo/)### [ The Beginner’s Blueprint to Landing a 148 Unit Deal ](https://rodkhleif.com/podcasts/multifamily-capital-raising-with-erin-frigo/)
July 10, 2026
[ See full case study » ](https://rodkhleif.com/podcasts/multifamily-capital-raising-with-erin-frigo/)
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## The Results Are Real
***“Investing in Rod’s course and attending the boot camps completely changed my life. Between the knowledge I gained and the incredible people I’ve connected with, it’s been a game changer.”** Brian Fay*
***“We made $180,000 in a single day double closing this self storage facility. This one deal changed my perspective of what was possible in real estate. Since this first deal I have done another $235,000 in wholesale fees split up between a few other deals.”*** *– Mike Mannino*
***“We are extremely thankful to Rod Khleif! His program gave us the confidence and knowledge to scale with Multifamily. We went from $8,500 a month cash flow to $20,000 a month after we became a warrior.”*** *-Nathaniel & Valeri Kolwyck (Now Own 65 Units)*
***“I mailed 350 letters using Rod’s template from the coaching program, got a 15 unit property under contract, assigned it, and earned just under $130k from one deal. It was my largest deal ever in 20 years of doing this. God bless you, Rod.”*** *– Steven Menzel*
***“This weekend’s Bootcamp was AMAZING!!! I thank you, Rod Khleif and his wonderful panelists for providing such wonderful information, knowledge, wisdom & motivation.” –** Tonya Harding*
***“Since joining the warrior group my wife and I have gone from being completely caught up in the rat race to well on the road to financial independence.”*** *– Jonathen Wells (Now Owns 3857 Units)*
***“Since we have met about a year ago, I have GP ownership in 82 units total with no capital in.”*** *– Trina Picero*
***“Being in Rod’s program helped me scale my rental portfolio from a few smaller properties to syndicating large apartment complexes and quit my W2 job.”*** *– Jens Nielsen (Now Owns 2000+ Units)*
***“Rod’s coaching program is by far the best decision of my life! IT.IS.WORTH.***
***EVERY.PENNY. I’m living proof.”*** *– Mike Olson*
***“I just locked up a Nashville infill project: 2.5 acres that I rezoned for a 45 unit build. I optioned the land, $10M total budget, secured the general contractor rights. Projected builder fees of about $540 K.”*** *– Steven Menzel*
***“The past year has been life changing:***
***🏢 900+ multifamily units acquired***
***💰 $100M+ assets under management***
***The biggest lesson? You don’t need to know everything to start. You just have to start.”*** *– Atil Gulf*
***“What a year! Like many of you, we pushed hard and saw incredible growth:***
***✅ 3 solid acquisitions***
***🏢 348 units added to the portfolio***
***💰 $31.2M in portfolio growth.”*** *– Suresh Chilamkurty*
***“This group has given me access to a network of people, and therefore opportunities, that I would not have had otherwise… I have purchased large multifamily properties and that value that far exceeds the cost of joining the program.”** -Logical-Tomorrow5646 on Reddit*
*All reviews and stats have been verified internally 06/25. Results are not guaranteed. Real estate investing involves risk and requires work.*
[  ](https://rodkhleif.com/lcfa-ebook/?sl=rkrev)
## Get Rod's Best Selling Book FREE!
## Download the FREE eBook and start learning multifamily today!
click here to get the FREE ebook
## [Prefer a hard copy? Click here to just pay shipping. ](https://www.lcfabook.com/core-book/?sl=rkrev)
## Get Rod's Best Selling Book FREE!
[  ](https://rodkhleif.com/lcfa-ebook/?sl=rkrev)
## Download the FREE eBook and start learning multifamily today!
[ Click Here to Get The Get the FREE eBook ](https://rodkhleif.com/lcfa-ebook/?sl=rkrev)
## [Prefer a hard copy? Click here to just pay shipping. ](https://www.lcfabook.com/core-book/?sl=rkrev)
## Ready to Create Lifetime Cashflow?
### You're in the right place.
[ Apply to the Warrior Coaching Program ](/strategy-call/)
[ Sign Up for the Next Bootcamp ](https://rodkhleif.com/bootcamp/)
[ Check out the podcast ](https://rodkhleif.com/lifetime-cashflow-podcast/)
Want to independent reviews? [Check out this page on whether Rod Khleif is a scam or not!](https://beastpreneur.com/rod-khleif-review-scam-or-legit/)
Real estate investing carries risk. Past performance does not guarantee future results. Testimonials reflect individual experiences; typical students put in significant time and work. All statistics updated June 2025 and verified by internal records.
---
### [Courses](https://rodkhleif.com/courses/)
**Published:** January 15, 2020
**Author:** Rod Khleif
**Content:**
# Best Selling Real Estate Courses by Rod Khleif
Whether you are new to real estate or want to grow quickly, these courses can help. These are the same courses Rod’s coaching students used in the Warrior Program to own over 305,000 units!
## Why these courses?
### Proven strategies.
Real results.
These aren’t theory-based. These are the same systems and frameworks Rod and his students have used to own over **305****,000 multifamily units** and towards creating lifetime cash flow.
- Step-by-Step Video Modules
- Backed By Insane Results
- Technical & Real World Training
- Money Back Guarantee!
## Real Results
### Two Deals After Taking the Course
***“Purchasing the ‘Multifamily Investing Course’ was the thing that pushed me over the edge and got me in the game!”***
[  ](https://rodkhleif.com/multifamily-investing-course/)
** Rated 5 out of 5
$ 2495.00
## [The Multifamily Investing Course](https://rodkhleif.com/multifamily-investing-course/)
**The complete blueprint for finding, funding, and closing multifamily deals.
From beginner to advanced, this is Rod’s signature multifamily course and the foundation for learning how to find, fund, evaluate and close profitable multifamily deals. Whether by yourself or in a syndication.
[ Learn More ](https://rodkhleif.com/multifamily-investing-course/)
[  ](https://lifetimecashflowacademy.clickfunnels.com/finding-deals-course)
** Rated 5 out of 5
$ 1495.00
## Finding Deals
Course
**Discover off-market deals before your competition.
Learn how top investors source high-quality properties in any market without relying on brokers.
[ Learn More ](https://lifetimecashflowacademy.clickfunnels.com/finding-deals-course)
[  ](https://rodkhleif.com/multifamily-wholesale-real-estate-course/)
** Rated 5 out of 5
$2495.00
## [Wholesaling Multifamily Course](https://rodkhleif.com/multifamily-wholesale-real-estate-course/)
**Make money from multifamily real estate without ever it.
Learn how to structure wholesale deals, find buyers, and flip contracts for fast profits with $0 of your own money!
[ Learn More ](https://rodkhleif.com/multifamily-wholesale-real-estate-course/)
[  ](https://lifetimecashflowacademy.clickfunnels.com/c-c-course)
** Rated 5 out of 5
$1995.00
## Courage & Confidence Course
**Rewire your mindset and crush fear for good.
This power-packed training helps you overcome limiting beliefs, master clarity, and step into bold action.
[ Learn More ](https://lifetimecashflowacademy.clickfunnels.com/c-c-course)
[  ](https://lifetimecashflowacademy.clickfunnels.com/crush-it)
** Rated 5 out of 5
$2495.00
## How to Crush it on Social Media Course
Learn the exact tactics & strategies that Rod Khleif uses to get millions of impressions per month on all social media platforms including Facebook, YouTube, TikTok, Podcasting, Instagram, and more!
[ Learn More ](https://lifetimecashflowacademy.clickfunnels.com/crush-it)
[  ](https://www.rodkhleif.com/bootcamp/)
** Rated 5 out of 5
FREE
## [Free Multifamily Analyzer Tools](https://mfaunderwriting.com/rodkhleif/)
[ Get Free Tools Now ](https://mfaunderwriting.com/rodkhleif/)
[  ](https://www.rodkhleif.com/bootcamp/)
** Rated 5 out of 5
$47.00
## [Virtual Multifamily Bootcamp Ticket](https://rodkhleif.com/bootcamp/?sl=rkcoursepage)
[ Learn More ](https://rodkhleif.com/bootcamp/?sl=rkcoursepage)
** Rated 5 out of 5
$995.00
## Full Document
Library
Locked
### **Don’t Just Learn. Start Doing.**
Every course includes downloadable tools, templates, and real world case studies designed to get you closing deals faster.
No fluff. No theory. Just the roadmap to your first (or next) multifamily acquisition.
The Fastest Path
## Want to Advance Faster?
Join the Warrior Program.
Courses give you the education. Warrior gives you the coaching, community, accountability, and deal support to actually move.
If you're serious about multifamily and ready to stop figuring it out alone, the Warrior Program surrounds you with the people, coaching, and resources to help you take action and close deals faster.
[Apply for the Warrior Program](https://rodkhleif.com/rod-khleif-warrior-program/) [See Warrior Program Reviews](https://rodkhleif.com/reviews/warrior-program/)
**305,000+** multifamily units
owned by Rod's students as of 07/2026
> "One of the best real estate decisions I’ve made was to join Rod's Warrior program. It's really taken my investing career to the next level. I now have over 1,000 units and I'm sure that number will jump significantly very soon."
>
> Powell Chee - Now Over 6,600 Units as of 07/2026
⚔️ Close your first deal and earn a custom-engraved Warrior Sword.
### What You Get Inside The Warrior Program
- 2 Full Years of Access and Support
Coaching, accountability, and community for the full two years, not just a few months.
- Unlimited 1-on-1 Coaching, On Demand
With an expert multifamily coach to review your deals and keep you moving.
- Access to All of Rod's Courses
Every course on this page included, plus the complete online training library.
- Live Group Coaching Calls
Structured live calls every week with Q&A, plus full A-to-Z deal deep dives.
- Unlimited Deal Review
Submit deals for expert review to spot red flags and strengthen offers before you commit.
- Deal Evaluator Software
Analyze deals fast and see if the numbers work before wasting time.
- Private Warrior Community
JV partners, capital connections, deal feedback, and daily accountability.
- High Performance Coaching
Because mindset and massive action is how you scale fast.
- Access to Private Warrior Only Events
Meetups, masterminds, workshops, and advanced tracks only offered to members of the Warrior Program.
## Student Success Stories
[  ](https://rodkhleif.com/podcasts/single-mom-to-massive-success-in-multifamily/)
## [Featuring Elsa Nguyens #682](https://rodkhleif.com/podcasts/single-mom-to-massive-success-in-multifamily/)
## [Immigrant Mom To Massive Success In Multifamily](https://rodkhleif.com/podcasts/single-mom-to-massive-success-in-multifamily/)
## [Featuring Oliver Fernandez #721](https://rodkhleif.com/podcasts/from-7-to-1000-units-in-3-years-2/)
## [From 7 to 1000 units in 3 years](https://rodkhleif.com/podcasts/from-7-to-1000-units-in-3-years-2/)
## [Featuring Rasool Mutawakkil #715](https://rodkhleif.com/podcasts/10mm-in-multifamily-assets-under-management-in-one-year/)
## [$10MM in Multifamily Assets Under Management in One Year](https://rodkhleif.com/podcasts/10mm-in-multifamily-assets-under-management-in-one-year/)
---
### [About](https://rodkhleif.com/about/)
**Published:** August 13, 2025
**Author:** Rod Khleif
**Content:**
# Meet Rod Khleif
## The mentor behind one of the most successful real estate mentorships in the world
Rod Khleif is widely regarded as one of the best multifamily real estate coaches in the country, with over 20 million podcast downloads and students owning more than 305,000+ units.
[ Join the Next Bootcamp ](/bootcamp/)
## From Struggle to Success,
A story of resilience, mindset, and mission.
- Immigrated to the U.S. at age 6 with almost nothing
- Bought his first property by 18
- Owned thousands of properties by his 40s
- Lost $50M in 2008
- Rebuilt his portfolio AND his purpose
Like many investors, he faced major challenges during the 2008 crash.
But instead of staying down, he rebuilt smarter, with stronger systems, deeper purpose, and a mission.
He gives unfiltered view into the successes and struggles he’s been through with the hopes of guiding others to through the real estate industry.
## Real Experience.
Real Results.
Rod Khleif has helped guide thousands of investors (from complete beginners to sophisticated syndicators) to achieve generational wealth. His impact is tangible, proven, and backed by his own personal success.
-  **\#1 Best-Selling Author:** *How to Create Lifetime CashFlow Through Multifamily Properties*
-  **Host of a Top 1% Ranked Real Estate Podcast 20M Downloads:** *How to Create Lifetime Cashflow Through Real Estate Investing*
-  **Over 45 Years of Active Investing Experience:** *2,000+ Properties Owned & Managed*
-  **Highly Successful Coaching Program:** *305,000+ Units Owned by His Students*
-  **Awarded #1 Multifamily Mentor & Coach:** H.E.R.O. Coaches Summit
-  **Mentored both Beginners & Seasoned Investors** to massive success no matter the experience level. Click here to see hundreds of real student case studies.
## Validated by Recognition.
### Featured in:
🏅 Awarded *\#1 Multifamily Mentor & Coach*: [H.E.R.O. Coaches Summit](https://herocoaches.com/)
🎤 Keynote Speaker at [Wealthcon](https://www.wealthcon.org/) in Las Vegas
🎤 Keynote Speaker at [Secret X Exclusive Multifamily Mastermind](https://www.instagram.com/reel/C71V4rKp_qa/)
🎤 Keynote Speaker at [MFINCON](https://www.multifamilyinvestornation.com/mfincon-1)
Shared Stage with Shaquille ‘Shaq’ O’Neal, Barbara Corcoran, and more!
## Driven by Purpose.
For Rod Khleif, true success isn’t measured by money, it’s measured by impact. His deepest fulfillment comes not from real estate deals, but from giving back and lifting others. That’s why he founded the [**Tiny Hands Foundation**](https://tinyhandsfoundation.org/), a nonprofit that focuses on children and families in need. Rod’s mission is simple: build wealth with heart, and use that wealth to make a difference. His philanthropy isn’t a side note, it’s at the center of everything he does.
- **15,000+** Backpacks & School Supplies
- **160,000+** Children Fed for Holidays
- **4,000+** Teddy Bears Donated to Police
- **250,000+** Holiday Gifts Given
## Authenticated by Adversity.
Rod has experienced every part of the entrepreneurial journey, learning difficult lessons he now incorporates into his teachings and mentorship. He has faced rapid growth and market declines. He has found himself entangled in business deals with unethical partners. He has even faced frivolous lawsuits and baseless character attacks.
These experiences didn’t break him, they strengthened his approach. Instead of giving up or reacting with bitterness, Rod chose to respond with resilience, wisdom, and integrity: the same qualities that now define how he leads, teaches, and mentors others to build real, lasting success.
- **Navigated Market Downturns**: Decades of perspective through every cycle
- **Overcame Unethical Partnerships:** Learned lessons & built stronger alliances.
- **Stood Tall Through Slander** Focused on truth, service, and long term impact
- **Built Systems That Work:** Proven frameworks based on real lessons.
- **Turned Adversity Into Insight:** Helps students sidestep costly mistakes
## Powered by Results.
305k +
Student Owned Units
1,800 +
Private Network of Investors
343 +Real Deal Case Studies
*“We made $180,000 in a single day double closing this self storage facility. This one deal changed my perspective of what was possible in real estate.”
– Mike Mannino II*
*“We are extremely thankful to Rod Khleif! His program gave us the confidence and knowledge to scale with Multifamily. We went from $8,500 a month cash flow to $20,000 a month.”
-Nathaniel & Valeri Kolwyck*
*“I was initially hesitant and skeptical about your intentions. However, I’m genuinely pleased to discover your genuine commitment to making a difference in people’s lives.”
– Amy Broadnax*
*“Since your event my partnership has bought a 61 unit. In addition, you taught me to reward myself. At 39, I bought my wife and four children her 5,000 square foot dream home.”
– Nic Evans*
[
](https://rodkhleif.com/podcasts/creative-multifamily-financing-harvey-lockhart/)### [ How a Music Teacher Landed a $3.5M Apartment Deal ](https://rodkhleif.com/podcasts/creative-multifamily-financing-harvey-lockhart/)
July 31, 2026
[ See full case study » ](https://rodkhleif.com/podcasts/creative-multifamily-financing-harvey-lockhart/)
[
](https://rodkhleif.com/podcasts/multifamily-asset-management-jay-tana-boersma/)### [ They Raised Rents Without Renovating a Single Unit ](https://rodkhleif.com/podcasts/multifamily-asset-management-jay-tana-boersma/)
July 24, 2026
[ See full case study » ](https://rodkhleif.com/podcasts/multifamily-asset-management-jay-tana-boersma/)
[
](https://rodkhleif.com/podcasts/distressed-senior-housing-investing-ali-choucri/)### [ Why Smart Investors Are Leaving Multifamily for Senior Housing ](https://rodkhleif.com/podcasts/distressed-senior-housing-investing-ali-choucri/)
July 17, 2026
[ See full case study » ](https://rodkhleif.com/podcasts/distressed-senior-housing-investing-ali-choucri/)
[
](https://rodkhleif.com/podcasts/multifamily-capital-raising-with-erin-frigo/)### [ The Beginner’s Blueprint to Landing a 148 Unit Deal ](https://rodkhleif.com/podcasts/multifamily-capital-raising-with-erin-frigo/)
July 10, 2026
[ See full case study » ](https://rodkhleif.com/podcasts/multifamily-capital-raising-with-erin-frigo/)
Page1[Page2](https://rodkhleif.com/about/?e-page-d2f5744=2&doing_wp_cron=1786304290.3479468822479248046875)[Page3](https://rodkhleif.com/about/?e-page-d2f5744=3&doing_wp_cron=1786304290.3479468822479248046875)…[Page50](https://rodkhleif.com/about/?e-page-d2f5744=50&doing_wp_cron=1786304290.3479468822479248046875)
[ Click Here to See All Case Studies ](https://rodkhleif.com/warriorwins/)
*Note: These are verified reviews and case studies from real people. Real estate takes work and results are not guaranteed.*
## Our Mission Is To Help You Improve More Than Just Your Income…
Yes, Rod Khleif can teach you how to buy apartments, raise capital, and build wealth through multifamily real estate. But his mission goes far beyond financial success.
Rod’s true passion is helping people transform every part of their lives. T**heir confidence, mindset, relationships, and purpose**. He wants you to build a life you love waking up to. A life filled with meaning, momentum, and the freedom to give back.
Because when you grow as a person, your income follows.
**And when you lead with contribution, success becomes inevitable.**
## Think you’re the right fit?
[ Apply For Mentorship ](/strategy-call/)
---
### [Deal Underwriting Tool](https://rodkhleif.com/deal-underwriting-tool/)
**Published:** February 18, 2025
**Author:** Matt RK
**Content:**
## Free Multifamily Deal Analyzer
Underwriting Calculator
*I built this free multifamily deal analyzer to help you evaluate properties in minutes instead of hours. Input your property data and investment assumptions, and you instantly see cap rates, cash-on-cash returns, and exit scenarios. Here’s why I created this tool: during my early years, I spent way too much time in spreadsheets doing calculations when I should have been out finding deals. Most investors still do the same thing, which means they evaluate fewer deals and miss opportunities sitting right in front of them. Let me speed up your analysis phase so you can evaluate more deals, negotiate better, and ultimately own more apartment buildings.*
*– Rod Khleif*
` + '
' + '
' + '' + `` + '
' + `${description}` + '
' + '
'; target.innerHTML = html; updateProgress(id); } function createForm() { var f = document.getElementById(getId("form")); createFormField("unit-no", "No of Units:", "Enter the total number of units in the property", 100, { unit: "Unit", min: 1, max: 500 }); createFormField("market-rent", "Market rent:", "Enter the average market rent per unit", 1250, { unit: "USD", min: 100, max: 5000, step: 25 }); createFormField("occupancy", "Occupancy:", "Enter the occupancy percentage of the deal", 90, { min: 1, max: 100 }); createFormField("other-income", "Other Income:", "Enter other income as a percentage from application fees, pet fees, utilities, trash fees, parking fees, etc.", 10, { min: 0, max: 50 }); createFormField("expenses", "Expense ratio:", "Enter your expenses as percentage of your gross annual income", 50, { min: 0, max: 100 }); createFormField("cap-rate", "Cap Rate:", "Enter the Cap Rate you're willing to pay", 6, { min: 1, max: 30, step: .25 }); disableLoading(); f.addEventListener("submit", submitForm); calculate(); } function submitForm(e) { calculate(); e?.preventDefault(); } document.addEventListener("readystatechange", e => { if (document.readyState !== "complete") return; createForm(); })
Get ready to do a quick high level underwrite in seconds!### Investment Analysis
###### PRICE TO OFFER FOR THE DEAL
# $1,000,000
###### NET OPERATING INCOME
## $25,000
Please wait...
**Looking at a potential apartment investment?**
Don’t rely on guesswork.
Our **Multifamily Deal Analyzer** is the essential tool every investor needs to confidently underwrite and evaluate real estate opportunities, whether you’re just starting out or managing a large syndication.
If you want to invest in apartment buildings, you need a multifamily deal analyzer. It is important for growing your real estate portfolio. In today’s competitive multifamily market, every investor must quickly evaluate the numbers. They need to identify risks and calculate potential returns before making a decision. Your ability to evaluate a property’s value is important for your success. This applies whether you are considering your first 8 unit property or a larger deal with over 200 units. Whether you’re looking to invest passively, structure your own GP/LP deal, or simply sharpen your underwriting skills, mastering the use of a reliable multifamily deal analyzer is one of the most important steps you can take.
---
### [How to find off-market deals in a hot market](https://rodkhleif.com/how-to-find-off-market-deals-in-a-hot-market/)
**Published:** March 6, 2020
**Author:** Rod Khleif
**Content:**
[  ](https://rodkhleif.com)
# FREE DOWNLOAD
How to Find Off Market Multifamily Deals
Please enter your info below to get instant access to this comprehensive guide. By clicking, you accept our [Terms Of Service And Privacy Policy.](/privacy-policy-terms-of-use/)
- FIRST NAME\*
- EMAIL ADDRESS\*
- PHONE
By providing your number, you consent to receive marketing call or texts.
By clicking, you agree to our [Terms Of Service And Privacy Policy.](https://rodkhleif.com/terms-privacy/)
# How to Find off market Multifamily deals
This book is a crash course from world renowned Multifamily Mentor, Rod Khleif, on the best ways to find off market multifamily deals. These are the same lessons that he teaches his students. Off market deals can be a strategic way to obtain valuable investments without the competition of listed properties. By learning these strategies, you will be one step closer to mastering multifamily real estate investing.
Some effective methods include: Networking, direct mail campaigns, online platforms, real estate wholesalers, cold calling, driving for dollars, property management companies, auctions, online skip tracing and more. Learn all about them in this comprehensive guide.
- [ SPEAKING ](/speaking)
- [ MEDIA ](/media)
- © All Rights Reserved
- [ Terms of Service / Privacy Policy ](/terms-privacy%20)
- [ Disclaimers ](/disclaimers)
-
- © All Rights Reserved
- [ Terms of Service / Privacy Policy ](/terms-privacy%20)
- [ Disclaimers ](/disclaimers)
[  ](https://influex.com/?utm_source=rod-khleif&utm_medium=footer-link&utm_content=influexwp-client-site-footer-link&utm_campaign=influexwp-client-site)
---
### [A Comprehensive Guide to Multifamily Due Diligence](https://rodkhleif.com/a-comprehensive-guide-to-multifamily-due-diligence/)
**Published:** June 8, 2025
**Author:** PerryL
**Content:**
[  ](https://rodkhleif.com)
# Free Download:
The Ultimate Guide to Multifamily Due Diligence
Before you buy any multifamily property, there’s one critical step: **due diligence**.
This free eBook will show you how to *perform due diligence like a pro.* You’ll learn to avoid red flags, and make informed decisions that lead to long term success.
Whether you’re new to multifamily or expanding your portfolio, this guide walks you through the major types of due diligence every investor needs to understand before closing a deal.
- FIRST NAME\*
- EMAIL ADDRESS\*
- PHONE
Please enter your info to get instant access
to this comprehensive guide. By clicking, you accept our
[Terms Of Service And Privacy Policy.](/terms-privacy)
By providing your number, you consent to receive marketing calls or texts.
## What You’ll Learn Inside
- How to spot red flags in physical inspections, leases, and service contracts
- How to analyze financial statements and rent rolls for hidden issues
- Key questions to ask about property management and maintenance
- How to evaluate market conditions and compare submarkets
- Step-by-step due diligence checklists to use on every business transaction
- Legal, operational, and physical risk factors to investigate
- How to make informed decisions by identifying potential risks before closing
- Why a poor due diligence process can ruin your long-term returns
[ Download ](#form)
### **Why This Guide Is So Valuable**
Why would you invest in a multi-million dollar asset without a system to uncover risks?
Due diligence is the backbone of every smart real estate business transaction. It’s how you protect your investment, assess the true condition of a property, and uncover potential risks that could destroy your cash flow.
This guide is used by top investors and taught to students inside Rod Khleif’s Warrior Coaching Program. His students now own over 260,000 units.
###
### **Who Should Use This Guide?**
1\. Investors who want to manage their property with clarity
2\. Buyers looking to confidently assess market conditions and comps
3\. Anyone needing a clearer framework for evaluating rental property investments
4\. Passive investors wanting to understand the financial statements and risks behind dealsGuid
## Download Your
Free Guide to
Multifamily Due Diligence
Instant access.
No fluff.
Learn How to Perform Due Diligence and Avoid Costly Mistakes on Your Next Deal.
- FIRST NAME\*
- EMAIL ADDRESS\*
- PHONE
- [ SPEAKING ](/speaking)
- [ MEDIA ](/media)
- © All Rights Reserved
- [ Terms of Service / Privacy Policy ](/terms-privacy%20)
- [ Disclaimers ](/disclaimers)
-
- © All Rights Reserved
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- [ Disclaimers ](/disclaimers)
[  ](https://influex.com/?utm_source=rod-khleif&utm_medium=footer-link&utm_content=influexwp-client-site-footer-link&utm_campaign=influexwp-client-site)
---
### [Guide to Multifamily Syndications](https://rodkhleif.com/guide-to-multifamily-syndications/)
**Published:** May 1, 2025
**Author:** PerryL
**Content:**
[  ](https://rodkhleif.com)
# FREE DOWNLOAD
Guide to Multifamily Syndications
Thinking about investing in real estate without the stress of tenants, toilets, and day-to-day property management?
Whether you’re a seasoned investor or just starting out, this guide will walk you through how multifamily syndications work, how the investor receives returns, and why they’re one of the most efficient ways to grow your portfolio.
Please enter your info below to get instant access to to our free “**Guide to Multifamily Syndications.**”
- FIRST NAME\*
- LAST NAME\*
- EMAIL ADDRESS\*
- PHONE
By providing your number, you consent to receive marketing call or texts.
By clicking, you agree to our [Terms Of Service And Privacy Policy.](https://rodkhleif.com/terms-privacy/)
## What You’ll Learn Inside This Free Multifamily Syndication Guide:
- How multifamily syndication works
- The capital stack: debt, equity, preferred returns, and more
- Syndication roles and responsibilities
- Deal structure strategies and how profits are shared
- Legal document templates
- Sample Private Placement Memorandum (PPM) with addendums
- Common syndication mistakes
- Plus… tips to evaluate deals and protect your capital
Download
This is a **comprehensive 220 page guide** designed to walk you through every critical piece of the syndication process. Whether you’re looking to raise capital, partner on deals, or invest passively, this free eBook will give you the clarity and confidence to move forward.
### **What Is a Multifamily Syndication?**
A multifamily syndication is when a group of investors pools capital to purchase large apartment communities. Typically, the deal is led by a sponsor or general partner, who handles the business plan, financing, due diligence, and property management strategy, while passive investors contribute funds in exchange for a share of the profits.
###
### Why Passive Investors Love Syndications
- **Truly Hands Off:** No calls from tenants or repair jobs. The sponsor handles everything from acquisition to asset management.
- **Consistent Cash Flow:** Most deals distribute returns quarterly or monthly once stabilized.
- **Tax Advantages:** Through depreciation and cost segregation, **passive investors** often show paper losses while receiving real cash flow.
- **Equity Growth:** As the property is improved and NOI increases, so does its value. This leads to potential long term capital gains.
- **Risk Sharing:** Unlike investing alone, syndications allow you to invest in larger, more stable assets with experienced operators.
## Download Your
Free Guide to
Multifamily Property Syndications
Instant access.
No fluff.
Just everything you need to understand and succeed in multifamily syndication.
- FIRST NAME\*
- LAST NAME\*
- EMAIL ADDRESS\*
- PHONE
- [ 2 DAY BOOTCAMP ](http://Multifamilybootcamp.com)
- [ WANT ME AS YOUR COACH? ](https://rodkhleif.com/strategy-call)
- © All Rights Reserved
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---
### [Rod's Multifamily Virtual Bootcamp](https://rodkhleif.com/bootcamp01/)
**Published:** February 13, 2025
**Author:** Matt RK
**Content:**
- [ABOUT](#about)
- [PANELISTS](#panelists)
- [TRAINING](#training)
- [TESTIMONIALS](#testimonials)
- [GET TICKETS](#tickets)
- [ABOUT](#about)
- [PANELISTS](#panelists)
- [TRAINING](#training)
- [TESTIMONIALS](#testimonials)
- [GET TICKETS](#tickets)
## Rod Khleif's
# Multifamily
Virtual Bootcamp!
## August 29th & 30th, 2026
[ Get Your Bootcamp Ticket ](#elementor-action%3Aaction%3Dpopup%3Aopen%26settings%3DeyJpZCI6IjM1NjM5IiwidG9nZ2xlIjpmYWxzZX0%3D)
## YOUR MULTIFAMILY TRAINER:
**Rod Khleif**
Rod Khleif is an entrepreneur, real estate investor, multiple business owner, author, mentor, and community philanthropist who is passionate about business, life, success, and giving back. As one of the country’s top real estate trainers, Rod has personally owned and managed over 2,000 properties.
Rod delivers the blueprint for Multifamily Mastery in an intensive live bootcamp event. Rod will guide you step-by-step on how to generate consistent, monthly cash flow through multifamily real estate. Not only will you discover how to buy an apartment building, Rod will also help you breakthrough your limiting beliefs and develop the confidence and mindset you need to succeed.
## This Event Is for You if:
- **You’re totally new to real estate investing** and have never bought a property before. You’ll discover the proven steps to take, and in what order, to buy an apartment building.
- **You’ve bought a few residential or multifamily properties** , but you’re having a hard time reaching the next level of success. You’ll learn how to find better deals, and how to find investors to help finance those deals.
- **You’re a seasoned investor** You already own dozens of properties, and you want to connect with other investors, collaborate on deals and grow your income.
## Your Ticket Feeds A Family!
When you purchase a bootcamp ticket, we are able to help a family in need by feeding them through our Tiny Hands Foundation. Our annual Basket Brigade provides a holiday meal with toys for at risk families. On behalf of all those who have benefitted from your help and kindness, thank you.
## Guest Presenters
## Tyler Carney-DeBord
## Atlas Real Estate Capital
## Merrill Kaliser
## Kaliser & Associates
## Multifamily
Rock Star Panelists
These are the multifamily experts that savvy investors go to to get their questions answered! There are few in this industry who have as much competence and integrity as these working professionals.
## Noel Walton
## Atlas Real Estate Capital
## Warrior Program
## Oliver Fernandez
## 3,718 Doors
## Warrior Program
## Eric Upchurch
## 2,874 Doors
## Warrior Program
## Chris Wooten
## 4,300+ Doors
## Warrior Program
## Alice Ng
## 1,080+ Doors
## Warrior Program
## Doris Ng
## 1,080+ Doors
## Warrior Program
## Steeve Breton
## 3,300 Doors
## Warrior Program
## Charlie Peters
## 1,728 Doors
## Warrior Program
## Colby Bowers
## 776 Doors
## Warrior Program
## Jens Nielsen
## 2,900 Doors
## Warrior Program
## Powell Chee
## 1100 Doors
## Warrior Program
## Ed Modzel
## 2,203 Doors
## Warrior Program
[ Get Your Bootcamp Ticket! ](#elementor-action%3Aaction%3Dpopup%3Aopen%26settings%3DeyJpZCI6IjM1NjM5IiwidG9nZ2xlIjpmYWxzZX0%3D)
## What's Included At The Bootcamp
## Secret Facebook Group
Multifamily is a TEAM sport, so we have a number of way to connect. One way is our secret Facebook Group for multifamily networking and deal making.
## Winning Multifamily Strategies
You’ll walk away with a step-by-step plan for the proven steps to take, and in what order, to buy an apartment building.
## Scripts and Templates
You get the due diligence checklists, financing templates, scripts for talking to bankers and lenders, sample seller’s agreements, deal packages, purchase and sale documents and more.
[ Get Your Bootcamp Ticket! ](#elementor-action%3Aaction%3Dpopup%3Aopen%26settings%3DeyJpZCI6IjM1NjM5IiwidG9nZ2xlIjpmYWxzZX0%3D)
## **Multifamily Bootcamp** Training
## Covering All These Critical Topics
## How to Buy an Apartment Building Action Guide
You’ll walk away with a step-by-step plan for the proven steps to take, and in what order, to buy an apartment building.
## How to Analyze a Property
Before you make an offer, it’s crucial that you do your due diligence to make sure the property will be a sound investment. I’ll tell you the information you must request, how to analyze it, and how to know if you should walk away from a deal.
## Done-for-You Templates, Scripts & Checklists
You’ll leave Multifamily Bootcamp with everything you need to hit the ground running, including due diligence checklists, financing templates, scripts for talking to bankers and lenders, sample seller’s agreements, deal packages, purchase and sale documents and more.
## Little-Known Negotiation Tactics of Multi-Millionaire Investors
At Multifamily Bootcamp, I’ll teach you highly-effective negotiation strategies that will help you close a great deal, while leaving the seller feeling like they also won. This is one of the secrets to building great relationships that you can benefit from, over and over again.
## How to Manage Your Properties
The pros and cons of doing it yourself vs. hiring a property management company, what to look for in a property management company (and red flags to watch out for), and what to ask for when making your deal.
## How to Fund Your Deals
Most of my students are shocked by how much easier it is to get a bank loan for an apartment building than it is a single-family home. You can go this route too, or you can do what I’ve done on many of my deals… bring investors in! I’ll show you how.
## Develop a Multi-Millionaire Mindset
You can learn the mechanics of this business all you want, but without a mindset that says, “I can do this,” you’ll never put those mechanics to use. At Multifamily Bootcamp, you’ll get crystal clear on your goals and develop a mindset that will skyrocket your success.
## How to Build a World-Class Team
Want to buy multiple apartment buildings and truly turn this into a business? I’ll show you how to build a team of people who will back you up and help you maximize your time, revenue and results.
## How to Grow Your Network & Ultimately, Your Lifetime Cash Flow
In any business, you need to network. I’ll teach you where to go and how to talk to people so that you make connections with key people: sellers, investors, brokers, lenders, attorneys, appraisers, title companies, mortgage brokers and more.
## How to Structure Your Real-Estate Investing Business
You can treat real estate like a hobby, or you can do what other professionals do: Treat it like the business that it is. At Multifamily Bootcamp, I’ll teach you the specific legal structures you need to set up that will support the growth of your business.
## Watch Testimonials From Our Bootcamp Events
## Enjoy The Bootcamp Experience
[ Get Your Bootcamp Ticket! ](#elementor-action%3Aaction%3Dpopup%3Aopen%26settings%3DeyJpZCI6IjM1NjM5IiwidG9nZ2xlIjpmYWxzZX0%3D)
[ Get Your Bootcamp Ticket! ](#elementor-action%3Aaction%3Dpopup%3Aopen%26settings%3DeyJpZCI6IjM1NjM5IiwidG9nZ2xlIjpmYWxzZX0%3D)
[ Get Your Bootcamp Ticket! ](#elementor-action%3Aaction%3Dpopup%3Aopen%26settings%3DeyJpZCI6IjM1NjM5IiwidG9nZ2xlIjpmYWxzZX0%3D)
[ Get Your Bootcamp Ticket! ](#elementor-action%3Aaction%3Dpopup%3Aopen%26settings%3DeyJpZCI6IjM1NjM5IiwidG9nZ2xlIjpmYWxzZX0%3D)
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---
### [Links](https://rodkhleif.com/links/)
**Published:** January 23, 2025
**Author:** Matt RK
**Content:**
# @RodKhleif
## Multifamily Virtual Bootcamp - August 29th & 30th
## [.](https://www.rodkhleif.com/bootcamp/?sl=lt)
## Cash Flow Club - Learn How To Invest Passively in MF
## [.](https://creecashflowclub.com/?sl=lt)
## My #1 Ranked Multifamily Podcast
## [.](https://linktr.ee/lifetimecashflow)
## Mentorship - Want Me as Your Coach?
## [.](https://rodkhleif.com/strategy-call/?sl=lt)
## How to Get Started in Multifamily Book
## [.](http://www.lcfabook.com/?sl=lt)
## My Website RodKhleif.com
## [.](https://rodkhleif.com/?sl=lt)
## Join Our Multifamily Skool Community
## [.](https://www.skool.com/lcfa)
## My Youtube Channel
## [.](https://www.youtube.com/channel/UCbb357-0yQw0kdNelWKrSkA/?sl=lt&sub_confirmation=1)
## My Facebook Page - (To Ask Me Questions)
## [.](https://www.facebook.com/rodkhleifofficial/?sl=lt)
## FREE eBooks - Various Multifamily Topics
## [.](https://linktr.ee/rkebooks/?sl=lt)
## Free Goal Setting Workshop - Set Yourself up To Crush Your Goals
## [.](https://rodkhleif.com/goal-setting-workshop/?sl=lt)
## Raising Capital Masterclass
## [.](https://www.lifetimecashflowacademy.com/raising-capital/?sl=lt)
---
### [Warrior Program Reviews](https://rodkhleif.com/reviews/warrior-program/)
**Published:** June 27, 2025
**Author:** Alex Khleif
**Content:**
# Warrior Program Reviews
Real Students. Real Deals. Real Results.
# Apply To
Become A Warrior
- LinkedIn
This field is for validation purposes and should be left unchanged.
- First Name\*
- Last name\*
- Email Address\*
- Phone Number\*
- Message frequency will vary. Message and data rates may apply. Reply STOP to opt out.
-
[Privacy Policy](https://rodkhleif.com/privacy-policy-terms-of-use/) | [Terms Of Service ](https://rodkhleif.com/privacy-policy-terms-of-use/)By providing your number, you consent to receive marketing call or texts.
**Powell Chee** 6,600 Units **Anthony Metzger** 218 Units (1st Deal) **Mike Mannino II** $180k in 1 Day**Alice & Doris NG** 1,050 Units **Bharat Kona** 6,505 Units **Jennifer Barner** 2,014 Units **Colette Jones** 475 Units (1st Year) **Chris Wooten** 6,266 Units **Steven Menzel** $130k from 1 Deal **Hillary Graves** 2,273 Units **Zane Wagner** 200 Units (First Deal) **Eric Upchurch** 4,872 Units **Roberto Carabetta** 500 Units in 18 Mo **Erik & Jeffrey Freeman** 168 Units (First Deal) **Powell Chee** 6,600 Units **Anthony Metzger** 218 Units (1st Deal) **Alice & Doris NG** 1,050 Units **Mike Mannino II** $180k in 1 Day **Bharat Kona** 6,505 Units **Erik & Jeffrey Freeman** 168 Units (First Deal) **Jennifer Barner** 2,014 Units **Chris Wooten** 6,266 Units **Jonathan Wells** 3,857 Units **Steven Menzel** $130k from 1 Deal **Hillary Graves** 2,273 Units **Jens Nielsen** 2,000+ Units **Oliver Fernandez** 1,000+ Units **Atil Gulf** 900+ Units / $100M AUM **Erik & Jeffrey Freeman** 168 Units (First Deal) **Roberto Carabetta** 500 Units in 18 Mo **Colette Jones** 475 Units (1st Year) **Eric Upchurch** 4,872 Units
## You’re probably asking...
## Is it really worth it?
Let us show you…
Since launch, **students now own over 305,000 apartment units**, raising millions in investor capital while transforming their mindsets from *“someday”* to *“done.”* Below you’ll find verified reviews, deal breakdowns, and in depth interviews with tons of real people.
## The Proof is in the Results
[ Click to see hundreds of real deal case studies ](https://rodkhleif.com/warriorwins/)
305k +
Student Owned Units
343 +
Real Deal Case Studies
1,800 +
Private Network of Investors
*Last updated 08/25. Verified internal records.*
## The Investment is Worth it
"We made $180,000 in a single day double closing this self storage facility. Since this first deal I have done another $235,000 in wholesale fees."– Mike Mannino II
"We went from $8,500/mo to $20,000/mo cash flow after we became a warrior. His program gave us the confidence and knowledge to scale."– Nathaniel & Valeri Kolwyck
"I mailed 350 letters using Rod's template, got a 15-unit under contract, assigned it, and earned just under $130K from one deal. Largest deal in 20 years."– Steven Menzel
"Since joining, I have GP ownership in 82 units total with no capital in."– Trina Picero
"The past year: 900+ multifamily units acquired, $100M+ AUM. You don't need to know everything to start. You just have to start."– Atil Gulf
"Rod's coaching helped me scale from a few smaller properties to syndicating large apartment complexes and quit my W2 job. Now over 2,000 units."– Jens Nielsen
"The Warrior Program changed my career. I went from 0 to 80 doors as GP. I tried before, but it was so hard without support."– Elsa Nguyen
"Joining his Warrior program completely changed my trajectory. In 18 months, I acquired 500 units across the U.S."– Roberto Carabetta
"Rod's coaching program is by far the best decision of my life! IT.IS.WORTH.EVERY.PENNY. I'm living proof."– Mike Olson on Reddit
"What a year! Like many of you, we pushed hard and saw incredible growth: ✅ 3 solid acquisitions
🏢 348 units added to the portfolio
💰 $31.2M in portfolio growth."– Suresh Chilamkurty
"Since joining the warrior group my wife and I have gone from being completely caught up in the rat race to well on the road to financial independence! – Jonathan Wells (Now Owns 3857 Units)
I signed up for Rod's program and completed my first deal within 6 months. Well worth the money for the connections alone. It's a big investment, but if you're serious about this career it's a shortcut to success.– Reddit User
*Verified testimonials 07/26. Results are not guaranteed. Real estate investing involves risk and requires work.*
## Watch
Or Listen
## Warrior Student Interviews
The Multifamily Rockstars Podcast features unfiltered interviews with Warrior Program students who have found great success in multifamily investing. Hear what worked, what didn’t, and what they learned on their journey.
[ Browse All Warrior Interviews ](https://rodkhleif.com/warriorwins/)
[
](https://rodkhleif.com/podcasts/creative-multifamily-financing-harvey-lockhart/)### [ How a Music Teacher Landed a $3.5M Apartment Deal ](https://rodkhleif.com/podcasts/creative-multifamily-financing-harvey-lockhart/)
July 31, 2026
[ See full case study » ](https://rodkhleif.com/podcasts/creative-multifamily-financing-harvey-lockhart/)
[
](https://rodkhleif.com/podcasts/multifamily-asset-management-jay-tana-boersma/)### [ They Raised Rents Without Renovating a Single Unit ](https://rodkhleif.com/podcasts/multifamily-asset-management-jay-tana-boersma/)
July 24, 2026
[ See full case study » ](https://rodkhleif.com/podcasts/multifamily-asset-management-jay-tana-boersma/)
[
](https://rodkhleif.com/podcasts/distressed-senior-housing-investing-ali-choucri/)### [ Why Smart Investors Are Leaving Multifamily for Senior Housing ](https://rodkhleif.com/podcasts/distressed-senior-housing-investing-ali-choucri/)
July 17, 2026
[ See full case study » ](https://rodkhleif.com/podcasts/distressed-senior-housing-investing-ali-choucri/)
[
](https://rodkhleif.com/podcasts/multifamily-capital-raising-with-erin-frigo/)### [ The Beginner’s Blueprint to Landing a 148 Unit Deal ](https://rodkhleif.com/podcasts/multifamily-capital-raising-with-erin-frigo/)
July 10, 2026
[ See full case study » ](https://rodkhleif.com/podcasts/multifamily-capital-raising-with-erin-frigo/)
Page1[Page2](https://rodkhleif.com/reviews/warrior-program/?e-page-00c1458=2&doing_wp_cron=1786304290.3479468822479248046875)[Page3](https://rodkhleif.com/reviews/warrior-program/?e-page-00c1458=3&doing_wp_cron=1786304290.3479468822479248046875)…[Page50](https://rodkhleif.com/reviews/warrior-program/?e-page-00c1458=50&doing_wp_cron=1786304290.3479468822479248046875)
## Why the Warrior Program Works
Unlike most real estate coaching programs, Rod doesn’t just teach the “how.”
He focuses on helping you become the kind of person who takes action, raises capital, builds teams, and closes deals.
## What makes it different?
- **2 Full Years** of Access and Support
- **Unlimited 1-on-1 Coaching** On-Demand with an expert multifamily coach
- **Access to All of Rod’s Courses** including any new ones he creates
- **Live Weekly Group Coaching Calls** and Q&A’s structured for a full A-Z deep dive
- **Unlimited Deal Review** to avoid costly mistakes
- **Deal Evaluator Software** to analyze deals fast
- **Access to the Private Warrior Community** with thousands of very active investors in 8+ asset classes
- **Access to Private Warrior Only Events** meetups, masterminds, workshops and advance tracks only offered to members
- **Tactical Deal Support & Underwriting Help** so you never feel alone or overwhelmed
- **High Performance Coaching** because Rod believes that mindset and massive action is the true key to success
- **PLUS Satisfaction Guarantee** Because Rod just wants to help people and if you don’t feel like you gained anything then you get your money back
## What Our Warriors Say About the Program
***“Rod I appreciate you opening my mind to this industry. I have invested passively in 2 deals totaling over 500 units and I am in the GP on another 3 deals totaling 718 units. I really appreciate the mindset shifts I have had since going through your program. Thank you!”** – Oliver Fernandez*
***“The people I have met are all fantastic and have been extremely generous with their time. The coaching has been amazing. Rod is also so generous with his time especially making an appearance on my Monday night zoom call.”** – Alex Love Li*
***“Every Warrior is a go-getter and winners and leaders in their own right and you want to be surrounded by like minded people to become the winner and achieve success.”** – Chat Sarmiento-Steinwald*
***‘This program has exceeded my expectations. I have loved every minute and every person that I have met.”** – Carrie Zatelli*
***“I’ve bought 7 single family deals, GP on 212, LP on 575, and we have SO many in the pipeline it’s hard to keep count.”** – Eric Upchurch*
***“I have been overwhelmed by the amount of support I’ve received from fellow Warriors along the way. I’m not sure how long it would have taken me to accomplish what I have in two years if it were not for the support of fellow Warriors.”** – Karl Schlobohm*
***“It has been life-changing. It has been an honor to learn from some the best operators out there, and to join them in taking down amazing deals, not to mention offering these opportunities to investors. The network has been the most amazing part.”** – Hilary Graves*
***“Being part of the warrior program has been all positive! It has helped propel our family throughout our exciting MF real estate journey, as well as having the honor to have learned, grown, and partnered with such great like minded individuals.”** – Javier & Yassenia Gonzalez*
***“I was surprised by a phone call from FL, and when I picked it up, yes, you guessed it right, it was Rod! – since I didn’t expect Rod to call me directly and welcome me to the group himself. Thank you Rod!”** – John Zhuang*
***“The Warrior Program changed my career. I tried getting into multifamily prior to joining the program but it was so hard. I had no support and couldn’t take the deal down on my own. Since joining the program, I went from 0 to 80 doors as GP.”** – Elsa Ngyen*
***“Rod has been my real estate mentor for the past couple of years, and joining his Warrior mentorship program completely changed my trajectory.***
***In just 18 months, I’ve been able to acquire 500 units across the U.S.”** – Roberto Carabetta*
***“The Rod Khleif Warrior Program is truly a remarkable journey into the realm of commercial real estate. It offers a comprehensive curriculum that spans all critical aspects of the industry.”** – Atif Gul*
## Experts Who Started as Students
## Many of Rod’s most trusted guest speakers… were once students.
**They’re living proof the Warrior Program doesn’t just teach theory, it *builds leaders.***
## For Beginners and Experienced Investors
## Whether you’re brand new to real estate or looking to scale fast…
**The *right guidance* doesn’t just save you money,
it saves you years.**
**New?**
You’ll get step-by-step blueprints, scripts, tools, calculators, group support, and coaching so you can take action without guessing or feeling alone.
**Experienced?**
You’ll learn how to systemize your business, raise more capital, structure deals better, and scale with confidence and an amazing network.
**And with Rod’s coaching, you won’t be doing this alone.**
You’ll be surrounded by a tribe of like-minded action takers who are closing deals and creating Lifetime Cashflow.
## The first step is applying to see if you are a fit.
- Company
This field is for validation purposes and should be left unchanged.
- First Name\*
- Last name\*
- Email Address\*
- Phone Number\*
- Message frequency will vary. Message and data rates may apply. Reply STOP to opt out.
-
[Privacy Policy](https://rodkhleif.com/privacy-policy-terms-of-use/) | [Terms Of Service](https://rodkhleif.com/privacy-policy-terms-of-use/)
## Ready to Take the First Step?
## Book a Call With Our Team
---
### [Is Rod Khleif a Scam?](https://rodkhleif.com/is-rod-khleif-a-scam/)
**Published:** May 15, 2025
**Author:** Alex Khleif
**Content:**
# Is Rod Khleif a Scam?
## The Truth About Rod's Track Record and Warrior Program
## What you should know
### about the man behind 305,000+ units owned by his coaching students
If you landed on this page, you’ve probably Googled:
- "Is Rod Khleif a scam?"
- "Is Rod Khleif legit?
- "Can you trust Rod Khleif's Warrior Program?"
We get it. In an industry flooded with hype, it’s smart to do your homework before investing time or money into any real estate education. So let’s set the record straight…
## Is Rod Khleif a Scam?
### No. Rod Khleif is one of the most trusted and respected mentors worldwide in multifamily real estate today.
He’s not only a seasoned and active investor with **thousands of units currently owned and managed**, but his students in the Warrior Coaching Program now own over 30**0,000 doors nationwide**.
That level of documented success is rare, and it doesn’t happen by accident!
[👉 ](https://rodkhleif.com/warriorwins/)[Click here to see hundreds of REAL student success stories. ](https://rodkhleif.com/warriorwins/)
## Who is Rod Khleif?
## Rod Khleif is a best-selling author, philanthropist, and keynote speaker
He is also the host of the top-ranked ***Lifetime Cashflow Through Real Estate Investing Podcast,*** with over 20M downloads. He’s been interviewed by Grant Cardone, Ken McElroy, Tom Wheelwright, and countless other industry legends.
## But more than that, he’s known for two things:
- **Real results**: Rod’s [Warrior Program](https://rodkhleif.com/rod-khleif-warrior-program/) has produced some of the most successful multifamily investors in the U.S.
- **Real heart:** Rod’s foundation, [*The* *Tiny Hands Foundation*](https://tinyhandsfoundation.org/), has fed over 160,000 children in need.
[ read rod's story ](/about)
## What Do Actual Students Say?
[  ](https://rodkhleif.com/jens-nielsen-bio/)
**“Being in Rod’s program helped me scale my rental portfolio … and quit my W2 job.”**
**Jens Nielsen**
*Retired W2, GP in 2,000+ Units*
[Click here to learn more about Jens.](https://rodkhleif.com/jens-nielsen-bio/)
[  ](https://rodkhleif.com/STEEVE-BRETON/)
**“I went from 16 units to 760 units in one year in the Warrior Program. Thanks for everything, Rod.”**
**Steeve Breton**
*Retired W2, GP in 3,000+ Units*
[Click here to learn more about Steeve.](https://rodkhleif.com/STEEVE-BRETON/)
[  ](https://rodkhleif.com/charlie-peters-bio/)
**“Amazing program. I couldn’t be happier with my decision to join Rod’s Warrior Program.”**
**Charlie Peters**
*Managing Partner, $187M Portfolio*
[Click here to learn more about Charlie.](https://rodkhleif.com/charlie-peters-bio/)
[ See more student success stories ](/warriorwins)
## Why do people ask "Is Rod Khleif a Scam?"
Rod talks about big results, and people are rightfully skeptical.
The truth?
**Multifamily real estate is not easy. But with the right mentor, it’s very possible.
Rod is honest about the work required. No “get rich quick.” No overnight success. Just a proven path, clear support, and a community of active action-takers.
## What Makes Rod's Coaching Different?
- Hands-on mentorship (not just videos)
- Very in-depth and comprehensive training
- A community of real investors actively closing real deals
- Proven systems that actually work
- A long track record of student success
**You’re right to be skeptical.** In a world full of big promises, it’s smart to ask: “Does this actually work?” That’s exactly why Rod’s coaching is different. It’s built on real results, real mentorship, and a community that actually wins.
## Do Your Due Diligence
## (Like You Would on Any Deal)
We encourage you to research. Read reviews. Watch testimonials.
Attend Rod’s [**Multifamily Bootcamp**](https://rodkhleif.com/bootcamp/) or download Rod’s **\#1 Best-Selling Book, [*How to Create Lifetime Cashflow Through Multifamily Properties*](https://www.lcfabook.com/core-book/).**
When you do, you’ll see why thousands of people from all walks of life trust Rod with their real estate investing journey.
## Ready to Learn More?
👉 [Explore Rod’s Coaching Program](https://rodkhleif.com/rod-khleif-warrior-program/)
👉 [See Warrior Student Success Stories](https://rodkhleif.com/warriorwins/)
👉 [Download Rod’s Free Best-Selling Multifamily Investing Book](https://rodkhleif.com/lcfa-ebook/)
---
### [Media](https://rodkhleif.com/media/)
**Published:** February 3, 2020
**Author:** Rod Khleif
**Content:**
## Share The
Global Mission
[ Book rod ](#interview-rod)
# Major Media Features
[](https://www.forbes.com/sites/forbesrealestatecouncil/2020/08/19/the-importance-of-property-manager-due-diligence/#49ef064880be)### [The Importance Of Property Manager Due Diligence](https://www.forbes.com/sites/forbesrealestatecouncil/2020/08/19/the-importance-of-property-manager-due-diligence/#49ef064880be)
[ Svg Vector Icons : http://www.onlinewebfonts.com/icon View Post ](https://www.forbes.com/sites/forbesrealestatecouncil/2020/08/19/the-importance-of-property-manager-due-diligence/#49ef064880be)
[](https://finance.yahoo.com/news/lifetime-cashflow-academys-warrior-program-144100443.html)### [Lifetime Cashflow Academy's Warrior Program Surpasses 260,000 Student-Owned Units...](https://finance.yahoo.com/news/lifetime-cashflow-academys-warrior-program-144100443.html)
[ Svg Vector Icons : http://www.onlinewebfonts.com/icon View Post ](https://finance.yahoo.com/news/lifetime-cashflow-academys-warrior-program-144100443.html)
[](https://finance.yahoo.com/news/top-real-estate-investors-keep-015500957.html)### [Top Real Estate Investors To Keep Track of in 2020](https://finance.yahoo.com/news/top-real-estate-investors-keep-015500957.html)
[ Svg Vector Icons : http://www.onlinewebfonts.com/icon View Post ](https://finance.yahoo.com/news/top-real-estate-investors-keep-015500957.html)
[](https://www.forbes.com/sites/forbesrealestatecouncil/2021/01/28/how-to-add-winning-amenities-to-multifamily-investment-properties/)### [How to add Winning amenities to Multifamily Investment Properties](https://www.forbes.com/sites/forbesrealestatecouncil/2021/01/28/how-to-add-winning-amenities-to-multifamily-investment-properties/)
[ Svg Vector Icons : http://www.onlinewebfonts.com/icon View Post ](https://www.forbes.com/sites/forbesrealestatecouncil/2021/01/28/how-to-add-winning-amenities-to-multifamily-investment-properties/)
[](https://www.forbes.com/sites/forbesrealestatecouncil/2020/10/20/what-multifamily-investors-should-understand-about-cost-segregation/)### [What Multifamily Investors Should Understand About Cost Segregation](https://www.forbes.com/sites/forbesrealestatecouncil/2020/10/20/what-multifamily-investors-should-understand-about-cost-segregation/)
[ Svg Vector Icons : http://www.onlinewebfonts.com/icon View Post ](https://www.forbes.com/sites/forbesrealestatecouncil/2020/10/20/what-multifamily-investors-should-understand-about-cost-segregation/)
[](https://www.forbes.com/sites/forbesrealestatecouncil/2021/05/28/a-beginners-guide-to-valuing-a-multifamily-property/)### [A Beginner's Guide to Valuing a Multifamily Property](https://www.forbes.com/sites/forbesrealestatecouncil/2021/05/28/a-beginners-guide-to-valuing-a-multifamily-property/)
[ Svg Vector Icons : http://www.onlinewebfonts.com/icon View Post ](https://www.forbes.com/sites/forbesrealestatecouncil/2021/05/28/a-beginners-guide-to-valuing-a-multifamily-property/)
[](https://www.forbes.com/sites/forbesrealestatecouncil/2020/09/16/signing-a-commercial-real-estate-contract-14-red-flags-to-avoid/)### [Signing a Commercial Real Estate Contract: 14 Red Flags to Avoid](https://www.forbes.com/sites/forbesrealestatecouncil/2020/09/16/signing-a-commercial-real-estate-contract-14-red-flags-to-avoid/)
[ Svg Vector Icons : http://www.onlinewebfonts.com/icon View Post ](https://www.forbes.com/sites/forbesrealestatecouncil/2020/09/16/signing-a-commercial-real-estate-contract-14-red-flags-to-avoid/)
[](https://www.forbes.com/sites/forbesrealestatecouncil/2020/03/04/why-demographic-trends-support-continued-multifamily-growth/#666fb2606844)### [Why Demographic Trends Support Continued Multifamily Growth](https://www.forbes.com/sites/forbesrealestatecouncil/2020/03/04/why-demographic-trends-support-continued-multifamily-growth/#666fb2606844)
[ Svg Vector Icons : http://www.onlinewebfonts.com/icon View Post ](https://www.forbes.com/sites/forbesrealestatecouncil/2020/03/04/why-demographic-trends-support-continued-multifamily-growth/#666fb2606844)
[](https://www.forbes.com/sites/forbesrealestatecouncil/2020/03/25/mitigating-regulatory-risk-in-a-multifamily-investment/)### [Mitigating Regulatory Risk In A Multifamily Investment](https://www.forbes.com/sites/forbesrealestatecouncil/2020/03/25/mitigating-regulatory-risk-in-a-multifamily-investment/)
[ Svg Vector Icons : http://www.onlinewebfonts.com/icon View Post ](https://www.forbes.com/sites/forbesrealestatecouncil/2020/03/25/mitigating-regulatory-risk-in-a-multifamily-investment/)
[](https://www.forbes.com/sites/forbesrealestatecouncil/2020/07/08/understanding-the-tax-benefits-of-multifamily-investment/)### [Understanding The Tax Benefits Of Multifamily Investment](https://www.forbes.com/sites/forbesrealestatecouncil/2020/07/08/understanding-the-tax-benefits-of-multifamily-investment/)
[ Svg Vector Icons : http://www.onlinewebfonts.com/icon View Post ](https://www.forbes.com/sites/forbesrealestatecouncil/2020/07/08/understanding-the-tax-benefits-of-multifamily-investment/)
[](https://www.forbes.com/sites/forbesrealestatecouncil/2020/06/17/understanding-the-loss-to-lease-calculation/)### [Understanding The Loss To Lease Calculation](https://www.forbes.com/sites/forbesrealestatecouncil/2020/06/17/understanding-the-loss-to-lease-calculation/)
[ Svg Vector Icons : http://www.onlinewebfonts.com/icon View Post ](https://www.forbes.com/sites/forbesrealestatecouncil/2020/06/17/understanding-the-loss-to-lease-calculation/)
[](https://www.forbes.com/sites/forbesrealestatecouncil/2020/05/28/real-estate-equity-waterfalls-how-they-work-and-what-to-look-for/)### [Real Estate Equity Waterfalls: How They Work And What To Look For](https://www.forbes.com/sites/forbesrealestatecouncil/2020/05/28/real-estate-equity-waterfalls-how-they-work-and-what-to-look-for/)
[ Svg Vector Icons : http://www.onlinewebfonts.com/icon View Post ](https://www.forbes.com/sites/forbesrealestatecouncil/2020/05/28/real-estate-equity-waterfalls-how-they-work-and-what-to-look-for/)
[](https://www.forbes.com/sites/forbesrealestatecouncil/2020/11/13/why-non-recourse-loans-arent-always-non-recourse/?sh=330cc3854e5d)### [Why Non-Recourse Loans Aren't Always Non-Recourse](https://www.forbes.com/sites/forbesrealestatecouncil/2020/11/13/why-non-recourse-loans-arent-always-non-recourse/?sh=330cc3854e5d)
[ Svg Vector Icons : http://www.onlinewebfonts.com/icon View Post ](https://www.forbes.com/sites/forbesrealestatecouncil/2020/11/13/why-non-recourse-loans-arent-always-non-recourse/?sh=c6080824e5da)
[](https://www.forbes.com/sites/forbesrealestatecouncil/2021/01/06/leveraging-depreciation-as-a-multifamily-investment-tax-benefit/)### [Leveraging Depreciation As A Multifamily Investment Tax Benefit](https://www.forbes.com/sites/forbesrealestatecouncil/2021/01/06/leveraging-depreciation-as-a-multifamily-investment-tax-benefit/)
[ Svg Vector Icons : http://www.onlinewebfonts.com/icon View Post ](https://www.forbes.com/sites/forbesrealestatecouncil/2021/01/06/leveraging-depreciation-as-a-multifamily-investment-tax-benefit/)
[](https://www.forbes.com/sites/forbesrealestatecouncil/2021/02/19/what-types-of-insurance-policies-are-needed-for-multifamily-properties/)### [What Types Of Insurance Policies Are Needed For Multifamily Properties?](https://www.forbes.com/sites/forbesrealestatecouncil/2021/02/19/what-types-of-insurance-policies-are-needed-for-multifamily-properties/)
[ Svg Vector Icons : http://www.onlinewebfonts.com/icon View Post ](https://www.forbes.com/sites/forbesrealestatecouncil/2021/02/19/what-types-of-insurance-policies-are-needed-for-multifamily-properties/)
[](https://www.forbes.com/sites/forbesrealestatecouncil/2021/06/24/benefits-of-passive-multifamily-investment/?sh=409fa9ddc747)### [Benefits Of Passive Multifamily Investment](https://www.forbes.com/sites/forbesrealestatecouncil/2021/06/24/benefits-of-passive-multifamily-investment/?sh=409fa9ddc747)
[ Svg Vector Icons : http://www.onlinewebfonts.com/icon View Post ](https://www.forbes.com/sites/forbesrealestatecouncil/2021/06/24/benefits-of-passive-multifamily-investment/?sh=409fa9ddc747)
[](https://www.forbes.com/sites/forbesrealestatecouncil/2021/07/20/how-proposed-tax-changes-could-impact-multifamily-investment-profitability/?sh=2f0971a511a0)### [How Proposed Tax Changes Could Impact Multifamily Investment Profitability](https://www.forbes.com/sites/forbesrealestatecouncil/2021/07/20/how-proposed-tax-changes-could-impact-multifamily-investment-profitability/?sh=2f0971a511a0)
[ Svg Vector Icons : http://www.onlinewebfonts.com/icon View Post ](https://www.forbes.com/sites/forbesrealestatecouncil/2021/07/20/how-proposed-tax-changes-could-impact-multifamily-investment-profitability/?sh=2f0971a511a0)
[](http://forbes.com/sites/forbesrealestatecouncil/2021/08/11/how-flexible-work-arrangements-will-impact-demand-for-multifamily-amenities/)### [How Flexible Work Arrangements Will Impact Demand For Multifamily Amenities](http://forbes.com/sites/forbesrealestatecouncil/2021/08/11/how-flexible-work-arrangements-will-impact-demand-for-multifamily-amenities/)
[ Svg Vector Icons : http://www.onlinewebfonts.com/icon View Post ](http://forbes.com/sites/forbesrealestatecouncil/2021/08/11/how-flexible-work-arrangements-will-impact-demand-for-multifamily-amenities/)
[](https://www.forbes.com/sites/forbesrealestatecouncil/2021/09/01/eight-ways-to-increase-non-rental-income-in-your-multifamily-property/?sh=6f6475d751e5)### [Eight Ways To Increase Non-Rental Income In Your Multifamily Property](https://www.forbes.com/sites/forbesrealestatecouncil/2021/09/01/eight-ways-to-increase-non-rental-income-in-your-multifamily-property/?sh=6f6475d751e5)
[ Svg Vector Icons : http://www.onlinewebfonts.com/icon View Post ](https://www.forbes.com/sites/forbesrealestatecouncil/2021/09/01/eight-ways-to-increase-non-rental-income-in-your-multifamily-property/?sh=6f6475d751e5)
[](https://www.forbes.com/sites/forbesbizcouncil/2021/11/09/five-common-multifamily-underwriting-mistakes-to-avoid/?sh=4ddca9c4250a)### [Five Common Multifamily Underwriting Mistakes To Avoid](https://www.forbes.com/sites/forbesbizcouncil/2021/11/09/five-common-multifamily-underwriting-mistakes-to-avoid/?sh=4ddca9c4250a)
[ Svg Vector Icons : http://www.onlinewebfonts.com/icon View Post ](https://www.forbes.com/sites/forbesbizcouncil/2021/11/09/five-common-multifamily-underwriting-mistakes-to-avoid/?sh=4ddca9c4250a)
# News Features
[](https://finance.yahoo.com/news/generational-wealth-building-real-estate-190007123.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAHuvddRpqeNYB8B50EPEyl8WVJUSb889l_-nvbCPLe_WoPK1Exi8FY1wA5hIRu6nwo7BTjXyPDszyiiS84GslGitS4wzMyHiQehBXDocaT91YVpF2jyE3KNaKxFyCx4hqC_C0LSnJFCRBavwcovCaOpq1eTzaWHmr-wB8iJkvphF)### [5 Strategies Boomers Use To Build Generational Wealth Through Real Estate](https://finance.yahoo.com/news/generational-wealth-building-real-estate-190007123.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAHuvddRpqeNYB8B50EPEyl8WVJUSb889l_-nvbCPLe_WoPK1Exi8FY1wA5hIRu6nwo7BTjXyPDszyiiS84GslGitS4wzMyHiQehBXDocaT91YVpF2jyE3KNaKxFyCx4hqC_C0LSnJFCRBavwcovCaOpq1eTzaWHmr-wB8iJkvphF)
[ Svg Vector Icons : http://www.onlinewebfonts.com/icon View Post ](https://finance.yahoo.com/news/generational-wealth-building-real-estate-190007123.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAHuvddRpqeNYB8B50EPEyl8WVJUSb889l_-nvbCPLe_WoPK1Exi8FY1wA5hIRu6nwo7BTjXyPDszyiiS84GslGitS4wzMyHiQehBXDocaT91YVpF2jyE3KNaKxFyCx4hqC_C0LSnJFCRBavwcovCaOpq1eTzaWHmr-wB8iJkvphF)
[](https://finance.yahoo.com/news/home-value-dropping-10-things-140017020.html)### [If Your Home Value Is Dropping, Do These 10 Things Now](https://finance.yahoo.com/news/home-value-dropping-10-things-140017020.html)
[ Svg Vector Icons : http://www.onlinewebfonts.com/icon View Post ](https://finance.yahoo.com/news/home-value-dropping-10-things-140017020.html)
[](https://www.luxurytravelmagazine.com/news-articles/the-investors-mindset-why-most-people-never-achieve-financial-freedom)### [The Investor’s Mindset: Why Most People Never Achieve Financial Freedom](https://www.luxurytravelmagazine.com/news-articles/the-investors-mindset-why-most-people-never-achieve-financial-freedom)
[ Svg Vector Icons : http://www.onlinewebfonts.com/icon View Post ](https://www.luxurytravelmagazine.com/news-articles/the-investors-mindset-why-most-people-never-achieve-financial-freedom)
[](https://www.heraldtribune.com/story/news/2006/11/08/basket-brigade-seeks-help-to-get-food-to-the-needy/28510820007/)### [Basket Brigade seeks help to get food to the needy](https://www.heraldtribune.com/story/news/2006/11/08/basket-brigade-seeks-help-to-get-food-to-the-needy/28510820007/)
[ Svg Vector Icons : http://www.onlinewebfonts.com/icon View Post ](https://www.heraldtribune.com/story/news/2006/11/08/basket-brigade-seeks-help-to-get-food-to-the-needy/28510820007/)
[](https://www.abcmoney.co.uk/2025/03/from-losing-millions-to-rebuilding-an-empire-rod-khleifs-journey-through-the-2008-crash/)### [From Losing Millions to Rebuilding an Empire: Rod Khleif’s Journey Through the 2008 Crash](https://www.abcmoney.co.uk/2025/03/from-losing-millions-to-rebuilding-an-empire-rod-khleifs-journey-through-the-2008-crash/)
[ Svg Vector Icons : http://www.onlinewebfonts.com/icon View Post ](https://www.abcmoney.co.uk/2025/03/from-losing-millions-to-rebuilding-an-empire-rod-khleifs-journey-through-the-2008-crash/)
[](https://www.msn.com/en-us/money/realestate/multifamily-investing-as-a-hedge-against-inflation-what-investors-need-to-know/ar-AA1BoJ6Q)### [Multifamily Investing as a Hedge Against Inflation:
What Investors Need to Know](https://www.msn.com/en-us/money/realestate/multifamily-investing-as-a-hedge-against-inflation-what-investors-need-to-know/ar-AA1BoJ6Q)
[ Svg Vector Icons : http://www.onlinewebfonts.com/icon View Post ](https://www.msn.com/en-us/money/realestate/multifamily-investing-as-a-hedge-against-inflation-what-investors-need-to-know/ar-AA1BoJ6Q)
[](https://newsable.asianetnews.com/amp/markets/multifamily-investing-as-a-hedge-against-inflation-what-investors-need-to-know-sthhya)### [Multifamily Investing as a Hedge Against Inflation: What Investors Need to Know](https://newsable.asianetnews.com/amp/markets/multifamily-investing-as-a-hedge-against-inflation-what-investors-need-to-know-sthhya)
[ Svg Vector Icons : http://www.onlinewebfonts.com/icon View Post ](https://newsable.asianetnews.com/amp/markets/multifamily-investing-as-a-hedge-against-inflation-what-investors-need-to-know-sthhya)
[](https://stocktwits.com/news-articles/business/others/multifamily-investing-as-a-hedge-against-inflation-what-investors-need-to-know/ch7oReJRb55)### [Multifamily Investing as a Hedge Against Inflation:
What Investors Need to Know](https://stocktwits.com/news-articles/business/others/multifamily-investing-as-a-hedge-against-inflation-what-investors-need-to-know/ch7oReJRb55)
[ Svg Vector Icons : http://www.onlinewebfonts.com/icon View Post ](https://stocktwits.com/news-articles/business/others/multifamily-investing-as-a-hedge-against-inflation-what-investors-need-to-know/ch7oReJRb55)
[](https://www.heraldtribune.com/story/news/2010/12/05/foundation-needs-help-to-share-holiday-cheer/28982305007/)### [Foundation needs help to share holiday cheer](https://www.heraldtribune.com/story/news/2010/12/05/foundation-needs-help-to-share-holiday-cheer/28982305007/)
[ Svg Vector Icons : http://www.onlinewebfonts.com/icon View Post ](https://www.heraldtribune.com/story/news/2010/12/05/foundation-needs-help-to-share-holiday-cheer/28982305007/)
[](https://www.heraldtribune.com/story/news/2008/12/10/nonprofit-needs-help-for-holidays/28680935007/)### [Nonprofit needs help for holidays](https://www.heraldtribune.com/story/news/2008/12/10/nonprofit-needs-help-for-holidays/28680935007/)
[ Svg Vector Icons : http://www.onlinewebfonts.com/icon View Post ](https://www.heraldtribune.com/story/news/2008/12/10/nonprofit-needs-help-for-holidays/28680935007/)
## Rod In Podcasts
[  ](https://www.eofire.com/podcast/rodkhleif/)
## [The Proven Strategies Everyone Should Know to Achieve Massive Success and Overcome Adversity with Rod Khleif](https://www.eofire.com/podcast/rodkhleif/)
[ Svg Vector Icons : http://www.onlinewebfonts.com/icon Listen Now ](https://www.eofire.com/podcast/rodkhleif/)
[  ](https://www.realwealthnetwork.com/learn/real-estate-empire-rod-khleifs-rags-riches-story/)
## [\[RWS #730\] Real Estate Empire: Rod Khleif’s Rags-to-Riches Story](https://www.realwealthnetwork.com/learn/real-estate-empire-rod-khleifs-rags-riches-story/)
[ Svg Vector Icons : http://www.onlinewebfonts.com/icon Listen Now ](https://www.realwealthnetwork.com/learn/real-estate-empire-rod-khleifs-rags-riches-story/)
[  ](https://www.oldcapitalpodcast.com/podcasts/episode-117-michael-explains-how-to-source-apartment-opportunities-with-rod-khleif)
## [Episode 117 - Michael explains how to SOURCE APARTMENT OPPORTUNITIES with Rod Khleif](https://www.oldcapitalpodcast.com/podcasts/episode-117-michael-explains-how-to-source-apartment-opportunities-with-rod-khleif)
[ Svg Vector Icons : http://www.onlinewebfonts.com/icon Listen Now ](https://www.oldcapitalpodcast.com/podcasts/episode-117-michael-explains-how-to-source-apartment-opportunities-with-rod-khleif)
[  ](https://www.passiverealestateinvesting.com/finding-the-drive-to-be-a-huge-success-in-real-estate/)
## [Finding The Drive To Be A Huge Success In Real Estate – Rod Khleif | PREI 053](https://www.passiverealestateinvesting.com/finding-the-drive-to-be-a-huge-success-in-real-estate/)
[ Svg Vector Icons : http://www.onlinewebfonts.com/icon Listen Now ](https://www.passiverealestateinvesting.com/finding-the-drive-to-be-a-huge-success-in-real-estate/)
[  ](https://www.kevinbupp.com/podcast/ep-145-the-step-by-step-formula-for-creating-a-winning-mindset-and-massive-fortunes-as-real-estate-investor-with-rod-khleif/)
## [Ep #145: The Step-by-Step Formula For Creating a Winning Mindset and Massive Fortunes as a Real Estate Investor – with Rod Khleif](https://www.kevinbupp.com/podcast/ep-145-the-step-by-step-formula-for-creating-a-winning-mindset-and-massive-fortunes-as-real-estate-investor-with-rod-khleif/)
[ Svg Vector Icons : http://www.onlinewebfonts.com/icon Listen Now ](https://www.kevinbupp.com/podcast/ep-145-the-step-by-step-formula-for-creating-a-winning-mindset-and-massive-fortunes-as-real-estate-investor-with-rod-khleif/)
[  ](https://podbay.fm/podcast/973748237/e/1464180503)
## [Deal Farm - A Real Estate Investing Community Deal Farm - A Real Estate Investing Community](https://podbay.fm/podcast/973748237/e/1464180503)
[ Svg Vector Icons : http://www.onlinewebfonts.com/icon Listen Now ](https://podbay.fm/podcast/973748237/e/1464180503)
[ show more ](#)
[  ](http://dwellynn.libsyn.com/ds80-double-rags-to-riches-story-from-50m-in-assets-to-0-and-then-back-again-rod-khleif)
## [DS80 | Double rags-to-riches story: From $50M in assets to $0 and then back again | Rod Khleif](http://dwellynn.libsyn.com/ds80-double-rags-to-riches-story-from-50m-in-assets-to-0-and-then-back-again-rod-khleif)
[ Svg Vector Icons : http://www.onlinewebfonts.com/icon Listen Now ](http://dwellynn.libsyn.com/ds80-double-rags-to-riches-story-from-50m-in-assets-to-0-and-then-back-again-rod-khleif)
[  ](https://www.stitcher.com/podcast/jacob-ayers/the-real-estate-way-to-wealth-and-freedom/e/53937528)
## [095: Top 10 Lessons Learned with Jacob Ayers](https://www.stitcher.com/podcast/jacob-ayers/the-real-estate-way-to-wealth-and-freedom/e/53937528)
[ Svg Vector Icons : http://www.onlinewebfonts.com/icon Listen Now ](https://www.stitcher.com/podcast/jacob-ayers/the-real-estate-way-to-wealth-and-freedom/e/53937528)
[  ](https://shows.acast.com/simplepassivecashflow/episodes/spc072-interview-with-rod-khleif)
## [SPC072 - Interview with Rod Khleif](https://shows.acast.com/simplepassivecashflow/episodes/spc072-interview-with-rod-khleif)
[ Svg Vector Icons : http://www.onlinewebfonts.com/icon Listen Now ](https://shows.acast.com/simplepassivecashflow/episodes/spc072-interview-with-rod-khleif)
[ show more ](#)
[  ](https://podtail.com/en/podcast/real-estate-investing-profits-master-series-with-c/episode-43-rod-khlief-lifetime-cashflow/)
## [Episode 43: Rod Khlief Lifetime Cashflow](https://podtail.com/en/podcast/real-estate-investing-profits-master-series-with-c/episode-43-rod-khlief-lifetime-cashflow/)
[ Svg Vector Icons : http://www.onlinewebfonts.com/icon Listen Now ](https://podtail.com/en/podcast/real-estate-investing-profits-master-series-with-c/episode-43-rod-khlief-lifetime-cashflow/)
## Published Articles & Book Features
[
](https://rodkhleif.com/value-add-opportunity-what-does-it-mean-and-should-i-consider-it/)### [ Value Add Opportunity in Real Estate: How to Maximize Profit ](https://rodkhleif.com/value-add-opportunity-what-does-it-mean-and-should-i-consider-it/)
If you have spent any time at all researching potential apartment investments within the last several years, I am certain that you have presented with a property in which the seller and/or agent have presented the deal as a great “value-add opportunity.”
[ View Post ⟶ ](https://rodkhleif.com/value-add-opportunity-what-does-it-mean-and-should-i-consider-it/)
## Interview Rod
- First Name\*
- Last name\*
- Email\*
- Phone
- Organization
- How can we help you?
- By providing your number, you consent to receive marketing call or texts
## About Rod
Rod Khleif is a passionate real estate investor who has personally owned and managed over 2000 properties. He also runs the most successful multifamily coaching program in the country with over 305,000 verified student owned units. As one of the country’s top real estate, business, and peak performance luminaries, Rod has also built over 29 businesses in his 40 year business career.
A compelling rags-to-riches-to-rags-to-riches story, Khleif soared from humble beginnings as a young, impoverished Dutch immigrant to incredible success. Rod’s experience involves both remarkable triumphs, and spectacular failures, which he affectionately calls “seminars.” Rod brings incredible authenticity and insight to his approach to business, success and life.
Rod loves training and coaching the “psychology of success” to aspiring real estate investors and entrepreneurs. He can train and coach on virtually any business or success related topic in great depth, contributing incredible first-hand, technical, and motivational knowledge and skills.
Rod Khleif has combined his passion for real estate investing with his personal philosophy of goal setting, envisioning, and manifesting success to become one of America’s top real estate investment and high performance life coaches.
As an accomplished entrepreneur and business owner, Rod has built several successful multi-million dollar businesses. But ask him what he is most proud of, and he will tell you about his work as a community philanthropist.
[  ](https://rodkhleif.com/wp-content/uploads/2020/01/rodkhlief-logo.png)
[  HI-RES DOWNLOAD
](https://rodkhleif.com/wp-content/uploads/2020/02/flatirons-43-685x1024-2.jpg) [  HI-RES DOWNLOAD
](https://rodkhleif.com/wp-content/uploads/2020/02/hero-1024x485-2.jpg) [  HI-RES DOWNLOAD
](https://rodkhleif.com/wp-content/uploads/2020/02/multifam_928_balt0064-1024x485-1.jpg) [  HI-RES DOWNLOAD
](https://rodkhleif.com/wp-content/uploads/2020/02/flatirons-6-685x1024-2.jpg)
## Protect Your Deals, Your
Team & Your Reputation.
Access Your Free Copy Of The MF Property Checklist Now And Gain The Guidelines To Securing Your Safest Most Profitable Real Estate Opportunities.
- Phone
This field is for validation purposes and should be left unchanged.
- First Name\*
- Email Address\*
- Phone
-
---
### [Tiffany Lowe Khleif Bio](https://rodkhleif.com/tiffany-lowe-khleif-bio/)
**Published:** June 5, 2025
**Author:** Alex Khleif
**Content:**
## Tiffany
Lowe-Khleif
## Investor, Lifestyle Thought Leader & Advocate for Women’s Empowerment
Tiffany is an entrepreneur, active real estate investor, and co-creator of one of the most successful multifamily mentorship programs in the country. With over a decade in the industry, she has taken multiple properties full cycle and helped thousands do the same through ventures like the Lifetime Cashflow Academy and the Warrior Coaching Program, where students have gone on to own over 305,000+ units nationwide. A passionate advocate for women’s financial independence, Tiffany is committed to educating and empowering aspiring investors to build lasting, generational wealth through multifamily real estate.
## Entrepreneur | Real Estate Investor | Empowerment Advocate
Tiffany’s professional journey is marked by her collaborative partnership with well known real estate mentor, Rod Khleif. Together, they have built a robust real estate portfolio and co-hosted educational events nationwide.
Beyond her business endeavors, Tiffany is deeply committed to community engagement and mentorship, aiming to uplift and support others on their path to success.
[ ](https://rodkhleif.com/wp-content/uploads/2025/05/DSC03713-scaled.jpg) [ ](https://rodkhleif.com/wp-content/uploads/2025/05/1665589862037-1.jpeg) [ ](https://rodkhleif.com/wp-content/uploads/2025/05/DSC09500-1-scaled.jpg) [ ](https://rodkhleif.com/wp-content/uploads/2025/05/37231542_2046617235651448_9003941088255279104_n.jpg) [ ](https://rodkhleif.com/wp-content/uploads/2025/05/1692204902034-1.jpeg) [ ](https://rodkhleif.com/wp-content/uploads/2025/05/Set-7-29-scaled.jpg) [ ](https://rodkhleif.com/wp-content/uploads/2025/05/Rod_Day0_1-10-scaled.jpg) [ ](https://rodkhleif.com/wp-content/uploads/2025/05/1681922881383.jpeg) [ ](https://rodkhleif.com/wp-content/uploads/2025/05/20200117-IMG_9854.jpg) [ ](https://rodkhleif.com/wp-content/uploads/2025/05/1674060421916.jpeg) [ ](https://rodkhleif.com/wp-content/uploads/2025/05/74615497_10157780495281873_683000886414278656_n.jpg) [ ](https://rodkhleif.com/wp-content/uploads/2025/05/43643511_2129809910665513_5197046853501190144_n.jpg)
## Notable Contributions & Involvement
- **[Co-Founder of the Warrior Program](#b)** – A world renowned multifamily real estate coaching program boasting over **305,000** **student owned units.**
- **[Helped Grow the Lifetime Cashflow Podcast](#b)** – Rod Khleif’s real estate investing podcast that has over **20 million downloads.**
- **[Featured Speaker and Thought Leader](#b)** – Large following online for lifestyle and investing tips as well as frequent participant and the Multifamily Bootcamp.
- [Long Time Business Partner to Rod Khleif](https://rodkhleif.com/?page_id=36338&elementor-preview=36338&ver=1744660436#b)– Helping to pioneer and scale multiple successful ventures.
> Tiffany is passionate about teaching people, especially women, that wealth isn’t just about numbers. It’s about freedom, power, and choice. She believes that when people understand money, they unlock the ability to live on their terms, build generational stability, and lead with purpose.
## The Woman Behind the Mission
Tiffany’s superpower is simple: **she sees people deeply.** Her quiet influence has helped shape countless success stories by guiding entrepreneurs not just to build wealth, but to do it with compassion, and passion.
As Rod Khleif’s wife and longtime partner, Tiffany continues to be a foundational part of the mission: helping others live a life not just of financial freedom, but of **spiritual wealth** as well.
## Join Rod and Tiffany’s Mission
👉 [Explore the Warrior Program](https://rodkhleif.com/work-with-rod/)
👉 [Attend the Next Multifamily Bootcamp](https://rodkhleif.com/bootcamp/)
👉 [Download Rod’s Free Guide to Multifamily Freedom](https://rodkhleif.com/lcfa-ebook/)
---
### [Rod Khleif Net Worth](https://rodkhleif.com/rod-khleif-net-worth/)
**Published:** June 6, 2025
**Author:** Alex Khleif
**Content:**
# Rod Khleif
Net Worth:
## What Drives His Wealth Today
### It's not just about a number..
### What you should know
## about the man behind 305,000+ student owned units
Rod has built an empire that includes one of the most respected multifamily coaching programs in the world with 305,000+ student owned units, his own significant real estate portfolio, a top ranked real estate podcast, and a #1 Best Selling book.
## Rod's Lifetime Cashflow Legacy
### ** Over 4 Decades of Active Investing**
Rod’s extensive real estate portfolio makes up the majority of his wealth. Spanning many markets across the U.S., Rod has been an active real estate investor for over 4 decades in various asset classes. He still actively invests to this day.
### ** 305,000+ Units Owned by Students**
Rod’s Warrior Coaching Program, is one of the most successful real estate investing coaching programs in the world.
### ** #1 Best-Selling Author**
His book *How to Create Lifetime Cashflow Through Multifamily Properties* is widely considered the quintessential guide in the multifamily investing industry.
### ** Top Multifamily Podcast**
The *Lifetime Cashflow Through Real Estate Investing Podcast* has over 20 million downloads and regularly features the most successful investors in the world.
### ** Nationally Recognized Speaker & Mentor**
Rod has spoken on stages across the U.S., in front of thousands, inspiring and training investors to master both their *mindset* and *multifamily investing*.
### ** Prolific Philanthropist**
For the last 25 years, Rod has fed over 150,000 at risk children for the holidays, provided tens of thousands of backpacks filled with school supplies to underprivileged kids, and donated thousands Teddy Bears to local police departments for officers to keep in their vehicles when they encounter a child in a traumatic situation. This is through his *Tiny Hands Foundation.*
## What Makes Up Rod's True Wealth
### **👨👩👧👦 Family First**
Rod’s proudest role is being a father. The legacy he’s building is one of values, love, and personal growth passed down to his children. Every deal, every win, and every challenge has been shaped by his commitment to providing for and guiding his family.
### **💛 The Tiny Hands Foundation**
Rod is the founder of the [**Tiny Hands Foundation**](https://tinyhandsfoundation.org/), a nonprofit that has fed over 150,000 children through the annual **[*Basket Brigade*](https://tinyhandsfoundation.org/basket-brigade/).** His mission: to give back to those who feel forgotten, especially children and single parents struggling during the holidays.
### ** Student Success Stories**
Rod measures success by how many people he helps achieve financial freedom. With over **30****0,000+ units owned by his students**, his greatest returns come from witnessing others create financial and time freedom for themselves and their families.
>>[Click to see student success stories. ](https://rodkhleif.com/warriorwins/)
## What Do Actual Students Say?
[  ](https://rodkhleif.com/jens-nielsen-bio/)
**“Being in Rod’s program helped me scale my rental portfolio … and quit my W2 job.”**
**Jens Nielsen**
*Retired W2, GP in 2,000+ Units*
[Click here to learn more about Jens.](https://rodkhleif.com/jens-nielsen-bio/)
[  ](https://rodkhleif.com/STEEVE-BRETON/)
**“I went from 16 units to 760 units in one year in the Warrior Program. Thanks for everything, Rod.”**
**Steeve Breton**
*Retired W2, GP in 3,000+ Units*
[Click here to learn more about Steeve.](https://rodkhleif.com/STEEVE-BRETON/)
[  ](https://rodkhleif.com/charlie-peters-bio/)
**“Amazing program. I couldn’t be happier with my decision to join Rod’s Warrior Program.”**
**Charlie Peters**
*Managing Partner, $187M Portfolio*
[Click here to learn more about Charlie.](https://rodkhleif.com/charlie-peters-bio/)
[ See more student success stories ](/warriorwins)
## Wealth Measured in Lives Changed
When people Google “Rod Khleif net worth,” they’re often looking for proof of success.
**But the real proof?**
Lives changed. Generational wealth built. Helping thousands work to achieve financial freedom.
## Ready to Learn More?
👉 [Explore Rod’s Coaching Program](https://rodkhleif.com/rod-khleif-warrior-program/)
👉 [Check Out the Lifetime Cashflow Podcast](https://rodkhleif.com/lifetime-cashflow-podcast/)
👉 [Download Rod’s Free Best-Selling Multifamily Investing Book](https://rodkhleif.com/lcfa-ebook/)
---
### [LCFA Ebook Free Download](https://rodkhleif.com/lcfa-ebook/)
**Published:** April 16, 2025
**Author:** Alex Khleif
**Content:**
[  ](https://rodkhleif.com)
## Rod Khleif's #1 Best Selling Book FREE
## How to Create Lifetime Cashflow Through Multifamily Properties
### **FREE EBOOK DOWNLOAD**
Whether you’re a beginner or an experienced investor ready to scale, this guide breaks down the multifamily investing process step-by-step so you can take action with confidence and build lifetime cashflow. This is the exact strategy Rod Khleif used to build a portfolio of thousands of units and help his students reach over 305,000 doors
**No fluff.** Just the full 250+ page eBook completely free.
[**WANT A HARD COPY? CLICK HERE AND JUST PAY SHIPPING.** ](https://www.lcfabook.com/core-book)
Name
Email
Telephone
Download the FREE eBook Now!
By providing your number, you consent to receive marketing calls or texts.
By clicking, you agree to our [Terms of Service and Privacy Policy. ](https://rodkhleif.com/terms-privacy/)
## What You’ll Learn Inside This Free eBook
✔︎ How to find the money for your deals (even if you’re starting from zero)
✔︎ Where to invest (and where not to) to maximize long term growth
✔︎ How to find and negotiate off-market apartment deals
✔︎ How to identify a truly great deal (and avoid the traps)
✔︎ The art of evaluating properties like a pro
✔︎ How to attract investors and syndicate your first (or next) apartment complex
✔︎ Scripts for sellers, brokers, lenders, and investors that open doors
✔︎ The most costly mistakes new investors make
✔︎ How to systemize your business and scale like the pros
✔︎ And much more inside this 250+ page guide
[ Download the FREE eBook now! ](#form)
Rod’s strategies have helped teach thousands how to create lifetime cashflow through real estate investing!
Now they’re yours FREE!
*How to Create Lifetime Cashflow Through Multifamily Properties* normally sells for $24.95 on [Amazon](https://www.amazon.com/Lifetime-Cashflow-Through-Multifamily-Properties/dp/0999225014), but today Rod’s offering the full **digital eBook version 100% free** as a way to pay it forward and help more people unlock the power of multifamily real estate!
[ Download ](#form)
“Rod arms you with tools that help you build long-term wealth—and grow as a person too.”
Ken McElroy
Rich Dad Advisor & Bestselling Author
## Download Now!
Instant access.
No fluff.
Just the full digital book that’s helped thousands of people take action and build wealth in Multifamily Real Estate.
Name
Email
Telephone
Download the FREE eBook Now!
Prefer a physical copy?
You can still get the hardcover version **PLUS** bonus training, checklists, and scripts Rod normally only shares with his coaching students.
[ Learn More ](https://www.lcfabook.com/core-book/)
- [ 2 DAY BOOTCAMP ](http://Multifamilybootcamp.com)
- [ WANT ME AS YOUR COACH? ](https://rodkhleif.com/strategy-call)
- © All Rights Reserved
- [ Terms of Service / Privacy Policy ](/terms-privacy%20)
- [ Disclaimers ](/disclaimers)
-
- © All Rights Reserved
- [ Terms of Service / Privacy Policy ](/terms-privacy%20)
- [ Disclaimers ](/disclaimers)
[  ](https://influex.com/?utm_source=rod-khleif&utm_medium=footer-link&utm_content=influexwp-client-site-footer-link&utm_campaign=influexwp-client-site)
---
### [Multifamily Investing Free Beginner Resources](https://rodkhleif.com/beginner-resources/)
**Published:** August 23, 2025
**Author:** Alex Khleif
**Content:**
# Beginner Resources
## Get started in Multifamily Investing the Right Way
Actionable Tools & Training from Investor, Mentor, Best-Selling Author and #1 Multifamily Podcaster, Rod Khleif
[ Wanna fast track?
Join the next multifamily bootcamp ](/bootcamp/)
## Top Actionable Starter Resources
*[Click here for a downloadable list of all beginner multifamily resources.](https://docs.google.com/spreadsheets/d/e/2PACX-1vQMRgGUiXmmnDXDE0W5IXrGJW4RmoUgRfNJpVM3EMZ22_3F_4tn0EWdqMuBahZm7ls3ECN_83g5S2au/pub?output=xlsx)*
## \#1 Beginner Resource for Multifamily Investing
#### **Download Rod Khleif’s Best-Selling Book — FREE!**
**“How to Create Lifetime Cash Flow Through Multifamily Properties”
This 200+ page guide is the ultimate beginner’s textbook for aspiring apartment investors. Rod explains each step of the process. He covers finding your first deal, raising capital, and growing quickly. His advice is based on proven strategies used by thousands of his successful students who know own **over 305,000 units.**
[**Click here to download the FREE eBook](https://rodkhleif.com/lcfa-ebook/?sl=begginer)
**Prefer a physical copy?👉 [Click here to get the paperback. Just pay shipping.](https://www.lcfabook.com/core-book/?sl=begginer)
## Free eBooks
[**29 Mistakes Most Apartment Buyers Make**](https://rodkhleif.com/29-mistakes/)
*Free eBook*
[**How to Find Off Market Multifamily Deals**](https://rodkhleif.com/how-find-off-market-deals-thank-you/)
*Free eBook*
[**Comprehensive Guide to Multifamily Due Diligence**](https://rodkhleif.com/a-comprehensive-guide-to-multifamily-due-diligence/)
*Free eBook*
[**Multifamily Property Toolbox**](https://rodkhleif.com/multifamily-property-toolbook/)
*Free eBook*
[**Guide to Multifamily Syndications**](https://rodkhleif.com/guide-to-multifamily-syndications/)
*Free eBook*
## Tools
 [**Deal Underwriting Calculator**](https://rodkhleif.com/deal-underwriting-tool/)
*Free Tool*
[**Cap Rate Calculator**](https://rodkhleif.com/cap-rate-calculator/)
*Free Tool*
**[List of All Beginner Multifamily Investing Resources](https://docs.google.com/spreadsheets/d/e/2PACX-1vQMRgGUiXmmnDXDE0W5IXrGJW4RmoUgRfNJpVM3EMZ22_3F_4tn0EWdqMuBahZm7ls3ECN_83g5S2au/pub?output=xlsx)**
*Spread Sheet*
[ Click Here to See All Deal Case Studies ](https://rodkhleif.com/warriorwins/)
## Articles & Guides
[  ](https://rodkhleif.com/buying-an-apartment-building-complete-guide/)
[**How to Buy an Apartment Building: The Complete Guide**](https://rodkhleif.com/buying-an-apartment-building-complete-guide/)
*Blog Article*
[  ](https://rodkhleif.com/why-you-should-invest-in-multifamily-by-rod-khleif/)
[**Why You Should Invest in Multifamily Real Estate**](https://rodkhleif.com/why-you-should-invest-in-multifamily-by-rod-khleif/)
[  ](https://rodkhleif.com/are-apartment-buildings-a-good-investment/)
[**Are Apartment Buildings A Good Investment in 2026?**](https://rodkhleif.com/are-apartment-buildings-a-good-investment/)
*Blog Article*
[  ](https://rodkhleif.com/fha-loans-multifamily-real-estate-investors/)
[**FHA Multifamily Loans**](https://rodkhleif.com/fha-loans-multifamily-real-estate-investors/)
*Guide*
[  ](https://rodkhleif.com/17-reasons-multifamily-investing-beats-single-family/)
[**17 Reasons Why Multifamily Beats Single Family**](https://rodkhleif.com/17-reasons-multifamily-investing-beats-single-family/)
*Blog Article*
[  ](https://rodkhleif.com/finding-analyzing-multifamily-deals-like-a-pro/)
[**Finding and Analyzing Multifamily Deals Like A Pro**](https://rodkhleif.com/finding-analyzing-multifamily-deals-like-a-pro/)
*Guide*
[  ](https://rodkhleif.com/what-is-apartment-building-syndication/)
[**What is Apartment Building Syndication**](https://rodkhleif.com/what-is-apartment-building-syndication/)
*Guide*
[  ](https://rodkhleif.com/the-10-biggest-mistakes-new-multifamily-investors-make/)
[**Top 10 Biggest Multifamily Investing Mistakes 2026**](https://rodkhleif.com/the-10-biggest-mistakes-new-multifamily-investors-make/)
*Guide*
## Youtube Videos
[**How to Start From Scratch in Multifamily Real Estate**](https://www.youtube.com/watch?v=0OsK1q8FUWI)
*Youtube Video*
[**Underwriting 101: How to Analyze Any Multifamily Deal Like A Pro**](https://www.youtube.com/watch?v=fh0PBy0569I)
*Youtube Video*
[**Cap Rates in Real Estate: Quick Explainer**](https://www.youtube.com/shorts/_l-dzMm0Ngw)
*Youtube Video*
[**What Type of Multifamily Should You Buy?**](https://youtu.be/npU28QWkuSE?si=58WDE06vYDssbuUL)
*Youtube Video*
[**Constructing a Successful Multifamily Team**](https://youtu.be/2FZsCWrVKOg?si=15mNLXruGwSopnma)
*Youtube Video*
[**47 Minutes of the BEST Multifamily Investing Lessons (Beginner Compilation)**](https://m.youtube.com/watch?v=MeivsQV5YdA)
*Youtube Video*
[**FULL Real Estate Capital Raising Course (3+ HOURS)**](https://www.youtube.com/watch?v=NuzmUY9AcIs)
*Youtube Video (Course)*
## Podcasts
[
](https://rodkhleif.com/podcasts/creative-financing-single-family-vs-multifamily-with-pace-morby-rod-khleif/)### [ Pace Morby Creative Financing ](https://rodkhleif.com/podcasts/creative-financing-single-family-vs-multifamily-with-pace-morby-rod-khleif/)
[ Watch or Listen » ](https://rodkhleif.com/podcasts/creative-financing-single-family-vs-multifamily-with-pace-morby-rod-khleif/)
[
](https://rodkhleif.com/podcasts/how-to-get-your-first-multifamily-deal-with-zero-experience/)### [ How To Get Your First Multifamily Deal With Zero Experience ](https://rodkhleif.com/podcasts/how-to-get-your-first-multifamily-deal-with-zero-experience/)
[ Watch or Listen » ](https://rodkhleif.com/podcasts/how-to-get-your-first-multifamily-deal-with-zero-experience/)
[
](https://rodkhleif.com/podcasts/multifamily-real-estate-financing-explained/)### [ Multifamily Real Estate Financing Explained ](https://rodkhleif.com/podcasts/multifamily-real-estate-financing-explained/)
[ Watch or Listen » ](https://rodkhleif.com/podcasts/multifamily-real-estate-financing-explained/)
[
](https://rodkhleif.com/podcasts/you-dont-have-to-know-everything-to-get-started/)### [ You Don’t Have To Know Everything To Get Started ](https://rodkhleif.com/podcasts/you-dont-have-to-know-everything-to-get-started/)
[ Watch or Listen » ](https://rodkhleif.com/podcasts/you-dont-have-to-know-everything-to-get-started/)
[
](https://rodkhleif.com/podcasts/starting-multifamily-from-nothing/)### [ Starting Multifamily From Nothing ](https://rodkhleif.com/podcasts/starting-multifamily-from-nothing/)
[ Watch or Listen » ](https://rodkhleif.com/podcasts/starting-multifamily-from-nothing/)
[
](https://rodkhleif.com/podcasts/successful-multifamily-tax-strategies/)### [ Successful Multifamily Tax Strategies ](https://rodkhleif.com/podcasts/successful-multifamily-tax-strategies/)
[ Watch or Listen » ](https://rodkhleif.com/podcasts/successful-multifamily-tax-strategies/)
## **Frequently Asked Questions (FAQ)**
### **❓ What’s the best place to start if I’m brand new to multifamily investing?**
Start by downloading Rod’s best-selling book [“How to Create Lifetime Cash Flow Through Multifamily Properties.”](https://rodkhleif.com/lcfa-ebook/) It’s free, beginner-friendly, and gives you a complete overview of the multifamily investing process from mindset to deal structure.
### **❓ Do I need money or experience to start investing?**
Not necessarily. Many of Rod’s students have closed their first multifamily deal with no prior experience or personal capital. Yes, obviously these assets require money, but it doesn’t have to be your personal money. Rod’s students are taught how to raise the money they need to execute on these deals. Several free guides and trainings on this page show you how to raise money, build a team, and partner with others ethically.
### **❓ Are these resources actually free?**
Yes! Every eBook, spreadsheet, and calculator is 100% free to download. You can also grab a free PDF of Rod’s #1 best-selling book or order a paperback copy by just covering shipping.
### **❓ How long does it take to close your first deal?**
It varies. Some students close a deal within 90 days of going all-in, while others take longer depending on time commitment and market. The free tools and case studies can help you shortcut the process. There is always risk in investing. Multifamily requires work and success is not guaranteed.
### **❓ What are the most popular tools for beginners?**
The most downloaded tools include:
- **Multifamily Property Toolbook
- **Guide to Multifamily Syndications**
- Warrior Deal Case Studies**
These help you analyze deals, understand key metrics, and spot red flags.
### **❓ Are these strategies relevant for 2026 and beyond?**
Absolutely. The tools and guides are updated regularly based on current market shifts, interest rates, and investor trends. Articles like [***“Are Apartment Buildings a Good Investment in 2026?”***](https://rodkhleif.com/are-apartment-buildings-a-good-investment/) address today’s landscape.
### **❓ Where can I hear from people who’ve actually done this?**
Check out the [**Case Studies**](/warrior-wins/) section. You’ll see real students with names, photos, and deal details with their insight on experiences, challenges and lessons.
### **❓ What’s the next step after these free resources?**
If you’re serious about fast tracking your results, [**Rod’s Multifamily Bootcamp**](/bootcamp) or the [**Warrior Mentorship Program**](/work-with-rod/) are the next levels. Depending on your goals, these are the two best ways to massively increase your success in multifamily investing.
## Want to Fast Track Your Learning?
[ Join the Next Multifamily Bootcamp ](/bootcamp/)
---
### [Warrior Wins](https://rodkhleif.com/warriorwins/)
**Published:** June 30, 2025
**Author:** PerryL
**Content:**
# Warrior Student Case Studies
Real Deals Closed by Rod Khleif’s Students
[  ](#deals)
[  ](#interviews)
[  ](#reviews)
*Last updated 06/25. Verified internal records.*
## Explore the Deals
From first-time multifamily buyers to seasoned pros scaling to thousands of units, see how these students used Rod’s coaching program to close deals.
## Inside These Case Studies, You’ll Discover:
- How Warriors found off market and undervalued properties
- How they raised capital and how much
- Creative financing strategies that got deals across the finish line
- Detailed breakdowns of deal size, structure, ROI, and lessons learned
- What went wrong and how they fixed it
- What ways they added value to increase rent
- The exact support they received from Rod’s team, community, and tools
[Click Here to Download *Rod Khleif Warrior Program Verified Student Deal Case Study Tracker*](https://docs.google.com/spreadsheets/d/e/2PACX-1vT1iAZas1vr8zNA9ze1lkioQVas1X9-6EFkhBFU2cXlpETxTXIyqqT0pA3WbpdE1ivltcaSkL6Jgq_R/pub?output=xlsx)
## **Click any image below to dive into the case study**
[ 
### David Morgia’s 186 Unit Multifamily Deal
](https://rodkhleif.com/warrior-wins-david-morgia-2/) [ 
### David Morgia’s 64 Unit Deal in NC
](https://rodkhleif.com/warrior-wins-david-morgia/) [ 
### Eric Upchurch
80 Unit Close in Indiana
](https://rodkhleif.com/warrior-wins/) [ 
### Tim Davis Closes $7.6M Multifamily Deal with Warrior Program
](https://rodkhleif.com/warrior-wins-tim-davis-2/) [ 
### Tim Davis’ Multifamily Deal: How He Made It Happen
](https://rodkhleif.com/warrior-wins-tim-davis/) [ 
### Warrior Win:
Aaron Novotney
53 Unit in OH
](https://rodkhleif.com/warrior-win-aaron-novotney-53-unit-in-oh/) [ 
### Warrior Win:
Alejandro Chardon
Land Development Project in AZ
](https://rodkhleif.com/warrior-win-alejandro-chardon-land-development-project-az/) [ 
### Warrior Win:
Chris Freeman
130 Unit in NC
](https://rodkhleif.com/warrior-wins-chris-freeman/) [ 
### Warrior Win:
Crystal & Chris D’Agostino
36 Unit in TX
](https://rodkhleif.com/warrior-win-crystal-chris-dagostino-36-unit-in-tx/) [ 
### Warrior Win:
Danny Sallis
57 Units
](https://rodkhleif.com/warrior-wins-danny-sallis-2/) [ 
### Warrior Win:
Jay & Tana Boersma
124 Unit in OK
](https://rodkhleif.com/warrior-win-jay-tana-boersma-124-unit-ok/) [ 
### Warrior Win:
Jesse Jenifer
44 Unit in Florida
](https://rodkhleif.com/warrior-win-jesse-jenifer-44-unit-fl/) [ 
### Warrior Win:
Larry Carroll
133 Unit in TX
](https://rodkhleif.com/warrior-win-larry-carroll-133-unit-tx/) [ 
### Warrior Win:
Patrick Hayter
51 Unit in NY
](https://rodkhleif.com/warrior-win-patrick-hayter-51-unit-ny/) [ 
### Warrior Win:
Roberto Carabetta
58 Unit in GA
](https://rodkhleif.com/warrior-win-roberto-carabetta-58-unit-ga/) [ 
### Warrior Win:
Ronald and Mary Jane Lou
204 Units in TX
](https://rodkhleif.com/warrior-win-ronal-and-mary-jane-lou-204-units-tx/) [ 
### Warrior Win:
Victor Collazo
92 Units in KS
](https://rodkhleif.com/warrior-win-victor-collazo-92-unit-ks/) [ 
### Warrior Win: Brian Kochendorfer’s 100 Unit Acquisition
](https://rodkhleif.com/warrior-wins-brian-kochendorfer-3/) [ 
### Warrior Win: Brian Kochendorfer’s 45 Unit Deal
](https://rodkhleif.com/warrior-wins-brian-kochendorfer-2/) [ 
### Warrior Win: Charlie Peters’ 6 Unit Denver Deal
](https://rodkhleif.com/warrior-wins-charlie-peters-2/) [ 
### Warrior Win: Charlie Peters’ 72 Unit Investment
](https://rodkhleif.com/warrior-wins-charlie-peters-3/) [ 
### Warrior Win: Charlie Peters’ 88 Unit Acquisition
](https://rodkhleif.com/warrior-wins-charlie-peters/) [ 
### Warrior Win: Chris Moyer Grows to 76 Units
](https://rodkhleif.com/warrior-wins-chris-moyer-4/) [ 
### Warrior Win: Chris Moyer’s 34 Unit Creekside Townhomes
](https://rodkhleif.com/warrior-wins-chris-moyer/) [ 
### Warrior Win: Chris Moyer’s 60 Bowling Lanes in Wichita
](https://rodkhleif.com/warrior-wins-chris-moyer-2/) [ 
### Warrior Win: Danny Sallis 12 Units Acquisition
](https://rodkhleif.com/warrior-wins-danny-sallis/) [ 
### Warrior Win: Drew Doran 12 Unit Acquisition
](https://rodkhleif.com/warrior-wins-drew-doran-2/) [ 
### Warrior Win: Drew Doran 174 Unit Acquisition
](https://rodkhleif.com/warrior-wins-drew-doran/) [ 
### Warrior Win: Edward Lowell 13 Unit Acquisition
](https://rodkhleif.com/warrior-wins-edward-lowell/) [ 
### Warrior Win: Edward Lowell 16 Unit Acquisition
](https://rodkhleif.com/warrior-wins-edward-lowell-3/) [ 
### Warrior Win: Joel Bolomboy 59 Unit Acquisition
](https://rodkhleif.com/warrior-wins-joel-bolomby/) [ 
### Warrior Win: Karl Schlobohm 24 Unit Storage Acquisition
](https://rodkhleif.com/warrior-wins-karl-schlobohm/) [ 
### Warrior Win: Karl Schlobohm’s 27 Unit Acquisition
](https://rodkhleif.com/warrior-wins-karl-schlobohm-2/) [ 
### Warrior Win: Levi Weber 57 Units
](https://rodkhleif.com/warrior-wins-levi-weber-2/) [ 
### Warrior Win: Levi Weber’s 13 Unit Denver Acquisition
](https://rodkhleif.com/warrior-wins-levi-weber/) [ 
### Warrior Win: The Valentino’s 236 Units
](https://rodkhleif.com/warrior-wins-chris-corinne-valentino/) [ 
### Warrior Wins – Adam Beckstedt
](https://rodkhleif.com/warrior-wins-adam-beckstedt/) [ 
### Warrior Wins – AJ Simeone
](https://rodkhleif.com/warrior-wins-aj-simeone/) [ 
### Warrior Wins – Albert Sidhom
](https://rodkhleif.com/warrior-wins-albert-sidhom/) [ 
### Warrior Wins – Alekhya Mukherji
](https://rodkhleif.com/warrior-wins-alekhya-mukherji/) [ 
### Warrior Wins – Alex Love Li
](https://rodkhleif.com/warrior-wins-alex-love-li/) [ 
### Warrior Wins – Alex Zahn
](https://rodkhleif.com/warrior-wins-alex-zahn/) [ 
### Warrior Wins – Amar Nagireddy
](https://rodkhleif.com/warrior-wins-amar-nagireddy/) [ 
### Warrior Wins – Anchal Dwivedi
](https://rodkhleif.com/warrior-wins-anchal-dwivedi/) [ 
### Warrior Wins – Andrew Dressel
](https://rodkhleif.com/warrior-wins-andrew-dressel/) [ 
### Warrior Wins – Andrew Duclos
](https://rodkhleif.com/warrior-wins-andrew-duclos/) [ 
### Warrior Wins – Anthony & Candace Coffey
](https://rodkhleif.com/warrior-wins-anthony-candace-coffey/) [ 
### Warrior Wins – Atif Gul
](https://rodkhleif.com/warrior-wins-atif-gul/) [ 
### Warrior Wins – Baran Menguloglu
](https://rodkhleif.com/warrior-wins-baran-menguloglu/) [ 
### Warrior Wins – Barry Coppedge
](https://rodkhleif.com/warrior-wins-barry-coppedge/) [ 
### Warrior Wins – Benedict Joanis
](https://rodkhleif.com/warrior-wins-benedict-joanis/) [ 
### Warrior Wins – Benjamin Cedarland
](https://rodkhleif.com/warrior-wins-benjamin-cedarland/) [ 
### Warrior Wins – Bethany Smith
](https://rodkhleif.com/warrior-wins-bethany-smith/) [ 
### Warrior Wins – Bharat Kona
](https://rodkhleif.com/warrior-wins-bharat-kona/) [ 
### Warrior Wins – Bobby & Desiree D’Alessio
](https://rodkhleif.com/warrior-wins-bobby-desiree-dalessio/) [ 
### Warrior Wins – Bonnie Schwam
](https://rodkhleif.com/warrior-wins-bonnie-schwam/) [ 
### Warrior Wins – Brandon Hicks
](https://rodkhleif.com/warrior-wins-brandon-hicks/) [ 
### Warrior Wins – Brent Bardales
](https://rodkhleif.com/warrior-wins-brent-bardales/) [ 
### Warrior Wins – Brian Corr and Jay Boersma
](https://rodkhleif.com/warrior-wins-brian-corr-and-jay-boersma/) [ 
### Warrior Wins – Brian Fay
](https://rodkhleif.com/warrior-wins-brian-fay/) [ 
### Warrior Wins – Brian Kochendorfer
](https://rodkhleif.com/warrior-wins-brian-kochendorfer/) [ 
### Warrior Wins – Bridget Smith-Osbourne
](https://rodkhleif.com/warrior-wins-bridget-smith-osbourne/) [ 
### Warrior Wins – Cain McNeil
](https://rodkhleif.com/warrior-wins-cain-mcneil/) [ 
### Warrior Wins – Candice Crawford
](https://rodkhleif.com/warrior-wins-candice-crawford/) [ 
### Warrior Wins – Carolina Botero
](https://rodkhleif.com/warrior-wins-carolina-botero/) [ 
### Warrior Wins – Carrie Zatelli
](https://rodkhleif.com/warrior-wins-carrie-zatelli/) [ 
### Warrior Wins – Chase Craig
](https://rodkhleif.com/warrior-wins-chase-craig/) [ 
### Warrior Wins – Chris Hernandez
](https://rodkhleif.com/warrior-wins-chris-hernandez/) [ 
### Warrior Wins – Chris Miller
](https://rodkhleif.com/warrior-wins-chris-miller/) [
### Warrior Wins – Chris Moyer – 12 Units
](https://rodkhleif.com/warrior-wins-chris-moyer-5/) [ 
### Warrior Wins – Chris Moyer Secures Another Deal
](https://rodkhleif.com/warrior-wins-chris-moyer-3/) [ 
### Warrior Wins – Christian Onalfo
](https://rodkhleif.com/warrior-wins-christian-onalfo/) [ 
### Warrior Wins – Cindy and Damion Gaynor-Harper
](https://rodkhleif.com/warrior-wins-cindy-and-damion-gaynor-harper/) [ 
### Warrior Wins – Cody Wiseman
](https://rodkhleif.com/warrior-wins-cody-wiseman/) [ 
### Warrior Wins – Colby Bowers
](https://rodkhleif.com/warrior-wins-colby-bowers/) [ 
### Warrior Wins – Daniel Campana
](https://rodkhleif.com/warrior-wins-adam-daniel-campana/) [ 
### Warrior Wins – Daniel Charles
](https://rodkhleif.com/warrior-wins-daniel-charles/) [ 
### Warrior Wins – Daniel Velez
](https://rodkhleif.com/warrior-wins-daniel-velez/) [ 
### Warrior Wins – Dave Snehal
](https://rodkhleif.com/warrior-wins-dave-snehal/) [ 
### Warrior Wins – David Iglewicz
](https://rodkhleif.com/warrior-wins-david-iglewicz/) [ 
### Warrior Wins – David Turner
](https://rodkhleif.com/warrior-wins-david-turner/) [ 
### Warrior Wins – Diana Ji
](https://rodkhleif.com/warrior-wins-diana-ji/) [ 
### Warrior Wins – Dinesh Nayak
](https://rodkhleif.com/warrior-wins-dinesh-nayak/) [ 
### Warrior Wins – Doris Ng
](https://rodkhleif.com/warrior-wins-doris-ng/) [ 
### Warrior Wins – Duy Nguyen
](https://rodkhleif.com/warrior-wins-duy-nguyen/) [ 
### Warrior Wins – Ed Modzel
](https://rodkhleif.com/warrior-wins-ed-modzel/) [ 
### Warrior Wins – Edward Lowell – #2
](https://rodkhleif.com/warrior-wins-edward-lowell-2/) [ 
### Warrior Wins – Edward Lowell – #4
](https://rodkhleif.com/warrior-wins-edward-lowell-4/) [ 
### Warrior Wins – Enrique Ortega
](https://rodkhleif.com/warrior-wins-enrique-ortega/) [ 
### Warrior Wins – Eric and Lisa Doud
](https://rodkhleif.com/warrior-wins-eric-and-lisa-doud/) [ 
### Warrior Wins – Eric Lindsey
](https://rodkhleif.com/warrior-wins-eric-lindsey/) [ 
### Warrior Wins – Eric Williams
](https://rodkhleif.com/warrior-wins-eric-williams/) [ 
### Warrior Wins – Eyal Ohana
](https://rodkhleif.com/warrior-wins-eyal-ohana/) [ 
### Warrior Wins – Francesco Orselli
](https://rodkhleif.com/warrior-wins-francesco-orselli/) [ 
### Warrior Wins – Frank Lettiere
](https://rodkhleif.com/warrior-wins-frank-lettiere/) [ 
### Warrior Wins – Frank Patalano
](https://rodkhleif.com/warrior-wins-frank-patalano/) [ 
### Warrior Wins – Franklin Gonzalez
](https://rodkhleif.com/warrior-wins-franklin-gonzalez/) [ 
### Warrior Wins – George & Elizabeth Tavares
](https://rodkhleif.com/warrior-wins-george-elizabeth-tavares/) [ 
### Warrior Wins – George Rodrique
](https://rodkhleif.com/warrior-wins-george-rodrique/) [ 
### Warrior Wins – Georgy Marrero
](https://rodkhleif.com/warrior-wins-georgy-marrero/) [ 
### Warrior Wins – Grace Gonzalez
](https://rodkhleif.com/warrior-wins-grace-gonzalez/) [ 
### Warrior Wins – Greg Chew
](https://rodkhleif.com/warrior-wins-greg-chew/) [ 
### Warrior Wins – Hector Arteaga and Michelle Eggleton
](https://rodkhleif.com/warrior-wins-hector-arteaga-and-michelle-eggleton/) [ 
### Warrior Wins – Hector Hernandez
](https://rodkhleif.com/warrior-wins-hector-hernandez/) [ 
### Warrior Wins – Hemant Pawar
](https://rodkhleif.com/warrior-wins-hemant-pawar/) [ 
### Warrior Wins – Hilary Graves
](https://rodkhleif.com/warrior-wins-hilary-graves/) [ 
### Warrior Wins – Ian Schmidt
](https://rodkhleif.com/warrior-wins-ian-schmidt/) [ 
### Warrior Wins – James Hughes
](https://rodkhleif.com/warrior-wins-james-hughes/) [ 
### Warrior Wins – Jason Markowicz
](https://rodkhleif.com/warrior-wins-jason-markowicz/) [ 
### Warrior Wins – Jason Martins
](https://rodkhleif.com/warrior-wins-jason-martins/) [ 
### Warrior Wins – Javier and Yessenia Gonzalez
](https://rodkhleif.com/warrior-wins-javier-and-yessenia-gonzalez/) [ 
### Warrior Wins – Jefferson Gan
](https://rodkhleif.com/warrior-wins-jefferson-gan/) [ 
### Warrior Wins – Jeffrey Pitzer
](https://rodkhleif.com/warrior-wins-jeffrey-pitzer/) [ 
### Warrior Wins – Jens Nielson
](https://rodkhleif.com/warrior-wins-jens-nielson/) [ 
### Warrior Wins – Jermaine Xavier
](https://rodkhleif.com/warrior-wins-jermaine-xavier/) [ 
### Warrior Wins – Joe and Lisa Ebanks
](https://rodkhleif.com/warrior-wins-joe-and-lisa-ebanks/) [ 
### Warrior Wins – Joe Weldon
](https://rodkhleif.com/warrior-wins-joe-weldon/) [ 
### Warrior Wins – Joel Bolomboy – #2
](https://rodkhleif.com/warrior-wins-joel-bolomboy-2/) [ 
### Warrior Wins – John letters
](https://rodkhleif.com/warrior-wins-john-letters/) [ 
### Warrior Wins – Jon Potts
](https://rodkhleif.com/warrior-wins-jon-potts/) [ 
### Warrior Wins – Jon Sidoti
](https://rodkhleif.com/warrior-wins-jon-sidoti/) [ 
### Warrior Wins – Jonas Gustafsson
](https://rodkhleif.com/warrior-wins-jonas-gustafsson/) [ 
### Warrior Wins – Jonathan Long
](https://rodkhleif.com/warrior-wins-jonathan-long/) [ 
### Warrior Wins – Jonathan Russell
](https://rodkhleif.com/warrior-wins-jonathan-russell/) [ 
### Warrior Wins – Jonathan Wells
](https://rodkhleif.com/warrior-wins-jonathan-wells/) [ 
### Warrior Wins – Jordan Hinz
](https://rodkhleif.com/warrior-wins-jordan-hinz/) [ 
### Warrior Wins – Jordan Hollis
](https://rodkhleif.com/warrior-wins-jordan-hollis/) [ 
### Warrior Wins – Jorjio Hopkins
](https://rodkhleif.com/warrior-wins-jorjio-hopkins/) [ 
### Warrior Wins – Josh Norell
](https://rodkhleif.com/warrior-wins-josh-norell/) [ 
### Warrior Wins – Josh Whitinger
](https://rodkhleif.com/warrior-wins-josh-whitinger/) [ 
### Warrior Wins – Juan Cruz
](https://rodkhleif.com/warrior-wins-juan-cruz/) [ 
### Warrior Wins – Kanwaljit Dhunna
](https://rodkhleif.com/warrior-wins-kanwaljit-dhunna/) [ 
### Warrior Wins – Kevin Easterly
](https://rodkhleif.com/warrior-wins-kevin-easterly/) [ 
### Warrior Wins – Larry Murray
](https://rodkhleif.com/warrior-wins-larry-murray/) [ 
### Warrior Wins – Lee Fjord
](https://rodkhleif.com/warrior-wins-lee-fjord/) [ 
### Warrior Wins – Lizzy Neutz
](https://rodkhleif.com/warrior-wins-lizzy-neutz/) [ 
### Warrior Wins – Loren Jacobs
](https://rodkhleif.com/warrior-wins-loren-jacobs/) [ 
### Warrior Wins – Mark Blass
](https://rodkhleif.com/warrior-wins-mark-blass/) [ 
### Warrior Wins – Marquice T. D. Hobbs
](https://rodkhleif.com/warrior-wins-marquice-t-d-hobbs/) [ 
### Warrior Wins – Marvin McGuire
](https://rodkhleif.com/warrior-wins-marvin-mcguire/) [ 
### Warrior Wins – Marvin Micthell
](https://rodkhleif.com/warrior-wins-marvin-micthell/) [ 
### Warrior Wins – Matt Iverson
](https://rodkhleif.com/warrior-wins-matt-iverson/) [ 
### Warrior Wins – Matt Martin
](https://rodkhleif.com/warrior-wins-matt-martin/) [ 
### Warrior Wins – Matt Spangenberg
](https://rodkhleif.com/warrior-wins-matt-spangenberg/) [ 
### Warrior Wins – Max Moala
](https://rodkhleif.com/warrior-wins-max-moala/) [ 
### Warrior Wins – Max Shah
](https://rodkhleif.com/warrior-wins-max-shah/) [ 
### Warrior Wins – Michael and Regina Lucero
](https://rodkhleif.com/warrior-wins-michael-and-regina-lucera/) [ 
### Warrior Wins – Michael Bailey
](https://rodkhleif.com/warrior-wins-michael-bailey/) [ 
### Warrior Wins – Michael Davidov
](https://rodkhleif.com/warrior-wins-michael-davidov/) [ 
### Warrior Wins – Michael Lewis
](https://rodkhleif.com/warrior-wins-michael-lewis/) [ 
### Warrior Wins – Michael Mannino II
](https://rodkhleif.com/warrior-wins-michael-mannino-ii/) [ 
### Warrior Wins – Mickey Braithwaite
](https://rodkhleif.com/warrior-wins-mickey-braithwaite/) [ 
### Warrior Wins – Monica Duhart
](https://rodkhleif.com/warrior-wins-monica-duhart/) [ 
### Warrior Wins – Natasha Jameson-Randolph
](https://rodkhleif.com/warrior-wins-natasha-jameson-randolph/) [ 
### Warrior Wins – Nathaniel and Valerie Kolwyck
](https://rodkhleif.com/warrior-wins-nathaniel-and-valerie-kolwyck/) [ 
### Warrior Wins – Neil Coffee
](https://rodkhleif.com/warrior-wins-neil-coffee/) [ 
### Warrior Wins – Oliver Fernandez
](https://rodkhleif.com/warrior-wins-oliver-fernandez/) [ 
### Warrior Wins – Parag Dave
](https://rodkhleif.com/warrior-wins-parag-dave/) [ 
### Warrior Wins – Paul Hassebroek
](https://rodkhleif.com/warrior-wins-paul-hassebroek/) [ 
### Warrior Wins – Phil Klima
](https://rodkhleif.com/warrior-wins-phil-klima/) [ 
### Warrior Wins – Powell Chee
](https://rodkhleif.com/warrior-wins-powell-chee/) [ 
### Warrior Wins – Rasool Mutawakkil
](https://rodkhleif.com/warrior-wins-rasool-mutawakkil/) [ 
### Warrior Wins – Ray Hightower
](https://rodkhleif.com/warrior-wins-ray-hightower/) [ 
### Warrior Wins – Rob Nickester
](https://rodkhleif.com/warrior-wins-rob-nickester/) [ 
### Warrior Wins – Robert Shedden
](https://rodkhleif.com/warrior-wins-robert-shedden/) [ 
### Warrior Wins – Rodrigo Valdez Jr
](https://rodkhleif.com/warrior-wins-rodrigo-valdez-jr/) [ 
### Warrior Wins – Ryan Dworak
](https://rodkhleif.com/warrior-wins-ryan-dworak/) [ 
### Warrior Wins – Scott Jacobson
](https://rodkhleif.com/warrior-wins-scott-jacobson/) [ 
### Warrior Wins – Sean Cullen
](https://rodkhleif.com/warrior-wins-sean-cullen/) [ 
### Warrior Wins – Shawn Ricehouse
](https://rodkhleif.com/warrior-wins-shawn-ricehouse/) [ 
### Warrior Wins – Sing Joey Chan
](https://rodkhleif.com/warrior-wins-sing-joey-chan/) [ 
### Warrior Wins – Steeve Breton
](https://rodkhleif.com/warrior-wins-steeve-breton/) [ 
### Warrior Wins – Steve Ronan
](https://rodkhleif.com/warrior-wins-steve-ronan/) [ 
### Warrior Wins – Steven Wright
](https://rodkhleif.com/warrior-wins-steven-wright/) [ 
### Warrior Wins – Sumanth Banda
](https://rodkhleif.com/warrior-wins-sumanth-banda/) [ 
### Warrior Wins – Tarek Ahmed Eid and Roushel Eid
](https://rodkhleif.com/warrior-wins-tarek-ahmed-eid-and-roushel-eid/) [ 
### Warrior Wins – Tien Truong
](https://rodkhleif.com/warrior-wins-tien-truong/) [ 
### Warrior Wins – Tim Fergestad
](https://rodkhleif.com/warrior-wins-tim-fergestad/) [ 
### Warrior Wins – Tim Severson
](https://rodkhleif.com/warrior-wins-tim-severson/) [ 
### Warrior Wins – Tom Mix Martini Petreca
](https://rodkhleif.com/warrior-wins-tom-mix-martini-petreca/) [ 
### Warrior Wins – Tomas and Nilsa Valenzuela
](https://rodkhleif.com/warrior-wins-tomas-and-nilsa-valenzuela/) [ 
### Warrior Wins – Travis
](https://rodkhleif.com/warrior-wins-travis/) [ 
### Warrior Wins – Trevor and Shannon Sherman
](https://rodkhleif.com/warrior-wins-trevor-and-shannon-sherman/) [ 
### Warrior Wins – Trey Powell
](https://rodkhleif.com/warrior-wins-trey-powell/) [ 
### Warrior Wins – Trina Piceno
](https://rodkhleif.com/warrior-wins-trina-piceno/) [ 
### Warrior Wins – Troy Trecroce
](https://rodkhleif.com/warrior-wins-troy-trecroce/) [ 
### Warrior Wins – Tyson Burtenshaw
](https://rodkhleif.com/warrior-wins-tyson-burtenshaw/) [ 
### Warrior Wins – William Edwards
](https://rodkhleif.com/warrior-wins-william-edwards/) [ 
### Warrior Wins – William Yoder
](https://rodkhleif.com/warrior-wins-william-yoder/) [ 
### Warrior Wins – Yi Xu
](https://rodkhleif.com/warrior-wins-yi-xu/) [ 
### Warrior Wins -Mandy McAllister
](https://rodkhleif.com/warrior-wins-mandy-mcallister/) [ 
### Warrior Wins | Chat Sarmiento-Steinwald | 101 Units
](https://rodkhleif.com/warrior-wins-chat-sarmiento-steinwwald/) [ 
### Warrior Wins | Shawn Ricehouse: 120 Units
](https://rodkhleif.com/warrior-wins-shawn-ricehouse-3/) [ 
### Warrior Wins | Shawn Ricehouse: 63 Units in Dallas
](https://rodkhleif.com/warrior-wins-shawn-ricehouse-2/) [ 
### Warrior Wins: Chris & Chelsey Grant 24 Units
](https://rodkhleif.com/warrior-wins-chris-chelsey-grant/)
## Frequently Asked Questions:
How many deals have Warrior Program students closed?
The case studies on this page document 343+ verified deals closed by students of Rod Khleif’s Warrior Mentorship Program, representing over 20,000 units and more than $1.8 Billion in total deal volume. This is just a small sample; the broader Warrior community has collectively acquired over 305,000 units across the United States.
What types of deals do Warrior students close?
Warriors close a wide range of deal types. Of the documented deals on this page, 136 are syndications, 60 are joint ventures, and the remainder are direct acquisitions or creative structures like seller financing and ground-up development. Deal sizes range from small 5-unit multifamily properties to 400+ unit apartment complexes worth over $40 million. Approximately 87% of deals use a value-add strategy. This means students improve properties through renovations, operational changes, or rent repositioning to raise value.
Are these verified, real deals?
Yes. Every deal on this page was submitted directly by the student who closed it through a structured intake form. Each submission includes the property name and location, purchase price, unit count, financing structure, projected returns, value-add plan, lessons learned, and the student’s own commentary about their experience. These are real closings by real people, not projections, hypothetical scenarios, or cherry-picked examples. Many students have closed multiple deals and appear more than once.
What results do students typically achieve?
Individual results vary significantly based on each student’s experience level, available capital, market conditions, time commitment, and deal quality. Among the documented deals, cash-on-cash returns are typically projected between 6% and 15%, with internal rates of return ranging from 12% to 25%+. Some students close their first deal within months of joining while others take longer to find the right opportunity. The case studies below include full deal economics so you can see the real numbers behind each closing.
Are Rod Khleif's programs worth the investment?
The students featured on this page have collectively closed over $1.8 billion in real estate transactions through deals they found, structured, and financed with the support of the Warrior community. Many students specifically credit the mentorship, coaching, deal review process, and peer network as the factors that gave them the confidence and knowledge to take action. That said, results depend on the individual. The program is designed for people who are serious about building a multifamily portfolio and willing to put in the work. Read the student quotes in each case study to hear directly from people who have been through it.
How does the Warrior Program help students close deals?
The Warrior Program provides hands-on mentorship that goes beyond education. Students get one-on-one coaching, live deal review and underwriting support, access to a community of active investors for joint ventures and capital raising, accountability groups, and direct connections with brokers, lenders, and other professionals. Many of the deals on this page were found through Warrior-to-Warrior partnerships. Students bringing each other into deals, co-investing, and raising capital together. The community element is often cited as the most valuable part of the program.
What makes Rod Khleif's mentorship different from other programs?
Rod’s approach combines tactical multifamily skills, including underwriting, deal sourcing, capital raising, asset management with a heavy emphasis on mindset, personal development, and purpose-driven investing. The Warrior community includes students at every level from first-time investors to operators with thousands of units, and the culture is built around collaboration rather than competition. Rod also integrates philanthropy through the Tiny Hands Foundation, reinforcing the idea that wealth creation and giving back go hand in hand. The deal case studies below show the diversity of backgrounds, deal types, and markets represented in the community.
Can beginners with no experience close deals through this program?
Yes. Many of the students featured on this page closed their first-ever real estate deal through the Warrior Program. You’ll see entries where students specifically say they had zero multifamily experience before joining and acquired dozens or even hundreds of units within their first year. The program is structured to take someone from foundational knowledge through deal execution, and the community provides a built-in network of potential partners, mentors, and co-investors who can help newer members get their first deal across the finish line. Several students note that partnering with more experienced Warriors on their first deal was the key that made it possible.
## Watch Or Listen
## Warrior Student Interviews
The Multifamily Rockstars features interviews with Warrior Program students who have found great success in multifamily investing. Hear what worked, what didn’t, and what they learned on their journey.
[
](https://rodkhleif.com/podcasts/creative-multifamily-financing-harvey-lockhart/)### [ How a Music Teacher Landed a $3.5M Apartment Deal ](https://rodkhleif.com/podcasts/creative-multifamily-financing-harvey-lockhart/)
July 31, 2026
[ See full case study » ](https://rodkhleif.com/podcasts/creative-multifamily-financing-harvey-lockhart/)
[
](https://rodkhleif.com/podcasts/multifamily-asset-management-jay-tana-boersma/)### [ They Raised Rents Without Renovating a Single Unit ](https://rodkhleif.com/podcasts/multifamily-asset-management-jay-tana-boersma/)
July 24, 2026
[ See full case study » ](https://rodkhleif.com/podcasts/multifamily-asset-management-jay-tana-boersma/)
[
](https://rodkhleif.com/podcasts/distressed-senior-housing-investing-ali-choucri/)### [ Why Smart Investors Are Leaving Multifamily for Senior Housing ](https://rodkhleif.com/podcasts/distressed-senior-housing-investing-ali-choucri/)
July 17, 2026
[ See full case study » ](https://rodkhleif.com/podcasts/distressed-senior-housing-investing-ali-choucri/)
[
](https://rodkhleif.com/podcasts/multifamily-capital-raising-with-erin-frigo/)### [ The Beginner’s Blueprint to Landing a 148 Unit Deal ](https://rodkhleif.com/podcasts/multifamily-capital-raising-with-erin-frigo/)
July 10, 2026
[ See full case study » ](https://rodkhleif.com/podcasts/multifamily-capital-raising-with-erin-frigo/)
Page1[Page2](https://rodkhleif.com/warriorwins/?e-page-494767b=2&doing_wp_cron=1786304290.3479468822479248046875)[Page3](https://rodkhleif.com/warriorwins/?e-page-494767b=3&doing_wp_cron=1786304290.3479468822479248046875)…[Page50](https://rodkhleif.com/warriorwins/?e-page-494767b=50&doing_wp_cron=1786304290.3479468822479248046875)
## Warrior Program Testimonials
## The first step is applying to see if you are a fit.
- Comments
This field is for validation purposes and should be left unchanged.
- First Name\*
- Last name\*
- Email Address\*
- Phone Number\*
- Message frequency will vary. Message and data rates may apply. Reply STOP to opt out.
-
[Privacy Policy](https://rodkhleif.com/privacy-policy-terms-of-use/) | [Terms Of Service](https://rodkhleif.com/privacy-policy-terms-of-use/)
## Ready to Take the First Step?
## Book a Call With Our Team
---
### [Warrior Community Dashboard](https://rodkhleif.com/warrior-community-dashboard/)
**Published:** February 24, 2026
**Author:** Alex Khleif
**Content:**
# Warrior Community Dashboard
Real deals. Real units.
Real investors changing their lives inside Rod’s community.
[ Apply to Join the Warrior Community ](#call)
[ Learn About the Warrior Program ](https://rodkhleif.com/reviews/warrior-program/)
305K+
Student Owned Units
373+
Tracked Deals Closed
747M+
Total Capital Raised
103+
U.S. Markets Covered
1.8k+
Warriors in the Community
Note: These represent only deals directly submitted by students. Many students do not submit their deals, so it is assumed that these numbers are only a portion actual total. Stats updated 7/08/26. [Click here to view the full Rod Khleif Warrior Program Submitted Student Deal Case Study Tracker.](https://docs.google.com/spreadsheets/d/e/2PACX-1vT1iAZas1vr8zNA9ze1lkioQVas1X9-6EFkhBFU2cXlpETxTXIyqqT0pA3WbpdE1ivltcaSkL6Jgq_R/pub?output=xlsx)
## Warrior Leader Board
Total units owned by Warriors.
Powell Chee **TOTAL 6,600**
Bharat Kona **TOTAL 6,505**
Chris Wooten **TOTAL 6,266**
## New Warrior Leader Board
Units owned by Warriors who have joined within a year.
Colette Jones **TOTAL 475**
Ryan Byrne **TOTAL 320**
Crystal D’Agostin **TOTAL 36**
## Featured Case Study
X Units | Dallas, TX | Multifamily
**Senior Living Portfolio: Assisted Living & Memory Care**
173 Beds | 153 Units
**Deal Highlights:**
15% CoC | 28% IRR | 43% ARR
“Rod Khleif, I am forever grateful.”
-Roberto Carabetta
[**–> Click here to see hundreds more case studies.** ](https://rodkhleif.com/warriorwins/)
## Warrior Portfolio by Asset Class
305k+
Multifamily Units
1.85M+
Commercial/Industrial
Flex Space (SqFt)
11,896+
Self Storage Units
2,213+
Mobile Home Park Lots
1,590+
Senior Housing Beds
250+
Acres of Land
110+
Salon Suites
30+
Land Development
Projects
9+
Tiny Home
Communities
5+
Business Acquisitions
2+
Start Up
Angel Investments
And More
Portfolio Expansion
In Progress!
## The Warrior Sword:
Your First Deal Milestone
- **Awarded Upon First Deal Closed**
- **Custom Engraved**
- **Symbol of Commitment, Courage & Action**
**Want a Sword?**
[ Apply for the Warrior Program ](#call)
## Warriors with Their Swords
## Want to Be the Next Warrior?
### And Get YOUR Sword!
## The first step is applying to see if you are a fit.
- X/Twitter
This field is for validation purposes and should be left unchanged.
- First Name\*
- Last name\*
- Email Address\*
- Phone Number\*
- Message frequency will vary. Message and data rates may apply. Reply STOP to opt out.
-
[Privacy Policy](https://rodkhleif.com/privacy-policy-terms-of-use/) | [Terms Of Service ](https://rodkhleif.com/privacy-policy-terms-of-use/)By providing your number, you consent to receive marketing call or texts.
---
### [Speaking](https://rodkhleif.com/speaking/)
**Published:** January 22, 2020
**Author:** Rod Khleif
**Content:**
# Sharing My 40+ Years of Real Estate Experience on a Stage Near You
[ MultiFamily Bootcamp - Enroll Now ](http://rodkhleif.com/bootcamp)
[ Watch video ](#elementor-action%3Aaction%3Dlightbox%26settings%3DeyJ0eXBlIjoidmlkZW8iLCJ2aWRlb1R5cGUiOiJ5b3V0dWJlIiwidXJsIjoiaHR0cHM6XC9cL3d3dy55b3V0dWJlLmNvbVwvZW1iZWRcLzhEdm9ETEg4QjlVP2ZlYXR1cmU9b2VtYmVkIn0%3D)
** Rated 5 out of 5
## *“Rod's events are the best”*
He delivers excellent content and attacks some great talent and the networking is the best I have seen of real people doing deals willing to help out.
## Brian Corr
## Position and Company Name
** Rated 5 out of 5
## *“Absolutely amazing event.”*
Anyone thinking of going, just do it! It’s all mindset and Rod will breakthrough those barriers that are holding you back to live to your fullest potential. And not to mention the networking is AMAZING!
## Hariel De Leon
## Position and Company Name
** Rated 5 out of 5
## *“This is one of the best real estate seminars I’ve ever attended!”*
Rod’s content and how he ties successful investing to mindset is not only inspiring, but a unique and necessary. Nothing matters if your mindset isn’t right. Rod helps to get us there! I will be attending future events, while taking massive action!
## Monique Wills
## Position and Company Name
## Discover Why I’ve Interviewed and Educated Alongside These Industry Influencers:
 Albert Berriz
 Chris Voss
 Dean Graziosi
 Grant Cardone
 Hal Elrod
 John Assaraf
 Tom Hopkins
## Do you run a speaker series or mastermind group with individuals interested in real estate?
For anyone ready to leave the rat race for good, I’m happy to share the hardwon tools, techniques and secrets that my team and I have spent (literally) decades piecing together.
I love pumping audiences up while offering tested wisdom that leads to unstoppable success.
Let’s see if you have the right stage for me.
[ Book Me To Speak ](#speak-form)
## PLAY VIDEO
## Rod Is an Expert Speaker
## on These Topics:
- Multifamily Mastery
- Any Real Estate Related Topic in Great Depth
- The Principles for Success
- The Psychology of Success
- How to Prepare for the Next Economic Recession
- Customized Presentations for Your Audience
## Watch Clips From My Recent Talks:
## I Would Love to Empower Your Audience With the Foolproof
Framework to Succeed in Real Estate and to Create Cashflow for Life.
## Focus on your wants
## LA MULTIFAMILY BOOTCAMP | 2020
## Push Through the Fear
## LA MULTIFAMILY BOOTCAMP | 2020
## Speaking Request Form
- First Name\*
- Last name\*
- Email\*
- PHONE
- Size of event
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- Date\* MM slash DD slash YYYY
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## Meet Rod
Rod Khleif is a passionate real estate investor who has personally owned and managed over 2000 properties. As one of the country’s top real estate, business, and peak performance luminaries, Rod has also built over 23 businesses in his 40 year business career.
A compelling rags-to-riches-to-rags-to-riches story, Khleif soared from humble beginnings as a young, impoverished Dutch immigrant to incredible success. Rod’s experience involves both remarkable triumphs, and spectacular failures, which he affectionately calls “seminars.” Rod brings incredible authenticity and insight to his approach to business, success and life.
Rod loves training and coaching the “psychology of success” to aspiring real estate investors and entrepreneurs. He can train and coach on virtually any business or success related topic in great depth, contributing incredible first-hand, technical, and motivational knowledge and skills.
Rod Khleif has combined his passion for real estate investing with his personal philosophy of goal setting, envisioning, and manifesting success to become one of America’s top real estate investment and high performance life coaches.
As an accomplished entrepreneur and business owner, Rod has built several successful multi-million dollar businesses. But ask him what he is most proud of, and he will tell you about his work as a community philanthropist.
[  ](https://rodkhleif.com/wp-content/uploads/2020/01/rodkhlief-logo.png)
[  HI-RES DOWNLOAD
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---
### [Cap Rate Calculator | Free](https://rodkhleif.com/cap-rate-calculator/)
**Published:** March 21, 2025
**Author:** Alex Khleif
**Content:**
# Free Cap Rate Calculator by Rod Khleif
## for Commercial & Multifamily Real Estate
` + '
' + '
' + '' + `` + '
' + `${description}` + '
' + '
'; target.innerHTML = html; updateProgress(id); } function createForm() { createFormField("market-price", "Sales price:", "Enter the sales price of your investment", 5000000, { unit: "USD", min: 100000, max: 100000000, step: 100000 }); createFormField("noi", "Net Operating Income:", "Enter the annual net operating income", 300000, { unit: "USD", min: 10000, max: 5000000, step: 10000 }); createFormField("cap-rate", "Calculated Cap Rate:", "Enter your desired cap rate", 6, { min: 0.25, max: 20, step: 0.25 }); disableLoading(); calculate("market-price"); } document.addEventListener("readystatechange", e => { if (document.readyState !== "complete") return; createForm(); })
### Find Your Cap Rate In Seconds!
Please wait...
I built this free cap rate calculator to help investors like you analyze deals faster and smarter than ever before. I was tired of watching investors make math errors during deal analysis or get caught up in calculations instead of evaluating opportunities. Here’s what this tool does. You enter net operating income and purchase price. You instantly see your cap rate percentage. You can compare it to your investment criteria. Most investors still use spreadsheets and mental math, which leads to mistakes and missed deals. -Rod Khleif
**Bookmark this calculator and use it for every property you evaluate. It will save you hours and help prevent costly analysis mistakes.**
Looking to quickly evaluate the return on a real estate investment? Our **free Cap Rate Calculator** helps you determine the capitalization rate of any multifamily or commercial property in seconds. Whether you’re analyzing a new deal or comparing multiple properties, understanding cap rate is essential for making smart, data-driven investment decisions. Use this tool to estimate your property’s income potential and take the guesswork out of underwriting.
## How to Use Our Free Cap Rate Calculator
Our cap rate calculator simplifies this process for finding your capitalization rate. Here’s how it works:
1. **Enter Your Property’s Value:** Type in the purchase price or current market value.
2. **Enter Your NOI:** Input your property’s annual Net Operating Income (Income minus Operating Expenses).
3. **View Instant Results:** Our calculator instantly provides your property’s cap rate.
## What is a cap Rate?
A **Cap Rate (Capitalization Rate)** is a fundamental metric used by real estate investors to estimate the potential return on investment of a property. It provides a quick snapshot of profitability and risk, which enables investors to compare different real estate opportunities easily.
### **How Do You Calculate A Cap Rate?**
**Cap Rate = (Net Operating Income ÷ Property Value) × 100
- **Net Operating Income (NOI)** is your property’s annual income minus operating expenses (excluding mortgage payments).
- **Property Value** is your property’s current market value or purchase price.
Wondering **how to calculate cap rate?** It’s straightforward. Here’s the formula:
**Example:
If your property’s Net Operating Income (NOI) is **$100,000** per year and the property’s purchase price is **$1,500,000**, your cap rate would be:
## What is considered a good cap rate?
A “good” cap rate depends on your market, property type, and risk tolerance. Typically, investors look for cap rates between 4% to 10%, but prime markets may have lower rates, indicating stable returns and lower risk.
Check out this article on [good cap rates for multifamily.](https://rodkhleif.com/what-is-a-good-cap-rate-for-multifamily/)
### Is a higher or lower cap rate better?
It depends on your goals. Lower cap rates usually indicate safer investments with stable returns. Higher cap rates might mean more risk but potentially higher returns. Choose the rate aligned with your investment strategy and risk tolerance.
What’s the difference between cap rate and ROI?
Cap rate measures your property’s profitability by dividing NOI by property value, without considering financing. ROI, however, includes your total investment return factoring in financing, appreciation, and taxes.
How do expenses affect cap rate calculation?
Higher operating expenses lower your Net Operating Income (NOI), resulting in a lower cap rate. Controlling and reducing expenses can significantly improve your property’s cap rate and overall profitability.
Does cap rate include mortgage payments?
No, the cap rate calculation doesn’t include mortgage payments or financing costs. It strictly uses Net Operating Income (NOI) and the property’s purchase price or market value.
Why do cap rates vary between markets?
Cap rates fluctuate based on local economic stability, supply and demand, property conditions, and investor interest. Stable, high-demand markets typically have lower cap rates compared to emerging or riskier markets.
Can cap rate predict future profitability?
[Cap rates](https://rodkhleif.com/what-does-the-capitalization-rate-really-tell-you/) measure current profitability, not future performance. While helpful for evaluating potential returns, future profitability depends on additional factors like market trends, appreciation, and property management.
*For accurate local market insights and economic indicators, you can reference official data from the* [*U.S. Bureau of Labor Statistics*](https://www.bls.gov/data/) *to better evaluate your property’s market conditions.*
What is the difference between a property’s cap rate and market cap rate?
A property’s cap rate refers specifically to that property’s returns, while a market cap rate is the average rate for similar properties in the same geographic area, offering insight into broader market trends.
Is cap rate enough to evaluate a multifamily investment?
Cap rate is valuable, but it’s not enough by itself. For thorough analysis, also consider cash-on-cash returns, internal rate of return (IRR), location factors, market trends, and overall investment strategy.
Can I improve a property’s cap rate after purchase?
Absolutely! Increasing rent, reducing operating expenses, improving property management, and strategic property enhancements can significantly increase NOI, thereby improving your property’s cap rate and overall real estate valuation.
What Are the Key Factors Influencing Cap Rates?
Multifamily Cap Rates vary based on several critical factors:
- **Property Location:** Prime markets typically have lower cap rates due to lower risk.
- **Property Condition:** Newer, well-maintained properties usually have lower cap rates.
- **Market Conditions:** Economic factors such as interest rates, demand, and growth trends directly influence cap rates.
What are the limitations of using cap rate alone?
While the cap rate is essential, it’s not the complete picture. It doesn’t account for financing, property appreciation, or tax benefits. For comprehensive investment analysis, combine the cap rate with other financial metrics and due diligence processes.
[Click here to learn how to find and analyze multifamily deals like a pro!](https://rodkhleif.com/finding-analyzing-multifamily-deals-like-a-pro/)
## Final Thoughts from Rod Khleif
*“Understanding how to calculate cap rate is absolutely critical to your success as a multifamily or commercial real estate investor. But remember, it’s just one part of the puzzle. Use this free Cap Rate Calculator to quickly evaluate your deals, then dive deeper into your due diligence. Combining solid analysis with the right mindset and strategies is the key to creating lasting cash flow and building true financial freedom.”
– **Rod Khleif**
Want to learn more? Join us at the next [Multifamily Bootcamp! ](https://rodkhleif.com/bootcamp/)
[  ](https://rodkhleif.com/bootcamp/)
Follow us for more info:
[ Facebook ](https://www.facebook.com/rodkhleifofficial) [ Instagram ](https://www.instagram.com/rod_khleif/) [ Youtube ](https://www.youtube.com/c/RodKhleif) [ Linkedin ](https://www.linkedin.com/in/rodkhleif/)
---
### [Strategy Call Thank You](https://rodkhleif.com/strategy-call-thank-you/)
**Published:** February 14, 2020
**Author:** Rod Khleif
**Content:**
# Thank You
## We've received your application.
Keep your eyes peeled on your inbox. One of our team members will get back to you shortly with your next steps.
To Your Success,
-Rod
## Raving Reviews For Rod’s Warrior Program
## Chat Steinwald
## Ed Modzel
## Eric Upchurch
## Jens Nielsons
## Mark Blass
## Matt Spangenberg
## You're in the Right Place
"We made $180,000 in a single day double closing this self storage facility. Since this first deal I have done another $235,000 in wholesale fees."– Mike Mannino II
"We went from $8,500/mo to $20,000/mo cash flow after we became a warrior. His program gave us the confidence and knowledge to scale."– Nathaniel & Valeri Kolwyck
"I mailed 350 letters using Rod's template, got a 15-unit under contract, assigned it, and earned just under $130K from one deal. Largest deal in 20 years."– Steven Menzel
"Since joining, I have GP ownership in 82 units total with no capital in."– Trina Picero
"The past year: 900+ multifamily units acquired, $100M+ AUM. You don't need to know everything to start. You just have to start."– Atil Gulf
"Rod's coaching helped me scale from a few smaller properties to syndicating large apartment complexes and quit my W2 job. Now over 2,000 units."– Jens Nielsen
"The Warrior Program changed my career. I went from 0 to 80 doors as GP. I tried before, but it was so hard without support."– Elsa Nguyen
"Joining his Warrior program completely changed my trajectory. In 18 months, I acquired 500 units across the U.S."– Roberto Carabetta
"Rod's coaching program is by far the best decision of my life! IT.IS.WORTH.EVERY.PENNY. I'm living proof."– Mike Olson on Reddit
*Verified testimonials 04/26. Results are not guaranteed. Real estate investing involves risk and requires work.*
---
### [Connect](https://rodkhleif.com/connect/)
**Published:** January 7, 2020
**Author:** Rod Khleif
**Content:**
# GET IN TOUCH
[ Interested in Mentorship? ](https://rodkhleif.com/work-with-rod/)
[ Speaking Inquires ](/speaking/#speak-form)
[ Media Inquires ](/media/#interview-rod)
## For general inquiries & support
## Please fill out the form below. I’d love to hear from you and someone from my staff will be in touch with you promptly. Thank you.
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By providing your number, you consent to receive marketing calls or texts
## Keep Up With Rod
& Stay Up To Date On Everything Multi-Family
[ Join my tribe ](https://www.facebook.com/rodkhleifofficial/)
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[ follow me around @rod\_khleif ](https://www.instagram.com/rod_khleif/)
[ Follow my activity @RodKhleif ](https://twitter.com/RodKhleif)
---
### [Warrior Win:
Danny Sallis
57 Units](https://rodkhleif.com/warrior-wins-danny-sallis-2/)
**Published:** January 24, 2023
**Author:** Graciela
**Content:**
## Warrior Win
# Danny Sallis
## Property Overview
**Location:** Alexandria, Indiana
**Number of Units:** 80
**Value Add Deal:** Yes
**Purchase Price:** $3,250,000
**Projected Monthly Rent Increase:** $90 per unit
**Anticipated Value After Value Add:** $5,000,000
**Estimated Cash-on-Cash Return:** 10%
**Estimated Internal Rate of Return (IRR):** 15%
## Be the Next Warrior Success Story
Danny journey is proof that the right mentorship, network, and action can accelerate your success in multifamily real estate. Through strategic connections, expert guidance, and a community of like-minded investors, he turned obstacles into opportunities and scaled his portfolio to thousands of units.
**Success in multifamily investing isn’t about luck.**
Success is about learning from those who have done it, surrounding yourself with the right people, having all the tools and resources you need, and taking decisive action. **Rod Khleif’s Warrior Coaching Program** provides you with a step-by-step system, direct mentorship from experienced investors, and access to a powerful network that can help you close more deals, raise capital, and grow your wealth faster.
If you’re ready to take the next step, apply for mentorship today.
[ Join the Warrior Program ](https://rodkhleif.com/work-with-rod/)
## Warrior Success Stories
[Play Video](https://www.youtube.com/watch?v=6L-ho9oRtUY)
#### [Featuring Elsa Nguyens #682](https://rodkhleif.com/podcasts/single-mom-to-massive-success-in-multifamily/)
### [Immigrant Mom To Massive Success In Multifamily](https://rodkhleif.com/podcasts/single-mom-to-massive-success-in-multifamily/)
[Play Video](https://www.youtube.com/watch?v=Fmqzl9_8Nj4)
#### [Featuring Oliver Fernandez #721](https://rodkhleif.com/podcasts/from-7-to-1000-units-in-3-years-2/)
### [From 7 to 1000 units in 3 years](https://rodkhleif.com/podcasts/from-7-to-1000-units-in-3-years-2/)
[Play Video](https://www.youtube.com/watch?v=J-fDFPBRilY)
#### [Featuring Rasool Mutawakkil #715](https://rodkhleif.com/podcasts/10mm-in-multifamily-assets-under-management-in-one-year/)
### [$10MM in Multifamily Assets Under Management in One Year](https://rodkhleif.com/podcasts/10mm-in-multifamily-assets-under-management-in-one-year/)
[ See more warrior wins ](/warriorwins)
---
### [Books](https://rodkhleif.com/books/)
**Published:** November 30, 2023
**Author:** Matt Rohde
**Content:**
[  ](https://www.lcfabook.com/core-book/?sl=rksite)
** Rated 5 out of 5
*“Through significant experience, Rod has turned his journey into an all-encompassing road map with this book. This is not a ‘quick fix;’ he arms you with lessons and tools that will help you achieve incredible long-term wealth, but that will also help develop you on a personal level. These lessons are invaluable and Rod has laid them out in a way that anyone can understand, whether you’re in the business or not.”*
**Ken McElroy**, Rich Dad Advisor to Robert Kiyoski
and Bestselling Author
[ Kindle Version ](https://www.amazon.com/Lifetime-CashFlow-Through-Multifamily-Properties-ebook/dp/B07RV5ZRQV/)
[ Paperback version ](https://www.amazon.com/Lifetime-Cashflow-Through-Multifamily-Properties/dp/0999225014)
[ Just Pay Shipping ](https://www.lcfabook.com/core-book/?sl=rksite)
## How To Create Lifetime Cashflow Through Multifamily Properties
NEW for the SECOND EDITION: Included with the book is the 90 Day Action Plan – Your step by step guide for navigating the when, where, and what to do over the next 90 days. Also included is the Lifetime Cashflow book online companion course that includes, videos, scripts, templates, contracts, and checklists.
This 250+ page #1 best selling book is the essential textbook for aspiring multifamily real estate investors. It carefully outlines why the rules of real estate investing have changed forever. The book offers a step-by-step approach to the exciting and lucrative business of multifamily real estate investing.
## Here is what you'll learn:
- How to find the money for your apartment purchases
- The four best areas to buy in and how to quickly evaluate an area
- How to find the best off-market deals
- How to identify a great deal
- How to evaluate a property
- How to convince sellers to give you seller financing
- How to find investors for your deals and syndicate to buy larger properties
- Scripts for talking to sellers, brokers, investors and lenders
- How to perform comprehensive due diligence to protect yourself
- The mistakes to avoid
- How to systemize your business and turn it into a machine
- And so much more!!!
# Rod Khleif's Best-Selling Books To Help You
Master Real Estate
Not only we provide training on real estate multifamily investing, but also offer multi-family real estate books. Here, you will find the best books on apartment investing. You can call us the Lifetime Cashflow Academy as we are investing mentors guiding novice real estate investors on buying multi-family real estate.
### [How To Create Lifetime
Cashflow Through
Multifamily Properties](https://www.lcfabook.com/core-book/?sl=rksite)
#### [The New Rules of
Real Estate Investing](https://www.lcfabook.com/core-book/?sl=rksite)
[  ](https://www.lcfabook.com/core-book/?sl=rksite)
[ get the book ](https://www.lcfabook.com/core-book/?sl=rksite)
### [Multifamily
Property
Toolbook](/multifamily-property-toolbook/)
#### [Comprehensive
Checklist](/multifamily-property-toolbook/)
[  ](/multifamily-property-toolbook/)
[ get the book ](/multifamily-property-toolbook/)
### [How To Find Off
Market Deals
In A Hot Market](/how-to-find-off-market-deals-in-a-hot-market/)
#### [6 Strategies To Secure Off Market Properties](/how-to-find-off-market-deals-in-a-hot-market/)
[  ](/how-to-find-off-market-deals-in-a-hot-market/)
[ get the book ](/how-to-find-off-market-deals-in-a-hot-market/)
### [29 Fatal Mistakes
Many Apartment
Buyers Make](/29-mistakes/)
#### [And how to avoid
them…](/29-mistakes/)
[  ](/29-mistakes/)
[ get the book ](/29-mistakes/)
** Rated 5 out of 5
## Multifamily investing from A-Z
Rod, long time follower. I got a digital copy of your multifamily book before you officially released it. Amazing info and it helped me score my first property right in my backyard. You set me on path to financial freedom. Thank you for being such a great teacher and mentor.
**– Cody Dove**
## Multifamily Property Toolbook
## Free Download
Proper due diligence is the foundation of every successful multifamily deal. To help you evaluate and close profitable investments with confidence, we’re giving you the **exact Property & Due Diligence Checklist** we use for our own acquisitions. This step-by-step toolbook ensures you never overlook critical property details, whether you’re buying your first or fifth multifamily asset.
**What’s Inside?**
- **Comprehensive Property Evaluation** – Analyze demographics, market conditions, financials, and occupancy rates.
- **Fill-in-the-Blank Format** – Streamline your due diligence process with an easy-to-follow structure.
- **“Who to Call & What to Ask” Guide** – Know exactly who to contact and what questions to ask before making an investment.
- Investor-Proven Strategies **– The same system we use to** keep our team efficient, competitive, and on track while closing deals.
- **Risk Mitigation Framework** – Avoid costly mistakes by ensuring every key factor is considered before purchasing.
** Rated 5 out of 5
*“Buy this book! Read it, apply it, and prosper! Rod has vast experience in the real estate world, both in up and down markets. Rod is a strategic thinker who knows how to reduce risk and increase gains in both types of markets. It’s rare to find someone who brings this kind of experience to real estate and is willing to share their knowledge.”*
**Diane Kennedy**, Rich Dad Advisor to Robert Kiyosaki
and Bestselling Author
[ Get it now! ](/multifamily-property-toolbook)
## FREE – 29 Fatal Mistakes Many Apartment Buyers Make
“All of these mistakes are common, but very sad and completely avoidable. I wrote this book because I kept seeing the same mistakes over and over again and I saw lives ruined and investors leave the business, when with a little foresight they would have been fine. Take this little extra time to read this book and protect yourself.”
**ROD KHLEIF**
[ Get it now! ](/29-mistakes)
## FREE – How to Find Off–Market Deals in a Hot Market
Here are 6 great strategies to help you find off–market properties in a hot market. In my eBook, How to Find Off–Market Deals in a Hot Market I go in-depth into some “unique strategies” that you likely have not heard before.
[ Get it now! ](/how-to-find-off-market-deals-in-a-hot-market/)
## The first step is applying to see if you are a fit.
Do you want to Sign up for SMS to stay updated about our Warrior coaching program, bootcamps, and more?
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## Want to Fast Track Your Learning?
## Apply for the Warrior Program!
---
### [Lifetime Cashflow Podcast](https://rodkhleif.com/lifetime-cashflow-podcast/)
**Published:** January 7, 2020
**Author:** Rod Khleif
**Content:**
# The Lifetime CashFlow
Through Real Estate Investing Podcast
**The go-to source for multifamily and commercial real estate investing strategies, expert insights, and financial freedom tips. Hosted by top real estate mentor Rod Khleif, this podcast has over 20 million downloads. It features interviews with many well-known real estate investors and business thought leaders**
## Subscribe
[  ](https://podcasts.apple.com/us/podcast/lifetime-cash-flow-through-real-estate-investing/id1097449598)
[  ](https://www.youtube.com/RodKhleif)
Search
- [All](https://rodkhleif.com/blog/)
- [Due
Diligence](https://rodkhleif.com/category/due-diligence/)
- [Finding
Deals](https://rodkhleif.com/category/finding-deals/)
- [Industrial Flex Space](https://rodkhleif.com/category/industrial-flex-space/)
- [Mobile Home Parks](https://rodkhleif.com/category/mobile-home-parks/)
- [Property Management](https://rodkhleif.com/category/managing-your-properties/)
- [Psychology
of Success](https://rodkhleif.com/category/psychology-of-success/)
- [Raising Capital](https://rodkhleif.com/category/funding-deals-financing/)
- [Self Storage](https://rodkhleif.com/category/self-storage/)
- [Senior Housing](https://rodkhleif.com/category/senior-housing/)
- [Syndication](https://rodkhleif.com/category/syndication/)
- [All](https://rodkhleif.com/blog/)
- [Due
Diligence](https://rodkhleif.com/category/due-diligence/)
- [Finding
Deals](https://rodkhleif.com/category/finding-deals/)
- [Industrial Flex Space](https://rodkhleif.com/category/industrial-flex-space/)
- [Mobile Home Parks](https://rodkhleif.com/category/mobile-home-parks/)
- [Property Management](https://rodkhleif.com/category/managing-your-properties/)
- [Psychology
of Success](https://rodkhleif.com/category/psychology-of-success/)
- [Raising Capital](https://rodkhleif.com/category/funding-deals-financing/)
- [Self Storage](https://rodkhleif.com/category/self-storage/)
- [Senior Housing](https://rodkhleif.com/category/senior-housing/)
- [Syndication](https://rodkhleif.com/category/syndication/)
*I host Lifetime Cashflow Podcast because I wanted to share the exact strategies and mindset shifts that took me from broke to thousands of units. Every week I interview successful investors and dive deep into real estate strategies that actually work in the real world. Here’s why I’m obsessed with this podcast: education is the fastest shortcut to success, but most education is generic and theoretical instead of battle-tested. The podcast is where I bring my two decades of experience directly to your ears so you don’t waste years figuring this out. Let me be your guide through the strategies that real successful investors use to build serious wealth. – Rod Khleif*
## Most Recent
[
](https://rodkhleif.com/podcasts/public-insurance-adjuster-ralph-sampson/)I Lost $7 Million… Here’s What Saved Me
[ Listen Now  ](https://rodkhleif.com/podcasts/public-insurance-adjuster-ralph-sampson/)
[
](https://rodkhleif.com/podcasts/creative-multifamily-financing-harvey-lockhart/)How a Music Teacher Landed a $3.5M Apartment Deal
[ Listen Now  ](https://rodkhleif.com/podcasts/creative-multifamily-financing-harvey-lockhart/)
[
](https://rodkhleif.com/podcasts/hotel-to-multifamily-conversion-alexander-cartwright/)The Real Estate Strategy Nobody Is Talking About
[ Listen Now  ](https://rodkhleif.com/podcasts/hotel-to-multifamily-conversion-alexander-cartwright/)
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## Most Popular
[
](https://rodkhleif.com/podcasts/why-multifamily-is-the-best-investment-for-the-coming-crash/)### [ Why Multifamily is the Best Investment for the Coming Crash ](https://rodkhleif.com/podcasts/why-multifamily-is-the-best-investment-for-the-coming-crash/)
[ Listen Now  ](https://rodkhleif.com/podcasts/why-multifamily-is-the-best-investment-for-the-coming-crash/)
[
](https://rodkhleif.com/podcasts/ep-361-kyle-mitchell-how-to-start-strong-in-multifamily/)### [ Kyle Mitchell – How to Start Strong in Multifamily ](https://rodkhleif.com/podcasts/ep-361-kyle-mitchell-how-to-start-strong-in-multifamily/)
[ Listen Now  ](https://rodkhleif.com/podcasts/ep-361-kyle-mitchell-how-to-start-strong-in-multifamily/)
[
](https://rodkhleif.com/podcasts/ep-183-grant-cardone-controls-4000-apartments-worth-half-billion-dollars/)### [ Grant Cardone on the Lifetime Cash Flow Podcast ](https://rodkhleif.com/podcasts/ep-183-grant-cardone-controls-4000-apartments-worth-half-billion-dollars/)
[ Listen Now  ](https://rodkhleif.com/podcasts/ep-183-grant-cardone-controls-4000-apartments-worth-half-billion-dollars/)
## Coaching Student Success Stories
[  ](https://rodkhleif.com/podcasts/single-mom-to-massive-success-in-multifamily/)
## [Featuring Elsa Nguyens #682](https://rodkhleif.com/podcasts/single-mom-to-massive-success-in-multifamily/)
## [Immigrant Mom To Massive Success In Multifamily](https://rodkhleif.com/podcasts/single-mom-to-massive-success-in-multifamily/)
[  ](https://rodkhleif.com/podcasts/from-7-to-1000-units-in-3-years-2/)
## [Featuring Oliver Fernandez #721](https://rodkhleif.com/podcasts/from-7-to-1000-units-in-3-years-2/)
## [From 7 to 1000 units in 3 years](https://rodkhleif.com/podcasts/from-7-to-1000-units-in-3-years-2/)
[  ](https://rodkhleif.com/podcasts/10mm-in-multifamily-assets-under-management-in-one-year/)
## [Featuring Rasool Mutawakkil #715](https://rodkhleif.com/podcasts/10mm-in-multifamily-assets-under-management-in-one-year/)
## [$10MM in Multifamily Assets Under Management in One Year](https://rodkhleif.com/podcasts/10mm-in-multifamily-assets-under-management-in-one-year/)
[ meet more successful students ](/warriorwins)
## Join The Next Virtual Multifamily Bootcamp
Rod Khleif’s Multifamily Bootcamp is widely regarded as the best live training event for beginner multifamily investors and is the most recommended starting point for anyone looking to learn multifamily real estate.
[ Get Your Ticket ](http://www.rodkhleif.com/bootcamp)
## Join one of the Most successful multifamily Mentorships in the world!
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## Want to Fast Track Your Investing Journey?
## Apply for the Warrior Program!
---
### [Warrior Wins - Josh Norell](https://rodkhleif.com/warrior-wins-josh-norell/)
**Published:** April 25, 2022
**Author:** Graciela
**Content:**
## Warrior Win
# Josh Norell
I’ve been in IT for 20 years, entered real estate with single family rentals in 2015. I have been doing single family flips and BRRR’s. Entered into the multifamily space in 2021. Passionate about helping others enter real estate to achieve financial freedom.
## Property Details
**Address:** 982 S Sheridan Denver, CO
**Number of Units:** 10
**Value Add Deal?** Yes
**Purchase Price:** $1.325 M
**Estimated monthly increase projected?** $800
**Anticipated value after value add:** $2.25 M
**Estimated Cash on Cash Return:** This is a flip, not important.
**Estimated Internal Rate of Return:** 40%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Overall a good experience. The coaching didn’t help as much as I thought it might. But relationships built within the program are life changing.
## How did you find this property?
Broker.
## How did you structure the financing of this property?
75% LTC loan through local bank.
## Was this a joint venture or syndication?
Joint Venture.
## How did you raise the equity?
50/50 with another warrior.
## What was the equity raise?
$400k.
## What are some hurdles you had to overcome to get this deal done?
Dealing with non-paying tenants, and getting them out.
## What are some of the lessons you learned with this deal?
Finding the right contractor is important. Working with an experienced partner can make a huge difference in your learning curve, and ability to land a deal.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Cindy and Damion Gaynor-Harper](https://rodkhleif.com/warrior-wins-cindy-and-damion-gaynor-harper/)
**Published:** February 11, 2022
**Author:** Matt RK
**Content:**
## Warrior Win
# Cindy and Damion
Gaynor-Harper
My husband Damion Harper and I started our RE experience together in 2020. I am a Real Estate Agent practicing for 7 years and Damion is a 20 year Veteran in the US Army. We have a combined passion about our family, self transformation, networking, and philanthropy.
## Property Details
**Address:** Sedgwick Apartments
**Number of Units:** 24
**Value Add Deal?** Yes
**Purchase Price:** $6,000,000
**Estimated monthly increase projected?** Current in place rents are at $1.85 psf/month and market rents in the surrounding area are at least $2.56 psf per our appraisal for a 2-bed unit. Bringing the entire building to the average market rent of at least $2.56 psf would translate into $209,592 per year of additional revenue. The Property has received $625,000 in renovations over the past four years elevating the living standard to match the area. About half of the units have been renovated from a very good quality to premium and are commanding over $1,000 more in monthly rent ($1600 jump to $2600).
**Anticipated value after value add:** $8,200,000
**Estimated Cash on Cash Return:** 8.32%
**Estimated Internal Rate of Return:** 14.06%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
We joined this program in hopes of one day leaving our w-2s and after consistent networking and exposure, we are one step closer.
## How did you find this property?
Through our sphere of influence
## How did you structure the financing of this property?
We passively invested in the property as LP’s with the intent to purchase additional shares and greater involvement after closing.
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
Personal funding used
## What was the equity raise?
$2,500,000
## What are some hurdles you had to overcome to get this deal done?
We had no issues with this deal.
## What are some of the lessons you learned with this deal?
Next time, we will make sure to have more involvement before p&s is signed to have a bigger stake in the deal.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Amar Nagireddy](https://rodkhleif.com/warrior-wins-amar-nagireddy/)
**Published:** November 10, 2023
**Author:** Greciel Moreno
**Content:**
## Warrior Win
# Amar Nagireddy
I comes from an IT background of over 18 years and has diverse real estate experience, an extensive network of seasoned professionals and impressive analytical skills. With his ability to assess investment opportunities with a discerning eye, he can maximize returns while also preserving the principal for our investors. Amar currently has 350 doors in MF & 400 in Self-storage.
Amar’s expertise in real estate is enhanced by his academic achievements. He holds a Master’s degree in Industrial Engineering from Northern Illinois University, where he gained a solid foundation in the principles of engineering and their applications in various industries. Furthermore, he is currently pursuing an Executive Master of Business Administration (EMBA) degree from Florida Atlantic University (FAU). This rigorous program is designed to equip him with the latest knowledge and skills necessary to stay on top of the ever-evolving trends in the real estate industry.
## Property Details
**Address:** Apartment Village of Evansville
**Number of Units:** 56
**Value Add Deal?** Minor value – add
**Purchase Price:** $4.7M
**Estimated monthly increase projected?** $300/unit
**Anticipated value after value add:** None
**Estimated Cash on Cash Return:** 9%
**Estimated Internal Rate of Return:** 21%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
The warriors are always willing to assist, offering suggestions when necessary, providing lender referrals, and giving feedback about the location.
## How did you find this property?
I shared my willingness to assist with UW in various groups without expecting anything in return. This effort ultimately led to the opportunity I have now.
## How did you structure the financing of this property?
30 % down and rest loan @ 9.75 interest with 24 IO.
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
Fellow Warriors, Friends and Family.
## What was the equity raise?
$1.6M
## What are some hurdles you had to overcome to get this deal done?
Bank terms were changed at the last min,
## What are some of the lessons you learned with this deal?
It’s essential to have a reliable network of resources that can offer assistance or guidance during challenging situations.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [See You There](https://rodkhleif.com/see-you-there/)
**Published:** February 3, 2026
**Author:** M Ashan
**Content:**
You’re Officially Registered for the LIVE Training: Saturday, February 14th at 9:30am EST
# Join Our Private Skool Community to Prepare for the Live Training
Before we go live on Zoom, I want you inside our private Skool community, where you’ll get access to free resources designed to help you get more value out of the training.
This is where you can prepare, get grounded in the fundamentals, and show up ready to execute.
[ Join the Multifamily Skool Community Now ](https://www.skool.com/lcfa)
*This is where you can prepare, get grounded in the fundamentals, and show up ready to execute.*
# Inside the Skool Community, You’ll Get Access To:
- Free training resources to help you understand how multifamily deals actually work
- Educational content that breaks down real-world execution—not theory
- Tools and insights to help you follow along during the live Zoom session
- A clearer understanding of what matters (and what doesn’t) in today’s market
This community is meant to support your learning before the live training, so when we go live, you’re not trying to catch up—you’re ready to apply.
# What We’ll Cover During the Live Training
During the 3-hour live Zoom session, I’ll walk you through:
- How today’s market is creating opportunities most investors are missing
- What actually matters when underwriting deals right now
- How to scale without over-leveraging or gambling
- The real difference between chasing cash flow and building true wealth
K L Promotions LLC © 2026. All Rights Reserved
| [Privacy Policy ](https://rodkhleif.com/privacy-policy-terms-of-use/)| [Terms & Conditions](https://rodkhleif.com/privacy-policy-terms-of-use/) | Customer Service: [941-207-5520](tel:941-207-5520)
---
### [Webinar](https://rodkhleif.com/webinar/)
**Published:** February 2, 2026
**Author:** M Ashan
**Content:**
How Smart Investors Are Positioning for the Next Real Estate Cycle – Live February 14th at 9:30 AM EST
## Free Live Training
# How Smart Investors Are Positioning for the Next Real Estate Cycle
## LIVE Workshop Starts In:
Days
Hours
Minutes
Seconds
Name(Required) First Name (Required) Last Name (Required)
Email Address(Required)
## During this free "deep-dive" Masterclass, you'll learn
## Secret #1
How today’s market is creating opportunities most investors are completely missing
## Secret #2
The real difference between “cash flow” and true long-term wealth
## Secret #3
Why apartments continue to outperform, even in uncertain markets
## • Join Us For This Free Live Training •
## Meet Your Host Rod Khleif
## Rod is host of the top-ranked iTunes real estate podcast which has been downloaded more than 20,000,000 times – “The Lifetime Cash Flow Through Real Estate Investing Podcast.” As one of the country’s top real estate trainers, Rod has personally owned and managed over 2,000 properties.
## Register now to learn What It Actually Takes to Win in Multifamily Real Estate!
Name(Required) First Name (Required) Last Name (Required)
Email Address(Required)
## Free Multifamily Training Masterclass
K L Promotions LLC © 2026. All Rights Reserved
| [Privacy Policy ](https://rodkhleif.com/privacy-policy-terms-of-use/)| [Terms & Conditions](https://rodkhleif.com/privacy-policy-terms-of-use/) | Customer Service: [(941) 225- 8477](tel:(941)%20225-%208477)
---
### [Commercial Real Estate Underwriting Tool](https://rodkhleif.com/commercial-real-estate-underwriting-tool/)
**Published:** March 25, 2025
**Author:** Alex Khleif
**Content:**
# Commercial Real Estate Underwriting Tool
## for Multifamily Investment Analysis
Whether you’re a seasoned investor or analyzing your very first multifamily deal, our **free commercial real estate underwriting calculator** is designed to help you quickly and accurately evaluate the financials that matter most. This simple yet powerful tool gives you a clear picture of a property’s potential, without needing to build a spreadsheet from scratch.
` + '
' + '
' + '' + `` + '
' + `${description}` + '
' + '
'; target.innerHTML = html; updateProgress(id); } function createForm() { var f = document.getElementById(getId("form")); createFormField("unit-no", "No of Units:", "Enter the total number of units in the property", 100, { unit: "Unit", min: 1, max: 500 }); createFormField("market-rent", "Market rent:", "Enter the average market rent per unit", 1250, { unit: "USD", min: 100, max: 5000, step: 25 }); createFormField("occupancy", "Occupancy:", "Enter the occupancy percentage of the deal", 90, { min: 1, max: 100 }); createFormField("other-income", "Other Income:", "Enter other income as a percentage from application fees, pet fees, utilities, trash fees, parking fees, etc.", 10, { min: 0, max: 50 }); createFormField("expenses", "Expense ratio:", "Enter your expenses as percentage of your gross annual income", 50, { min: 0, max: 100 }); createFormField("cap-rate", "Cap Rate:", "Enter the Cap Rate you're willing to pay", 6, { min: 1, max: 30, step: .25 }); disableLoading(); f.addEventListener("submit", submitForm); calculate(); } function submitForm(e) { calculate(); e?.preventDefault(); } document.addEventListener("readystatechange", e => { if (document.readyState !== "complete") return; createForm(); })
Get ready to do a quick high level underwrite in seconds!### Investment Analysis
###### PRICE TO OFFER FOR THE DEAL
# $1,000,000
###### NET OPERATING INCOME
## $25,000
Please wait...
### How to Use Our Commercial Real Estate Underwriting Calculator
Our free commercial real estate underwriting calculator makes deal analysis simple. Here’s how it works:
1. **Enter Property Details:** Type in the market rent, number of units, and other details.
2. **Add Other Info:** Input cap rate, expense ration, and other income.
3. **Review Key Metrics:** Instantly view the price to offer and NOI.
## What is Commercial Real Estate Underwriting?
Underwriting is the process of evaluating a property’s financial performance to assess its investment potential. It involves analyzing income, expenses, and other metrics to ensure the property meets your financial goals.
## Why Use a Commercial Real Estate Underwriting Tool?
Our calculator simplifies deal analysis, saves time, and reduces risk. It’s designed for both new and experienced investors who want to:
- Quickly evaluate a deal’s profitability
- Avoid overpaying for properties
- Make data-driven investment decisions
## How do you underwrite a commercial real estate deal?
Underwriting a commercial real estate deal means reviewing the income, subtracting realistic expenses, factoring in debt payments, and calculating returns like NOI, cash flow, and IRR.
## Can beginners use this underwriting tool?
Yes! This calculator is user-friendly for beginners but detailed enough for advanced investors.
## What’s the difference between NOI and cash flow?
NOI is income minus operating expenses, excluding financing. Cash flow subtracts debt payments from NOI.
## Does the calculator include refinance or exit scenarios?
No. This tool focuses on conservative financial fundamentals like income, expenses, and financing. Tax and appreciation factors can be modeled separately.
**Disclaimer:** This tool is provided for informational and educational purposes only. Users are responsible for conducting their own due diligence and verifying results with professional financial and legal advisors before making any investment decisions.
## Final Thoughts from Rod Khleif
*“Smart underwriting is what separates average investors from great ones. This free tool helps you run the numbers fast, avoid mistakes, and make confident investment decisions. But remember, numbers are just the start. Back them with action, integrity, and the right mentorship.”*
– **Rod Khleif**
Want to learn more? Join us at the next [Multifamily Bootcamp! ](https://rodkhleif.com/bootcamp/)
[  ](https://rodkhleif.com/bootcamp/)
Follow us for more info:
[ Facebook ](https://www.facebook.com/rodkhleifofficial) [ Instagram ](https://www.instagram.com/rod_khleif/) [ Youtube ](https://www.youtube.com/c/RodKhleif) [ Linkedin ](https://www.linkedin.com/in/rodkhleif/)
[  ](https://www.rodkhleif.com/bootcamp/?sl=rkside)
[  ](https://www.lcfabook.com/core-book/?sl=rksite)
## Get Rod Khleif’s Best-Selling Multifamily Book – FREE!
Pay only shipping and get **Rod Khleif’s step-by-step blueprint** for building wealth through multifamily real estate.
[ Get Book ](https://www.lcfabook.com/core-book/?sl=rksite)
## Popular Episodes
[
](https://rodkhleif.com/podcasts/ep-79-tom-wheelwright-cpa-author-tax-free-wealth-build-massive-wealth-permanently-lowering-taxes-rich-dad-advisors-discusses-greatest-financial-benefits-multifamily-rea/)Ep #79 – Tom Wheelwright CPA, author of Tax-Free Wealth, and Rich Dad Advisor talks Multifamily Investing.
[
](https://rodkhleif.com/podcasts/ep-183-grant-cardone-controls-4000-apartments-worth-half-billion-dollars/)Ep #183 – Grant Cardone Controls Over 4,000 Apartments Worth Over a Half a Billion Dollars.
[
](https://rodkhleif.com/podcasts/ep-259-chris-voss-author-of-never-split-the-difference-former-fbi-hostage-negotiator/)Ep #259 – Chris Voss – Author of Never Split The Difference – Former FBI Hostage Negotiator
---
### [Free Raising Capital Masterclass](https://rodkhleif.com/free-raising-capital-masterclass/)
**Published:** May 15, 2025
**Author:** Alex Khleif
**Content:**
**Rod Khleif’s Raising Capital Masterclass begins on: [November 12th at 7pm EST](https://us02web.zoom.us/webinar/register/WN_JPIXWHqSQ-uP9NR6bo4GUQ)**
## Free Masterclass
## How To Raise All the
Money for Your
Real Estate Deals
LIVE Workshop Starts In:
Days
Hours
Minutes
Seconds
[ Register Now For Free ](https://us02web.zoom.us/webinar/register/WN_JPIXWHqSQ-uP9NR6bo4GUQ)
During this free “deep-dive” Masterclass, you’ll discover…
Secret #1
How to buy a multifamily deal with little to none of your own $$$
Secret #2
Rod’s favorite ways of finding all the funding for Multifamily deals
Secret #3
How to build a team to help you acquire funding for deals
## • Join Us For This Free Raising Capital Masterclass •
## Meet Your Host Rod Khleif
Rod is host of the top-ranked iTunes real estate podcast which has been downloaded more than 20,000,000 times – “The Lifetime Cash Flow Through Real Estate Investing Podcast.” As one of the country’s top real estate trainers, Rod has personally owned and managed over 2,000 properties.
Register now to learn how to find all the funding you need to begin buying multifamily deals!
[ Register Now For Free ](https://us02web.zoom.us/webinar/register/WN_JPIXWHqSQ-uP9NR6bo4GUQ)
## Free Raising Capital Masterclass
K L Promotions LLC © 2025. All Rights Reserved
| [Privacy Policy ](https://rodkhleif.com/privacy-policy-terms-of-use/)| [Terms & Conditions](https://rodkhleif.com/privacy-policy-terms-of-use/) | Customer Service: 941-207-5520
---
### [Warrior Interviews](https://rodkhleif.com/reviews/warrior-interviews/)
**Published:** June 30, 2025
**Author:** Alex Khleif
**Content:**
# Warrior Podcast Interviews
Unfiltered interviews with Rod’s Warrior Program Coaching Students.
[  ](https://rodkhleif.com/reviews/warrior-program/)
[  ](https://rodkhleif.com/warriorwins/)
[  ](https://rodkhleif.com/reviews/)
## What happens when everyday people commit to taking massive action?
## They win.
And on Rod Khleif’s podcast, they share exactly how they did it. From their *first deal* to scaling 500+ units, Warrior Coaching Students open up about what worked, what didn’t, and what they learned along the way.
### Inside these interviews you'll hear students talk about:
- The mindset shifts that helped them finally take action
- Creative ways they found and funded their first deals
- How they overcame fear, doubt, and rejection
- Detailed tactics they used to raise capital, underwrite and more
- Their biggest mistakes and how they recovered
- Experiences in different asset classes
- How they built momentum, partnerships, and portfolios
## Fan Favorite Episodes
[  ](https://rodkhleif.com/podcasts/single-mom-to-massive-success-in-multifamily/)
## [Featuring Elsa Nguyens #682](https://rodkhleif.com/podcasts/single-mom-to-massive-success-in-multifamily/)
## [Immigrant Mom To Massive Success In Multifamily](https://rodkhleif.com/podcasts/single-mom-to-massive-success-in-multifamily/)
## [Featuring Rasool Mutawakkil #715](https://rodkhleif.com/podcasts/10mm-in-multifamily-assets-under-management-in-one-year/)
## [$10MM in Multifamily Assets Under Management in One Year](https://rodkhleif.com/podcasts/10mm-in-multifamily-assets-under-management-in-one-year/)
## [Featuring Oliver Fernandez #721](https://rodkhleif.com/podcasts/from-7-to-1000-units-in-3-years-2/)
## [From 7 to 1000 units in 3 years](https://rodkhleif.com/podcasts/from-7-to-1000-units-in-3-years-2/)
## All Warrior Interviews
## Mutltifamily Rockstars
[
](https://rodkhleif.com/podcasts/creative-multifamily-financing-harvey-lockhart/) July 31, 2026
How a Music Teacher Landed a $3.5M Apartment Deal
[ Listen Now → ](https://rodkhleif.com/podcasts/creative-multifamily-financing-harvey-lockhart/)
[
](https://rodkhleif.com/podcasts/multifamily-asset-management-jay-tana-boersma/) July 24, 2026
They Raised Rents Without Renovating a Single Unit
[ Listen Now → ](https://rodkhleif.com/podcasts/multifamily-asset-management-jay-tana-boersma/)
[
](https://rodkhleif.com/podcasts/distressed-senior-housing-investing-ali-choucri/) July 17, 2026
Why Smart Investors Are Leaving Multifamily for Senior Housing
[ Listen Now → ](https://rodkhleif.com/podcasts/distressed-senior-housing-investing-ali-choucri/)
[
](https://rodkhleif.com/podcasts/multifamily-capital-raising-with-erin-frigo/) July 10, 2026
The Beginner’s Blueprint to Landing a 148 Unit Deal
[ Listen Now → ](https://rodkhleif.com/podcasts/multifamily-capital-raising-with-erin-frigo/)
[
](https://rodkhleif.com/podcasts/multifamily-asset-management-with-ify-asoh/) July 3, 2026
How a Single Mom Built a 540 Unit Real Estate Portfolio
[ Listen Now → ](https://rodkhleif.com/podcasts/multifamily-asset-management-with-ify-asoh/)
[
](https://rodkhleif.com/podcasts/cost-segregation-in-multifamily-real-estate-baran-menguloglu/) June 26, 2026
The 10X Systems That Replaced His Day Job
[ Listen Now → ](https://rodkhleif.com/podcasts/cost-segregation-in-multifamily-real-estate-baran-menguloglu/)
[
](https://rodkhleif.com/podcasts/multifamily-distressed-assets-with-mike-mannino/) June 19, 2026
The Real Estate Strategy That Changed His Life Forever
[ Listen Now → ](https://rodkhleif.com/podcasts/multifamily-distressed-assets-with-mike-mannino/)
[
](https://rodkhleif.com/podcasts/mobile-home-park-syndication-with-tim-davis/) May 29, 2026
How a Mobile Home Park Deal Raised $2M in 30 Days
[ Listen Now → ](https://rodkhleif.com/podcasts/mobile-home-park-syndication-with-tim-davis/)
[
](https://rodkhleif.com/podcasts/how-he-turned-25-parking-spots-into-185k-in-value/) May 22, 2026
How He Turned $25 Parking Spots Into $185K in Value
[ Listen Now → ](https://rodkhleif.com/podcasts/how-he-turned-25-parking-spots-into-185k-in-value/)
[
](https://rodkhleif.com/podcasts/multifamily-real-estate-development-with-edward-song/) May 15, 2026
He Bought A Building For $5.7M And Forced The Value To $10.5M With One Letter
[ Listen Now → ](https://rodkhleif.com/podcasts/multifamily-real-estate-development-with-edward-song/)
[
](https://rodkhleif.com/podcasts/senior-housing-investing-with-debora-randall/) May 8, 2026
How To Replace Your Income With Real Estate In 2026 Even With No Experience
[ Listen Now → ](https://rodkhleif.com/podcasts/senior-housing-investing-with-debora-randall/)
[
](https://rodkhleif.com/podcasts/his-first-multifamily-deal-was-197-units-at-21-million/) May 1, 2026
His First Multifamily Deal Was 197 Units At $21 Million
[ Listen Now → ](https://rodkhleif.com/podcasts/his-first-multifamily-deal-was-197-units-at-21-million/)
[
](https://rodkhleif.com/podcasts/he-left-mexico-with-0-now-owns-141-multifamily-units/) April 24, 2026
He Left Mexico With $0… Now Owns 141 Multifamily Units
[ Listen Now → ](https://rodkhleif.com/podcasts/he-left-mexico-with-0-now-owns-141-multifamily-units/)
[
](https://rodkhleif.com/podcasts/how-this-couple-went-from-zero-to-24-units-while-working-full-time/) April 17, 2026
How This Couple Went From Zero To 24 Units While Working Full Time
[ Listen Now → ](https://rodkhleif.com/podcasts/how-this-couple-went-from-zero-to-24-units-while-working-full-time/)
[
](https://rodkhleif.com/podcasts/multifamily-buy-box-strategy-with-daniel-velez/) April 10, 2026
The Best Way To Start Multifamily Real Estate In 2026
[ Listen Now → ](https://rodkhleif.com/podcasts/multifamily-buy-box-strategy-with-daniel-velez/)
[
](https://rodkhleif.com/podcasts/real-estate-asset-protection-with-scott-smith/) April 3, 2026
How He Bought A 14-Unit With No Money Down (Creative Financing)
[ Listen Now → ](https://rodkhleif.com/podcasts/real-estate-asset-protection-with-scott-smith/)
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## Want to Be the Next Warrior on the Podcast?
**If you’re ready to start your journey, the Warrior Program might be the perfect fit.**
It’s not just about learning how to buy apartments.
It’s about creating the momentum and support system to *actually* do it.
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---
### [Jens Nielsen Bio](https://rodkhleif.com/jens-nielsen-bio/)
**Published:** May 12, 2025
**Author:** Alex Khleif
**Content:**
## Jens Nielsen
## From IT Executive to Full-Time Multifamily Investor
Jens Nielsen is a strategic investor and analytical powerhouse who retired from his W-2 job after just five years by mastering the world of multifamily syndication. Originally from Denmark, Jens spent two decades in telecommunications and IT before turning his full focus to real estate.
Jens brings a unique edge to multifamily: the ability to build teams, vet partners, and evaluate deals with precision, while staying aligned with his values and vision for a life on his terms.
**500+**
LP Units
**2,000+**
GP Units
**10 Yrs**
Investing
**$300M**
Portfolio
## How Jens Got Started in Multifamily
Jens started with small properties and “safe” thinking. But once he joined the Warrior Program, he realized the path to scale was aligning with the right partners, markets, and systems.
An introvert by nature, Jens focused on underwriting, investor communication, and building solid back-end systems. He did this while partnering with extroverted deal-finders and capital-raisers to create lasting success.
## Notable Contributions & Involvement
- Owns 100,000 SF of Warehouse
- Retired from his job less than five years after starting in real estate
- Built his business entirely through alignment, mindset, and smart partnerships
- Recovered from a life-threatening cycling accident with a renewed focus on purpose
- Regularly speaks at events and inspires fellow introverts to take bold action
## Check Out Jens' Videos
[ See more warrior wins ](/warriorwins)
## Want to See Jens at the Next Bootcamp?
Jens Nielsen is a featured panelist at Rod Khleif’s Multifamily Bootcamp. At the event, you’ll get the opportunity to learn directly from Jens as he answers your questions and breaks down proven syndication strategies, common mistakes to avoid, and the mindset required for success.
**If you’re serious about accelerating your real estate success, don’t miss this chance to gain insights from the industries top investors**
[ Grab Your Ticket Now ](/bootcamp/)
---
### [Warrior Wins - Michael Davidov](https://rodkhleif.com/warrior-wins-michael-davidov/)
**Published:** December 8, 2023
**Author:** Greciel Moreno
**Content:**
## Warrior Win
# Michael Davidov
Attorney and Wealth Manager, with 20 years of single and small multi family investment experience.
## Property Details
**Address:** 2900 South Freeway, Fort Worth, TX 76104.
**Number of Units:** 123
**Value Add Deal?** light value add (capex of $400K)
**Purchase Price:** $11,250,000
**Estimated monthly increase projected?** $130/unit
**Anticipated value after value add:** $15,000,000
**Estimated Cash on Cash Return:** 7.5%%
**Estimated Internal Rate of Return:** 17.8%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
I wish the focus for me would have been on creating a good team and working on capital raising and asset management rather than on deal analysis and underwriting when I started. I raised 1.2 mil for this deal, but would have raised more if I was more comfortable with the asset manager. I am learning quite a bit about the financing part (as the KP) and the asset management part. I’ve taken a very active role in asset management to get my comfort level higher to a point where I can do more of the asset management.
## How did you find this property?
The deal was brought to me by another Warrior, Francesco Orselli.
## How did you structure the financing of this property?
Fannie Mae 7 year fixed at 6.23% with 3 year IO and 3 year Yield Maintenance, then 1% termination fee.
## Was this a joint venture or syndication?
Syndication (506b and 506c).
## How did you raise the equity?
Friends, business contacts.
## What was the equity raise?
$4,500,000
## What are some hurdles you had to overcome to get this deal done?
I don’t get along with one of the partners (non-warrior) who brought the deal to us. It’s been a challenge to work with this person who is the lead asset manager. However, as one of 3 KPs, we have an ability to vote the person out with regards to decisions.
## What are some of the lessons you learned with this deal?
Pick your team carefully, and discuss equity split from the start. The person who brought the deal wanted to retain a significant portion, and did little to raise capital.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Jeffrey Pitzer](https://rodkhleif.com/warrior-wins-jeffrey-pitzer/)
**Published:** April 15, 2020
**Author:** Matt RK
**Content:**
## Warrior Win
# Jeffrey Pitzer
Have worked for New Home Builders for 33 in Sales and Sales Management. Was the VP of Sales and was responsible for the sales revenue for 17 communities across 5 counties in Southern California. Also ran the New Home Trade-In program which was a fix and flip operation for builders. Have owned and operated a laundry mat for 12 years and in 2015/2016 built a new laundry mat in Temecula Ca. My passions are building high performance teams, real estate, travel, golf, yoga and tennis.
## Property Details
**Address:** 5635-5639 N. 49th St. Ruston Washington 98407
**Number of Units:** 2
**Value Add Deal?** Yes
**Purchase Price:** $479,000
**Estimated monthly increase projected?** $450-650/unit
**Anticipated value after value add:** $550,000
**Estimated Cash on Cash Return:** 6%
## Warrior team
shout outs:
## Which Warriors helped you with this deal, and how?
Chris and Chelsea Grant met with me up in Tacoma…referred to me a contractor which I employed and the contractor did a fantastic job. They also gave me insights on the tenant landlord laws as I was going through the process. My coach Jeff Greenberg referred to me Madison Specs as a Cost Segregation company and he also gave me advice on working with property managers. He actually spoke with me every step along the way and was a tremendous help as I was going through the negotiations on repairs with the owner.
## Any comments about your experience so far in the Warrior Program?
Amazing…have met many new friends and have started to develop the relationships that will start to turn into partnerships over the next year and have been participating in a accountability group and am now participating in a smaller group and we are master minding a Joint Venture
##
How did you find this property?
Searching listings I was being sent by a broker
##
How did you structure the financing of this property?
Non-Owner Occupied Financing with 25% down. Paid 8k in points to buy the rate down
## How did you raise the equity?
From 401k savings. In order to pay for the tax hit for the withdrawal…I paid for a cost segregation study on the advice of my coach(Jeff Greenberg). The ability to offset the taxes through the use of tax segregation is invaluable.
## What was the equity raise?
$0…but I did have to borrow 10k to finish the renovations
## What are some hurdles you had to overcome to get this deal done?
There was quite a bit of deferred maintenance and the seller did not want to fix anything. This meant I had to dig deeper for cash to renovate. We also gave rent increases to both tenants at the same time and both decided to vacate. This caused to renovate both sides at the same time…when I really initially planned to renovate one side. This meant I had to have more staying power from a cash standpoint.
## What are some of the lessons you learned with this deal?
Must have more cash set aside than you originally thought. I renovated the property very nicely and thinking I could have scaled it down a bit. Would have only increased rent on one side so as not to have both sides vacant at the same time. Also, I have a property manager that only charges 5% and as a result…they are not executing to my standards. I have my own standards or Mission Statement and I expect those that I do business with to do the same. Because of this…they are very time consuming…would prefer something a little easier more hands off.Hopefully, this will now shift into auto-pilot.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Enrique Ortega](https://rodkhleif.com/warrior-wins-enrique-ortega/)
**Published:** May 3, 2022
**Author:** Graciela
**Content:**
## Warrior Win
# Enrique Ortega
I am an Investment Advisor and Investor, whose passion is not only invest for myself but also guide people in the investments world in order to achieve their goals. My expertise is in investing such us stocks, bonds, funds and single family real estate. However, since becoming a warrior it has changed and now I added Multifamily Investing on my list of skills. Since becoming a warrior in the third quarter of 2020, my real estate portfolio has grown from a single family condo (1 unit) to 50 units, owned by myself and my wife as single partners. After acquiring a fourplex in June 2021, my latest acquisition is a 35 unit apartment portfolio located in Holly Hill FL ( part of Daytona Beach, FL).
## Property Details
**Address:** 1202 Ridgewood Ave, Holly Hill, FL 32117
**Number of Units:** 35
**Value Add Deal?** Yes
**Purchase Price:** $1,925,000
**Estimated monthly increase projected?** $200/unit on half of the units and $100/unit on another quarter.
**Anticipated value after value add:** $3,225,000
**Estimated Cash on Cash Return:** 11.5%
**Estimated Internal Rate of Return:** 21.3%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
The Warrior Program not only has improved my financial life by increasing my passive income from $250/month to $8,500/month in less than two years but also has improved significantly my mindset in all aspects of my life. It has show me that your wildest dreams can really become a reality.
## How did you find this property?
Through a Commercial Real Estate Broker.
## How did you structure the financing of this property?
Seller Financing.
## Was this a joint venture or syndication?
Joint Venture with my Wife.
## How did you raise the equity?
Mainly Savings and then some HELOCs on other properties.
## What was the equity raise?
My own equity $500,000
## What are some hurdles you had to overcome to get this deal done?
Finding the deal, negotiating the seller finance, negotiating price.
## What are some of the lessons you learned with this deal?
Always throw the seller finance option. Have a good property manager.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Eyal Ohana](https://rodkhleif.com/warrior-wins-eyal-ohana/)
**Published:** August 20, 2021
**Author:** Matt RK
**Content:**
## Warrior Win
# Eyal
Ohana
Started program with Rod about 1 year ago, started as a passive investor in 2 of Rods deals and 2 more deals. As of last week finally got my first JV deal
## Property Details
**Address:** COSGROVE FLATS
**Number of Units:** 36
**Value Add Deal?** Yes
**Purchase Price:** $4,442500
**Estimated monthly increase projected?** $50-100/unit
**Anticipated value after value add:** $4,800,000
**Estimated Cash on Cash Return:** 10%
**Estimated Internal Rate of Return:** 17.58%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
love the people and need to get on more calls with like minded people on this group
## How did you find this property?
Found deal through our team in connection with Darren light.
## Was this a joint venture or syndication?
Joint Venture
## How did you raise the equity?
Contacting our investor list and marketing since this was a 506(c)
## What was the equity raise?
$1.3 mil
## What are some hurdles you had to overcome to get this deal done?
just a waiting game in a hot market
## What are some of the lessons you learned with this deal?
this is definitely a team sport
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Joel Bolomboy - #2](https://rodkhleif.com/warrior-wins-joel-bolomboy-2/)
**Published:** April 9, 2020
**Author:** Matt RK
**Content:**
## Warrior Win
# Joel Bolomboy
I am currently a pro basketball player in my 4th year playing professionally. I originally got into and found real estate by looking for other ways to invest and grow my money outside of the stock market. Long story short I first learned about the real estate investing by coming across Grant Cardone and started watching and following him closely. Then took it upon myself to learn the game. Fast forward some more and I am at full swing now due to ROD KHLEIF. I am invested in 405 units total, at this point I am always learning but know enough to only invest in my own deals. 197 of these units I am an actual GP in these deals with my partners. As of 4.6.2020 we have 3 deals under contract, a 68, 22 and 130 all within a years worth of time after taking Rod’s course and learning from him.
## Property Details
**Address:** 917 Apollo Beach Blvd, Tampa FL 33572
**Number of Units:** 56
**Value Add Deal?** Yes
**Purchase Price:** $6,800,00
**Estimated monthly increase projected?** $138
**Estimated Cash on Cash Return:** 7-9%
**Estimated Internal Rate of Return:** 15-17%
## Warrior team
shout outs:
## Which Warriors helped you with this deal, and how?
Vehano Joseph, Nick Contessa, Brian Murphey, Steeve Breton, Robinson Law and many others
## Any comments about your experience so far in the Warrior Program?
Best program out there! We can all make any of our dreams or wildest imaginations happen through hard work, not giving up and massive action everyday!
## How did you find this property?
Our property management company that manages our apartments in Tampa gave us this deal. At the time they were managing Pilar’s and knew it was going to sell, so they first offered it to us. They manage 4,500 units, with that said it shows you they trusted us to get the deal done and believed in what we are doing.
## How did you structure the financing of this property?
70% LTV agency, non recourse, fixed interest rate for 12 years
##
Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
Private investors
##
What was the equity raise?
$2,500,000
##
What are some hurdles you had to overcome to get this deal done?
Day of rate lock our interest rate increased due to 30 day LIBOR
##
What are some of the lessons you learned with this deal?
Bonus for us was when 3rd party personal visited and when bank underwrote the deal, they valued the property at $7.2 million and we bought it for $6.8million
## What are some of the Major Improvements planned or completed?
Light renovations such as updating. Modern cabinets, backsplash, light fixtures, usb outlets and flooring. $8k per unit. Also kitchen upgrades, technology pack, screened patio, outdoor kitchen and exterior work.
## Add Your Heading Text Here
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Cain McNeil](https://rodkhleif.com/warrior-wins-cain-mcneil/)
**Published:** April 25, 2023
**Author:** Greciel Moreno
**Content:**
## Warrior Win
# Cain McNeil
7 years in multifamily and mobile home park investing. 7 years as a licensed agent. I do flips and new construction as well. I own a 3rd party property management company that manages over 1,000 units. My portfolio consists of 333 units. My hobbies and passion includes spending quality time with my wife and daughter and competitive bodybuilding.
## Property Details
**Address:** 3120 Minnesota Avenue, Panama City, FL 32405 “Cottage Grove”
**Number of Units:** 86
**Value Add Deal?** Yes
**Purchase Price:** $2,000,000
**Estimated monthly increase projected?** $143,500
**Anticipated value after value add:** $16MM
**Estimated Cash on Cash Return:** 11-13%
**Estimated Internal Rate of Return:** Infinite after refi
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Excellent material especially the books sent directly to me. Ed Mylett is a great coach/person.
## How did you find this property?
I have had a relationship with the seller for 5 years. The property was on the market but going through litigation. We bought it once litigation with the local municipality was done.
## How did you structure the financing of this property?
Owner financing for property. Triad lending for purchase order from manufacturer.
## Was this a joint venture or syndication?
Joint Venture
## How did you raise the equity?
Personal relationships
## What was the equity raise?
$900,000
## What are some hurdles you had to overcome to get this deal done?
Getting answers from the city attorney confirming we may execute our business plan.
## What are some of the lessons you learned with this deal?
Thorough due diligence. Key partnerships.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - George & Elizabeth Tavares](https://rodkhleif.com/warrior-wins-george-elizabeth-tavares/)
**Published:** February 9, 2023
**Author:** Graciela
**Content:**
## Warrior Win
# George & Elizabeth Tavares
George and I are both employees. George works as a manager in a major power plant in NYC and I am a bilingual speech-language pathologist in the school system. We own a rental property and our SFH, both in NYC. We are currently passionate about achieving financial freedom so that we can leave our W2s and enjoy more family time.
## Property Details
**Address:** 12955 Larchmere Boulevard, Shaker Heights OH 44120
**Number of Units:** 31
**Value Add Deal?** Yes
**Purchase Price:** $1,400,000
**Estimated monthly increase projected?** $400/unit
**Anticipated value after value add:** $3,000,000
**Estimated Cash on Cash Return:** 7.5%
**Estimated Internal Rate of Return:** 12-14%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
We have always wanted to get involved in real estate. Purchasing outside of NYC just didn’t seem possible. Attaining an apartment seemed even less likely. Joining the warrior program has definitely allowed us to dream bigger and opened our eyes to all of the possibilities. We have met some awesome people in this program and even partnered with them to help us get started!
## How did you find this property?
Our coach, Jason Pero, helped us to acquire this property with him and a few others.
## How did you structure the financing of this property?
Bridge Loan for 3 years.
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
Friends and Family 506B
## What was the equity raise?
$1,200,000
## What are some hurdles you had to overcome to get this deal done?
For this deal, we definitely had to learn how to come out of our comfort zone in order to raise the capital. This was one of the biggest hurdles for my husband and I, as we am slowly learning about syndications. The other issue we ran into was the addition of the SFH, which is part of the 31 units. We had trouble getting access to the home because of a trouble tenant who was living there and not paying rent. Thankfully, we were able to finally gain access and evict the tenant.
## What are some of the lessons you learned with this deal?
We have learned so much. The most important for us has been getting more comfortable talking to potential investors. It’s quite scary when you talk to potential investors who have knowledge about syndications and/or investing in real estate. Doing so, has taught us so much, as we have had to do research to search for answers that experienced investors have asked us.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Win:
Aaron Novotney
53 Unit in OH](https://rodkhleif.com/warrior-win-aaron-novotney-53-unit-in-oh/)
**Published:** July 1, 2025
**Author:** Graciela
**Content:**
## Warrior Win
# Aaron Novotney
53 Units Closed
## Aaron Novotney:
## From Healthcare Business Development to Multifamily Syndicator
Aaron brings 30 years of experience in healthcare business development and a year in property management to his multifamily investing journey. Transitioning into real estate, Aaron leveraged his business acumen and passion for value-add strategies to acquire and improve a 53-unit property. As a dedicated member of Rod Khleif’s Warrior Coaching Program, he utilized mentorship and a strong network to successfully syndicate and manage his deal, moving closer to his financial freedom goals.
[Learn more about Warrior Coaching → ](https://rodkhleif.com/work-with-rod/)
## Property Overview
**Location:** Lima 315 LLC.
**Number of Units:** 53
**Deal Type:** Value Add
**Purchase Price:** $5,000,000
**Projected Monthly Rent Increase:** 12%
**Anticipated Value After Value Add:** $6,000,000
**Estimated Cash-on-Cash Return:** 18%
**Estimated Internal Rate of Return (IRR):** 8%
## How This Deal Came Together
### Deal Source
**Business Partner Found It:** The property was sourced through a trusted business partner who identified the opportunity, enabling Aaron to act quickly on this value-add deal.
### Equity Raise
**$1 Million Raised Through Word of Mouth:** Aaron raised equity by leveraging personal relationships with friends and business colleagues, demonstrating the power of networking within the Warrior community.
### Financing Structure
**Class A and Class B Shares Syndication:** The financing was structured using Class A and Class B shares, facilitating a syndication model that allowed multiple investors to participate in the deal.
### Value-Add Strategies
**Major Renovations Completed:** Aaron focused on critical improvements including roofs, siding, windows, bathrooms, and kitchens to increase property value and tenant satisfaction, driving the projected rent increase.
### ## Challenges Faced
Ugly Looking Proposition Due to Rehab Needs: The deal presented significant hurdles with many units requiring extensive rehab, making it a challenging but ultimately rewarding investment.
### Warrior Program Support
Mark Blass is the Mastermind: Aaron credits fellow Warrior Mark Blass for invaluable guidance and support throughout the deal process, highlighting the strength of the Warrior network.
### Lessons Learned & Key Takeaways
**Rehab Costs a Ton:** Aaron learned firsthand the high costs associated with property rehabilitation, emphasizing the importance of thorough budgeting and contingency planning.
> This is lot of work--you almost have to make the decision to jump in full time if you really want to realize your dreams.
>
> Aaron Novotney
## Be the Next Warrior Success Story
Aaron’s journey from healthcare to multifamily syndication proves that with the right mentorship, network, and commitment, you can overcome challenges and build a profitable real estate portfolio. Rod Khleif’s Warrior Coaching Program offers step-by-step guidance, expert mentorship, and a supportive community to help you close deals, raise capital, and grow your wealth. Ready to take control of your financial future? Apply for mentorship today and start your own Warrior Win.
[ Join the Warrior Program ](https://rodkhleif.com/work-with-rod/)
## Warrior Success Stories
[Play Video](https://www.youtube.com/watch?v=6L-ho9oRtUY)
#### [Featuring Elsa Nguyens #682](https://rodkhleif.com/podcasts/single-mom-to-massive-success-in-multifamily/)
### [Immigrant Mom To Massive Success In Multifamily](https://rodkhleif.com/podcasts/single-mom-to-massive-success-in-multifamily/)
[Play Video](https://www.youtube.com/watch?v=Fmqzl9_8Nj4)
#### [Featuring Oliver Fernandez #721](https://rodkhleif.com/podcasts/from-7-to-1000-units-in-3-years-2/)
### [From 7 to 1000 units in 3 years](https://rodkhleif.com/podcasts/from-7-to-1000-units-in-3-years-2/)
[Play Video](https://www.youtube.com/watch?v=J-fDFPBRilY)
#### [Featuring Rasool Mutawakkil #715](https://rodkhleif.com/podcasts/10mm-in-multifamily-assets-under-management-in-one-year/)
### [$10MM in Multifamily Assets Under Management in One Year](https://rodkhleif.com/podcasts/10mm-in-multifamily-assets-under-management-in-one-year/)
[ See more warrior wins ](/warriorwins)
---
### [Warrior Wins - Jon Potts](https://rodkhleif.com/warrior-wins-jon-potts/)
**Published:** November 10, 2023
**Author:** Greciel Moreno
**Content:**
## Warrior Win
# Jon Potts
I have a sales background, I started a company flipping houses with my wife and have flipped over 20 properties. I have a passion for real estate but ultimately love my wife and daughter and being apart of my church community.
## Property Details
**Address:** Regency Square apartments. Indiana, PA
**Number of Units:** 84
**Value Add Deal?** Yes
**Purchase Price:** $1.45M
**Estimated monthly increase projected?** $100.00/unit
**Anticipated value after value add:** $3.5 Million
**Estimated Cash on Cash Return:** 10%
**Estimated Internal Rate of Return:** 30%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
I would not be where I am if it weren’t for this incredible group of warriors. This group and program has given me confidence to go after my dreams and push me out of my comfort zone. The people Rod attracts are inspiring and genuine people and I love being apart of it!
## How did you find this property?
Through other warriors. Dan Velez and AJ Simeone were both looking at the same property so we all decided to partner up.
## How did you structure the financing of this property?
We financed through brentwood bank and all partners brought funds for closing/Cap ex.
## Was this a joint venture or syndication?
Joint Venture.
## How did you raise the equity?
Everyone on the team brought funds.
## What was the equity raise?
There was no outside equity raise.
## What are some hurdles you had to overcome to get this deal done?
We overcame many hurdles including Carrying over a LIHTC Agreement, discovering aluminum wiring during DD, having a hard time getting insurance due to the aluminum wiring, and a miscommunication with the township and state on occupancy.
## What are some of the lessons you learned with this deal?
Over communication is key.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Daniel Velez](https://rodkhleif.com/warrior-wins-daniel-velez/)
**Published:** November 10, 2023
**Author:** Greciel Moreno
**Content:**
## Warrior Win
# Daniel Velez
CPA – 11 years in public accounting and private. Been focused on the start up/tech space over the past 6 years, helping implement processes/controls/and reporting for companies looking to scale (Series A to C). I’ve owned a single family rental for 7 years, have completed a flip, and run a RE meet up for the past 6 years.
## Property Details
**Address:** 1400 Oakland Ave, Indiana, PA
**Number of Units:** 84
**Value Add Deal?** Yes
**Purchase Price:** $1,450,000
**Estimated monthly increase projected?** $100/unit once out of LIHTC
**Anticipated value after value add:** $3.5m
**Estimated Cash on Cash Return:** 10%
**Estimated Internal Rate of Return:** 33%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Great group of folks. I was feeling overwhelmed/disappointed that I didn’t close a deal within my first 90, 180, 365 days. But in working with this team, I believe that it will be the relationships that I’ve built that will enable me to scale for the long term successfully vs. just acquiring doors quickly. My goal is to lead asset mgmt/ops so deal sourcing and working with more experienced operators and capital raisers will be my continued focus.
## How did you find this property?
Broker.
## How did you structure the financing of this property?
80% loan to cost with 2 years IO. 5 year balloon and 25 yr amort.
## Was this a joint venture or syndication?
Joint Venture.
## How did you raise the equity?
All members of the JV contributed.
## What was the equity raise?
$750k.
## What are some hurdles you had to overcome to get this deal done?
Inspection – identified aluminum wiring during the inspection and that electric hasn’t been updated from original construction (1971)
Insurance – denied by 20+ carriers due to aluminum wiring and/or the percentage of S8 tenants. We also had a cancellation notice issued because of the delays in closing from original bind date
Legal – Took 60 days to get a signed PSA from the sellers Legal (they faxed comments over to our attorneys)
Occupancy Permits – The property falls within 2 townships. 48 of the units didn’t have a final permit/occupancy permit issued upon completion. Had to get a letter from the current local authority that the property was operating in good standing
Title – closing was pushed back 3 times due to disorganization of title and last min requests from local banks
Local bank – unresponsive on required deliverables and their legal team was MIA on day of close to approve final transfer of funds from escrow to sellers pay off account.
## What are some of the lessons you learned with this deal?
Set up a close calendar that we maintain as the operators to hold all external 3rd parties accountable for their required docs and timelines. So many hiccups and disorganization from title and the local bank, the same files were delivered multiple times to the parties. Basically need to micromanage more. I incorrectly anticipated that some of these companies would operate more smoothly vs. a residential transaction (comparing to my residential agent business), and that just wasn’t the case.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Max Shah](https://rodkhleif.com/warrior-wins-max-shah/)
**Published:** November 10, 2023
**Author:** Greciel Moreno
**Content:**
## Warrior Win Max Shah
56 Unit
# Max Shah
Meet Max Shah, a highly accomplished real estate investor with an exceptional track record. With a career spanning since 2014, Max has amassed an impressive portfolio of over 1169 Units across various sectors. As the esteemed founder of ROS Capital, a distinguished real estate investment firm, Max specializes in multifamily properties, self-storage facilities, single-family rentals, short-term rentals, hotels, and gas stations. Driven by a deep passion for empowering others to achieve financial success through real estate investing, Max serves as a trusted advisor and partner. His unwavering commitment to delivering exceptional results for his clients has earned him a sterling reputation in the industry. With Priyank by their side, individuals can rest assured that they are in the capable hands of a seasoned professional who is dedicated to their prosperity.
## Property Details
**Address:** Apartment Villages 2900 Ravenswood Dr, Evansville, IN 47714
**Number of Units:** 56
**Value Add Deal?** Yes
**Purchase Price:** $3,975,000
**Estimated monthly increase projected?** $250+/unit
**Anticipated value after value add:** $5,950,000
**Estimated Cash on Cash Return:** 6%
**Estimated Internal Rate of Return:** 18%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
One word Awsome so many great people and all of them are welcoming and friendly.
Best program and upmost respect for Rod and his team! One day maybe I can coach and bread next generation of warriors!
## How did you find this property?
Property was brought to me by another investor which I found through my networking. They failed to close. So I was being pulled in to help out.
## How did you structure the financing of this property?
We had local bank fund property. 7% Interests only for 24 month’s 25 yr term.
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
506b So prior networking contacts and friends.
## What was the equity raise?
$1,500,000
## What are some hurdles you had to overcome to get this deal done?
LOTS Of THEM.
Bank rates spiked to 1.5% from first underwriting to closing, leading to multiple renegotiations. We couldn’t advertise due to 506b regulations. Closing in 3 weeks with $0 wired was a hurdle. Preparing the PPM and Operating Agreement took longer than expected. To save the deal, we creatively negotiated with the property manager, reducing fees from 7% to 1% for year 1 and 3% thereafter and brought them as GP wirh 10%, ensuring our returns met guidelines. And motivating them to perform!
Just days before closing, the bank’s term sheet added complications, but we navigated it successfully to avoid risking investor funds.
## What are some of the lessons you learned with this deal?
Lock in Rates and also keep your eyes open for mortgage documents.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Benedict Joanis](https://rodkhleif.com/warrior-wins-benedict-joanis/)
**Published:** November 10, 2020
**Author:** Matt RK
**Content:**
## Warrior Win
# Benedict Joanis
Former Financial Advisor with 10 years of experience. Real Estate Investor (Wholesaler & Flipper) for the past 6 years. Landlord for the past 2 years.
## Property Details
**Address:** 48 N 17th St East Orange NJ
**Number of Units:** 2
**Value Add Deal?** Yes
**Purchase Price:** $137,000
**Estimated monthly increase projected?** $3,500
**Anticipated value after value add:** $325,000
**Estimated Cash on Cash Return:** 29.66%
**Estimated Internal Rate of Return:** 16.35%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
It’s been great! Excited to be able to focus more on buying more and more doors.
## How did you find this property?
With my car magnets at a local Home Depot
## How did you structure the financing of this property?
Cash Partner – 50/50 split. Used partner’s money to purchase and rehab project. Put in 30k of my own money. Refinanced out at 70% LTV. Now both partner and I have 30k each in property. 60k total.
## Was this a joint venture or syndication?
Joint Venture
## How did you raise the equity?
Private investor that I’ve used on other projects.
## What was the equity raise?
210000 Partner + 30000 me
## What are some hurdles you had to overcome to get this deal done?
Managing the renovations.
## What are some of the lessons you learned with this deal?
Outsource the renovation work. Hire a project manager.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Eric and Lisa Doud](https://rodkhleif.com/warrior-wins-eric-and-lisa-doud/)
**Published:** August 4, 2020
**Author:** Matt RK
**Content:**
## Warrior Win
# Eric and Lisa Doud
Eric and Lisa Doud Real Estate Investors, Realtors, Property Managers, Licensed Real Estate Broker, Licensed Home improvement Contractor, and Business Owners.
Eric served in the US Navy for 20 years and is now retired, since retiring he has been a full time contractor and realtor working in our businesses.
Lisa served in the the US Navy for 9 years, worked as a government contractor for about 5 years until we started our own business which she has been full time since 2012 running the Brokerage.
## Property Details
**Address:** 148 W. Balview Ave norfolk VA 23503
**Number of Units:** 6
**Value Add Deal?** No
**Purchase Price:** $375,000
**Estimated monthly increase projected?** $1,500 per month
**Estimated Cash on Cash Return:** 10.65%
**Estimated Internal Rate of Return:** 78.03%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
It made us go out of our comfort zone and do the mail marketing which lead to this purchase.
## How did you find this property?
We purchased 2 6 unit apartment buildings in 2010, and the prior owners, gave us 1 building 100% owner financing, and we had a bank loan for the other property. We re-financed the property in April 2020, and they were paid off. We sent out out our mail marketing letter in May 2020, and they called us and told us that they wanted to sell us their other 6 unit apartment building. They never asked for any financial documents or even a current credit report, they figured if we could pay them 10 years without missing a payment chances of getting their money was really good and they were ready to sell.
## Was this a joint venture or syndication?
Personal Deal (Eric and Lisa only)
## How did you structure the financing of this property?
100% Owner Financing. $5,000 down Loan amount $370,000 4.25% interest rate Amortized 30 years with 10 year balloon.
## What are some hurdles you had to overcome to get this deal done?
Absolutely no Hurdles. The easiest deal, and I can’t still believe it was real.
## What are some of the lessons you learned with this deal?
It is very important that you pay your loans and keep your word. It was a 10-year relationship on our other property that made the Bellamys want to sell this property to us.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Rasool Mutawakkil](https://rodkhleif.com/warrior-wins-rasool-mutawakkil/)
**Published:** June 11, 2021
**Author:** Matt RK
**Content:**
## Warrior Win
# Rasool Mutawakkil
Working as a Senior Financial Analyst for my 9-5, my wife and I decided that we need to start looking at other investment vehicles to grow our net worth.
## Property Details
**Address:** Oakwood Gardens 3880 Mayfield Road Cleveland Heights, OH 44121
**Number of Units:** 42
**Value Add Deal?** Yes
**Purchase Price:** $2,220,000
**Estimated monthly increase projected?** $128 average unit increase
**Anticipated value after value add:** $3,200,000
**Estimated Cash on Cash Return:** 22.5%
**Estimated Internal Rate of Return:** 17.63% IRR
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
I really wanted to thank this group for being as amazing as it is. Every team member helps make this place an amazing spot to learn and grow and build a network of people who want to grow and succeed in this space. Rod’s way of teaching commercial in the bootcamp is better than anyone could ever hope for.
## How did you find this property?
Networked with a broker who was looking for capital partners to get their deals done.
## How did you structure the financing of this property?
25% down payment, 30 year amortization, 2 year interest only period at 3.38%. refinancing after rehabs are complete around the beginning of year 3 to return 80% of the capital to the investors conservatively.
## Was this a joint venture or syndication?
Syndication 506b
## What was the equity raise?
$975,000
## How did you raise the equity?
I personally spoke with investors, explained our business plan and projected returns based on very conservative estimations. I had the full amount within 5 days of beginning the raise
## What are some hurdles you had to overcome to get this deal done?
The most difficult part of this deal was getting to it. I had underwritten hundreds of deals before, fallen out of contract on a few deals, partnerships that didn’t go anywhere, but finally, when this deal presented itself I knew that it was an amazing one and I would easily be able to build confidence in my investor group
## What are some of the lessons you learned with this deal?
Persistence is truly the key to success. There were many times when I felt like I was just wasting my time. But even though I wasn’t closing on deals, the failures looked slightly different each time. They were happening a little further along in the process each time so I just had the feeling that if I kept pushing on that boulder, eventually it would come rolling down the hill.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Jermaine Xavier](https://rodkhleif.com/warrior-wins-jermaine-xavier/)
**Published:** December 7, 2023
**Author:** Greciel Moreno
**Content:**
## Warrior Win
# Jermaine Xavier
Jermaine has been a real estate investor since 2005 with a portfolio that includes multi-family and single family assets. He is currently a general partner in 34 units in Arkansas and owns a 6 unit commercial property and single family properties in Maryland and Southern California. Jermaine has gone ‘Full Cycle’ on four multifamily properties and one single family property from 2011 through 2023.
Jermaine is a licensed electrical engineer, and a Program Manager for the National Aeronautics and Space Administration.
As a former HVAC contractor and business owner, Jermaine adds engineering and technical capability to assets within his portfolio.
By the end of 2024 Jermaine has plans to close two multifamily assets as a general partner adding over 200 doors to his portfolio. Jermaine is currently working to expand his investor and professional network.
## Property Details
**Address:** Creekside Village Townhomes
**Number of Units:** 34
**Value Add Deal?** Yes
**Purchase Price:** $1,425,000
**Estimated monthly increase projected?** $150-200/unit
**Anticipated value after value add:** $2,500,000
**Estimated Cash on Cash Return:** 8.72%
**Estimated Internal Rate of Return:** 33.2%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
The warrior program has really opened my eyes to the multi-family real estate business. I took my daughter and son to the event in Orlando, and plan to enroll them in the Warrior Program once they graduate from college.
## How did you find this property?
I am teamed up with another Warrior Chris Moyer who found this asset.
## How did you structure the financing of this property?
We got local financing at 8.5%, with the plan to refinance to agency debt after a return of capital after 24 months.
## Was this a joint venture or syndication?
Syndication.
## How did you raise the equity?
506(b). Friends, and other Warriors met at the Orlando event.
## What was the equity raise?
$725,000
## What are some hurdles you had to overcome to get this deal done?
Every hurdle Rod mentions. Capital raising was the main one. I was surprised how difficult the capital raising process was. I learned to get 2-3 times the number of soft commits and needed to fully fund.
## What are some of the lessons you learned with this deal?
I learned the importance of truly putting into practice what Rod says about capital raising…if someone sits still long enough…tell them what you do.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Alex Zahn](https://rodkhleif.com/warrior-wins-alex-zahn/)
**Published:** August 11, 2022
**Author:** Graciela
**Content:**
## Warrior Win
# Alex Zahn
I graduated from college a year ago and instantly took a job in medical sales. Even though the money was good, it wasn’t my passion.
So through networking, I met a guy who has over 2500+ units. He offered a job of a property manager so that I can learn that side of the business. I have been in that role for 7 months and am currently transitioning into an acquisitions role.
## Property Details
**Address:** 3630 Ranch Rd. Columbia, SC 29206
**Number of Units:** 66
**Value Add Deal?** Yes
**Purchase Price:** $4,500,000
**Estimated monthly increase projected?** $200/unit
**Anticipated value after value add:** $7,000,000
**Estimated Cash on Cash Return:** 8.64%
**Estimated Internal Rate of Return:** 21.47%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
It’s been great!
## How did you find this property?
Off market.
## How did you structure the financing of this property?
Seller financed 50%
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
From family and friends.
## What was the equity raise?
2.25 Million
## What are some hurdles you had to overcome to get this deal done?
We were anticipating the seller financing 60% of the deal but he changed his mind last minute due to the loan paydown that he still had to make.
## What are some of the lessons you learned with this deal?
Make sure to inspect every unit before you buy.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Win: Levi Weber 57 Units](https://rodkhleif.com/warrior-wins-levi-weber-2/)
**Published:** January 26, 2023
**Author:** Graciela
**Content:**
## Warrior Win
# Levi Weber
In 2018, Levi began his journey to become a prominent player in the Colorado Real
Estate market. Starting with single family and small multifamily properties, in 2020 he
pivoted to commercial multifamily real estate and in 2022 expanded into hospitality.
He is a graduate of CSU with a mechanical engineering degree. In early 2021, having grown his portfolio of
profitable RE investments, he transitioned to real estate full time.
Levi through a variety of different LLC’s is currently focused on small to mid-size value add
properties. His investment strategy is to buy well located property and create value
by redeveloping existing buildings, improving management, and seeing creative
opportunities others may have missed.
## Property Details
**Address:** Fountain Terrace
**Number of Units:** 57
**Value Add Deal?** Yes
**Purchase Price:** $8,500,000
**Estimated monthly increase projected?** $300
**Anticipated value after value add:** $12,000,000
**Estimated Cash on Cash Return:** 7%
**Estimated Internal Rate of Return:** 16-18%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Great for meeting other active investors.
## How did you find this property?
Broker relationships.
## How did you structure the financing of this property?
70% LTC loan through local lender that I have a track record with on several previous projects.
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
Partners and self raising.
## What was the equity raise?
$3,100,000
## What are some hurdles you had to overcome to get this deal done?
Putting the deal together during a very volatile time in the economy.
## What are some of the lessons you learned with this deal?
I learned more about the syndication process. After putting together 15+ JV deals I realized the syndication process isn’t as different as I perceived it would be.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Jonathan Long](https://rodkhleif.com/warrior-wins-jonathan-long/)
**Published:** September 22, 2023
**Author:** Graciela
**Content:**
## Warrior Win
# Jonathan Long
Early years I was a Mechanic and Fabricator. Currently own and manage a used car lot for 11 years. Had no Real Estate experience before joining warrior program.
## Property Details
**Address:** Archway Apartments 685 Rountree Rd, Riverdale, GA 30274
**Number of Units:** 106
**Value Add Deal?** Yes
**Purchase Price:** $13,400,000
**Estimated monthly increase projected?** 151 by year 3
**Anticipated value after value add:** $20,261,905
**Estimated Cash on Cash Return:** 7%
**Estimated Internal Rate of Return:** 15%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Love the ability to call anyone in the group and ask for advice or help. The network is unmatched compared to anything else out there.
## How did you find this property?
Was found be other warriors
## How did you structure the financing of this property?
Assumable long term agency Debt
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
Lp investors and pref equity
## What was the equity raise?
$6,105,194
## What are some hurdles you had to overcome to get this deal done?
Hard time raising enough to close and had to take short term loans and seller finance to close. Pref equity took forever to get approved and extending the capital raise after closing.
## What are some of the lessons you learned with this deal?
Make sure capital raisers on team are experienced and have the investors to back their commitment. Some new people are fine but not the majority.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Max Moala](https://rodkhleif.com/warrior-wins-max-moala/)
**Published:** September 16, 2022
**Author:** Graciela
**Content:**
## Warrior Win
# Max Moala
Founder of Api Investments. Co-owner of Live to give realty a wholesale real estate company and managing member of Poly Capital Group, Multifamily Real Estate Investment company.
January of 2022 he quit his 6 figure w2 salary, sold their home and he has him family moved to Dallas, TX in pursuit of their dream. Working for himself as a real estate investor, building a business that he could own and pass on to his kids. Within 8 months in the warrior program now a General Partner on 91 Multifamily units & 2 Single Family Residential homes.
In his previous w2 Life As a manager, was instrumental in growing the company from $3M-$50MM in revenue in less than 4 years.
## Property Details
**Address:** Thomas Portfolio
**Number of Units:** 31
**Value Add Deal?** Yes
**Purchase Price:** $1,385,000
**Estimated monthly increase projected?** $500
**Anticipated value after value add:** $6,000,000
**Estimated Cash on Cash Return:** 40.86%
**Estimated Internal Rate of Return:** 30.96%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Been great so far. The educational resources and network are phenomenal. I would not have been as confident going into multifamily prior to joining, even though I had read a couple of books and joined a small coaching program, it wasn’t enough for me to go out and take action.
## How did you find this property?
Saw the property while driving. Skip traced the owner. Midnight cold call. Tired landlord of over 20 yrs. Hadn’t raised rents in nearly 10 yrs.
## How did you structure the financing of this property?
Purchased the SFR homes all cash $400K. The 16 unit we were able to get long term fixed debt at 4% through local bank
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
Family and friends. 506b offering.
## What was the equity raise?
$695,500
## What are some hurdles you had to overcome to get this deal done?
New market, newer team, not much experience. The shift in the economy and interest rate hikes caused Majority of my investors to hold onto their cash.
## What are some of the lessons you learned with this deal?
Perseverance. Non-negotiable no quit attitude is required to make it work.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Parag Dave](https://rodkhleif.com/warrior-wins-parag-dave/)
**Published:** November 10, 2023
**Author:** Greciel Moreno
**Content:**
## Warrior Win
# Parag Dave
3 years as a warrior! When I was a little kid I would collect rent with my parents at a 12 plex in Addison Illinois. I have a flooring company so we work with many landlords and operators. I love spending time with my family! I have 2 year old twin boys and want to make sure they are financially literate. I have a passion for my sports teams and riding my bike. My goal for next year is to complete a triathlon!
## Property Details
**Address:** Stoney Creek Highlands
**Number of Units:** 278
**Value Add Deal?** NO
**Purchase Price:** $46.7M
**Estimated monthly increase projected?** Year 1 7.5% (we hit our year one goal prior to closing because the previous owner renewed leases with a $170 average bump on 58% of the units!!)
**Anticipated value after value add:** $72m
**Estimated Cash on Cash Return:** 6-8%
**Estimated Internal Rate of Return:** 16-17%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
It has been great. I have been a quieter warrior overall but have been soaking in tidbits from all of the Thursday calls and have started to network more as my kids have required less attention. I plan to keep making moves and learning from the group. Thank you for putting this group together!
## How did you find this property?
Networkinging! We had a relationship with a few people on our lead sponsor team. Through a handful of conversations this deal ended up being a great property to add to our portfolio.
## How did you structure the financing of this property?
Freddie with 7 years I/o and fixed debt at 5.85%
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
Family friends and linkdin connections.
## What was the equity raise?
$19.3M.
## What are some hurdles you had to overcome to get this deal done?
Raising equity with the current economic state did have some push back and being in a smaller market people were not too eager to invest. But with the numbers to back up our business plan and staying in front of our investors we were able to complete the raise.
## What are some of the lessons you learned with this deal?
Stay in front of all investors at all times especially during a raise.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Duy Nguyen](https://rodkhleif.com/warrior-wins-duy-nguyen/)
**Published:** February 11, 2022
**Author:** Matt RK
**Content:**
## Warrior Win
# Duy
Nguyen
Duy Nguyen started investing in Real Estate as a residential rehabber and wholesaler in 2012. He became a residential realtor in 2016. In 2018 he started to scale his Real Estate business to include spec home building, commercial multifamily, land development, notes, mobile home parks, and is starting his first commercial 57 multifamily townhome development.
He is currently a GP and LP of a 42 unit apartment complex in Ohio, a JV partner in a 48 unit apartment complex in Ohio, raised capital for a GP position in a 166 unit apartment complex in Bradenton, FL, and a JV partner in a 42 pad mobile home park in Panama City, FL.
Throughout his career Duy has done well over 800 real estate transactions between 2012 to 2021. His goal is to break 1000 transactions this year by scaling his spec home business to do 100 new starts this year spread throughout Polk county, Palm Bay, FL, and Leigh Acres, FL on top of his rehabs, wholesales, and agent sales.
## Property Details
**Address:** 630 S. Abbe Road, Elyria, OH 44035
**Number of Units:** 48
**Value Add Deal?** Yes
**Purchase Price:** $2,025,000
**Estimated monthly increase projected?** $146/unit
**Anticipated value after value add:** Value at sale will be $3.4M, although we’re planning on hanging on to this for lifetime cashflow and will refi to recoup initial capital
**Estimated Cash on Cash Return:** Cash on Cash return was projected at 11%, but with the lowered cap rates, we’re projecting 15%, but will likely be infinite return as we will get back all of our investor capital on this one.
**Estimated Internal Rate of Return:** 30%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
The education and networking opportunities you receive in this program is unmatched. I am extremely introverted but to be able to partner with a person like Rasool (AKA networking King) is game changing.
## How did you find this property?
This was a bridge loan with 80% LTC including rehab expenses
## How did you structure the financing of this property?
Bridge loan to Agency debt
## Was this a joint venture or syndication?
Joint Venture
## How did you raise the equity?
Brought 8 capital partners together
## What was the equity raise?
$550,000
## What are some hurdles you had to overcome to get this deal done?
Some hurdles were getting a good insurance quote because of the previous fire. Another was one of the investors on the deal backed out before closing which caused a scramble for more funds at the end, but we found the extra cash among our group and got it closed!
## What are some of the lessons you learned with this deal?
Networking is the key to doing more deals faster!
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Eric Lindsey](https://rodkhleif.com/warrior-wins-eric-lindsey/)
**Published:** September 8, 2022
**Author:** Graciela
**Content:**
## Warrior Win
# Eric Lindsey
Eric Lindsey has over 17 years of Construction experience, but has shifted his attention solely to workforce housing within the Manufactured Home and Apartments sector of Real Estate.
Eric Lindsey’s largest wholesale transaction to date was a 600+ space Manufactured Home Community located within Council Bluffs, Iowa, The MHP sold for $20,000,000+.
• I am a General Partner within a Salina, Kansas Mobile Home Park Syndication.
• I have personally closed on 100 Single Family Homes through my Wholesaling company that closes 20-25 properties per year. My estimated transactions total close to $10,000,000 in closed transaction.
## Property Details
**Address:** 116 Spring City Dr, Johnson City, TN 37601: Spring City RV and Mobile Home Park.
**Number of Units:** 78
**Value Add Deal?** Yes
**Purchase Price:** $2,250,000
**Estimated monthly increase projected?** $280/unit
**Anticipated value after value add:** $3,900,000
**Estimated Cash on Cash Return:** 8% COC in Yr. 2
**Estimated Internal Rate of Return:** 18%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
The Warrior program is worth it’s weight in Gold. I would not have been able to do this deal without the group! The Network within the Warrior program is amazing!
## How did you find this property?
I found this property through a Cold Call, I went direct to seller.
## How did you structure the financing of this property?
We used a local bank: The terms were 30% Down payment: 5.75% Fixed: 5 Yr term: No Prepayment penalty.
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
I had two partners raise all of the equity. I found the deal.
## What was the equity raise?
$920,000
## What are some hurdles you had to overcome to get this deal done?
I gave up my Memorial Day to get this property under contract, boarded 4 flights, and risked not being able to get this property under contract. The seller was very difficult, and refused to sign a contract unless I met him in person. I had to risk catching a flight and trusting that a seller would sign the contract. Once arriving the seller met me and signed the contract without even looking at the contract.
## What are some of the lessons you learned with this deal?
I learned that going direct to seller is still alive. The seller kept stating that he didn’t know why he chose to work with me because he receive calls on a day to day basis and mailers. I also learned that you have to do things that others aren’t willing to do to get deals sometime. I also learned that a deal isn’t dead until it is dead. Many times throughout the life of the contract I thought that this deal would die, but through persistence, faith, hard work, and utilizing the Warrior group I was able to get the deal to the finish line.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Matt Iverson](https://rodkhleif.com/warrior-wins-matt-iverson/)
**Published:** June 7, 2023
**Author:** Greciel Moreno
**Content:**
## Warrior Win
# Matt Iverson
I have been in the real estate industry my entire career. after a short stint with a mutual fund firm out of college i was offered an opportunity to help Vail Resort Development Launch a ground up for sale condo project in Breckenridge. 22 years later my self and my family brokerage have sold almost $3billion in resort real estate homes and project, developed almost $45million in for sale luxurey resort homes and fix and flipped close to $25 million in resort propeties. i love living in the mountains of Colorado where i am an avid fly fisher, hunter and skier. My wife and i have 3 daughters and have ventured into Multifamily to build a new business with investments that provide cashflow no matter where we are! Since then they have closed on 2 complexes with 4 more under contract through partnering.
## Property Details
**Address:** Traditions at Slate Ridge, Columbus OH
**Number of Units:** 94
**Value Add Deal?** Yes
**Purchase Price:** $18,500,000
**Estimated monthly increase projected?**$250/unit/month on average
**Anticipated value after value add:** $27,556,000
**Estimated Cash on Cash Return:** 7%
**Estimated Internal Rate of Return:** 18-22%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Excellent, everyone is ready to jump and help in anyway. The content of the education is beyond thorough, and it keeps growing! Everything someon needs to be successful is there, you just need to take daily and consistant action, network with great people and believe inyourself.
## How did you find this property?
Through networking with some mutual friends and family i was introduced to the group who had the deal under contract. After applying all that i had learned in Lifetime cashflow academy, it was apparent it fit my buy box and they envited me on to the GP team to bring some capital and help with ongoing management.
## How did you structure the financing of this property?
Agency Loan at 5.6%, Interest Only for 5 years, fixed for 10 years.
## Was this a joint venture or syndication?
Syndication.
## How did you raise the equity?
I launched my syndication firm and took it to my existing real estate client database and reached out to all my High networth clients and discussed what i was doing and they were very excited to be a part of it and invested with me through my firm.
## What was the equity raise?
$9,500,000.
## What are some hurdles you had to overcome to get this deal done?
Capital raising was difficult. We launched this deal right at the same moment banks were failing and many people were fearful. But through the power of well managed debt and long term need for housing many investors felt it was the safer option.
## What are some of the lessons you learned with this deal?
How to better interact and reach more investors, the power of trust and telling your personal story.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Natasha Jameson-Randolph](https://rodkhleif.com/warrior-wins-natasha-jameson-randolph/)
**Published:** November 10, 2020
**Author:** Matt RK
**Content:**
## Warrior Win
# Natasha Jameson-Randolph
I’m a military veteran who invests in short term rentals. I will be growing my portfolio thru their sale and 1031 exchange by early 2021. Currently I’m a portfolio manager for the US Department of State.
## Property Details
**Address:** 1050 Minns Dr. Machesney Park, Il 61115
**Number of Units:** 6
**Value Add Deal?** Yes
**Purchase Price:** $450,000
**Estimated monthly increase projected?** $300-$500
**Anticipated value after value add:** $550,000
**Estimated Cash on Cash Return:** 10-12%
**Estimated Internal Rate of Return:** 12%-15%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Love the warrior program. Enjoy the camaraderie and friendship made while working to achieve the same goals.
## How did you find this property?
I’m a short term rental investor seeking to move invest in multifamily. I started an accountability group not long after becoming a warrior. I met a really resourceful and driven warrior who consistently attended named Rob Shedden. Ultimately he found an asset in his local market, around the corner from his home. He pitched the deal to our group and after many months of searching myself and another warrior/group member became business partners and provided the equity for the deal. Rob and Tara Shedden are amazing. Driven and dedicated to making IT happen.
## How did you structure the financing of this property?
Joint venture partners @ 7% .
## Was this a joint venture or syndication?
Joint Venture
## How did you raise the equity?
Each of us had so much faith in Rob and Tara, we wrote a check
## What was the equity raise?
Equity between 4 partners was $110K
## What are some hurdles you had to overcome to get this deal done?
Challenges with the broker-Nasty demeanor, constantly inflating and hyping up pitfalls for Rob and Tara to deal with.
## What are some of the lessons you learned with this deal?
The path to success is full of challenges, even at the last minute. Rob and Tara were able to negotiate another $6k seller credit at the closing table due to information the owner failed to disclose.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Steve Ronan](https://rodkhleif.com/warrior-wins-steve-ronan/)
**Published:** April 9, 2020
**Author:** Matt RK
**Content:**
## Warrior Win
# Steve Ronan
Retired from NYPD. Owned 1 investment single family home prior to joining.
## Property Details
**Address:** 110-112 E Otterman St Greensburg, Pa
**Number of Units:** 57
**Value Add Deal?** Yes
**Purchase Price:** $150,000
**Anticipated value after value add:** $1.4 Mil
## Warrior team
shout outs:
## Which Warriors helped you with this deal, and how?
George O’Brian. He found the property and brought me in. He is also overseeing the construction.
## Any comments about your experience so far in the Warrior Program?
Great program. Garrison was a great help and motivator
## How did you find this property?
Partnered with another warrior, George O’Brian
## How did you structure the financing of this property?
Received $800k loan to cover construction costs. Plan to refi after construction is complete and apartments are rented. Will pay off the construction loan and return our cash deposits.
## How did you raise the equity?
Self
## What was the equity raise?
$150,000
## What are some hurdles you had to overcome to get this deal done?
It helps greatly to have someone in the area when investing out of state.
## What are some of the lessons you learned with this deal?
Construction costs are much higher than anticipated
## Was this a joint venture or syndication?
Joint venture
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Francesco Orselli](https://rodkhleif.com/warrior-wins-francesco-orselli/)
**Published:** January 26, 2023
**Author:** Graciela
**Content:**
## Warrior Win
# Francesco Orselli
Francesco Orselli has over 15 years of international finance and management consulting experience for global fortune 100 financial services organizations.
He has been investing in real estate since 2016 in single-family and multi-family properties. He owns or is a partner in 400+ doors in various states in the US.
Francesco holds a Master in Business Administration with concentration in Finance and a Master in Mechanical Engineering.
## Property Details
**Address:** Garden Villas – 8731 N 30th St Tampa, FL 33604
**Number of Units:** 40
**Value Add Deal?** Yes
**Purchase Price:** $6,854,999
**Estimated monthly increase projected?** $300/unit
**Anticipated value after value add:** $10,700,000
**Estimated Cash on Cash Return:** 12%
**Estimated Internal Rate of Return:** 18%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
I enjoy the program and get the most value by the relationships I have been able to form with some of the its members
## How did you find this property?
Relation with broker.
## How did you structure the financing of this property?
48% agency loan, 52% equity
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
Through a 506(b) offering
## What was the equity raise?
$5,000,000
## What are some hurdles you had to overcome to get this deal done?
Raise all the required capital to close, secure loan approval from lender, renegotiate the purchase price in light of increasing 10-yr treasury rate.
## What are some of the lessons you learned with this deal?
Define GP roles and responsibilities earlier in the process, form operating agreements and secure qualified property manager earlier in the process to minimize last minute requests from lender.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Ed Modzel](https://rodkhleif.com/warrior-wins-ed-modzel/)
**Published:** October 30, 2020
**Author:** Matt RK
**Content:**
## Warrior Win
# Ed Modzel
I have been a real estate investor since 1980 and made the switch to multifamily over 3 years ago. I am an owner in 720 units as a GP & 586 units as an LP. I am currently under contract on 3 properties for an additional 261 units. I recently went ‘Full Cycle’ my first multifamily deal outlined here.
I have been a coach for 2 years, I host a multifamily investor Meetup and I am a member of an Rod’s elite nationwide mastermind group.
While proudly serving in the US Navy for 6 years, I met my wife Pilar and we have been married over 41 years. We are parents to 3 beautiful daughters and a new grandson. Life is good.
I retired as Chief Engineer with a 10-time Emmy Award winning TV show in 2015 and I am a lifelong drummer.
## Property Details
**Address:** Chateau Pointe Apartments
**Number of Units:** 40
**Value Add Deal?** Yes, $368K Capex
**Purchase Price:** $1,345,000
**Estimated monthly increase projected?** $200/unit
**Anticipated value after value add:** $2,400,00
**Estimated Cash on Cash Return:** 139% in 17 months
**Estimated Internal Rate of Return:** Off the charts
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
I have been a Warrior over 3 years and it has been a major factor in my success.
## How did you find this property?
Through the CRE broker with whom I’ve built a relationship with and asked me to take over the deal.
## How did you structure the financing of this property?
Local Bank
## Was this a joint venture or syndication?
Joint Venture
## How did you raise the equity?
From people I met at my meetup group and other meetup groups.
## What was the equity raise?
$400K
## What are some hurdles you had to overcome to get this deal done?
I had to fire 2 property managers within the first year and take over the role myself and bring the asset to sale
## What are some of the lessons you learned with this deal?
Property management is a challenge on a 40-unit C class asset. Referrals are a must when selecting a property manager.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Lee Fjord](https://rodkhleif.com/warrior-wins-lee-fjord/)
**Published:** April 20, 2022
**Author:** Graciela
**Content:**
## Warrior Win
# Lee Fjord
Property Manager 2012-2019
First investment property 4plex 2015
Marcus & Millichap broker – former
475 doors $25mil assets currently owned
## Property Details
**Address:** 813 Falcon St Park Hills MO 63601
**Number of Units:** 272
**Value Add Deal?** Yes
**Purchase Price:** $16,000,000
**Estimated monthly increase projected?** $150/mo/door
**Anticipated value after value add:** $24,000,000
**Estimated Cash on Cash Return:** 11%
**Estimated Internal Rate of Return:** 21%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Having access to the Warrior network has changed my life.
## How did you find this property?
Broker from Berkadia – relationship
## How did you structure the financing of this property?
Fannie Mae Large Balance Loan
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
Great partners.
## What was the equity raise?
$6,000,000.
## What are some hurdles you had to overcome to get this deal done?
Hard money day one.
## What are some of the lessons you learned with this deal?
Partner with great people.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Matt Martin](https://rodkhleif.com/warrior-wins-matt-martin/)
**Published:** June 11, 2021
**Author:** Matt RK
**Content:**
## Warrior Win
# Matt Martin
My wife and I own an advertising agency and have limited experience in Real Estate Investing. We purchased a small multifamily asset before joining the group called Hat Creek Apartments consisting of 8 doors.
## Property Details
**Address:** Ashton Meadows Apartments 11669 FM 3025, Stephenville, TX 76087
**Number of Units:** 7
**Value Add Deal?** Yes
**Purchase Price:** $600,000
**Estimated monthly increase projected?** $150-$200
**Anticipated value after value add:** $700,000-$750,000
**Estimated Cash on Cash Return:** 10%
**Estimated Internal Rate of Return:** 15%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
This program has been so amazing. I have already recouped my investment and then some just in this first deal. More than that I have actually been working on my own personal developement and challenging myself thanks to the books Rod has sent. I have a better mindset and am just getting started! Best investment I’ve made! Kudos to you guys for what you are doing.
## How did you find this property?
I was actually secret shopping assets in my area to see what rent rates were and noticed that these were significantly lower than any other asset in the area. I developed a relationship with the owners and told them I already owned an asset down the road and asked if they were interested in selling. At first they told me no, but we stayed in touch over a few months and out of the blue they changed their mind (He is losing his job) and we can to an agreement quickly.
## How did you structure the financing of this property?
Local Regional Bank. 20 year term, 4% interest fixed for 5 years. 20% downpayment
## Was this a joint venture or syndication?
JV. Myself and one investor
## What was the equity raise?
$133,000
## How did you raise the equity?
We had an investor in our network that recognized the education and mentorship we were doing through the warrior group and they approached us about “going in on a deal together”. Originally I assumed I would put up half the money and they would put up half and we would be 50-50 partners. It occurred to me that I was bringing this off-market deal to the table as well as doing all the work managing the asset so I structured a 50-50 equity split but they put up the downpayment money and closing costs.
## What are some hurdles you had to overcome to get this deal done?
It was a learning experience for sure. The seller tried to back out of the deal after we went under contract because he felt he had undersold it. When I didn’t let him out, he didn’t play very nicely. To say the least, he wasn’t helpful in making this a smooth transition.
## What are some of the lessons you learned with this deal?
I learned the power of off-market deals. I haven’t been able to find anything even close to a good deal so far and this off-market asset appraised for $25,000 over the contract price! I also learned a lot about things like partnership agreements, buy sell agreements and how to set your LLC up so that if someone were “hit by a bus” or couldn’t agree on a strategy, you aren’t stuck doing business with their spouse or family. You set all of that up on the front end just in case. We used an attorney and he brought up some points that I never would have considered!
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Scott Jacobson](https://rodkhleif.com/warrior-wins-scott-jacobson/)
**Published:** January 24, 2023
**Author:** Graciela
**Content:**
## Warrior Win
# Scott Jacobson
Scott has two decades of active real estate investing experience and knowledge, ranging from single-family homes and duplexes, to multi-family apartment buildings and a medical/professional office building. Combining a passion for real estate with real-world experiences in property acquisition, management and successful exit strategies, his vision is to align with like-minded people who can see the financial benefits and excitement that real estate investing can offer.
In 2013, Scott and his wife Denise founded a 501c3 non-profit charity called the SON Foundation, which serves as a home-away-from-home for cancer patients and their caregivers while they are in Indianapolis for treatments. Guests are not charged to stay at the SON House, and to date the SON Foundation has provided over 7,000 nights of lodging for its guests.
## Property Details
**Address:** Lakemore and Moreland – 2666 & 2680 N Moreland Boulevard Shaker Heights, OH 44120
**Number of Units:** 66
**Value Add Deal?** Yes
**Purchase Price:** $3,680,000
**Estimated monthly increase projected?** $250/unit
**Anticipated value after value add:** $7,000,000
**Estimated Cash on Cash Return:** 7.52%
**Estimated Internal Rate of Return:** 17.83%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
it’s been great, I love that it has speed up my learning curve.
## How did you find this property?
fellow Warrior brought the deal.
## How did you structure the financing of this property?
Bank debt at 63% LTV.
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
From our network of investors.
## What was the equity raise?
$2,360,000
## What are some hurdles you had to overcome to get this deal done?
Slower capital raise than expected/hoped, bank increased the reserves required just 2 days before closing so we had to wire additional personal funds to get through closing.
## What are some of the lessons you learned with this deal?
More capital is better than less! also lender requirements are tightening so plan accordingly.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - William Yoder](https://rodkhleif.com/warrior-wins-william-yoder/)
**Published:** April 9, 2020
**Author:** Matt RK
**Content:**
## Warrior Win
# William Yoder
I am a devoted husband and father. My day job is being a dentist. When I entered dentistry I became interested in real estate, which is when I started educating myself and saving money to invest. This is how I found Rod. My wife and I started investing over the past year and half. We have an eight unit, two houses, and have invested passively in a few apartment syndications. I am passionate about reaching my potential as father, husband, businessman, man of faith, and a fanatic of all things health related.
## Property Details
**Address:** 146 Kentucky Avenue Lexington, KY
**Number of Units:** 9
**Value Add Deal?** Yes
**Purchase Price:** $565,000
**Estimated monthly increase projected?** $2,275
**Anticipated value after value add:** $875,000
**Estimated Cash on Cash Return:** 13%
## Warrior team
shout outs:
## Which Warriors helped you with this deal, and how?
Jacob Blackett. He’s the best.
## Any comments about your experience so far in the Warrior Program?
I have really enjoyed it. Rod does a great job on the call, even though I was unable to make many of the recent ones due to work. I love the constant addition of the content online.
## How did you find this property?
Randomly reaching out to my broker friend and inviting him to lunch. The deal had just come across his desk.
## How did you structure the financing of this property?
Local bank; 20% down including additional 90k for capex 7 yr term, 25yr am, and 20k closing credit
## What are some hurdles you had to overcome to get this deal done?
All things that can come on a first deal. Rough tenants (slip and fall within 2 weeks of ownership, etc… ), first time managing sub-contractors, first time leasing, first time managing tenants.
## What are some of the lessons you learned with this deal?
Have better due-diligence procedures, work with a more professional company than lowes for delivery of all materials needed for reno (so I don’t have to run back and forth 100x). Have a better lease that spells out all possible scenarios.
## Was this a joint venture or syndication?
Solo
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Ryan Dworak](https://rodkhleif.com/warrior-wins-ryan-dworak/)
**Published:** June 11, 2021
**Author:** Matt RK
**Content:**
## Warrior Win
# Ryan Dworak
Avid learner who has developed multiple side income streams over the last 5 years. I currently own a 4-unit building which I manage myself, I just partnered in a 21 unit JV deal in Atlanta, and I am also a LP investor in a 100 unit deal in FL. Passionate about multifamily and growing other businesses so I can keep putting it into real estate. In the next 3 years I would like to leave my W-2 job and go full time in real estate. I am looking for more time freedom to spend with my growing family.
## Property Details
**Address:** 123 Faulkner Dr, Commerce, GA 30529
**Number of Units:** 21
**Value Add Deal?** Yes
**Purchase Price:** $1,330,330
**Estimated monthly increase projected?** $50-$75 as units turn over
**Anticipated value after value add:** $1,600,000
**Estimated Cash on Cash Return:** 10-12%
**Estimated Internal Rate of Return:** 16-17%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Fantastic group of like minded people, everyone willing to help.
## How did you find this property?
One of the partners found it through a broker connection in the ATL market.
## How did you structure the financing of this property?
Local Bank debt – 10 year term (5 year rate lock @4%, 25 year AM, recourse.
## Was this a joint venture or syndication?
Joint Venture
## How did you raise the equity?
Partners injected equity. Some more than others
## What was the equity raise?
$350,000
## What are some hurdles you had to overcome to get this deal done?
The owner was withholding information from us regarding an easement payment that he was getting from the Georgia DOT. He entered into the agreement to receive $33,000 and that would allow the DOT to come in an fix the driveway and put in drainage. He was breaching the contract and we were supposed to get some of those funds. We were able to involve lawyers and got most of the settlement.
## What are some of the lessons you learned with this deal?
You need to be prepared to submit a lot of paperwork if you are an out of state partner investing in an out of state deal and using local debt. Also, keep up on the broker to get you as much info as possible. We had to press him a bit to find out about the DOT settlement. Last, we found a few issues with the property and the owner wasn’t that willing to give us any credits. We had to work hard to get about half the credit we were owed.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Win: The Valentino's 236 Units](https://rodkhleif.com/warrior-wins-chris-corinne-valentino/)
**Published:** July 7, 2023
**Author:** Greciel Moreno
**Content:**
# Warrior Win: The Valentino's 236 Units
## Chris & Corinne Valentino
We have been in the MF space for 5 years and warriors for 18 months. We’ve independently owned smaller MF properties and SFH rentals which sparked our interest in scaling. We currently work in the corporate space and will be transitioning into syndications full time with a target of 3 years from now. Our passion is real estate and helping others become educated financially so they can better support themselves their families and those around them.
## Property Details
**Address:** 473 Sleepy Hollow Rd Unit 1269 Athens NY 12015
**Number of Units:** 236
**Value Add Deal?** Yes
**Purchase Price:** $36,000,000
**Estimated monthly increase projected?** On average and increase of $300 per unit after our value add plan is completed.
**Anticipated value after value add:** $42,000,000
**Estimated Cash on Cash Return:** 8,1%
**Estimated Internal Rate of Return:** 15,03%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Very satisfied with the Warrior program, with out we would have never made the connections we’ve made to be able to be part of a team and close on our first deal. Thank you Rod!!!
## How did you find this property?
We partnered with the Cash Flow Champs and Ed Monzel. We provided EMD and raised capital and perform investor relations.
## How did you structure the financing of this property?
Assumable agency loan @ 3.48%.
## Was this a joint venture or syndication?
Syndication.
## How did you raise the equity?
Common equity through independent investors.
## What was the equity raise?
About $11MM.
## What are some hurdles you had to overcome to get this deal done?
It was a large capital raise in not ideal market conditions giving investors a bit of reluctance.
## What are some of the lessons you learned with this deal?
Know your partners well. Having a strong legal team and be sure to include a closing extension option in the PSA.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Juan Cruz](https://rodkhleif.com/warrior-wins-juan-cruz/)
**Published:** November 10, 2023
**Author:** Greciel Moreno
**Content:**
## Warrior Win
# Juan Cruz
Bachelor’s degree in Information Systems Security with over 20 years of practicing experience. Currently working for a Fortune 100 corporation as an information security engineer.
Owner and operator of multiple single unit properties in South Florida since 2012 also has experience building homes from the ground up both in North Carolina and Florida.
Juan has resided in Colombia, CA, NC and FL. Juan enjoys helping children in Colombia via World Vision as well as cancer patients through St Jude hospital and Shriners Hospital, also helping animal in need through donations to the ASPCA. Juan also likes practicing soccer and martial arts.
Fist LP position in 2022 on two different deals in south FL. Now also a GP on a 176 units in Savanna GA
## Property Details
**Address:** Timberland Apartments – 10612 Abercorn Ext, Savannah, GA 31419
**Number of Units:** 176
**Value Add Deal?** Yes
**Purchase Price:** $27,000,000
**Estimated monthly increase projected?** $275/unit
**Anticipated value after value add:** $39,116,000 by year 2
**Estimated Cash on Cash Return:** 8.5%
**Estimated Internal Rate of Return:** 17-19%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
I really like it and being able to access the knowledge and experience from all the Warriors has been a game changer for me.
## How did you find this property?
Through Networking with warriors this deal was presented to me to underwrite to make sure it was a good deal, once I confirmed the underwriting was good and the returns aligned with what my investors are looking for, we joined the team to help on due diligence, capital raising, investor relations, presentations and ongoing support.
## How did you structure the financing of this property?
Assumed current loan at 4.64% interest rate, 9 years left on loan with term interest only.
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
506b through existing contacts family and friends.
## What was the equity raise?
$12,250,000
## What are some hurdles you had to overcome to get this deal done?
Some investors did not come through with soft commitments, other GPs filled up those amounts with their investors.
## What are some of the lessons you learned with this deal?
People tend to inflate the amount of money they actually have available to invest.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Adam Beckstedt](https://rodkhleif.com/warrior-wins-adam-beckstedt/)
**Published:** April 15, 2020
**Author:** Matt RK
**Content:**
## Warrior Win
# Adam Beckstedt
A few years back Adam sold his automoive business to focus solely on real estate. He wanted to ramp his learning curve so he bought several different types of units over a 2 year period to determine what he liked to invest in. After attending one of Rod’s bootcamps he and his wife decided to focus solely on large multi-family purchases. Since then they have closed on 2 complexes with 4 more under contract through partnering.
## Property Details
**Address:** Park Thirty99
**Number of Units:** 174
**Value Add Deal?** Yes
**Purchase Price:** $13,150,000
**Estimated monthly increase projected?** $100-150/unit
**Anticipated value after value add:** $17 mil
**Estimated Cash on Cash Return:** 11-13%
**Estimated Internal Rate of Return:** 19-21%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
The connections I have made are unrivaled to anything else I have ever attended. The sheer willingness to help one another is outstanding.
## How did you find this property?
One of our partners found this through a broker relationship.
## How did you structure the financing of this property?
Bridge loan to Agency debt
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
Contacting our investor list and marketing since this was a 506(c)
## What was the equity raise?
$3.5 mil
## What are some hurdles you had to overcome to get this deal done?
The seller stopped maintaining the property once it was under contract. We had to hold his feet to the fire in order to get the items taken care of.
## What are some of the lessons you learned with this deal?
Always have a bigger investor list than you think you should have.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Colby Bowers](https://rodkhleif.com/warrior-wins-colby-bowers/)
**Published:** June 11, 2021
**Author:** Matt RK
**Content:**
## Warrior Win
# Colby Bowers
Colby is a full-time real estate investor and co-founder of Veteran Pride Investment Group LLC. He has been investing in real estate since 2001 and has managed numerous fix and flips, a portfolio of single-family rentals as well as been a private note lender. Colby realized that for scalability and long-term wealth that multi-family real estate acquisitions are where he needed to be. In the last 36 months he has acquired over 600 rental units and expanded his company into four states. Colby has a passion for helping people to safely invest in real estate. He loves real estate because of the controllability of your inputs and outputs, risk aversion, and tax incentives. He also served 23 years of distinguished military service as a senior executive managing facilities and projects in multiple states, multi-million-dollar budgets, and hundreds of enlisted Air Force Members. As a wounded warrior, he has a passion for giving back to his community by helping homeless and struggling veterans and supporting first responders.
## Property Details
**Address:** Oriole Crossing Apartments, 99 Oaks MHP, Patriots part II MHP
**Number of Units:** 114
**Value Add Deal?** Yes
**Purchase Price:** $36,00,000
**Estimated monthly increase projected?** $150-$200 for oriole crossing, $250 per pad for both parks
**Anticipated value after value add:** $1.6M for Oriole Crossing, $1.8M for 99 Oaks, $2.7M for Patriots II
**Estimated Cash on Cash Return:** Oriole Crossing -10%, MHP’s 12%+
**Estimated Internal Rate of Return:** Oriole crossing 18%, MHP’s 23%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Having the warrior community to bounce ideas off of, partner with, and learn from has been a huge confidence builder and business growth opportunity. If it wasn’t for the warrior group and Rod, I would not be where I am today in this journey
## How did you find this property?
Cold call direct to seller for all three properties
## How did you structure the financing of this property?
Oriole Crossing Local loan
99Oaks, local bridge loan
Patriots Park II agency debt
## Was this a joint venture or syndication?
Oriole crossing is a JV and the MHP’s are one syndication deal
## How did you raise the equity?
Investor network that was developed over the last 3 years
## What was the equity raise?
$350K for Oriole Crossing and $1.08M for MHP
## What are some hurdles you had to overcome to get this deal done?
Oriole crossing was a smooth closing
MHP’s had a few extra hurdles to jump through from the lender on the agency debt that pushed closing back 3 weeks. The RR dropped below 90% on paper the the week before closing and the seller had to scramble to get the leases resigned to show above 90%occupancy.
## What are some of the lessons you learned with this deal?
Make sure leases won’t expire before closing and if they do have a contingency to fix it.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Troy Trecroce](https://rodkhleif.com/warrior-wins-troy-trecroce/)
**Published:** April 20, 2022
**Author:** Graciela
**Content:**
## Warrior Win
# Troy Trecroce
Work History: Air Force Contracting Officer.
RE experience: one LP deal prior to this.
## Property Details
**Address:** Merrill Oaks Apartments
**Number of Units:** 17
**Value Add Deal?** Yes
**Purchase Price:** $1,176,000
**Estimated monthly increase projected?** $275-$500
**Anticipated value after value add:** $2,000,000
**Estimated Cash on Cash Return:** 9%
**Estimated Internal Rate of Return:** 14%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Amazing experience. The mindset shift and relationships built within this community have completely altered my outlook and trajectory in work/life in such a positive way.
## How did you find this property?
Brought to me by another Warrior with whom I had a pre-existing relationship.
## How did you structure the financing of this property?
Private lender – 5-yr ARM, 75% LTV, 4.35%
## Was this a joint venture or syndication?
Joint Venture.
## How did you raise the equity?
JV partners.
## What was the equity raise?
$400k
## What are some hurdles you had to overcome to get this deal done?
Anticipated financing fell through at the 11th hour.
## What are some of the lessons you learned with this deal?
Stay on top of all parties involved during due diligence period through closing.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Matt Spangenberg](https://rodkhleif.com/warrior-wins-matt-spangenberg/)
**Published:** April 9, 2020
**Author:** Matt RK
**Content:**
## Warrior Win
# Matt Spangenberg
I have had a remodeling and construction company for the last ten years. Started buying single family homes and renovating them and doing the BRRRR model to keep and rent them. I thought single family homes were all I could afford. After listening to the Podcast and joining Rod’s coaching, I realized it wasn’t the question of “can I buy bigger units?” but more “how can I get hard money, investors, etc.?” It has opened my eyes to bigger properties and now I am buying small multi units with partners.
## Property Details
**Address:** 931 Broad Street, Emmaus PA 18049
**Number of Units:** 6
**Value Add Deal?** Yes
**Purchase Price:** $300,000
**Estimated monthly increase projected?** $790
**Anticipated value after value add:** $1.2 mil
**Estimated Cash on Cash Return:** Infinite. Did a cash out refi and got all our money back.
**Estimated Internal Rate of Return:** Infinite
## Warrior team
shout outs:
## Which Warriors helped you with this deal, and how?
Just Rods motivation from doing to online courses and calls.
## How did you find this property?
Called and for rent sign and did an off market purchase.
## How did you structure the financing of this property?
Regular bank fund for purchase, then hard money and investors money for rehab. Bought for 300. Invested 550 and refi and got a new loan for 860k and it still cash flows 25k a year.
## Was this a joint venture or syndication?
Partnership
## How did you raise the equity?
Friends, family, my partner and I
##
What was the equity raise?
$550,000
## What are some hurdles you had to overcome to get this deal done?
Thinking bigger then I ever had before. Commit first on buying it, then figure out a way to raise the money. Didn’t have all the answers up front. Just figured it out as we went.
##
What are some of the lessons you learned with this deal?
Look for opportunities all around you. Don’t be afraid to ask people to sell, and you don’t need all the answers and figure out how you will do each part of the deal ahead of time, just commit and you will figure it out as you go.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Bobby & Desiree D'Alessio](https://rodkhleif.com/warrior-wins-bobby-desiree-dalessio/)
**Published:** January 20, 2023
**Author:** Graciela
**Content:**
## Warrior Win
# Bobby & Desiree D'Alessio
My wife and I are both elementary school teachers in NYC. We had limited real estate experience our own primary residence and 6 duplexes that we owned coming into the program.
We are passionate about spending time with our daughter, helping others, and traveling.
## Property Details
**Address:** Shakertowne
**Number of Units:** 31
**Value Add Deal?** Yes
**Purchase Price:** $1,400,000
**Estimated monthly increase projected?** $250-350/unit
**Anticipated value after value add:** $2,929,000
**Estimated Cash on Cash Return:** 7%
**Estimated Internal Rate of Return:** 12-16%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
We have met several great people in this program and we look forward to doing deals with all of them. It has been an eye opening experience to see things being accomplished that we would have never thought possible.
## How did you find this property?
We found this through some friends.
## How did you structure the financing of this property?
Bridge to Bank.
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
Friends and Family.
## What was the equity raise?
$1,220,000
## What are some hurdles you had to overcome to get this deal done?
Rising interest rates, capital raising, little cooperation from the seller.
## What are some of the lessons you learned with this deal?
We learned that persistence is key. Having a strong team that can help support you is vital.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Joe Weldon](https://rodkhleif.com/warrior-wins-joe-weldon/)
**Published:** November 10, 2023
**Author:** Greciel Moreno
**Content:**
## Warrior Win
# Joe Weldon
I have worked in the manufacturing industry as a continuous improvement engineer, factory manager, and a cost accountant. I had no real estate experience before the warrior program, the warrior program helped me learn multifamily real estate investing and close two deals. I enjoy learning about personal development, reading, exercising, and traveling.
## Property Details
**Address:** 1601 Aber Ave Iowa City, IA
**Number of Units:** 12
**Value Add Deal?** Yes
**Purchase Price:** $1,012,500
**Estimated monthly increase projected?** $113/unit
**Anticipated value after value add:** $1,200,000
**Estimated Cash on Cash Return:** 10%
**Estimated Internal Rate of Return:** 23%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
The warrior program has been great, it has strengthened my real estate knowledge and connected me with so many great individuals. The network is amazing.
## How did you find this property?
James Hughes found this deal off market by emailing the owner. James and I met at a Rod Khleif event, after the event James and I decided we were going to reach out to owners in the Iowa City market.
## How did you structure the financing of this property?
Primary mortgage through local bank and a seller carry back note of $112,500.
## Was this a joint venture or syndication?
Joint Venture.
## How did you raise the equity?
Contacting our investor list and Joint venture partners.
## What was the equity raise?
$74,052
## What are some hurdles you had to overcome to get this deal done?
Finding the deal.
## What are some of the lessons you learned with this deal?
Strategically managing expenses.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Jonathan Wells](https://rodkhleif.com/warrior-wins-jonathan-wells/)
**Published:** June 9, 2023
**Author:** Greciel Moreno
**Content:**
## Warrior Win
# Jonathan Wells
In 2019, Jon & Sam, joined an elite nationwide multi-family mastermind group and have since scaled their business acquiring over $50MM in assets under management spanning over 600 doors across 8 properties in 4 states. They are also Limited Partners in 3401 units across 9 Multifamily assets.
Jon & Sam now coach other aspiring syndicators for a high-end multifamily syndication coaching company. They are regular guests on the #1 listened to multi-family syndication podcasts around the world. They have been asked to speak at many masterminds, and seminars across the country as an inspiration to other entrepreneurs eager to enter the multifamily investing world.
## Property Details
**Address:** Windmill Apartments
**Number of Units:** 162
**Value Add Deal?** Yes
**Purchase Price:** $14,000,000
**Estimated monthly increase projected?** $250/month/unit
**Anticipated value after value add:** $20,000,000
**Estimated Cash on Cash Return:** 8-10%
**Estimated Internal Rate of Return:** 19-21%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Life changing, both my wife and I are financially independent and can focus more on our family thanks to the Warrior Group.
## How did you find this property?
Broker relationship.
## How did you structure the financing of this property?
Fixed rate bridge debt and equity raise from friends and family.
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
Friends and Family.
## What was the equity raise?
$70,000,00.
## What are some hurdles you had to overcome to get this deal done?
This deal started a year before we went under contract, we staying in touch and submitted a dozen LOIs until the seller came around to realistic expectations. Understanding what the owner had and getting correct information on units needing renovated.
## What are some of the lessons you learned with this deal?
Stay consistent and persistent and you will get “Lucky”.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Jens Nielson](https://rodkhleif.com/warrior-wins-jens-nielson/)
**Published:** April 9, 2020
**Author:** Matt RK
**Content:**
## Warrior Win
# Jens Nielson
25 year IT professional.
I have purchased over 80 units in my own account and syndicated 650 units.
## Property Details
**Address:** 455 Valverde Drive, Albuquerque NM
**Number of Units:** 16
**Value Add Deal?** Yes
**Purchase Price:** $740,000
**Estimated monthly increase projected?** $2,000
**Anticipated value after value add:** $1,000,000
**Estimated Cash on Cash Return:** >10%
**Estimated Internal Rate of Return:** N/A Buy and hold
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
It has grown my network and expanded my thinking to a new level.
## How did you find this property?
Direct mail
## How did you structure the financing of this property?
Bank loan with rehab rolled into the loan
## What are some hurdles you had to overcome to get this deal done?
Work with the seller to build rapport.
## What are some of the lessons you learned with this deal?
It takes time to get a seller to trust you.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Bethany Smith](https://rodkhleif.com/warrior-wins-bethany-smith/)
**Published:** August 13, 2020
**Author:** Matt RK
**Content:**
## Warrior Win
# Bethany
Smith
Nate and Bethany have had a longtime interest in Real Estate Investing, house hacking their first home 11 years ago with a VA loan. He and Bethany are currently building a World Financial Group financial services agency in Southern California and nationwide, helping their team and clients save, grow, and protect their wealth. Bethany has a background in residential real estate sales working as the Director of Operations for one of the top sales teams in Utah, where she developed a strong interest in and passion for Multi-Family real estate. She transitioned at the beginning of 2019 into Multi Family Investing full time. She is acting asset manager on several communities in Western markets (NV and AZ), most recently closing on a 36 unit C-class property and actively pursuing the next investment. She is passionate about transforming troubled apartment complexes into safe, stable communities for tenants and their families. She also serves on the leadership team for Multi Family Masters, an international meetup organization focused on Multifamily Real Estate Investing.
## Property Details
**Address:** Monte Vista Commons
**Number of Units:** 36
**Value Add Deal?** Yes
**Purchase Price:** $1,800,000
**Estimated monthly increase projected?** $200
**Anticipated value after value add:** $3.5 mil
**Estimated Cash on Cash Return:** 20%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Great! Would love more networking events/zoom events for warriors
## How did you find this property?
Direct to Seller
## How did you structure the financing of this property?
Local lender
## Was this a joint venture or syndication?
Joint Venture
## How did you raise the equity?
Word of Mouth
## What was the equity raise?
$540,000
## What are some hurdles you had to overcome to get this deal done?
Mental Toughness
## What are some of the lessons you learned with this deal?
Focus on 1 market to get started, built relationships to ensure interests and goals align between partners
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Jason Markowicz](https://rodkhleif.com/warrior-wins-jason-markowicz/)
**Published:** June 11, 2021
**Author:** Matt RK
**Content:**
## Warrior Win
# Jason Markowicz
20 year career owning health clubs, franchise wellness brands, and rental properties. Got started in multi-family in 2019 and have 72 units today via JV deals.
## Property Details
**Address:** 377 Adams/30 & 40 W. Cook Manteno, IL
**Number of Units:** 16
**Value Add Deal?** Yes
**Purchase Price:** $1,090,000
**Estimated monthly increase projected?** $100-150/unit
**Anticipated value after value add:** $17 mil
**Estimated Cash on Cash Return:** 11-13%
**Estimated Internal Rate of Return:** 19-21%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
It’s been great. Love the people, networking, and relationships
## How did you find this property?
Broker relationship- off market
## How did you structure the financing of this property?
Conventional through a regional bank 25% down, 4% over 25 year AM- 5 year
## Was this a joint venture or syndication?
JV
## How did you raise the equity?
My partner and I
## What was the equity raise?
$275,000
## What are some of the lessons you learned with this deal?
Broker relationships matter!
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Marquice T. D. Hobbs](https://rodkhleif.com/warrior-wins-marquice-t-d-hobbs/)
**Published:** July 18, 2024
**Author:** Graciela
**Content:**
## Warrior Win
# Marquice T. D. Hobbs
Growing up and being raised in Houston, I’m deeply driven by a passion for empowering others in their faith journey and financial endeavors. As the Pastor of Contemporary Worship at Christ Church Sugar Land, I strive to inspire and guide individuals to take their next step in faith through delivering impactful sermons and nurturing discipleship.
I likewise dedicate my time to volunteering for various non-profit organizations, thus reinforcing my commitment to community service.
In my entrepreneurial endeavors, I utilize my expertise to underwrite properties, raise capital, analyze markets, and develop strategic business plans at Investream, ensuring robust and data-driven returns for our investors. My multifaceted approach to service reflects my deep-rooted dedication to uplifting others in both the spiritual and financial aspects of life
## Property Details
**Address:** Pioneers Business Park
**Number of Units:** 27
**Value Add Deal?** Yes
**Purchase Price:** $8,000,000
**Estimated monthly increase projected?** 0
**Anticipated value after value add:** 11,500,000
**Estimated Cash on Cash Return:** 2%
**Estimated Internal Rate of Return:** 26.67% Total and 18.45% for LP’s
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
This is one of the best communities. I haven’t been active, but every time I return there is a passion for adding value to one another and the world.
Also, I’d like to share that the meet up in Denver of 2022 helped me connect with Al Salous even more. Meaning, a warrior made the introduction and a warrior event helped deepen the connection even more.
## How did you find this property?
My team had boots on the ground.
## How did you structure the financing of this property?
Construction Loan, 80% LTC
Prime minus – 1%
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
Family and friends
## What was the equity raise?
$3,500,000
## What are some hurdles you had to overcome to get this deal done?
2 years of networking and underwriting
Started without a coach or mentor and found one through networking, which began with a warrior in Houston named Mike Bailey
I transitioned to a new church and my wife and I had our first baby during this time
## What are some of the lessons you learned with this deal?
Stay consistent, don’t give up, and find the right team.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Oliver Fernandez](https://rodkhleif.com/warrior-wins-oliver-fernandez/)
**Published:** November 9, 2020
**Author:** Matt RK
**Content:**
## Warrior Win
# Oliver Fernandez
I grew up in Maine with my single mother and three sisters. I worked as a dishwasher and now I run a construction company that has completed over 50M in projects and I am invested in over 100M of multi family real estate
## Property Details
**Address:** 3222 Kenelworth Dr, East Point, GA 30344 – Marketplace Square Apartment Homes
**Number of Units:** 152
**Value Add Deal?** Yes
**Purchase Price:** $9,000,000
**Estimated monthly increase projected?** $147/unit
**Anticipated value after value add:** $13,984,000
**Estimated Cash on Cash Return:** 12.22%
**Estimated Internal Rate of Return:** 12%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
The engagement in the community was great and the people all looking to grow and do deals together!
## How did you find this property?
My partners and I found the property through a Cushman Wakefield broker in Atlanta, GA
## How did you structure the financing of this property?
Bridge Loan for 3 year with 2 one year options. Interest only for 1 year and we brought equity on at a 25 GP / 75 LP split
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
Through friends and family
## What was the equity raise?
$2,508,000
## What are some hurdles you had to overcome to get this deal done?
The raise was difficult because it was such a heavy value add.
## What are some of the lessons you learned with this deal?
That the property management team will only be as good as you hold them accountable to be.
That these property need capital to run.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Travis](https://rodkhleif.com/warrior-wins-travis/)
**Published:** April 20, 2022
**Author:** Graciela
**Content:**
## Warrior Win
# Travis
I’m all in on Real Estate.
RE professional in NYC – commercial broker.
I make my money in NYC and invest in Landlord friendly states.
## Property Details
**Address:** Westside Manor, Salisbury NC
**Number of Units:** 64
**Value Add Deal?** Yes
**Purchase Price:** $512,000
**Estimated monthly increase projected?** $150/unit
**Anticipated value after value add:** 8 MM
**Estimated Cash on Cash Return:** 9.5%
**Estimated Internal Rate of Return:** 25%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Networking is amazing
## How did you find this property?
Ed Modzel.
## How did you structure the financing of this property?
Bridge
3+1+1
80% LTC
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
Proceeds from a previous exit.
## What was the equity raise?
1.5 MM
## What are some hurdles you had to overcome to get this deal done?
Quick close so we had to mobilize cash in a relatively short period.
## What are some of the lessons you learned with this deal?
TEAM!!!
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Phil Klima](https://rodkhleif.com/warrior-wins-phil-klima/)
**Published:** November 10, 2020
**Author:** Matt RK
**Content:**
## Warrior Win
# Phil Klima
We are one of the largest independent automobile dealers in terms of volume of sales in the state of Ohio. We started investing in small single family rental houses and when we got to about 70 shifted focus to apartment buildings. When I joined Rod’s program we had 120 units. Since than we have acquired 80 more units with 200 units under contract set to close by the end of this year. We are not syndicating and as such we own 100% of our doors.
## Property Details
**Address:** 20 South linden- Mansfield Oh
**Number of Units:** 72
**Value Add Deal?** Yes
**Purchase Price:** $1,700,000
**Estimated monthly increase projected?** $10,000
**Anticipated value after value add:** $2,600,00
**Estimated Cash on Cash Return:** 15%
**Estimated Internal Rate of Return:** 17.5%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Very well done program
## How did you find this property?
craigslist
## How did you structure the financing of this property?
80% debt community bank/20% equity injection.
## Was this a joint venture or syndication?
no
## How did you raise the equity?
family and personal
## What was the equity raise?
340k
## What are some hurdles you had to overcome to get this deal done?
this one went smoothly overall.
## What are some of the lessons you learned with this deal?
Always remember to get rid of any bad tenants quickly after taking over.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Robert Shedden](https://rodkhleif.com/warrior-wins-robert-shedden/)
**Published:** September 14, 2020
**Author:** Matt RK
**Content:**
## Warrior Win
# Robert Shedden
I am a Project Manager for UPS. I manage on Expansion/Construction Projects for a large shipping company. My wife and I bought our first fourplexes in December 2019 and January.2020. We renovated some apartments and have increase the NOI by 50%. Looking to leave my W-2 by December 31, 2021.
## Property Details
**Address:** 1050 Minns Drive, Machesney Park, IL 61115
**Number of Units:** 6
**Value Add Deal?** Yes
**Purchase Price:** $390,000
**Estimated monthly increase projected?** $425/unit
**Anticipated value after value add:** $640,000
**Estimated Cash on Cash Return:** 21%
**Estimated Internal Rate of Return:** 19.5%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
The mindset is by far the most important piece of Multifamily!!
## How did you find this property?
Our broker told us it was going on the market in February. We got it under contract for $455,000… then COVID hit. He let it go, joined the Lifetime Cashflow Academy in March, then got it under contract again in July for $390,000.
## How did you structure the financing of this property?
The bank is loaning us the purchase price ($390,000) and the full renovation budget ($87,000) at 80% LTV, 5.25% on a five-year term, amortized over 20 years. The first six months is interest-only. We will get the renovation budget reimbursed to us after all renovations are complete and the Chief Credit Officer at the bank conducts a walk-through.
We all loaned the newly formed LLC money and will get a 7% interest on that loan. As managing member, I will get 46% of all cash flow. The other partners will split the remaining 54% proportionally. I only brought $10,000 to the deal, the partners brought $100,000. We will refinance in year three, pay the other partners back their initial investment, and retain control of the cash-flowing property.
## How did you raise the equity?
Spoke to lots of Warriors and others in another Mastermind Group I am a part of.
## What was the equity raise?
$110,000
## What are some hurdles you had to overcome to get this deal done?
A lot! Here are the highlights: We had to let the property go in March. Our broker and the seller were very upset. When we got it under contract in July, the seller found out it was us (again) and almost didn’t sign the contract. we had delays with the financing (loan commitment) and had to file an extension. At the last minute (less than 24 hours before closing) we discovered that three tenants had not paid August Rent. One had not paid since March. We secured a $6350 credit just 20-minutes prior to closing!
## What are some of the lessons you learned with this deal?
Demand a T-12 and P&L Statement from the seller. This is challenging on the small mom and pop multifamily properties.
## Was This A Joint Venture Or Syndication?
Always have a bigger investor list than you think you should have.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Tien Truong](https://rodkhleif.com/warrior-wins-tien-truong/)
**Published:** February 18, 2021
**Author:** Matt RK
**Content:**
## Warrior Win
# Tien
Truong
I was a Pharmacist for 8+ years in NY. I picked up a few triplexes on the side from 2017-2020. Then moved to CA & quit my job in February 2020. I closed on 422 doors in 2020!
## Property Details
**Address:** Meadow Creek, Vista Nueva, Fairmount Portfolio, Desert Peaks
**Number of Units:** 422
**Value Add Deal?** Yes
**Purchase Price:** $356,850,000
**Estimated monthly increase projected?** $200/unit
**Anticipated value after value add:** $430,00,000
**Estimated Cash on Cash Return:** 8%
**Estimated Internal Rate of Return:** 15%
## Warrior team
shout outs:
## How did you find this property?
1 through a PM, the rest through brokers
## How did you structure the financing of this property?
Agency Debt 80/20
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
Contacting our investor list
## What was the equity raise?
$17mil
## What are some hurdles you had to overcome to get this deal done?
Covid Escrows
## What are some of the lessons you learned with this deal?
check loss runs 1st
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Greg Chew](https://rodkhleif.com/warrior-wins-greg-chew/)
**Published:** February 11, 2022
**Author:** Matt RK
**Content:**
## Warrior Win
# Greg
Chew
I have been a Warrior since January 2019 after attending the Tampa boot camp. I had no prior real estate experience before that. I love having new travel experiences with my family, and I hope to do a lot more of that when I retire from my IT career — hopefully this coming year!
## Property Details
**Address:** Bullock Habersham and Dodson Courtyard (Two-asset portfolio)
**Number of Units:** 203
**Value Add Deal?** Yes
**Purchase Price:** $20,455,000
**Estimated monthly increase projected?** $127/unit
**Anticipated value after value add:** $27,797,231
**Estimated Cash on Cash Return:** 9.84%
**Estimated Internal Rate of Return:** 16.4%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
I love the amount of networking and the education that the Warrior program brings. In addition, everyone in the group is so helpful and willing to guide other Warriors along the way. It’s also great to find terrific partnerships within the program.
## How did you find this property?
Through an existing relationship with the lead sponsor of a deal that I was an LP in. He invited myself and my business partner on the GP team to help out with the asset management and capex upgrades, as well as capital raising efforts.
## How did you structure the financing of this property?
Freddie Mac, Variable rate, 10-year ARM. 76% LTV, with I/O of 5 years, Interest rate of 2.95%.
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
Communications to Investor base, Webinar, friends, family, colleagues.
## What was the equity raise?
$7,750,000
## What are some hurdles you had to overcome to get this deal done?
This was my first capital raise, so it was quite nerve racking to get to the finish line. There were quite a few of my investors that soft committed but then never followed through with me.
## What are some of the lessons you learned with this deal?
An investor is not committed until the docs are signed and the wire is transferred through! And also spend lots of time following up and keeping in front of my investor base throughout the entire process, ensuring that they are fully reprised of the investment, and make sure that I spend the time to and energy to answer any questions that they may have in a very timely manner.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Anthony & Candace Coffey](https://rodkhleif.com/warrior-wins-anthony-candace-coffey/)
**Published:** February 11, 2022
**Author:** Matt RK
**Content:**
## Warrior Win
# Anthony & Candace Coffey
Single family investors for 7 years
Motivated by freedom.
## Property Details
**Address:** 164 nw vesper st blue springs MO
**Number of Units:** 8
**Value Add Deal?** Yes
**Purchase Price:** $225,000
**Estimated monthly increase projected?** $150/unit
**Anticipated value after value add:** $750,000
**Estimated Cash on Cash Return:** 100% after we BRRRR out
**Estimated Internal Rate of Return:** 100% after we BRRRR out
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Great community. Looking to get more involved and attend some events In 2022
## How did you find this property?
PPC lead
## How did you structure the financing of this property?
Partnered 50/50 split with cash partners
## Was this a joint venture or syndication?
Joint Venture
## How did you raise the equity?
Mastermind group we are in together
## What was the equity raise?
100%
## What are some hurdles you had to overcome to get this deal done?
Finding the cash/giving up equity
## What are some of the lessons you learned with this deal?
More due diligence. I bought pretty quickly after one walk thru. Sellers needed to close in 3 weeks.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Dave Snehal](https://rodkhleif.com/warrior-wins-dave-snehal/)
**Published:** May 5, 2023
**Author:** Greciel Moreno
**Content:**
## Warrior Win
# Dave Snehal
MF Investment Sales at EXP Commercial & Co-Founder of Synergy REI
Dave Snehal’s journey as an entrepreneur started in late 2002 when he was laid off from his position as a broadband provisioning engineer at MCI Worldcom.
Today, Dave represents real estate investors in the Chicago MSA as a multi-family commercial real estate investment sales consultant. Always holding client satisfaction as his highest priority, Dave works hard to make the acquisition or disposition experience as efficient, productive, and hassle-free as possible.
## Property Details
**Address:** 7 property self storage portfolio
**Number of Units:** 2,634
**Value Add Deal?** Yes
**Purchase Price:** $16,685,000
**Estimated monthly increase projected?** none
**Anticipated value after value add:** $28,000,000
**Estimated Cash on Cash Return:** 10%
**Estimated Internal Rate of Return:** 17.4%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
I love the connections I’ve made in the group. It has been life-changing and fulfilling.
## How did you find this property?
Powell Chee presented us with this opportunity.
## How did you structure the financing of this property?
Seller financing – 7.25% fixed rate loan of 62% LTV and 1 year I/O
5-year term with 30 yr am and no Pre-payment penalty.
## Was this a joint venture or syndication?
Syndication.
## How did you raise the equity?
Friends and family.
## What was the equity raise?
$87,710,000
## What are some hurdles you had to overcome to get this deal done?
Working on getting seller financing as opposed to the original CMBS lender we had planned for debt. Raising equity in this environment was tough.
## What are some of the lessons you learned with this deal?
We learned how to evaluate self-storage.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Josh Whitinger](https://rodkhleif.com/warrior-wins-josh-whitinger/)
**Published:** April 9, 2020
**Author:** Matt RK
**Content:**
## Warrior Win
# Josh Whitinger
Josh Whitinger currently resides in Waverly, IA with his beautiful wife and their four amazing children. Josh is currently the President of Peoples Insurance Agency. During Josh’s tenure at Peoples Insurance Agency, he has grown the agency revenues of the company from $100,000 in 2000 to $20,000,000 in 2020. Josh has also acquired, leveraged, and went full-cycle on a number of multi-family apartment complexes in the last 15 years.
Josh currently is a partner in over 6000 multi-family doors producing positive cash flow.
Lastly and maybe most importantly, Josh has a passion for personal development. He is an advocate for developing a positive mindset and an optimistic outlook on life. You need to be grateful for every good thing that comes to you. This gratitude has lead Josh to a new devotion – to give back by helping individuals within his areas of expertise.
## Property Details
**Property name:** Sunset Terrace
**Number of Units:** 207
**Value Add Deal?** Yes
**Purchase Price:** $16,500,000
**Estimated monthly increase projected?** $150
**Anticipated value after value add:** $23 mil
**Estimated Cash on Cash Return:** 10%
**Estimated Internal Rate of Return:** 17%
## Warrior team
shout outs:
## Which Warriors helped you with this deal, and how?
Rod Khleif, Drew Doran
## Any comments about your experience so far in the Warrior Program?
Alot of the people in the network have become good friends of mine. I am now doing alot of business with many of them. Great network and life changing experience.
## How did you find this property?
Aligning with a very experienced operator.
## How did you structure the financing of this property?
Agency debt through Hunt.
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
Raised the equity through family, friends, podcast, webinar, and through a very experienced operator
## What was the equity raise?
8.5 mil
## What are some hurdles you had to overcome to get this deal done?
The city of Dallas and obtaining the COO as they seller marketed the asset as 208 units but it was actually 207.
## What are some of the lessons you learned with this deal?
The success of the capex business plan goes very smooth with the right property management company
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Albert Sidhom](https://rodkhleif.com/warrior-wins-albert-sidhom/)
**Published:** April 19, 2024
**Author:** Graciela
**Content:**
## Warrior Win
# Albert Sidhom
I started out as a licensed professional counselor (LPC), then went on to become a full-time realtor. All the while picking up rental properties through the years. I built a strong portfolio of 21 units that cover most of my living costs but decided I was ready for that next class of investment when I decided to join the warrior program. I had plenty of doubts and frustrations as I joined during one of the worst years of real estate in 2023 but now find myself with an outstanding first deal and excited for more.
## Property Details
**Address:** 6745 Cindy Pl, New Orleans, LA 70127
**Number of Units:** 14
**Value Add Deal?** Yes
**Purchase Price:** $550,000
**Estimated monthly increase projected?** $$1076/unit
**Anticipated value after value add:** Stabilized appraisal price is 801k
**Estimated Cash on Cash Return:** 250% – I invested 24k total for the 600k loan and will get 60k in cash flow/year once stabililzed.
**Estimated Internal Rate of Return:** 33%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
I enjoyed my coach and all the resources
this deal came up at about my 3rd to last coaching session and I had my final one after we closed. Overall great experience.
## How did you find this property?
MLS.
## How did you structure the financing of this property?
I used a private lender and took out a loan of 600k to cover rehab costs as well. The lender placed 2nd lien on a high equity rental of mine as the down payment. I sold one of my single-family residences and used the 34k in profit as a 1031 into the deal. I also received a commission on the deal as the buyer’s agent.
## Was this a joint venture or syndication?
Neither, I bought it myself.
## How did you raise the equity?
N/A
## What was the equity raise?
N/A
## What are some hurdles you had to overcome to get this deal done?
It was mostly psychological. I was really scared to take it on, a lot of anxiety and fear of failure surfaced but I kept pushing through as the numbers and all the signs kept making sense.
## What are some of the lessons you learned with this deal?
Do all inspections! no matter how good the deal. I skipped the electrical because everything looked good, but it turned out the electrical was never permitted and I had to file for an extra meter.and then re-permit the whole complex. An added 7k expense.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Bonnie Schwam](https://rodkhleif.com/warrior-wins-bonnie-schwam/)
**Published:** May 19, 2023
**Author:** Greciel Moreno
**Content:**
## Warrior Win
# Bonnie Schwam
I have been a residential Realtor since 2005 and until the past several years only had residential rentals in my portfolio. I then joined with Grant Cardone 10X and became a LP on Class A properties in Florida, I believe that portfolio has over 1,400 units. I then joined Rod’s Warrior group where I became acquainted with my coach Eric Upchurch and Powell Chee the king of self-storage. I joined this group on the acquisition of 7 properties and over 2600 self-storage units in and around Beaumont Texas.
## Property Details
**Address:** Radiant Storage Beaumont 7P
**Number of Units:** 2,634
**Value Add Deal?** Yes
**Purchase Price:** $16,685,000
**Estimated monthly increase projected?** depends on properties
**Anticipated value after value add:** up to $28,000,000 in 3-5 years
**Estimated Cash on Cash Return:** 10-11%
**Estimated Internal Rate of Return:** 16-18%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
I feel heard, I feel like I am a part of something big and exciting and this opportunity will lead to more deals with more warriors.
## How did you find this property?
It was already under contract, I came on as investor relations and capital raiser.
## How did you structure the financing of this property?
It came down to a Seller financed deal, way better for everyone.
## Was this a joint venture or syndication?
Syndication.
## How did you raise the equity?
It was a 506B so I had to reach out to people I knew.
## What was the equity raise?
$10M.
## What are some hurdles you had to overcome to get this deal done?
Financing was a big one, as was capital raising.
## What are some of the lessons you learned with this deal?
Team work makes the dream work!
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Win:
Chris Freeman
130 Unit in NC](https://rodkhleif.com/warrior-wins-chris-freeman/)
**Published:** February 11, 2022
**Author:** Matt RK
**Content:**
# Warrior Win: Chris Freeman 130 Unit Close
## Chris
Freeman
20 years owning and operating smaller MF buildings in Portland OR. Joined the Warrior group to learn how to scale and syndicate. Currently a sales Director with a high tech company.
## Property Details
**Address:** Village at Rankin in Greensboro NC
**Number of Units:** 130
**Value Add Deal?** Yes
**Purchase Price:** $7,800,000
**Estimated monthly increase projected?** $100-158/unit
**Anticipated value after value add:** $11.6 mil in 5 years
**Estimated Cash on Cash Return:** 8.11%
**Estimated Internal Rate of Return:** 14.8% on 5 year hold
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
You get out of it what you put into it. I have shifted from trying to touch a volume of people to investing in deeper quality relationships with a few people.
## How did you find this property?
Working with my Ed Modzel, he had an existing relationship with a local operator in Raleigh. He found the property and brought it to Ed.
## How did you structure the financing of this property?
CMBS Loan – LTV 70%. We had 6 mos of Covid reserves that dropped in the middle of the raise. Interest only 36 months. 10 year term 3.9%.
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
506(b)
## What was the equity raise?
$3.9 mil
## What are some hurdles you had to overcome to get this deal done?
Last minute banking requirements that delayed closing by almost 30 days. Changing property managers in the middle of the raise.
## What are some of the lessons you learned with this deal?
While the property manager we chose has performed very well in other markets, they struggled in this market. Some additional inspection on their local infrastructure would have been good.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Daniel Campana](https://rodkhleif.com/warrior-wins-adam-daniel-campana/)
**Published:** April 25, 2022
**Author:** Graciela
**Content:**
## Warrior Win
# Daniel Campana
Moved to the USA from Ecuador when I was 11. Worked hard to get a full ride to the University of Miami. Graduated with a finance degree and have worked in Private Equity since then. Currently I am a Portfolio Manager. Have invested in SFH for the past 3 years. No MF experience.
## Property Details
**Address:** 311, 313, 315 Country Club Oval Daytona Beach FL
**Number of Units:** 42
**Value Add Deal?** Yes
**Purchase Price:** $3,600,000
**Estimated monthly increase projected?** $400
**Anticipated value after value add:** $5,600,000
**Estimated Cash on Cash Return:** 9%+
**Estimated Internal Rate of Return:** 17%+
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Great program to find quality individuals. I have meet my partners and together we are venturing into great projects (MF, STR, PE, a Fund) . A year after joining, I have given notice to my job that I will be leaving at the end of April.
## How did you find this property?
David Hayes, another warrior, brought me the deal. We meet during the warrior event in Daytona last year.
## How did you structure the financing of this property?
Bridge debt.
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
Arrows Capital Group partner with us and helped us.
## What was the equity raise?
$1,300,000
## What are some hurdles you had to overcome to get this deal done?
Two extension, heavier rehab than expected, KPs change in the middle of the deal, bank not being able to close
## What are some of the lessons you learned with this deal?
1) Find a good team
2) How to structure GPs
3) How to raise capital
4) How to do DD
5) How to underwrite deals and the details
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Andrew Duclos](https://rodkhleif.com/warrior-wins-andrew-duclos/)
**Published:** February 11, 2022
**Author:** Matt RK
**Content:**
## Warrior Win
# Andrew Duclos
I am a nurse anesthetist, this is my first multifamily purchase, I enjoy traveling.
## Property Details
**Address:** Uptown Townhomes. 2010 E 148th Ave. Lutz, FL 33549
**Number of Units:** 24
**Value Add Deal?** Yes
**Purchase Price:** $3,700,000
**Estimated monthly increase projected?** $250/unit
**Anticipated value after value add:** $5,900,000
**Estimated Cash on Cash Return:** 7%
**Estimated Internal Rate of Return:** 16%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Great for networking and education!
## How did you find this property?
Off market deal from a broker.
## How did you structure the financing of this property?
Community Bank
## Was this a joint venture or syndication?
Joint Venture
## How did you raise the equity?
Past investors with Dylan Marma
## What was the equity raise?
$1 Million
## What are some hurdles you had to overcome to get this deal done?
Property has a water treatment plant, had to get up to speed with these, had to go with a community bank because of this.
## What are some of the lessons you learned with this deal?
Pull in experts on areas you don’t know much about
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Hector Hernandez](https://rodkhleif.com/warrior-wins-hector-hernandez/)
**Published:** October 29, 2020
**Author:** Matt RK
**Content:**
## Warrior Win
# Hector
Hernandez
I am a restauranteur by trade and am learning real estate. My passion included building businesses with successful implementation of systems.
## Property Details
**Address:** 4223 central ave ne
**Number of Units:** 11
**Value Add Deal?** Yes
**Purchase Price:** $515,000
**Estimated monthly increase projected?** 40-60% per unit
**Anticipated value after value add:** $750,000
**Estimated Cash on Cash Return:** 16%
**Estimated Internal Rate of Return:** 8%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
The support and networking opportunities have been amazing. Although I haven’t needed to raise funds yet, I am confident when the opportunity arises the warrior group will help me reach the capital goal
## How did you find this property?
Craigslist (after reviewing Rod’s material from online course)
## How did you structure the financing of this property?
The owner was willing to carry the note with a 20 year balloon and 30 year amortization s he dile at 5% interés.
## Was this a joint venture or syndication?
No
## How did you raise the equity?
Refinancing money out of primary and investment property
## What was the equity raise?
$100,000
## What are some hurdles you had to overcome to get this deal done?
After walking away the first time I had the complex under contract because the numbers didn’t work, I waited a month and later found out their other buyer could not come up with the down payment. I reached out and negotiated the price down from $650K to $515K
## What are some of the lessons you learned with this deal?
Anything is negotiable in a seller financing deal. If you don’t ask you will never know.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Win:
Roberto Carabetta
58 Unit in GA](https://rodkhleif.com/warrior-win-roberto-carabetta-58-unit-ga/)
**Published:** April 24, 2025
**Author:** Graciela
**Content:**
## Warrior Win
# Roberto Carabetta
58 Unit Value-Add Senior Living Deal
## Roberto Carabetta
## Experienced Real Estate Investor and Contractor
Born and raised in Toronto, Canada, Roberto Carabetta has over 20 years of experience investing in single-family homes and working as a general contractor. After relocating to Ft. Lauderdale, FL, he expanded into commercial real estate, currently managing 400 CRE doors including 342 multifamily and 58 senior living units. His passion extends beyond real estate into healthcare innovation, participating in a diabetes management startup aimed at improving quality of life for diabetics. As a dedicated member of Rod Khleif’s Warrior Program, Roberto leverages mentorship and a powerful network to scale his portfolio and impact.
[Learn more about Warrior Coaching → ](https://rodkhleif.com/work-with-rod/)
## Property Overview
**Property Name**: North Spring Senior Living
**Location**: Claxton, GA
**Number of Units**: 58 senior living units
**Value Add Status**: Yes
**Major Improvements:** Increasing rents by 25% to market rates, converting 10-15 units into memory care with minimal rehab, updating exterior curb appeal and outdoor resident areas, and reducing staff expenses **Purchase Price**: $1.65 million
**Projected Monthly Rent Increase**: $600+ per unit including memory care
**Anticipated Value After Value Add**: $6.6 million
**Estimated Cash-on-Cash Return**: 13%
**Estimated Internal Rate of Return (IRR)**: 40
## How This Deal Came Together
### Deal Source
**Deal Sourcing Through Team Due Diligence:** A team member discovered the property while conducting due diligence on another senior living facility, leading to offers on both but acquisition of this one only.
### Equity Raise
**Total Equity Raised:** $600,000
**Method:** Syndication with four limited partners (LPs)
### Financing Structure
Creative and Layered Financing:
**Loan-to-Value (LTV):** 75% first mortgage
**Additional Financing:** 20% seller financing plus approximately $600k capital raise
**Refinance Plan:** Cash-out refinance planned after year 2
**Syndication Type:** Syndication
### Value-Add Strategies
Strategic Enhancements to Maximize Value:
**Rent Increases:** Raised rents by 25% to align with market rates
**Unit Conversion:** Converted 10-15 units into memory care with minimal rehab required
**Curb Appeal:** Updated exterior and outdoor resident areas to improve attractiveness and resident satisfaction
**Operational Efficiency:** Reduced staff expenses to improve net operating income
### ## Challenges Faced
Overcoming Financing and Operational Hurdles:
**Financing Complexity:** Location and lack of general partner experience in senior living made financing difficult
**Seller Challenges:** Seller was a long-term “mom and pop” owner with disorganized and outdated financials
**Weather Delays:** Hurricane Helene and Milton caused property damage and delayed closing
**Health Crisis:** One general partner suffered a massive heart attack weeks before closing
### Warrior Program Support
**Collaborative Warrior Network:** Key Warriors like JD Singh, Brian Fay, and Donovan Lucido played pivotal roles—JD Singh secured creative financing and negotiated concessions, Brian Fay led the capital raise contributing approximately 90% of the funds within one month, and Donovan Lucido provided earnest money deposit (EMD) and risk capital as a business partner.
**Mental Strength and Support System:** Roberto highlights the Warrior community as a source of motivation and mental resilience, pushing him to higher limits and reinforcing his belief in himself while pursuing his passion for real estate investing.
### Lessons Learned & Key Takeaways
Key Insights from the Senior Living Sector:
**Market Opportunity:** Senior living has a significant supply-demand gap with a $275 billion shortfall in accommodations
**Mom and Pop Potential:** Many properties are owned by small operators, presenting acquisition opportunities
**Team Building:** Success depends on building a strong team around senior living facility operators
> What an amazing program Rod and his team have created... It has changed my life. The network pushes me to higher limits and gives me the mental strength to believe in myself while doing what I love.
>
> Roberto Carabetta
## Be the Next Warrior Success Story
Roberto Carabetta. With expert mentorship, a supportive community, and proven strategies for capital raising and value-add deals, you can accelerate your path to financial freedom. Don’t wait—take the first step toward building your real estate empire. Apply now for Rod Khleif’s Warrior Mentorship Program and start your journey to success!
[ Join the Warrior Program ](https://rodkhleif.com/work-with-rod/)
## Warrior Success Stories
[Play Video](https://www.youtube.com/watch?v=6L-ho9oRtUY)
#### [Featuring Elsa Nguyens #682](https://rodkhleif.com/podcasts/single-mom-to-massive-success-in-multifamily/)
### [Immigrant Mom To Massive Success In Multifamily](https://rodkhleif.com/podcasts/single-mom-to-massive-success-in-multifamily/)
[Play Video](https://www.youtube.com/watch?v=Fmqzl9_8Nj4)
#### [Featuring Oliver Fernandez #721](https://rodkhleif.com/podcasts/from-7-to-1000-units-in-3-years-2/)
### [From 7 to 1000 units in 3 years](https://rodkhleif.com/podcasts/from-7-to-1000-units-in-3-years-2/)
[Play Video](https://www.youtube.com/watch?v=J-fDFPBRilY)
#### [Featuring Rasool Mutawakkil #715](https://rodkhleif.com/podcasts/10mm-in-multifamily-assets-under-management-in-one-year/)
### [$10MM in Multifamily Assets Under Management in One Year](https://rodkhleif.com/podcasts/10mm-in-multifamily-assets-under-management-in-one-year/)
[ See more warrior wins ](/warriorwins)
---
### [Warrior Wins - Atif Gul](https://rodkhleif.com/warrior-wins-atif-gul/)
**Published:** May 15, 2024
**Author:** Greciel Moreno
**Content:**
## Warrior Win
# Atif Gul
Transitioned from software engineering to real estate investing 1 year ago.
Leveraged the Warrior Program community to gain knowledge and expertise in real estate syndication.
Actively pursuing General Partner (GP) roles for the past 6 months.
Track record of successfully closing 3 deals totaling 450 doors and raising $3 million in capital. $65 million AUM.
## Property Details
**Address:** Regatta Apatment Homes – 12635 Scarsdale Drive, San Antonio, TX 7823 3
**Number of Units:** 200
**Value Add Deal?** Distressed Asset with Value Add
**Purchase Price:** $2,000,000
**Estimated monthly increase projected?** $200/unit
**Anticipated value after value add:** $38M
**Estimated Cash on Cash Return:** 6-8%
**Estimated Internal Rate of Return:** 15-17%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
The Rod Khleif Warrior Program is truly a remarkable journey into the realm of commercial real estate (CRE). It offers a comprehensive curriculum that spans all critical aspects of the industry—from sourcing deals to underwriting, raising capital, and managing assets effectively. What sets this program apart is the quality of the content
it’s not only thorough but also presented in a way that’s both engaging and easy to understand, making complex concepts accessible to beginners and seasoned professionals alike.
Another standout feature of the program is its vibrant community. The Warrior Program brings together a diverse group of individuals, each with their unique expertise and experience in different facets of real estate. This community is incredibly supportive, with members going out of their way to assist one another. Whether it’s through formal networking events or casual conversations, the willingness to share knowledge and experiences is palpable, and greatly enhances the learning experience.
Participants not only gain technical knowledge but also develop lasting relationships that can lead to future collaborations and partnerships. This nurturing environment fosters a spirit of generosity and growth, which is often missing in more competitive educational settings.
Overall, the Warrior Program by Rod Khleif is more than just a real estate course—it’s a gateway to a thriving career in CRE, supported by a network of professionals who are genuinely interested in seeing each other succeed. Whether you’re looking to start your journey in commercial real estate or aiming to elevate your existing career, this program offers valuable resources and a supportive community to help you achieve your goals.
## How did you find this property?
Rod found that property. It is CREE deal and I am co-gp on the deal.
## How did you structure the financing of this property?
$13.5M debt financing (assumable loan).
## Was this a joint venture or syndication?
Syndication.
## How did you raise the equity?
Investor network.
## What was the equity raise?
$12.5M
## What are some hurdles you had to overcome to get this deal done?
Due diligence took a lot of time.
## What are some of the lessons you learned with this deal?
Personal Learnings:
Teamwork is key: Absolutely! Real estate syndications involve various aspects, and having a strong team with complementary skills is crucial for success.
Thorough due diligence is essential: You’re right, don’t rely solely on information provided by others. Verifying data through inspections and independent research is vital for making informed decisions.
Other Lessons Learned:
Market research is crucial: Understanding the target market, vacancy rates, and rental trends is essential for accurate projections and identifying potential risks.
Sponsor track record matters: Research the sponsor’s experience, past performance, and reputation in the industry. This helps assess their capabilities and approach to managing the investment.
Scrutinize the offering documents: Carefully review the offering memorandum, operating agreement, and other legal documents to understand the terms, fees, and potential risks involved.
Exit strategy is important: Consider how you will eventually get your investment back. Will the property be sold, refinanced, or held for long-term income generation?
Don’t chase returns over reason: High cap rates can be tempting, but they might indicate underlying problems with the property or the market. Focus on realistic projections and sustainable returns.
Be prepared for unexpected events: Set aside reserves to handle unforeseen circumstances like repairs, vacancy fluctuations, or market downturns.
Communication is key: Maintain open and transparent communication with your partners and investors throughout the entire process.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Jordan Hinz](https://rodkhleif.com/warrior-wins-jordan-hinz/)
**Published:** February 27, 2024
**Author:** Graciela
**Content:**
## Warrior Win
# Jordan Hinz
Born and raised in Minnesota. After graduating from the University of Minnesota, I joined the Army National Gaurd Aviation and served for 8 years. Currently been with the American Red Cross in Data analytics for 8 years and working to transition into real estate full time. My wife and I own one commercial medical office building prior to our first multifamily. Passions and value that guild me are God, time with my family, and traveling.
## Property Details
**Address:** Silvan Townhomes / 6876 Vicksburg Ln N, Maple Grove, MN.
**Number of Units:** 48
**Value Add Deal?** Yes
**Purchase Price:** $10,225,000
**Estimated monthly increase projected?** $171/unit
**Anticipated value after value add:** $16,000,000
**Estimated Cash on Cash Return:** 6-8%
**Estimated Internal Rate of Return:** 14%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
The warrior program is an amazing community of like minded, selfless folks. I am energized everytime I am able to network and/connect with my fellow warriors and everyone is always so helpful when questions and support in needed.
## How did you find this property?
I was underwirting a local property that Charlie Peters passed on months ago. I set up a call with him and he brought Michael (who worked on opportunity with him) along. After that call I connected with Michael more to get to know him. He asked if Id like to join his current opportunity that Charlie is the Sponsor on because he liked me the heard only good things about warriors. I talked with Charlie more and then my Coach Eric, then decided to join the GP team.
## How did you structure the financing of this property?
7 year loan term
6% fixed rate
24m IO
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
I used my invester leads that I had signed up through my website.
## What was the equity raise?
$4,100,000
## What are some hurdles you had to overcome to get this deal done?
Cash flowing property with low vacancy. Hurdles would be martket conditions for timing of sale, and any unexpeded Reno costs.
## What are some of the lessons you learned with this deal?
I learned that even when you have leads saying they are ready to invest right now that you can not rely on that!
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Nathaniel and Valerie Kolwyck](https://rodkhleif.com/warrior-wins-nathaniel-and-valerie-kolwyck/)
**Published:** February 11, 2022
**Author:** Matt RK
**Content:**
# Warrior Win
## Adam Beckstedt
Built and sold houses for 15 years. Help run family business for 15. In 2018 separate from family business to do real estate investing full time. In March of 2020 mother was diagnosed with pancreatic cancer. Father had three choices to either sale, shut down, or asked me to come run it. So I went back to manage family business. My wife and I passions are to help with orphanages in Africa. Right now we can only donate our money one day goal is to help build and maintain a orphanage in Uganda.
## Property Details
**Address:** Cider point apartments
**Number of Units:** 26
**Value Add Deal?** Yes
**Purchase Price:** $1,200,000
**Estimated monthly increase projected?** $100/unit
**Anticipated value after value add:** $1,800,000
**Estimated Cash on Cash Return:** 12%
**Estimated Internal Rate of Return:** 22%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Awesome program
## How did you find this property?
Pocket listening
## How did you structure the financing of this property?
Leverage my single family units
## Was this a joint venture or syndication?
Joint Venture
## How did you raise the equity?
Leverage
## What was the equity raise?
Leverage
## What are some hurdles you had to overcome to get this deal done?
Mind set, how to show the banker we could manage the apartment
## What are some of the lessons you learned with this deal?
My wife and I can do anything that we set our minds to
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
## Add Your Heading Text Here
---
### [Warrior Wins - Alex Love Li](https://rodkhleif.com/warrior-wins-alex-love-li/)
**Published:** October 26, 2022
**Author:** Graciela
**Content:**
## Warrior Win
# Alex Love Li
I’ve been in a real estate investor for 18 years. I’ve done almost everything in Single-Family Home, from flipping to full builds to airbnbs.
## Property Details
**Address:** 520 Baxter Ave, Macon GA 31201, Vineville Townhomes
**Number of Units:** 174
**Value Add Deal?** Yes
**Purchase Price:** $11,650,000
**Estimated monthly increase projected?** $150/unit
**Anticipated value after value add:** $18,000,000
**Estimated Cash on Cash Return:** 10%
**Estimated Internal Rate of Return:** 16%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
The people I have met are all fantastic and have been extremely generous with their time. The coaching with Matt has been amazing. Rod is also so generous with his time especially making an appearance on my Monday night zoom call.
## How did you find this property?
We partnered with “think multifamily” and was brought into the deal.
## How did you structure the financing of this property?
70/30 split with, 8% pref
We got 65% LTV
SOFR+4.9%
3 year IO
## Was this a joint venture or syndication?
Joint Venture.
## How did you raise the equity?
My network, I personally raised $1.5m.
## What was the equity raise?
$5,500,000
## What are some hurdles you had to overcome to get this deal done?
Interest rate rising, lender extending closing date, lender taking longer to underwrite TIC, communications between 3 GP teams.
## What are some of the lessons you learned with this deal?
How to work with lender at this level. How to negotiate GP table terms, how to leverage this deal to gain new opportunities and deals from brokers.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Brian Kochendorfer](https://rodkhleif.com/warrior-wins-brian-kochendorfer/)
**Published:** April 15, 2020
**Author:** Matt RK
**Content:**
## Warrior Win
# Brian Kochendorfer
Brian Kochendorfer is the Managing Member of Arc Equity Group, a Chicago-based real estate investment firm specializing in acquiring and operating apartment properties in the Midwest. Brian is a general and limited partner in over 800 apartment units with a total value of approximately $60,000,000. He has 13 years of experience as a commercial real estate broker and has been involved in over $600M in real estate transactions throughout his career, primarily in multifamily. At Arc, Brian leverages his investment and brokerage experience to oversee the firm’s acquisition and operational strategy.
## Property Details
**Address:** 2909 E 78th St, Chicago, IL
**Number of Units:** 31
**Value Add Deal?** Yes
**Purchase Price:** $1,420,000
**Estimated monthly increase projected?** $200-250/unit
**Anticipated value after value add:** $2,600,000
**Estimated Cash on Cash Return:** 13%
**Estimated Internal Rate of Return:** 18%
## Warrior team
shout outs:
## Which Warriors helped you with this deal, and how?
I don’t have a coach but I am in touch with several warriors who I kick around ideas with and all support each other throughout the ups and downs of trying to put deals together.
## Any comments about your experience so far in the Warrior Program?
The networking has been great, and since I joined I’ve made offers on deals with others in the group as well as started a local meetup through people I met in this program
## How did you find this property?
My partner that I bought the 45 unit property in Melrose Park with found this one through a broker as he owned another property nearby
## How did you structure the financing of this property?
Bridge loan
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
Friends and family
## What was the equity raise?
$475,000
## What are some hurdles you had to overcome to get this deal done?
With the property being in a receivership the court process to several weeks longer than a typical deal, but it was worth it in the end
## What are some of the lessons you learned with this deal?
This is a heavy rehab project, and I wasn’t sure it would be worth it but will end up being one of our better properties. I learned not to take shortcuts with the rehab, our actual rents are significantly higher than our projections due to the quality of work being done.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Jonas Gustafsson](https://rodkhleif.com/warrior-wins-jonas-gustafsson/)
**Published:** June 11, 2021
**Author:** Matt RK
**Content:**
## Warrior Win
# Jonas Gustafsson
Airline Pilot, I own a single family and a duplex.
## Property Details
**Address:** 2234/2236 Hanser Dr, Covington, KY 41011
**Number of Units:** 12
**Value Add Deal?** Yes
**Purchase Price:** $528,000
**Estimated monthly increase projected?** $200/unit
**Anticipated value after value add:** $650,000
**Estimated Cash on Cash Return:** Initially 7% but average over 10 years 24%
**Estimated Internal Rate of Return:** 21%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
It’s been great! As I write this I’m tracking to close on a 18 unit and have another LOI out. This would have never happened if I did not join the warrior program. I’m supper excited about my progress not only in real estate but as a person as well!
## How did you find this property?
Direct mail by my partner
## How did you structure the financing of this property?
Credit Union
## Was this a joint venture or syndication?
JV
## How did you raise the equity?
Brought in one more warrior
## What are some hurdles you had to overcome to get this deal done?
Financing since it was my first deal. My net worth is low so brought in another warrior and reached out to a mortgage broker to get it done. We got financing with a credit union.
## What are some of the lessons you learned with this deal?
As we took over the property we had 4 tenants not paying rent. 2 of them have now paid but we should have verified with the sellers bank account that rents were actually being payed.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Powell Chee](https://rodkhleif.com/warrior-wins-powell-chee/)
**Published:** April 9, 2020
**Author:** Matt RK
**Content:**
## Warrior Win
# Powell Chee
Corporate Account Executive for Fortune 100 company
General Partner in 1000+ units, over 7 properties
Founder of MultiFamilyMasters.com
Entrepreneurship, Beach Volleyball, Working towards living the Extraordinary Life.
## Property Details
**Address:** Retreat at Stone Mountain
**Number of Units:** 212
**Value Add Deal?** Yes
**Purchase Price:** $1,420,000
**Estimated monthly increase projected?** $70
**Anticipated value after value add:** $11,810,000
**Estimated Cash on Cash Return:** 10.6%
**Estimated Internal Rate of Return:** 14.78%
## Warrior team
shout outs:
## Which Warriors helped you with this deal, and how?
Many people
## Any comments about your experience so far in the Warrior Program?
Awesome. Love the people. Inspiring. So many are willing to help. Can’t wait to see them again soon.
## How did you find this property?
I didn’t find it, I found partners with mutual alignment of the abundance mentality. I was able to bring value to the during the acquisition & raising of capital. Together we were able to acquire the property, raise the necessary capital, and operate the property according to plan.
## How did you structure the financing of this property?
Fannie Mae. 10 year term, 3 year IO, 4.8% Interest
## How did you raise the equity?
506b
## What was the equity raise?
6 mil
## What are some hurdles you had to overcome to get this deal done?
Large capital raise, operational pressure, corona virus
## What are some of the lessons you learned with this deal?
Partnerships, the good/bad/uncomfortable
##
Was this a joint venture or syndication?
Syndication
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Daniel Charles](https://rodkhleif.com/warrior-wins-daniel-charles/)
**Published:** September 22, 2023
**Author:** Graciela
**Content:**
## Warrior Win
# Daniel Charles
Prior to becoming a full-time real estate investor, I was a CPA that concentrated in M&A. Now in the Real Rstate space, I’m the COO of a property management company and GP on deals with Jason Pero.
## Property Details
**Address:** Kemper Ambassador
**Number of Units:** 186
**Value Add Deal?** Yes
**Purchase Price:** $9,675,000
**Estimated monthly increase projected?** $400/unit
**Anticipated value after value add:** $22,500,000
**Estimated Cash on Cash Return:** 5.4%
**Estimated Internal Rate of Return:** 16.3%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Best thing that has ever happened to me!
## How did you find this property?
My partner, Jason Pero had the broker connection for the deal.
## How did you structure the financing of this property?
Community bank debt (fixed rate recourse loan).
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
$1,800,000 from a TIC investor with the remainder from LP investors
## What was the equity raise?
$5,400,000
## What are some hurdles you had to overcome to get this deal done?
Insurance costs came in higher than expected and the overall timing was rough. From initial contact to closing was almost an entire year.
## What are some of the lessons you learned with this deal?
Make sure to get quotes on insurance prior to going under contract and stay away from chiller systems (unless the price is right).
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins -Mandy McAllister](https://rodkhleif.com/warrior-wins-mandy-mcallister/)
**Published:** November 10, 2020
**Author:** Matt RK
**Content:**
## Warrior Win
# Mandy McAllister
Mandy McAllister is a multifamily real estate investor, mindset ninja, eternal learner, coach and connector. She followed volleyball to Mercer University in Georgia where she was awarded Top Graduate in Marketing. Soon after, she moved to Chicago to do a Masters in Economics and began work at the Board of Trade. Her professional career transitioned to Medical Device Sales where she was a perennial top performer. After many years of “chasing commission” she has made it her mission to secure financial freedom for her family and others through syndications and coaching individuals to realize their personal potential. Her real estate expertise includes repositioning underperforming assets to increase cashflow and value. Her portfolio is currently comprised of 205 doors, primarily B- class workforce housing. Mandy has found success in college towns with student housing as well as urban centers. Her passion is to help others define their path to financial freedom especially women through her platform, Aspiring Women Achieving More. She is most proud to be mama to her hilarious 4-year-old son Duncan who, coincidentally, wants to be a real estate investor when he grows up.
## Property Details
**Address:** Veranda Apartments
**Number of Units:** 53
**Value Add Deal?** No
**Purchase Price:** $4,150,000
**Estimated Cash on Cash Return:** 10%
**Estimated Internal Rate of Return:** 14%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
It’s great ☺️
## How did you find this property?
Broker relationship.
## How did you structure the financing of this property?
Fannie
## Was this a joint venture or syndication?
Joint Venture
## What are some hurdles you had to overcome to get this deal done?
Structural basement issues
## What are some of the lessons you learned with this deal?
Have PFS and all documents set and ready
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - George Rodrique](https://rodkhleif.com/warrior-wins-george-rodrique/)
**Published:** April 24, 2023
**Author:** Greciel Moreno
**Content:**
## Warrior Win
# George Rodrique
I’ve been a professional cameraman/photographer/video editor since 1996. Before that I was a Correctional Officer in a jail for almost 4 years. I still love photography but loathe the business. My wife and I have purchased 6 properties and are under contract for a seventh. When my wife retires we will scale up significantly. Most likely in Florida. We really see the value in Pinellas County, Clearwater specifically. My wife and I are also passionate cat lovers. We have 3. We love to travel also…Iceland is our favorite. Been 3 times.
## Property Details
**Address:** 1190 Grove Street/Clearwater, Fl 33755
**Number of Units:** 4
**Value Add Deal?** It was as far as being able to raise the rents but value of property hasn’t reached its potential yet.
**Purchase Price:** $775,000
**Estimated monthly increase projected?** Rents were raised 117% for the 2 one bedrooms and 150% for the 2 two bedrooms.
**Anticipated value after value add:** It has lost about $10k in value but we will hold for at least 5 years.
**Estimated Cash on Cash Return:** 5%
**Estimated Internal Rate of Return:** none
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
It’s just a great group of people. People willing to offer up their time, even if it’s seconds, is a HUGE help when you are a novice. Like I was then, and still am. Always learning but never afraid to ask for help.
## How did you find this property?
I believe it was just searching on line.
## How did you structure the financing of this property?
Conventional loan… amortized over 30 years at
## Was this a joint venture or syndication?
It was neither. My wife and I purchased it alone.
## How did you raise the equity?
I believe my wife used some investment money for the down payment.
## What was the equity raise?
Personal funds
## What are some hurdles you had to overcome to get this deal done?
Price per door was higher than we wanted. Ended up being $193,750. So we didn’t want to pour a ton of money in CAP EX. But we realized we had to replace the roof in one unit and that was the biggest expenditure. Cleaning, painting and replacing light fixtures and faucets etc in all units was done also. The rents were ridiculously low when we purchased the property. $900 for the 1 BR/1BA and $1250 (117% increase) for the 2 BR/BA. After all of our improvements we were able to rent them out for $1950 for the 1 BR/BA and up to $2250 (150% increase) for the 2 BR/BA.
## What are some of the lessons you learned with this deal?
When tenants are transitioned out ALWAYS anticipate them leaving the property in disarray. Trashed even. It’s the standard FU to the new owners and their way of not appreciating being ‘forced’ out.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Ray Hightower](https://rodkhleif.com/warrior-wins-ray-hightower/)
**Published:** February 11, 2022
**Author:** Matt RK
**Content:**
## Warrior Win
# Ray
Hightower
Ray Hightower is a tech company founder and commercial real estate investor operating in the State of Arizona, USA. Growing a technology company for twenty-one years and ultimately selling it gave Hightower a boots-on-the-ground education in business execution and vanquishing obstacles.
Ray joined the Warrior program in July 2020. He moved from California to Arizona three months later, and four months after that he became an LP in his first syndication: 93u in Tucson, AZ. His Second LP, 302u in Phoenix, closed in Sep 2021. Ray closed his first GP deal in November 2021 with partners he met through the Warrior program.
## Property Details
**Address:** 1412 N 35th Street, Phoenix, AZ 85008
**Number of Units:** 28
**Value Add Deal?** Yes
**Purchase Price:** $4,788,000
**Estimated monthly increase projected?** $400-$600/door
**Anticipated value after value add:** $6,380,000
**Estimated Cash on Cash Return:** 5% (initially) with 2.0x equity multiple upon exit.
**Estimated Internal Rate of Return:** 16%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Since I joined the Warrior program, every deal I’ve done (or attempted) has included Warriors or people I’ve met through other Warriors. The network and mindset training is awesome.
## How did you find this property?
Broker relationship.
## How did you structure the financing of this property?
75% debt from a local bank
75% capex from the same local bank
Remainder (equity) raised via syndication.
## Was this a joint venture or syndication?
Syndication
## What was the equity raise?
$2 mil
## How did you raise the equity?
Each member of the GP team leveraged existing relationships and built new relationships since we made this a 506(c) offering.
## What are some hurdles you had to overcome to get this deal done?
* Raising capital.
* Replacing our initial management company (while we were still in due diligence).
* Finding contractors who we trust.
* Getting rent comps that make sense in the crazy Phoenix market. Y-o-Y rent growth between Sep2020 and Sep2021 = 22%, per YARDI. The bank pushed back against this, initially. And then we shared our data plus the opinions of two local PM companies.
## What are some of the lessons you learned with this deal?
* It’s never too early to raise money for a deal.
* FOMO during fundraising is real. I have multiple investors who moved too slow on this deal, and now they’re chomping at the bit for the next one.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Steven Wright](https://rodkhleif.com/warrior-wins-steven-wright/)
**Published:** May 14, 2024
**Author:** Greciel Moreno
**Content:**
## Warrior Win
# Steven Wright
I spent the last 7 years as the VP of a Construction Management & Architectural consulting firm, where I worked with developers, general contractors, engineers, and Architects to design & build projects all across the country. Many of the projects I worked on were multifamily apartment buildings, and so I began to develop an interest in commercial real estate because of that. My best friend and business partner, Eric Williams, was interested in it as well. We are both Realtors in Florida, and decided to go into business together after joining the Warrior program. My passions are mentoring, entrepreneurship, playing guitar, snowboarding, and creating lifetime cashflow through commercial real estate investing!
## Property Details
**Address:** District 52 Apartments – 2465 Harvard Ave, San Angelo, TX 76904
**Number of Units:** 52
**Value Add Deal?** Yes
**Purchase Price:** $2,600,000
**Estimated monthly increase projected?** $200-500 based on unit type
**Anticipated value after value add:** $4,160,000
**Estimated Cash on Cash Return:** 8%
**Estimated Internal Rate of Return:** 16%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
The Warrior program really fast-tracked us for success in this industry, and I can’t explain just how valuable it has been.
## How did you find this property?
We were brought on as General Partners by other Warriors.
## How did you structure the financing of this property?
Assumable 10 year Fannie Mae loan at 3.48%, with interest only payments until 2026.
## Was this a joint venture or syndication?
Syndication.
## How did you raise the equity?
Recorded a 25 minute video overview, and then sent it to everyone we knew beginning with friends and family, and then went to outside investors.
## What was the equity raise?
$1,700,000
## What are some hurdles you had to overcome to get this deal done?
The timeframe was pretty short, since we were brought on to raise funding for capital expenditures, and we had never raised capital before, so it required a very fast turnaround and creation of sales assets to potential investors.
## What are some of the lessons you learned with this deal?
The main lesson that we learned is that getting investors to pay takes more time than expected, and that people are certainly going to tell you that they’re investing and then either ghost you or pull out at the last second.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Sumanth Banda](https://rodkhleif.com/warrior-wins-sumanth-banda/)
**Published:** February 11, 2022
**Author:** Matt RK
**Content:**
## Warrior Win
# Sumanth
Banda
I have been in the technology field for the past 13 years. Started real estate journey in 2016 by single family flips and started MF in 2021.
## Property Details
**Address:** Sohana Apartments, Nashville, TN
**Number of Units:** 83
**Value Add Deal?** Yes
**Purchase Price:** $14,000,000
**Estimated monthly increase projected?** $150/unit
**Anticipated value after value add:** $19,000,000
**Estimated Cash on Cash Return:** 10%
**Estimated Internal Rate of Return:** 16%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Awesome group, learnt a lot from my coach Matt Picheny.
## How did you find this property?
Off market, our partner had a relationship with the broker.
## How did you structure the financing of this property?
75% LTV, 4.75% bridge loan
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
506B
## What was the equity raise?
$4.5 mil
## What are some hurdles you had to overcome to get this deal done?
Lender backed out 1 week before closing, had to get an extension from the seller and find a new lender. Had to raise additional money as the lending terms changed.
## What are some of the lessons you learned with this deal?
Have backup lenders ready to finance your deal
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Frank Patalano](https://rodkhleif.com/warrior-wins-frank-patalano/)
**Published:** August 10, 2022
**Author:** Graciela
**Content:**
## Warrior Win
# Frank Patalano
Former School Teacher
Investing in Real Estate for about 13 years. Been in Syndications for about 4 years.
## Property Details
**Address:** Pine Park and Playa Del Sol both in Albuquerque, NM
**Number of Units:** 98
**Value Add Deal?** Yes
**Purchase Price:** $8,300,000
**Estimated monthly increase projected?** 50 but also RUBs
**Anticipated value after value add:** $13,800,000
**Estimated Cash on Cash Return:** 9%
**Estimated Internal Rate of Return:** 31%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Enjoying so far but haven’t truly closely connected with any Warriors yet.
## How did you find this property?
I was asking another syndication friend if there was anything that he needed help with.
## How did you structure the financing of this property?
5 year. 2 year I/O
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
Called and Emailed my Network
## What was the equity raise?
$3.1 M
## What are some hurdles you had to overcome to get this deal done?
Market changing. Other GPs decided to do a 50/50 at sale. Buying a portfolio.
## What are some of the lessons you learned with this deal?
Speak up. People need help and I can provide value.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Tim Fergestad](https://rodkhleif.com/warrior-wins-tim-fergestad/)
**Published:** February 11, 2022
**Author:** Matt RK
**Content:**
## Warrior Win
# Tim
Fergestad
Prior to transitioning full time into real estate, I used my Ph.D. in Neuroscience to study a variety of diseases in the Genetics Department at the University of Wisconsin-Madison. My experiences in real estate started in 2017 including being a licensed agent, operating a land wholesaling company, remodeling and renovating properties, owning single family rental homes in multiple states, as well as a being a multifamily investor.
My passions are my family and helping people (improving the world in little doses).
## Property Details
**Address:** Sohana Apartments
**Number of Units:** 124
**Value Add Deal?** Yes
**Purchase Price:** $14 Mil
**Estimated monthly increase projected?** $80/unit
**Anticipated value after value add:** $18 mil
**Estimated Cash on Cash Return:** 10%
**Estimated Internal Rate of Return:** 18%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
The program is full of great people with growth and abundance mindsets. Rod has done an incredible job attracting quality people with his solid educational & motivational model as well as his genuine desire to help people achieve success.
## How did you find this property?
Networking with warriors (MGW Ventures found the property).
## How did you structure the financing of this property?
Bridge
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
Friends, but mostly PM (half!) and other GPs (MGW Ventures & Arrows Capital Group).
## What was the equity raise?
$4 mil
## What are some hurdles you had to overcome to get this deal done?
Initial bridge lender backed out 1 week before close. Had to extend sale and quickly find new a lender.
## What are some of the lessons you learned with this deal?
Have trusted team members (Mortgage brokers too!) and Lenders, your largest partner, hold all the cards.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Loren Jacobs](https://rodkhleif.com/warrior-wins-loren-jacobs/)
**Published:** October 29, 2020
**Author:** Matt RK
**Content:**
## Warrior Win
# Loren
Jacobs
Masters of Science in neuromuscular physiology, worked in a clinic of physiatry treating patients suffering from chronic pain conditions with regenerative therapies
researched utilizing stem cells as a therapeutic treatment option for these patients. Have since become a certified steam engineer and work at a canola processing plant.
Acquired 3 single family rentals and 1 commercial retail rental since 2016. After attending Rod’s Multifamily Bootcamp in LA last January I have become an LP on Views of Mt. Airies (282 units) with my partner, Lisa Campbell, closed on a new construction project (3 unit townhomes) and just closed on a syndicated 46 unit apartment community. Total: 335 units
331 of those came in the past 8 months!
Thanks Rod! This would not have been possible without you!
## Property Details
**Address:** Woodlawn Apartments – 3762 Up River Rd., Corpus Christi, TX 78408
**Number of Units:** 46
**Value Add Deal?** Yes
**Purchase Price:** $2,950,000
**Estimated monthly increase projected?** $25/unit
**Anticipated value after value add:** $3,800,000
**Estimated Cash on Cash Return:** 18%
**Estimated Internal Rate of Return:** 16.8%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
10/10. We are actively chasing deals and getting more under contract as we speak. I will always be a huge advocate for the program! I have been working hard to get out of the W2 so I can attend more of the training sessions.
## How did you structure the financing of this property?
Used a regional bank as bridge debt, 75% LTC 4.25% with 1 year i/o, 5 year term.
## What are some of the lessons you learned with this deal?
Learned a ton working with inspectors and getting construction bids during DD. Great experience working with and forming relationships with lenders and legal professionals. Putting together a syndication. Raising money is harder than you think, but, the right deal, structured and presented property will sell itself. Managing time and stress, taking care of my mental health. Taking less on the first few deals to set yourself up to do more in the future. Partnering with and adding value to experienced operators/positioning yourself to become a long term partner with experience operators.
## How did you raise the equity?
506(b) offering. Put on a webinar and invited friends and family. We were fully funded in less than 3 days.
## How did you find this property?
A local PM I met at Rod’s Bootcamp in LA brought the deal to me.
## What was the equity raise?
$865,000
## Was this a joint venture or syndication?
Syndication
## What are some hurdles you had to overcome to get this deal done?
Covid: we started looking at this deal in March – agreed to a 90 day option.
Negotiated two seller credits: one for the rebuild of the 6 down units ($300,000) and another for collapsed sewer mains we discovered during DD ($40,000).
Time: committing enough time to make this deal happen considering I work full-time, have two young kids (4 yr old and 1 yr old), self manage our single family and retail rentals, we own and operate a commercial gym and are partners in a commercial cattle operations with 140 pairs of Black Angus.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Rob Nickester](https://rodkhleif.com/warrior-wins-rob-nickester/)
**Published:** January 17, 2023
**Author:** Graciela
**Content:**
## Warrior Win
# Rob Nickester
Rob is a real estate investor and co-founder of Sentinel Equity Group, LCC. Rob is a Marine Corp veteran and spent 25+ years in corporate technology as an Infrastructure Architect. He has been investing in residential real estate since 2001 and commercial real estate across multiple states since 2019. Rob and his partners own and manage over 500 doors.
Rob has a broad range of experience including project management, strategic planning, property and asset management, acquisitions, underwriting, value-add opportunities,
and syndications.
## Property Details
**Address:** 7740 McCallum Communites
**Number of Units:** 419
**Value Add Deal?** Yes
**Purchase Price:** $54,000,000
**Estimated monthly increase projected?** about $125/unit
**Anticipated value after value add:** close to $70,000,000
**Estimated Cash on Cash Return:** 5.6% – 6.4%
**Estimated Internal Rate of Return:** 21.5% – 23.9%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
For me, the network of amazing people has been instrumental in getting started in MF.
## How did you find this property?
Through a broker who reached out to my partner.
## How did you structure the financing of this property?
We negotiated a loan assumption with the seller, used some private equity, and the rest capital we raised.
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
We raised equity through the personal networks of all the partners.
## What was the equity raise?
$20 Million PE, JV/LP 8.6 M and GP Equity $1.5 M
## What are some hurdles you had to overcome to get this deal done?
Working with individuals to get PE and trying to raise capital during a time of inflation has been pretty challenging.
## What are some of the lessons you learned with this deal?
Have a more robust and active investor list, especially for any deals in Q4 of a given year.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Benjamin Cedarland](https://rodkhleif.com/warrior-wins-benjamin-cedarland/)
**Published:** June 17, 2022
**Author:** Graciela
**Content:**
## Warrior Win
# Benjamin Cedarland
I have been involved in residential real estate development for 20 yrs. I held a few duplexes and 6-plexus along the way. I started pursuing Multi family about 2 yrs ago.
## Property Details
**Address:** 518 Linda Dr San Marcos Texas
**Number of Units:** 72
**Value Add Deal?** Yes
**Purchase Price:** $12,000,000
**Estimated monthly increase projected?** $130/unit
**Anticipated value after value add:** $16,000,000
**Estimated Cash on Cash Return:** 10.5%
**Estimated Internal Rate of Return:** 16.22%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
The Networking and support from the program has been amazing. I would not have the GP positions that I do without it.
## How did you find this property?
Through a relationship with a fellow Warrior and a Property Management company.
## How did you structure the financing of this property?
Bridge Loan.
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
Existing personal and business relationships.
## What was the equity raise?
$3,800,000
## What are some hurdles you had to overcome to get this deal done?
This was my first active involvement in a syndication so that was a whole new process for me.
## What are some of the lessons you learned with this deal?
Set up the legal purchasing entity and syndication paperwork sooner in the process.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Jason Martins](https://rodkhleif.com/warrior-wins-jason-martins/)
**Published:** April 10, 2023
**Author:** Graciela
**Content:**
## Warrior Win
# Jason Martins
Full time Property Manager since 2007
Certified Property Manager since 2014
Bought my first duplex in 2017
Started my management company in 2017
first LP spot in 2021
First GP spot in 2022
## Property Details
**Address:** 280 E Plant St, Winter Garden, FL 34787
**Number of Units:** 11
**Value Add Deal?** Yes
**Purchase Price:** $1,200,000
**Estimated monthly increase projected?** $8,800
**Anticipated value after value add:** $2,800,000
**Estimated Cash on Cash Return:** 9%
**Estimated Internal Rate of Return:** 47%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
I couldn’t have done it without being in the program.
## How did you find this property?
It was across the street from my duplex. It was on the market, it didn’t sell, so I called the owner directly. He agreed to a price and to seller finance.
## How did you structure the financing of this property?
Seller financing, 7% IO, 3 years, option to amortize after IO period.
## Was this a joint venture or syndication?
Joint Venture.
## How did you raise the equity?
I put in $150,000 and the rest came from partners.
## What was the equity raise?
$400,000
## What are some hurdles you had to overcome to get this deal done?
Putting together a JV team that could bring the money to close.
## What are some of the lessons you learned with this deal?
Be prepared with cash in case anything goes wrong.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Jonathan Russell](https://rodkhleif.com/warrior-wins-jonathan-russell/)
**Published:** June 11, 2021
**Author:** Matt RK
**Content:**
## Warrior Win
# Jonathan Russell
Full time in real estate. Have my Realtor’s License as well as have a couple new construction spec houses going for income generating. Puts my current rentals at 62 doors. I’ve done 71 doors total when including flips and new builds
## Property Details
**Address:** 310 Charlotte, Charleston, MO
**Number of Units:** 4
**Value Add Deal?** Yes
**Purchase Price:** $120,000
**Estimated monthly increase projected?** $75/unit
**Anticipated value after value add:** $150,000
**Estimated Cash on Cash Return:** infinite – no cash in
**Estimated Internal Rate of Return:** infinite – no cash in
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Love the community of everyone willing to help each other
## How did you find this property?
My joint venture partner on this found on Facebook through a friend.
## How did you structure the financing of this property?
100% purchase price financing through local lender I have relationship with. Seller covered closing cost. $0 out of pocket upfront
## Was this a joint venture or syndication?
Joint Venture
## How did you raise the equity?
$0 out of pocket upfront
## What was the equity raise?
$0 out of pocket upfront
## What are some hurdles you had to overcome to get this deal done?
My first purchase out of my home state. Had to bust out of my comfort zone
## What are some of the lessons you learned with this deal?
Good deals are anywhere if you know how and what to look for.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Mark Blass](https://rodkhleif.com/warrior-wins-mark-blass/)
**Published:** October 29, 2020
**Author:** Matt RK
**Content:**
## Warrior Win
# Mark
Blass
I left my full time job in 2007 at the age of 22 to become a full real estate investor and contractor. I started out attempting to do flips but quickly learned that in my market it is all about cashflow. I purchased several properties over the years including a couple multifamily properties. I really started honing my skills with multifamily investing after attending Rod Khleif’s first bootcamp and joining the warrior program. My passions include business, real estate, finance, my church, and anything to do with boating and/or being around water. I have been blessed to spend some time the past several winters in the Florida Keys and I look forward to the day that my real estate career will allow me to purchase a home in the Florida Keys
## Property Details
**Address:** 500 W Elm/222-232 S McDonel Street
**Number of Units:** 16
**Value Add Deal?** Yes
**Purchase Price:** $92,500
**Estimated monthly increase projected?** $10,0000
**Anticipated value after value add:** $910,000.00
**Estimated Cash on Cash Return:** 10%
**Estimated Internal Rate of Return:** 20%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
It is refreshing that EVERYONE wants to help and approaches all aspects of this business as a team effort. The amount of value that is added through the warrior program exceed expectations. The accomplishments that not only I have achieved but that I have witnessed other Warrior’s achieve is hard to comprehend at times. Its been fun to be a part of this group and I look forward to helping others along their journey with real estate.
## How did you find this property?
500 West Elm was a bank owned 10 unit apartment building that my broker brought to my attention.
## How did you structure the financing of this property?
Traditional financing – 75% LTV
## Was this a joint venture or syndication?
Once we moved forward with the construction of the triplexes we contributed the existing 10 unit building as equity to a new JV entity.
## How did you raise the equity?
Partnered with a realtor and and employee of the broker who brought me the deal.
## What was the equity raise?
$140,000.00
## What are some hurdles you had to overcome to get this deal done?
Zoning, building and local municipality red tape. This has turned into a process to identify obstacles that both the City of Lima and my team can overcome to make development easier and more inviting, especially to outside firms who may not have the knowledge and relationships on the local level. We are trying to set a precedent for other investors, developers and contractors to follow so growth and gentrification in our local market will take place.
## What are some of the lessons you learned with this deal?
Get commitments from local government including building authorities in writing.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Candice Crawford](https://rodkhleif.com/warrior-wins-candice-crawford/)
**Published:** November 29, 2022
**Author:** Graciela
**Content:**
## Warrior Win
# Candice Crawford
Self employeed Landscape contractor for 30 years and going. Build artificial trees and rocks for zoos that gave me construction experience to get my Unrestricted Contractors license. In 1997 physically build my own home. My passion for real estate began, with single-family fix and flips to note holding, then in 2021 finding multifamily the expressway to financial freedom and helping others at the same time. I joined Rod’s program and here I am in the first year, 134 doors. Passion is to helping others learn financial literacy, teaching women basic construction skills, and enjoying connecting with nature and creating my sculptures.
## Property Details
**Address:** Cali Crossing Apartments 17610 Cali Dr, Houston, TX 77090
**Number of Units:** 132
**Value Add Deal?** Yes
**Purchase Price:** $12,250,000
**Estimated monthly increase projected?** $360/unit
**Anticipated value after value add:** $25,371,232
**Estimated Cash on Cash Return:** 10%
**Estimated Internal Rate of Return:** 17.55%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
The depth of content is outstanding. The mindset with logistics of the industry is priceless. An amazing program and the networking environment is amazing as well.
## How did you find this property?
By invitation to a synidcation at Dec 2021 Rod boot camp lunch table.
## How did you structure the financing of this property?
63% LTV, remaining capital raise
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
Friends and family.
## What was the equity raise?
$6,200,000
## What are some hurdles you had to overcome to get this deal done?
Raising capital during and after the holidays.
## What are some of the lessons you learned with this deal?
Pushing a tiny bit further in uncomforable conversations to learn how team members handle themselves during times of stress. Do not have a sponsor on a deal also own the property management company running the deal. Clear communication when inviting individuals to on syndication team, to bring capital not cogps to bring capital. Making sure team members are not working on more than one syndication at a time. Clear communication after a deal closes of importance of communication response time.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - AJ Simeone](https://rodkhleif.com/warrior-wins-aj-simeone/)
**Published:** November 10, 2023
**Author:** Greciel Moreno
**Content:**
## Warrior Win
# AJ Simeone
I live in Pittsburgh, PA with my wife Sara, 13 year old son Cayden, and 5 month old son Rocco.
I’ve invested in Real Estate since 2016, I’ve bought and rehabbed SFH, Duplexes, and flipped a few SFH’s. I’m excited to continue purchasing larger buildings!
## Property Details
**Address:** Regency Square Apartments
**Number of Units:** 84
**Value Add Deal?** Yes
**Purchase Price:** $1,450,000
**Estimated monthly increase projected?** $100 mo /unit
**Anticipated value after value add:** $Appraisal came back at $2,340,000 with rent increases and other updates by year 5 $3.5m **Estimated Cash on Cash Return:** 9.8%
**Estimated Internal Rate of Return:** 23.05%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Everyone is so eager to help!
## How did you find this property?
We were brought the property off market.
## How did you structure the financing of this property?
Bank debit24 mo Interest only, $721,515 construction loan.
## Was this a joint venture or syndication?
Joint Venture
## How did you raise the equity?
We have a few other active investors in on the deal.
## What was the equity raise?
$750,000
## What are some hurdles you had to overcome to get this deal done?
We ran into issues with 48 units missing an occupancy permit, and had to have the township sign a letter they would not require an occupancy permit unless there was a change of use or major reno.
## What are some of the lessons you learned with this deal?
We had some issues with slow legal counsel, slow title, lenders counsel was slow to respond. To keep in mind some of the vendors you deal with won’t be quick to keep in communication.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Chase Craig](https://rodkhleif.com/warrior-wins-chase-craig/)
**Published:** December 9, 2022
**Author:** Graciela
**Content:**
# Warrior Win
Chase Craig | 104 Units
## Chase Craig
Chase Craig is a Real Estate Professional, Investor, and Business owner. Chase has sold over 3500 properties in his 17 years as a Realtor with over $1 Billion in real estate sold. He has experience acquiring properties, managing renovations, raising private capital, as well as managing single and multifamily investment properties.
He has built that company to consistently serve over 175 families with their real estate needs per year. During his time as a real estate professional, Chase was named by Realtor Magazine as the top 30 real estate agents under the age of 30 in 2011 out of over a million other Realtors and was given the highest honor by the Boise Regional Realtors in 2014 – Realtor of The Year.
## Property Details
**Address:** 518 Linda Dr, San Marcos, TX 78666 (Sutton Apartments)
**Number of Units:** 104
**Value Add Deal?** Yes
**Purchase Price:** $12,500,000
**Estimated monthly increase projected?** $125 (Currently acheiving $100+ over our projected updated units rents on non renovated units)
**Anticipated value after value add:** $21,000,000 with a 6 exit cap. market cap at purchase 4.5. 17245000 at a 7 exit cap
**Estimated Cash on Cash Return:** 7%
**Estimated Internal Rate of Return:** 17%+
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
It’s great to be surrounded by so many like-minded people that are looking to accomplish similar goals. I love Rod’s outlook on growth and the humility that he shares in his successes and failures.
## How did you find this property?
Broker.
## How did you structure the financing of this property?
Bridge Debt.
## Was this a joint venture or syndication?
Syndication.
## How did you raise the equity?
$1.3M
## What was the equity raise?
$4M
## What are some hurdles you had to overcome to get this deal done?
International Investors Risk. A large equity chunk dropped out 1 week prior to closing.
## What are some of the lessons you learned with this deal?
Ensure background check items are performed quickly. Check the city/county eviction process.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Larry Murray](https://rodkhleif.com/warrior-wins-larry-murray/)
**Published:** August 20, 2021
**Author:** Matt RK
**Content:**
## Warrior Win
# Larry
Murray
Firefighter for 38 years, 31 as a career. USMC reserves and Arkansas Air National Guard 8.5 years
No real estate investing experience
Helping people all my life. From the Boy Scouts to present day in the fire service. Love building sand castles and putting in Christmas light show
## Property Details
**Address:** Barton Oaks Apartments. 107 Barton Street, Little Rock, AR
**Number of Units:** 54
**Value Add Deal?** Yes
**Purchase Price:** $2,824,000
**Estimated monthly increase projected?** $100/unit
**Anticipated value after value add:** $3,650,000
**Estimated Cash on Cash Return:** 9.7%
**Estimated Internal Rate of Return:** 14%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Rod’s education and the support of the other warriors I have worked with and met along the way have made this all possible.
## How did you find this property?
Looking on line daily to find property to practice underwriting. Loop net listing. Found it underwrote it and it looked good.
## How did you structure the financing of this property?
Freddie Mac loan
3.29% 30 year Am 75% leverage
## Was this a joint venture or syndication?
Syndication
## What was the equity raise?
$1,710,545
## How did you raise the equity?
Deal sponsor and GP team raised equity, private equity placement
## What are some hurdles you had to overcome to get this deal done?
First warrior I approached said deal was to thin. Third one finally sponsored. 12 initial offers. Went to best and final. We got that. During actual walk of property found a major retaining wall problem. Had to get a seller credit. Lender forced us to do a phase two inspection. They thought there was a repair station gas station and cleaners on the property. Only cleaners over 70 years ago. Then lender took away 2 years IO and 80% leverage they originally offered when we first started out. And a few other problems.
## What are some of the lessons you learned with this deal?
Always have a plan B and C in place you never know when things can change in the deal.
Make sure someone is always in top of every step in the process
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Brian Fay](https://rodkhleif.com/warrior-wins-brian-fay/)
**Published:** May 8, 2024
**Author:** Greciel Moreno
**Content:**
## Warrior Win
# Brian Fay
I own an construction company and plumbing company in S. Florida. I own single family long term rentals, a 312 unit apartment complex and am working on a few development projects.
## Property Details
**Address:** The Pavilion on 62nd – Gainesville FL
**Number of Units:** 312
**Value Add Deal?** Yes
**Purchase Price:** $35,000,000
**Estimated monthly increase projected?** $139 on average/unit
**Anticipated value after value add:** $58,733,758
**Estimated Cash on Cash Return:** 52,79%
**Estimated Internal Rate of Return:** 57,15%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
I love the community!
## How did you find this property?
A friend brought the deal to me.
## How did you structure the financing of this property?
Equity of $11,787,750
Debt of $34,500,000
## Was this a joint venture or syndication?
Joint Venture.
## How did you raise the equity?
4 JV partners.
## What was the equity raise?
$11,787,750
## What are some hurdles you had to overcome to get this deal done?
It took a long time, converting from student housing to market rate, organizing capital stack.
## What are some of the lessons you learned with this deal?
It is much better to work with teams that have an impressive track record. Getting creative with deals can have a larger return.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Barry Coppedge](https://rodkhleif.com/warrior-wins-barry-coppedge/)
**Published:** November 29, 2022
**Author:** Graciela
**Content:**
## Warrior Win
# Barry Coppedge
I have been in the construction and development industry for 25 years. I started in the residential flipping houses 20 years ago and now develop and build apartments and commercial buildings.
## Property Details
**Address:** 617 S. Kerr Ave Wilmington NC
**Number of Units:** 24
**Value Add Deal?** Partially. We will installing new flooring and some other misc. capex improvements.
**Purchase Price:** $5,200,000
**Estimated monthly increase projected?** $75/unit
**Anticipated value after value add:** $11,000,000
**Estimated Cash on Cash Return:** 11-21%
**Estimated Internal Rate of Return:** Phase 1 = 16.05 Phase 2 = 28.59
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
I have toughly enjoyed my experience with the Warrior program. I have met many great contacts and would not be progressing as I am with out the support of the Warriors.
## How did you find this property?
I built the property for the original developer.
## How did you structure the financing of this property?
Conventional Bank for phase 1 70% LTC
Construction to Perm for Phase 2 .
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
Each partner reached out to friends and family.
## What was the equity raise?
$2,900,000
## What are some hurdles you had to overcome to get this deal done?
It was a lengthy process to get under contract due to some of the parcels did not have clear title. We had to switch bank midstream.
## What are some of the lessons you learned with this deal?
Always have more that one bank and Raise more money than you need sooner than later.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Trina Piceno](https://rodkhleif.com/warrior-wins-trina-piceno/)
**Published:** October 30, 2020
**Author:** Matt RK
**Content:**
## Warrior Win
# Trina Piceno
After working as a Preschool Teacher, Girls Sports Coordinator, Dispatcher and working in county jails, I served as an Army wife. Relocating back to my family area after his service was complete, I began in Property Management for my families portfolio and ultimately joined a boutique Property Management company where we grew from 74 doors to over 250. After gaining partnership we continued to evolve as a company and ultimately sold. I am passionate about helping people find their new home especially in under served areas. I pride my experience in redefining marketability in D-Class areas while working the caveats of support service programs to ultimately bridge the gap between ownership and residents who traditionally have a hard time finding a safe place for their family.
## Property Details
**Address:** Magnolia Gardens / La Brook Apartments – Richmond VA
**Number of Units:** 82
**Value Add Deal?** Yes
**Purchase Price:** $2,400,000
**Estimated monthly increase projected?** $80/unit
**Anticipated value after value add:** $3,400,000
**Estimated Cash on Cash Return:** 20%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
I don’t drink the kool-aid….This program has been the fire under my logical ass that has helped me see just how valid my experience is, I am still overcoming Imposter Syndrome and this program was the first major ah-hah just how much I can bring to the table! The wonderful people I have met in this program have become life long friends, Rod truly attracts the best of humans.
## How did you find this property?
A fellow Warrior who I met at bootcamps learned of my experience and asked if I could fulfill the experience piece for the bank qualifications.
## How did you structure the financing of this property?
80 LTV, Rehab loan included for $500,000 for CapEx.
## Was this a joint venture or syndication?
Joint Venture
## What was the equity raise?
$748000
## How did you raise the equity?
The partner that brought me in also did the raise.
## What are some hurdles you had to overcome to get this deal done?
D-Class experience longer turn times, higher expense ratios for standard upkeep and the business plan required that we utilize OpEx for some CapEx and OpEx while converting the economic vacancy, leaving me to negotiate some interesting promise to pays and waterfall our turnovers. Our PM team is amazing, I also know that us brining in our own Contractors would under cut their auxiliary income which they highly consider when determining profitability in the PMA negotiation, for this we set a fixed minimum monthly along side the management fee percent of rents collected based off of the actual rents collected instead of the projected rents collected offering a net reduction of our PM fees on a percentage basis as we increased rents.
## What are some of the lessons you learned with this deal?
Overcoming conflict inside partnerships can be like a toxic relationship if not fully exposed and communicated in respect. Realistic expectation setting needs to be done in writing even when its just internal to your teams. Another thing I learned is that my lessons from CA were so much more valuable that expected, just as we entered our second round of UD’s the county was pushing through legislation to imposed area sponsored payment arrangements to forgo evictions if possible. I saw this as a win, we’ve been negotiating stipulation agreements for years in CA.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Tom Mix Martini Petreca](https://rodkhleif.com/warrior-wins-tom-mix-martini-petreca/)
**Published:** February 11, 2022
**Author:** Matt RK
**Content:**
## Warrior Win
# Tom Mix Martini Petreca
Tom is experienced computer scientist with working experience in large tech companies. He started his journey in commercial real estate back in 2019, learning and investing passively in more than 340 doors but that wasn’t enough, so Tom joined two major multifamily training & mentorship programs in preparation for growth, Tom now is general partner in a large B-Class asset located in San Antonio, 296 doors where he plays roles in the acquisitions, asset mgt and loan guarantor.
Passion is family and helping others.
## Property Details
**Address:** Sedona Canyon – San Antonio, TX
**Number of Units:** 296
**Value Add Deal?** Yes
**Purchase Price:** $27,500,000
**Estimated monthly increase projected?** $200/unit
**Anticipated value after value add:** $40 mil
**Estimated Cash on Cash Return:** 8%
**Estimated Internal Rate of Return:** 15%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
I am thankful for the program, the education, the structure and the coaches. My coach Powell Chee was very important to guide me through the program.
## How did you find this property?
Co-GP deal with Rod.
## How did you structure the financing of this property?
Freddie Mac – 30y term
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
Rod and partners
## What was the equity raise?
$12,500,000
## What are some hurdles you had to overcome to get this deal done?
Know the market very well, provide value for the team.
## What are some of the lessons you learned with this deal?
Speed to make decisions, know the market very well,
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Brent Bardales](https://rodkhleif.com/warrior-wins-brent-bardales/)
**Published:** June 11, 2021
**Author:** Matt RK
**Content:**
## Warrior Win
# Brent Bardales
Entrepreneur. Bought, built, and sold companies in my past. Join warrior group last may (2020), and just closed on my first syndication recently.
## Property Details
**Address:** Tribble Gap Apartments
**Number of Units:** 20
**Value Add Deal?** Yes
**Purchase Price:** $13,00,000
**Estimated monthly increase projected?** $450
**Anticipated value after value add:** $25 mil
**Estimated Cash on Cash Return:** 10%
**Estimated Internal Rate of Return:** 18%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
The connections I have made are unrivaled to anything else I have ever attended. The sheer willingness to help one another is outstanding.
## How did you find this property?
Off market. Direct to seller.
## How did you structure the financing of this property?
Bridge loan
## Was this a joint venture or syndication?
Syndication
## What was the equity raise?
$550,000
## What are some hurdles you had to overcome to get this deal done?
Seller didn’t disclose a lot of the issues when we did inspections and had to re-trade. A lot of lender issues at the 11th hour.
## What are some of the lessons you learned with this deal?
The importance of a team, and having the right people in place. Also, to get a formal loan commitment from lender early on.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Jordan Hollis](https://rodkhleif.com/warrior-wins-jordan-hollis/)
**Published:** November 10, 2023
**Author:** Greciel Moreno
**Content:**
## Warrior Win
# Jordan Hollis
My current day job is sales in the construction industry. The only real estate experience to date was purchasing, remodeling, and selling our first home
no multifamily experience. My passion is to travel, give back and help my family, and spend time with the ones that matter most.
## Property Details
**Address:** Casa San Luis Apartments, 3155 Park Ln, Dallas, TX 75220
**Number of Units:** 63
**Value Add Deal?** Yes
**Purchase Price:** $6.9M
**Estimated monthly increase projected?** $400/unit
**Anticipated value after value add:** $13mm at the end of the business plan
**Estimated Cash on Cash Return:** 7%
**Estimated Internal Rate of Return:** 20%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
It has accelerated my growth and opportunities by at least 3-5 years.
## How did you find this property?
By networking with warriors.
## How did you structure the financing of this property?
Fixed debt with a 5.82% rate
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
General partners, Limited partners from personal connections.
## What was the equity raise?
$3.2 million
## What are some hurdles you had to overcome to get this deal done?
Raising the capital was a challenge in the current economic market.
## What are some of the lessons you learned with this deal?
Network with intent at all times. Look for ways to bring value to others first and the opportunities will return to you at some point.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Sing Joey Chan](https://rodkhleif.com/warrior-wins-sing-joey-chan/)
**Published:** October 10, 2022
**Author:** Graciela
**Content:**
## Warrior Win
# Sing Joey Chan
Remodeling contractor in commercial and residential properties for 20 years, Owns Kitchen Design Lab (Cabinet Showroom), Jersey Gourmet (Restaurant) and other small businesses. Is Married with 3 Kids, 2 girls and a boy. Has flipped over 40 properties. Currently owns 50 Units JV, 76 LP and 208 as GP.
## Property Details
**Address:** 2800 Jerridee Circle, Dallas, TX 75229
**Number of Units:** 208
**Value Add Deal?** Yes
**Purchase Price:** $32,000,000
**Estimated monthly increase projected?** $250/unit
**Anticipated value after value add:** $48k
**Estimated Cash on Cash Return:** 6.1% 1st Yr
**Estimated Internal Rate of Return:** 14%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Love the program, especially the local warriors, which i get to meet monthly.
## How did you find this property?
Through selling broker.
## How did you structure the financing of this property?
Raise 14.5 Mil in capital, then 22.1 Mil in 10 Yr Fannie Mae fixed interest only agency loan.
## Was this a joint venture or syndication?
Syndication.
## How did you raise the equity?
I raised a small portion of the equity around 1.075 Mil, the other GPs came up with the reminder.
## What was the equity raise?
$14.5k
## What are some hurdles you had to overcome to get this deal done?
The stock market was starting to tank much faster and crypto also tanked around this time, so investors were very hesitant to invest. I ended up speaking to a lot of people about this deal. Also this was my first capital raise, so didn’t know what to expect and or put together the right approach.
## What are some of the lessons you learned with this deal?
I learned that you have to be very flexible and to have a very strong team behind you to get the deal done. We almost lost this deal because we couldn’t raise capital fast enough, since this was a more conservative type of deal and not a very heavy value add deal.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Joe and Lisa Ebanks](https://rodkhleif.com/warrior-wins-joe-and-lisa-ebanks/)
**Published:** April 22, 2022
**Author:** Graciela
**Content:**
## Warrior Win
# Joe and Lisa Ebanks
We have been in real estate investors for over 20 years. Fix and flip, rental, wholesaling. Small multifamily 2-3 units. This is a lot of hard work. We were looking to get into something more passive. Our passion are take care of our family, enjoying our children and traveling!
## Property Details
**Address:** 2141-2235 Harrison Street, Titusville, FL 32780
**Number of Units:** 48
**Value Add Deal?** Yes
**Purchase Price:** $8.5M
**Estimated monthly increase projected?** Bump rents up to a $400 increase
**Anticipated value after value add:** $11M.
**Estimated Cash on Cash Return:** Initially it was 18%, now looking closer to above 20%.
**Estimated Internal Rate of Return:** Current rate of return is low since no distribution has been completed, nor have we recouped our cash injection. We are currently working on the refinance of the property which will help determine a more accurate gauge.
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
So far this group has been wonderful. I can’t wait to see what this year brings. We are ready and pumped up. Goal this year 250 units. We’re looking at tons of deal to see what makes since anywhere and getting out LOI’s on the good ones. We’re always looking for other Warriors to partner with to get these deals closed. After we saw the power of the group and we were not even members yet, we immediately signed up to be part of this great group of people. Lastly, we want to be able to add value as well.
## How did you find this property?
From being a wholesaler.
## How did you structure the financing of this property?
Because we had to move very quickly to close this deal we raise all of the money. We are currently working on refinancing the property.
## Was this a joint venture or syndication?
Joint Venture.
## How did you raise the equity?
Thru my partners network.
## What was the equity raise?
$9 m.
## What are some hurdles you had to overcome to get this deal done?
We had to close very quickly. I present this deal to Doris at lunch at the boot camp on the 7th of December and we closed by the 23rd of December right before the holidays.
## What are some of the lessons you learned with this deal?
That this network is very powerful if you have your stuff together and ready to go. Also, speed of implementation is a very valuable skill.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Edward Lowell - #4](https://rodkhleif.com/warrior-wins-edward-lowell-4/)
**Published:** April 15, 2020
**Author:** Matt RK
**Content:**
## Warrior Win
# Edward Lowell
Edward is a native of North Carolina and holds an MBA from Queens University-Charlotte. He has over 25 years of leadership and management experience in supply chain and operational functions. Edward’s current portfolio consists of a total of 49 doors, two 16 units and a 13 unit. We are actively searching the NC and SC markets for value-add properties ensuring efficient management and operations for superior profitability.
## Property Details
**Address:** Jim Minor Road Burlington NC (4 plex) and
Sharpe Road (tri-plex)
**Number of Units:** 7
**Value Add Deal?** Yes
**Purchase Price:** $300,000
**Estimated monthly increase projected?** $125/unit
**Anticipated value after value add:** $425,000
**Estimated Cash on Cash Return:** 10%
**Estimated Internal Rate of Return:** 15%
## Warrior team
shout outs:
## Which Warriors helped you with this deal, and how?
Rod, shortly after taking the course in 2017 this as my first purchase
## Any comments about your experience so far in the Warrior Program?
Great community and always willing to help, someone has done whatever you are going through and they can help answer your questions.
## How did you find this property?
Broker Relationship
## How did you structure the financing of this property?
Home loans as they were financed separately.
## How did you raise the equity?
Personal funds
## What was the equity raise?
$75,000
## What are some hurdles you had to overcome to get this deal done?
Had to re-trade after contract because of the age of the roofs.
## What are some of the lessons you learned with this deal?
How important your property management company is in your success and execution.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Franklin Gonzalez](https://rodkhleif.com/warrior-wins-franklin-gonzalez/)
**Published:** August 2, 2024
**Author:** Graciela
**Content:**
## Warrior Win
# Franklin Gonzalez
Real Estate investing in SF/MF, land, and real estate framing. Both general and limited partner in 1,124 units across three states.
Besides, RE, my passion is my 501(c)3 non profit foundation, Hope For All Paws. I believe all investors should be affiliated with a purpose besides real estate.
## Property Details
**Address:** 1421 Maryland Dr, Corpus Christi, TX 78415
**Number of Units:** 101
**Value Add Deal?** Yes
**Purchase Price:** $6,000,000
**Estimated monthly increase projected?** 3% yearly
**Anticipated value after value add:** $10,845,111
**Estimated Cash on Cash Return:** 10.6%
**Estimated Internal Rate of Return:** 16.9%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
The Warrior program is great. We’ve had an amazing experience and are grateful for everything we have learned. This is big lesson, we learned to be cautious of who we associate with within the Warrior program and do business with. Some people are their to take and not give back to the program. Be EXTREMELY cautious of the deals that are presented, the person and their involvement on the deal.
## How did you find this property?
MMG brought up the property to the key principles.
## How did you structure the financing of this property?
No bridge, financing is 6.3 % interest amortize for 25 years at 67% LTV. There is no bridge debt for this deal.
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
Raising equity through syndication. Having several calls to reach potential investors and inform them of this particular deal. Reaching out to fund to fund partners as well.
## What was the equity raise?
$3,000,000
## What are some hurdles you had to overcome to get this deal done?
The biggest hurdle was raising capital. We feel, too many investors are holding back investing in MF deals.
## What are some of the lessons you learned with this deal?
Being prepared to raise capital. Initially, we were not ready to raise the capital as the KP mention they had investors wanting to inject between $2MM – $3MM onto this deal. When the potential investors did not inject their respective funds, we had to raise capital. Scrambling to reach potential investors was daunting as we were not prepared.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Win: Brian Kochendorfer’s 100 Unit Acquisition](https://rodkhleif.com/warrior-wins-brian-kochendorfer-3/)
**Published:** April 15, 2020
**Author:** Matt RK
**Content:**
## Warrior Win
# Brian Kochendorfer
Brian Kochendorfer is the Managing Member of Arc Equity Group, a Chicago-based real estate investment firm specializing in acquiring and operating apartment properties in the Midwest. Brian is a general and limited partner in over 800 apartment units with a total value of approximately $60,000,000. He has 13 years of experience as a commercial real estate broker and has been involved in over $600M in real estate transactions throughout his career, primarily in multifamily. At Arc, Brian leverages his investment and brokerage experience to oversee the firm’s acquisition and operational strategy.
## Property Details
**Address:** Abbey Lane Apartments, 120 Abbey Ln, Chesterton, IN 46304
**Number of Units:** 100
**Value Add Deal?** Yes
**Purchase Price:** $8,550,000
**Estimated monthly increase projected?** $100-200/unit
**Anticipated value after value add:** $12 Mil
**Estimated Cash on Cash Return:** 11%
**Estimated Internal Rate of Return:** 16%
## Warrior team
shout outs:
## Which Warriors helped you with this deal, and how?
I don’t have a coach but multiple people in the group were supportive of me as I was getting started last year.
## Any comments about your experience so far in the Warrior Program?
The networking has been great, and since I joined I’ve made offers on deals with others in the group as well as started a local meetup through people I met in this program.
## How did you find this property?
Through a broker I built a relationship with
## How did you structure the financing of this property?
Fannie Mae
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
Partnered with a client of mine who is a high net worth individual
## What was the equity raise?
$2.7 Mil
## What are some hurdles you had to overcome to get this deal done?
Since this was our first deal as a GP, we had to prove that we were qualified buyers who would get to closing. Having been a broker for years, I structured our offer letter to includes resumes of the principals involved as well as completed the buyer questionnaire more thoroughly than anyone else did. We went contract to close in 7 weeks.
## What are some of the lessons you learned with this deal?
Staying top of mind with brokers is key. We got an early look at this deal since we were calling brokers on a regular basis to make sure they knew we were serious buyers.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Yi Xu](https://rodkhleif.com/warrior-wins-yi-xu/)
**Published:** May 15, 2024
**Author:** Greciel Moreno
**Content:**
## Warrior Win
# Yi Xu
Charles is the co-founder of Evergreen Capital. He started his real estate investment journey in 2011 from investing in residential rental properties in California and Georgia, and has expanded his investment portfolio to more than 600 units of multifamily assets. He is now dedicated to commercial real estate investment, focusing on investor education and relationship, asset management, and underwriting.
Charles came to the US in 2008 for his MBA in Emory University Goizueta Business School with full merit-based scholarship. Since graduation in 2010, he has been working for major high tech companies in silicon valley with leadership roles in product planning and operation.
## Property Details
**Address:** 2465 Harvard Ave, San Angelo, TX 76904
**Number of Units:** 52
**Value Add Deal?** Yes
**Purchase Price:** $2,650,000
**Estimated monthly increase projected?** $100/unit
**Anticipated value after value add:** $4-5M
**Estimated Cash on Cash Return:** 6-8%
**Estimated Internal Rate of Return:** 14-16%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Excellent network with like-minded people.
## How did you find this property?
On market listing with a major brokerage house. Part of a multi-property package seller was liquidating.
## How did you structure the financing of this property?
Assuming the existing loan from the seller at 3.48% fixed interested rate through 2030 at 75% LTV.
## Was this a joint venture or syndication?
Syndication.
## How did you raise the equity?
Friends, colleagues, general investors, and patterning with other warriors.
## What was the equity raise?
$1,750,000.
## What are some hurdles you had to overcome to get this deal done?
First MF acquisition and steep learning curve, putting together a winning team, lengthy negotiations with broker and seller on pricing, finding a good PM who knows the market, finding out about 4 down units during DD.
## What are some of the lessons you learned with this deal?
Understand the reason behind a distressed property, and be confident on the ability to turnaround the property with detailed business plan and strong property management.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Monica Duhart](https://rodkhleif.com/warrior-wins-monica-duhart/)
**Published:** July 21, 2020
**Author:** Matt RK
**Content:**
## Warrior Win
# Monica Duhart
Monica as founder of Ascension Acquisitions has passively invested in 1,147 units and several commercial properties; owns a duplex, and now making the transition from a passive to a full-time active investor. With a 13-year background in Aerospace & Defense as a cost/financial analyst, extends into her conservative approach and analytical skills that enable her to clearly assess risk and invest wisely to maximize client returns while preserving their principal. As a philanthropist she is committed to giving back to various charities and organizations as a benefactor as well as in volunteering. She loves to motivate, uplift, inspire, and encourage others and loves spending time outdoors in nature and reading.
## Property Details
**Address:** 2149-2151 Carrollton Ave Indinanpolis, IN
**Number of Units:** 2
**Value Add Deal?** Yes
**Purchase Price:** $140,000
**Estimated monthly increase projected?** $850
**Anticipated value after value add:** $350,000
**Estimated Cash on Cash Return:** 12%
**Estimated Internal Rate of Return:** 19%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
My experience has been good and I love our ecosystem that we have!
## How did you find this property?
Through a wholesaler I met at real estate meetup.
## How did you structure the financing of this property?
Cash
## Was this a joint venture or syndication?
Joint Venture
## What are some Major Improvements planned?
We improved the foundation, the siding, flooring throughout the entire house (vinyl & carpet), paint (whole house inside and out), updated bathrooms, added half bathroom to each side, updated kitchen (including new cabinets & countertops), built a new porch, new windows and screens, new electrical, new havoc (one side)
## What are some hurdles you had to overcome to get this deal done?
he initial purchase was pretty simple, but we had some issues with the contractor going several months beyond completion date and scope increase. Eventually we had to fire the contractor and hire another to complete the job.
## What are some of the lessons you learned with this deal?
I’ve learned to be more diligent with partners that have different responsibilities to make sure they are on top of their role. I’ve also learned to get everything in writing and to keep clean records and organized from the very beginning.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Tarek Ahmed Eid and Roushel Eid](https://rodkhleif.com/warrior-wins-tarek-ahmed-eid-and-roushel-eid/)
**Published:** December 8, 2023
**Author:** Greciel Moreno
**Content:**
## Warrior Win
# Tarek Ahmed Eid and Roushel Eid
We started investing in SFR in 2019 and joined the Warriors on July 2022. Since joining we are fortunate to be co GPs in 4 deals.
## Property Details
**Address:** Creekside at Chatham, 25 Creekside Cir, Pittsboro, NC 27312
**Number of Units:** 41
**Value Add Deal?** Yes
**Purchase Price:** $4.1M
**Estimated monthly increase projected?** $150-250/unit
**Anticipated value after value add:** $6.2 Million
**Estimated Cash on Cash Return:** 6-7%
**Estimated Internal Rate of Return:** 17-19%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
The Warrior program had been a blessing. I could no have asked for more from a mentorship group. We want to thank Michael Bailey (who is also a Warrior) for helping us get started.
## How did you find this property?
Our local partner found it through broker relationship.
## How did you structure the financing of this property?
60% loan, 40% Equity raise.
## Was this a joint venture or syndication?
Syndication.
## How did you raise the equity?
We raised from 506B investors then switched to 506C Investor.
## What was the equity raise?
$1.8Million.
## What are some hurdles you had to overcome to get this deal done?
We had a $1M 1031 exchange that fell through so we had to find investors to fill in that gap.
## What are some of the lessons you learned with this deal?
Investor funds are not final unless money is in the bank.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Neil Coffee](https://rodkhleif.com/warrior-wins-neil-coffee/)
**Published:** December 16, 2022
**Author:** Graciela
**Content:**
## Warrior Win
# Neil Coffee
I’ve been investing in Real Estate for three years. I started with a house hack than a duplex, and a BRRRR deal, then another with a partner. In my day job, I research and teach about the ancient Greek and Roman worlds. I have two young daughters who I devote a lot of my time to. In my spare time, I like to play classical guitar.
## Property Details
**Address:** Waterman Portfolio, Waterman and High Streets, Lockport NY
**Number of Units:** 28
**Value Add Deal?** Yes
**Purchase Price:** $730,000
**Estimated monthly increase projected?** $175/unit
**Anticipated value after value add:** $1,200,000
**Estimated Cash on Cash Return:** 18%
**Estimated Internal Rate of Return:** 20%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
So far so good. It’s been busy!
## How did you find this property?
Met off market seller through word of mouth.
## How did you structure the financing of this property?
Seller finance, 10% down, 15 year no balloon.
## Was this a joint venture or syndication?
None.
## How did you raise the equity?
Self-financed.
## What was the equity raise?
None.
## What are some hurdles you had to overcome to get this deal done?
Seller had to get out of previous contract.
## What are some of the lessons you learned with this deal?
Networking is important. So is patience.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Tyson Burtenshaw](https://rodkhleif.com/warrior-wins-tyson-burtenshaw/)
**Published:** March 17, 2023
**Author:** Graciela
**Content:**
## Warrior Win
# Tyson Burtenshaw
I am an Engineer Manager at a Rocket facility with an engineering degree & an MBA. I have always loved RE. Our first home was a 4plex which we updated, managed and have kept till this day. Our family has grown to 6 kids so continuing to build meant turning to Multifamily, which has been an incredible decision. We joined the Warrior group in April 2020, joined some deals with Warriors as an LP and help close our first deal, a 297 unit in Houston last fall.
## Property Details
**Address:** Elan Memorial Park – 920 Westcott St, Houston, TX 77007
**Number of Units:** 297
**Value Add Deal?** Yes
**Purchase Price:** $83,500,000
**Estimated monthly increase projected?** $120/unit **Anticipated value after value add:** $106,300,850
**Estimated Cash on Cash Return:** 7%
**Estimated Internal Rate of Return:** 16%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Tons of experience and everyone willing to share what they know. Lots of friendly people, coaches, mentors, and people learning side by side striving to be the best version of themselves and help everyone be successful in Multifamily!
## How did you find this property?
This property was one found by Raj Sarangam & Jack Aduwo. Working with Colby Fryar we joined them in this deal.
## How did you structure the financing of this property?
75% LTV, 5 yrs, 5.4% interest, I/O 3 yrs, $1.485M Rehab, 30 yrs.
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
Friends & Family (for my part)
## What was the equity raise?
$22,784,728
## What are some hurdles you had to overcome to get this deal done?
I had originally raised $500k for another deal in Dallas, TX but that deal ended up not working out with the shift in financing and the seller not willing to move. This deal in Houston was open and available for the investors to move their money into. I had a couple of investors decided not to come into the Houston deal as a result of changing.
## What are some of the lessons you learned with this deal?
Make sure I am an active part in the GP. I have had to try to be a part of the operating side of the business and be more of an active part of the GP team.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Win: Levi Weber's 13 Unit Denver Acquisition](https://rodkhleif.com/warrior-wins-levi-weber/)
**Published:** April 21, 2022
**Author:** Graciela
**Content:**
## Warrior Win
# Levi Weber
My wife and I are full-time real estate investors whose business has grown significantly over the last few years. We currently own 69 units comprised of 7 small multifamily properties and a single family house on the front range of Colorado and are about to close on another 49 units in early May. We generally purchase and operate value add apartment buildings that are distressed/mismanaged at acquisition. After we acquire the buildings, we add value to them through renovations and improve the management. We have taken several underperforming assets and turned them around improving them so that they are strong cash flowing properties.
## Property Details
**Address:** 59& 55 Corona st Denver
**Number of Units:** 13
**Value Add Deal?** Yes
**Purchase Price:** $300,000
**Estimated monthly increase projected?** $400/u/mo after reno and new leases in place.
**Anticipated value after value add:** We actually already have the property partially sold and the remainder under contract to sell at $3.9mm. We went uc to sell <1 month after buying.
**Estimated Cash on Cash Return:** $900k profit in 2 months.
**Estimated Internal Rate of Return:** originally it looked like it was going to be a 30% IRR deal but ended up vastly exceeding that.
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
The networking has been great to hear from other successful people in the program.
## How did you find this property?
Broker relations.
## How did you structure the financing of this property?
Local lender at approx 70% LTV. I paid the downpayment.
## Was this a joint venture or syndication?
JV, just my wife and I.
## How did you raise the equity?
I paid it partially out of pocket and partially from 1031 exchange proceeds from a different property.
## What was the equity raise?
$900k
## What are some hurdles you had to overcome to get this deal done?
Getting it under contract quickly.
## What are some of the lessons you learned with this deal?
Further reiterated how important broker relations are.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - John letters](https://rodkhleif.com/warrior-wins-john-letters/)
**Published:** June 10, 2022
**Author:** Graciela
**Content:**
## Warrior Win
# John letters
I have owned several commercial properties and single family residences for rentals.
## Property Details
**Address:** Thomas ridge apartments in Augusta Georgia and now sandover apartments In Charleston SC
**Number of Units:** 104
**Value Add Deal?** Yes
**Purchase Price:** 8,600,000
**Estimated monthly increase projected?** $200/unit
**Anticipated value after value add:** This will be in stages we project in three years a sale price of 13,000,000
**Estimated Cash on Cash Return:** 7%
**Estimated Internal Rate of Return:** 17%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
I never could have done this without the warrior program. I was really able raise the expectations I have for my life. I believed I had achieved success in life but also felt like I had peaked. I now know the best is still to come.
## How did you find this property?
My coach Ed Modzel found them.
## How did you structure the financing of this property?
We are using banc corp bridge debt. 3+1+1 . Originally we were looking at a 2 to 3 year hold but now we are looking at a longer term and will be shopping for agency debt next summer once we are stabilized.
## Was this a joint venture or syndication?
It is a tic with me owning 44% in the tic there is a syndication shock ownes the other half I am a 16% gp on the syndication also. The other property is 137 units and all syndication. I am LP investor of 500k and a GP of 6%
## How did you raise the equity?
I contributed my cash plus raised about a million from other investors.
## What was the equity raise?
3.8 million for Thomas ridge 6.3 million for sandover
## What are some hurdles you had to overcome to get this deal done?
Thomas ridge was relatively easy once we got the deal structure done. We are rapidly increasing rents and filling vacancies . Sandover was difficult because of some fire burned units causes some issues with insurance. Lender had issues with it, rising interest rates combined with insurance causes capital raise to go up over a million dollars at the last minute.
## What are some of the lessons you learned with this deal?
I love multifamily real estate. Things are much more fluid than I have ever experienced in commercial real estate. Fund raising is something I really enjoy. Good property managers are extremely valuable. I fell like I could go on for days about this.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Lizzy Neutz](https://rodkhleif.com/warrior-wins-lizzy-neutz/)
**Published:** June 11, 2021
**Author:** Matt RK
**Content:**
## Warrior Win
# Lizzy Neutz
Lizzy has co-created 2 businesses and 2 different meetup groups at just 22 years old.. Her main focus is multifamily real estate investing, primarily focusing on syndication and target markets close to her home- Louisville, KY, as well as Indiana, Tennessee & Alabama. Lizzy brings her youthful energy (and love for talking!) to build the necessary connections to make their business work.
Her first local meetup group, a women’s entrepreneur group, has well over 300 women and is constantly adding massive value at her events. She thinks BIG, loves building relationships & being an inspiration to those around her.
## Property Details
**Address:** 2234-2236 Hanser Drive, Covington, KY 41011
**Number of Units:** 12
**Value Add Deal?** Yes
**Purchase Price:** $528,000
**Estimated monthly increase projected?** 35-45% increase. Avg Rents in place – $566, our new average rents will be $775-800/unit.
**Anticipated value after value add:** $750,000
**Estimated Cash on Cash Return:** 14-18%
**Estimated Internal Rate of Return:** 20% plus
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
AMAZING! Love the culture and everyones’ willingness to be there and learn.
## How did you find this property?
Direct-to-seller
## How did you structure the financing of this property?
75% LTV traditional financing, 3.75 interest rate. Plan to refinance in 18 months
## Was this a joint venture or syndication?
Joint Venture
## How did you raise the equity?
Warrior group after private investors backed out due to fear of eviction moratorium.
## What was the equity raise?
$225,000
## What are some hurdles you had to overcome to get this deal done?
Having investors back out early on and having to get a big extension of 60 days on the contract. We did not have enough “pre-committed” capital to get it done on our own.
## What are some of the lessons you learned with this deal?
Talk to investors before you get under contract on a deal. Build relationships and teams early!
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Cody Wiseman](https://rodkhleif.com/warrior-wins-cody-wiseman/)
**Published:** August 7, 2024
**Author:** Graciela
**Content:**
## Warrior Win
# Cody Wiseman
Cody is a full-time multifamily real estate investor and developer with a focus on the Madison, Wisconsin market. He is passionate about helping others learn and invest in real estate. In 2022, he founded the Madison Multifamily Meetup, which has since become The Largest Multifamily Investor Meetup in the Midwest. Prior to founding Wiseman Capital, Cody built multi-million-dollar sales programs at several early-stage software companies. Since 2021, he has utilized his business operations and analytical skills to assess risk, invest wisely, and effectively manage real estate assets to maximize returns for investors. Cody’s professional background spans finance, sales, and business consulting.
Outside of Real Estate Investing, Cody enjoys the outdoors, working out, spending time on the lake barefooting, beach vacations with friends and family, or traveling with his fiancé Emily and their two dogs Cooper & Remi.
## Property Details
**Address:** 4757 Hayes Road, Madison, WI 53704
**Number of Units:** 126
**Value Add Deal?** Yes – Hotel to Apartment conversion
**Purchase Price:** $3,950,000
**Estimated monthly increase projected?** We plan to take it from $0 revenue to $1,700,000 EGI by year 3
**Anticipated value after value add:** Stabilized $17,000,000 ($15,400,00 as complete value per appraisal)
**Estimated Cash on Cash Return:** 8%
**Estimated Internal Rate of Return:** 18%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
I would not be where I am today without this group of people.
## How did you find this property?
Off-market from broker
## How did you structure the financing of this property?
Local bank, construction to perm fixed rate
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
Investor list of friends, family, and referrals.
## What was the equity raise?
$3,100,000
## What are some hurdles you had to overcome to get this deal done?
This project had some big hurdles along the way, like city approvals, a deed restriction that prohibited more than 36 units, the deal fell out of contract once, the state forced us to sub-meter all units, and our credit union pulled out 11 days before closing… just to name a few.
## What are some of the lessons you learned with this deal?
Too many to list here. Biggest one, keep moving forward.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Jefferson Gan](https://rodkhleif.com/warrior-wins-jefferson-gan/)
**Published:** April 20, 2022
**Author:** Graciela
**Content:**
## Warrior Win
# Jefferson Gan
Been in IT for 21 years. Real estate for 5 years. Have done some flipping on residential side. Love to automate stuff and systematize the process so it will be an easy rinse and repeat.
## Property Details
**Address:** 2301 and 2401 Vanstory St Greensboro, NC. The Apartments on Vanstory.
**Number of Units:** 42
**Value Add Deal?** Yes
**Purchase Price:** $3,150,000
**Estimated monthly increase projected?** $250+
**Anticipated value after value add:** $4,831,293
**Estimated Cash on Cash Return:** 7-8%
**Estimated Internal Rate of Return:** 16-17%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
I love it! And you can learn from each other and if you have any questions, there is someone that you can rely on to answer within the program.
## How did you find this property?
Broker.
## How did you structure the financing of this property?
3 years Bridge Loan at 4.5% with Rate cap of 2.5 on Y1, 3 on Year 2 and Year 3. It is a 3+1+1.
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
506B syndication.
## What was the equity raise?
$1,303,027
## What are some hurdles you had to overcome to get this deal done?
– Rate Cap, didn’t anticipate the rise in cost. Good thing the lender made an effort to reduce some of their closing costs to compensate with high price of rate cap.
– Capital raise on my end.
## What are some of the lessons you learned with this deal?
– Due to the possibility of rate increase, need to underwrite at a higher interest rate and for bridge loans take into account that Rate Cap cost.
– Always keep your passive investors warm, and make sure they are still ready to go
– Push for breakdown of lender fees, we tried to get it but they keep on dodging it and not disclosing all the fees upfront. Until the settlement disclosure is released that’s when we saw all the costs.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins: Chris & Chelsey Grant 24 Units](https://rodkhleif.com/warrior-wins-chris-chelsey-grant/)
**Published:** March 19, 2021
**Author:** Matt RK
**Content:**
# Warrior Win | 24 Units
## Chris & Chelsey
Grant
Chris Grant founded Evolve Equity to combine his knowledge and passion for the real estate investment industry with the desire to help others achieve financial independence and passive income. With over a decade of experience directly owning, renovating, and managing a portfolio of real estate assets, Chris provides specialized expertise in property management, contractor management, budget constraints, renovation timelines, and efficiency of daily operations. He is currently the lead sponsor on a multifamily syndication in the Phoenix market and is passively invested in three syndications across 453 units.
Chris currently lives in Arizona with his wife and three children, and in his spare time enjoys exercising, attending concerts, and traveling.
## Property Details
**Address:** 2223-2255 E Cactus Road, Phoenix, AZ 85022 (Cactus Road Apartments)
**Number of Units:** 24
**Value Add Deal?** Yes
**Purchase Price:** $2,500,000
**Estimated monthly increase projected?** $300/unit
**Anticipated value after value add:** $$4,130,632
**Estimated Cash on Cash Return:** 8%+
**Estimated Internal Rate of Return:** 15.84%+
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
We love the community and network within the Warriors program. Rod is ALWAYS adding more content and value to the group.
## How did you find this property?
It was part of a direct to seller campaign.
## How did you structure the financing of this property?
Community Bank
Non-Recourse
30 year AM
12 year term (7 fixed + 5 year option)
2 years I/O
3.5% Interest
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
506(b) Close friends and family.
## What was the equity raise?
$1,355,000
## What are some hurdles you had to overcome to get this deal done?
Since this was direct to seller it was a “mom & pop” operation. They had less than desirable book keeping, their PM was actually just a residential broker, competing offer came in after signed LOI, re-trading after inspection, intensive lender requirements since this was our first deal, executing the syndication process without a team member who has done one before.
## What are some of the lessons you learned with this deal?
We learned so much from actually taking the deal from LOI to closing. Work on getting soft commitments from your network prior to having a deal. Be very solid on the team you will be using and the abilities / time each of them can commit.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Andrew Dressel](https://rodkhleif.com/warrior-wins-andrew-dressel/)
**Published:** May 8, 2024
**Author:** Greciel Moreno
**Content:**
## Warrior Win
# Andrew Dressel
Andrew and Diana are husband and wife and longtime entrepreneurs and investors in residential real estate. Andrew is an attorney with his own practice specializing in commercial litigation and commercial real estate syndications. Diana is the founder of her own executive recruiting firm. Andrew and Diana decided to take Massive Action and made the leap to becoming GPs on a commercial real estate project in 2023, raising the funds necessary to close within a week of joining the team.
## Property Details
**Address:** 6004 Commerce Blvd., Garden City, GA 31408
**Number of Units:** 18
**Value Add Deal?** Yes
**Purchase Price:** $1,75M
**Estimated monthly increase projected?** $4,000
**Anticipated value after value add:** $2,85 million
**Estimated Cash on Cash Return:** 9,59%
**Estimated Internal Rate of Return:** 20,26%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
We love the Warrior Program
it’s a great network of positive people with positive energy.
## How did you find this property?
We worked with our fellow Warrior, Jon Sidoti.
## How did you structure the financing of this property?
Borrowing $1,05 million at an 8% interest rate.
## Was this a joint venture or syndication?
Syndication.
## How did you raise the equity?
Equity was raised by tapping into the personal of the GPs to find LPs.
## What was the equity raise?
$900,000
## What are some hurdles you had to overcome to get this deal done?
This deal had to close before the end of 2023, and the equity raise only began in early December, so equity raising had to be accomplished in a couple weeks, during the holidays. It was difficult to get the deal funded, but we did it.
## What are some of the lessons you learned with this deal?
We learned that a determined team can close a deal in a short period of time, but that you are much better off giving yourself time for the equity raise. We were also pleasantly surprised how many of our friends were interesting in learning about commercial real estate and investing.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Brandon Hicks](https://rodkhleif.com/warrior-wins-brandon-hicks/)
**Published:** August 20, 2021
**Author:** Matt RK
**Content:**
## Warrior Win
# Brandon
Hicks
Work background is in mechanical engineering. Started in real estate about 8 months ago when I joined the warrior group. Passions are traveling, exercise (currently training for a marathon), and helping mentor others.
## Property Details
**Address:** 6416 Quinn Drive – Self Storage Facility
**Number of Units:** 152
**Value Add Deal?** Yes
**Purchase Price:** $620,000
**Estimated monthly increase projected?** Rents are about 25% behind market. Assuming we will maintain this while we improve occupancy.
**Anticipated value after value add:** $1,200,000
**Estimated Cash on Cash Return:** 7%
**Estimated Internal Rate of Return:** 17%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Great experience with the program so far. Really enjoy the high performance coaching as well. Have taken much more action this year than in past several years in all aspects of my life (financial, relationship, health/wellness, friends, family)
## How did you find this property?
Working with fellow warrior Powell Chee.
## How did you structure the financing of this property?
Private lender for about 50% LTV
## Was this a joint venture or syndication?
Joint Venture
## How did you raise the equity?
JV partners
## What was the equity raise?
$460,000
## What are some hurdles you had to overcome to get this deal done?
Off market deal. not all due diligence docs buttoned up. needed to work with seller to identify required docs.
## What are some of the lessons you learned with this deal?
importance of proper lighting in self storage to make customers feel safe at all hours. quoting with vendors for improvements. reviewing inspection docs and prioritizing work once taking over facility. overlock process for non-paying customers.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Tomas and Nilsa Valenzuela](https://rodkhleif.com/warrior-wins-tomas-and-nilsa-valenzuela/)
**Published:** February 26, 2024
**Author:** Graciela
**Content:**
## Warrior Win
# Tomas and Nilsa Valenzuela
Tomas has been in construction, rehabs, fix and flips for over 30 years. Nilsa has a background in accounting, property claims, and management background. We started buying single family and flipping and have moved onto multifamily property investments. Create Passive Income,
generational wealth, and continue to help Bethel Mission in Nicaragua, who feed 100+ children and provide biblical teachings.
## Property Details
**Address:** 6612 S Zunis Ave, Tulsa, OK- Royal Oaks Condominiums
**Number of Units:** 10
**Value Add Deal?** Yes
**Purchase Price:** $325,000
**Estimated monthly increase projected?** $200/unit
**Anticipated value after value add:** $999,999
**Estimated Cash on Cash Return:** We currently are not expecting COC until the latter part of the year.
**Estimated Internal Rate of Return:** We currently are not expecting IRR until the latter part of the year
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Love the warrior program, have been to 2 bootcamps and 2 warrior events so far. Connected with fellow warriors at the conference.
## How did you find this property?
Broker.
## How did you structure the financing of this property?
Hard Money Loan.
## Was this a joint venture or syndication?
On our own- No JV or syndication.
## How did you raise the equity?
Own capital used.
## What was the equity raise?
$3.5 mil
## What are some hurdles you had to overcome to get this deal done?
Financing.
## What are some of the lessons you learned with this deal?
Budget for haul off of property left behind.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Diana Ji](https://rodkhleif.com/warrior-wins-diana-ji/)
**Published:** May 8, 2024
**Author:** Greciel Moreno
**Content:**
## Warrior Win
# Diana Ji
Diana Ji, who invests along with her husband, Andrew Dressel, is an experienced entrepreneur and real estate investor. The founder of her own executive recruiting firm, Diana also has invested in numerous residential real estate projects.
## Property Details
**Address:** 6004 Commerce Blvd., Garden City, GA 31408
**Number of Units:** 18
**Value Add Deal?** Yes
**Purchase Price:** $1,75M
**Estimated monthly increase projected?** $4,000
**Anticipated value after value add:** $2,85 million
**Estimated Cash on Cash Return:** 9,59%
**Estimated Internal Rate of Return:** 20,26%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
I love the Warrior Program and can’t wait to take more Massive Action!!!
## How did you find this property?
I worked with my fellow Warrior, Jon Sidoti.
## How did you structure the financing of this property?
Borrowing $1,05 million at an 8% interest rate.
## Was this a joint venture or syndication?
Syndication.
## How did you raise the equity?
Equity was raised by tapping into the personal networks of the GPs to find LPs.
## What was the equity raise?
$900,000
## What are some hurdles you had to overcome to get this deal done?
This deal had to close before the end of 2023, and the equity raise only began in early December, so equity raising had to be completed in a couple weeks, while getting through the holidays, but we did it!
## What are some of the lessons you learned with this deal?
I learned that a determined team can close a deal in a short period of time, but that you are much better off giving yourself time for the equity raise. I was also pleasantly surprised how many of my friends were eager to learn about real estate investing and to make an investment.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Trevor and Shannon Sherman](https://rodkhleif.com/warrior-wins-trevor-and-shannon-sherman/)
**Published:** November 10, 2023
**Author:** Greciel Moreno
**Content:**
## Warrior Win
# Trevor and Shannon Sherman
Shannon is a retired Physician Assistant and Trevor is an active airline pilot. We started our real estate journey 17 years ago with our first single family rental and have since acquired 9 single family rentals. We joined the Warrior program in August of 2022 looking to go bigger. We have since invested as LPs in properties in Texas and Nashville and are GPs on 4 deals in Florida, Georgia, and North Carolina.
## Property Details
**Address:** Elon Place Industrial Complex
**Number of Units:** 1
**Value Add Deal?** Yes
**Purchase Price:** $2,200,000
**Estimated monthly increase projected?** $436,000
**Anticipated value after value add:** $5,000,000
**Estimated Cash on Cash Return:** 4.4%
**Estimated Internal Rate of Return:** 20%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
We have very much enjoyed the program. We are amazed at all the great people we have met and worked with. It has been life changing for us and we are very grateful to be where we are today.
## How did you find this property?
The leader of our team found this property and brought us on board as GPs.
## How did you structure the financing of this property?
Investor money is used for a $500,000 down payment and the rest is a 6.5% fixed rate loan.
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
Still raising but using webinars, emails and known investors. This is a 506b.
## What was the equity raise?
$1,500,000
## What are some hurdles you had to overcome to get this deal done?
The purchase was for the industrial property and the lot next door from the same owner. The original value add plan was for a much larger indutrial building to be developed. However, once the environmental study was done, it was determined there was wetland with a stream in the middle of the property and we could not build on a large portion of the lot. We were able to retrade the cost of the lot to a significant amount and redesign the new building to fit the allowable space.
## What are some of the lessons you learned with this deal?
Doing the due dilligence and having a backup plan is very important. This is the first development deal we have done and the whole process of the planning and permitting was very interesting and educational.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Tim Severson](https://rodkhleif.com/warrior-wins-tim-severson/)
**Published:** April 25, 2022
**Author:** Graciela
**Content:**
## Warrior Win
# Tim Severson
Retiring in a few weeks (on May 6th) from a 30 year, multiple 6 figure W2 career. I’ve been a Regional Director for a National Apparel Retailer overseeing $145,000,000 Revenue across 58 Store Locations, 9 States and up to 2,000 Employees. The past 4 years in Real Estate Investing have positioned me for the ability to retire the W2 via Growing Capital through small MultiFamily and Residential Flips that were then Invested into JV’s totaling 92 units across a 52 unit and 40 unit MultiFamily Properties. These 2 properties were closed back 2 back in August and September 2021. My Passions are Building Teams, Leading People and Asset Management.
## Property Details
**Address:** Lind Commons (52 unit) and Craycroft Commons (40 unit)
**Number of Units:** 92
**Value Add Deal?** Yes
**Purchase Price:** $6,615,000
**Estimated monthly increase projected?** $300/unit
**Anticipated value after value add:** 52 unit from $3,450,000 to $5,700,000 and 40 unit from $3,165,000 to $5,000,000
**Estimated Cash on Cash Return:** 52 unit after ReFi (in progress @ Month 9) 14+% and 40 unit 12+%
**Estimated Internal Rate of Return:** The 52 unit cash out ReFi @ Month 9 will return 80% of initial capital. The 40 unit targeting 100% Cash out ReFi @ Year 2 for 100% initial Capital and then hold for infinite return.
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
The Culture among the group is incredible with very positive people in both mindset and in heart. Relationships are everything in this Business.
## How did you find this property?
Broker relationships for both. The 40 unit was a phone call on the right day at the right time which gave us first and only look at the property. We had accepted LOI within 48 hours of phone call.
## How did you structure the financing of this property?
52 unit @ Bridge Debt and 40 unit 7 year fixed.
## Was this a joint venture or syndication?
Joint Venture on both.
## How did you raise the equity?
JV Partners.
## What was the equity raise?
Partners invested $1,300,000 on the 52 unit and $1,000,000 on the 40 unit.
## What are some hurdles you had to overcome to get this deal done?
The occupancy on the 52 unit dropped below 90% before closing and had to shift to Bridge Debt at last minute and was still able to close the loan within 2 days based upon the relationship with local bank.
## What are some of the lessons you learned with this deal?
Put 90% occupancy to be maintained by Seller through close of escrow into the Purchase Agreement.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Kanwaljit Dhunna](https://rodkhleif.com/warrior-wins-kanwaljit-dhunna/)
**Published:** July 1, 2022
**Author:** Graciela
**Content:**
## Warrior Win
# Kanwaljit Dhunna
Working full time in MultiFamily, 27 years experience in Real Estate.
Multifamily is my passion.
## Property Details
**Address:** 4381 Gwinnett St. North Charleston SC 29418
**Number of Units:** 136
**Value Add Deal?** Yes
**Purchase Price:** $17,500,000
**Estimated monthly increase projected?** $150/unit
**Anticipated value after value add:** $24.000.000
**Estimated Cash on Cash Return:** 7%
**Estimated Internal Rate of Return:** 16%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Great Program!
## How did you find this property?
Ed Modzel.
## How did you structure the financing of this property?
3 year bridge loan.
## Was this a joint venture or syndication?
Syndication.
## How did you raise the equity?
From investors.
## What was the equity raise?
$ 7 Million.
## What are some hurdles you had to overcome to get this deal done?
Insurance was the big issue.
## What are some of the lessons you learned with this deal?
Never buy passet with insurance claims.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - David Turner](https://rodkhleif.com/warrior-wins-david-turner/)
**Published:** April 25, 2022
**Author:** Graciela
**Content:**
## Warrior Win
# David Turner
Full time W2 in IT Sales & Consulting
Began real estate career in 2019 flipping houses with my wife.
After a few successful projects, we decided to focus on long-term wealth building through multifamily investments. We joined the Warrior group in April 2021 and closed on our first deal in March 2022.
## Property Details
**Address:** Kabana Cove. Jacksonville, FL. Value Add Deal?** Yes
**Purchase Price:** $8,600,000
**Estimated monthly increase projected?** $200-$250
**Anticipated value after value add:** $11,590,475
**Estimated Cash on Cash Return:** 7%
**Estimated Internal Rate of Return:** 13.13%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
I love being part of a group of like-minded entrepreneurs willing to push through their comfort zone and heal each other build their businesses.
## How did you find this property?
Kabana Cove was an off-market deal brought to our team.
## How did you structure the financing of this property?
$7m Loan
3+1+1
36 month IO
73% LTV
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
As a team, we raised equity from 47 limited partners.
## What was the equity raise?
$3,384,235.
## What are some hurdles you had to overcome to get this deal done?
Personally, I had some investors hesitant to commit and decided not to participate.
## What are some of the lessons you learned with this deal?
Build a network of equity partners prior to having a deal that needs to be funded. Verbal commitments & interested LP don’t necessarily translate to raised capital. Building a large funnel will help when initial commitments fall through.
Also, tell everyone what you’re doing!
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Christian Onalfo](https://rodkhleif.com/warrior-wins-christian-onalfo/)
**Published:** April 18, 2022
**Author:** Matt RK
**Content:**
## Warrior Win
# Christian Onalfo
## Property Details
**Address:** 201-203 Bilbrey St Livingston, TN 38570
**Number of Units:** 8
**Value Add Deal?** Yes
**Purchase Price:** $410,000
**Estimated monthly increase projected?** $200-$250
**Anticipated value after value add:** $560,000
**Estimated Cash on Cash Return:** 12%-14%
**Estimated Internal Rate of Return:** 18%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
This has been one of the best decisions I have made! The initial investment to get into this program seemed like a lot of money (Which it still is) but its peanuts compared to the value this network of individuals already has brought me and the lifelong friendships I will have because of it. Couldn’t say enough about the program!
## How did you find this property?
I skip traced owners in the area, got their contact info and reached out. This owner wasn’t willing to sell but I followed up with him for 4 months until he finally decided he was ready to sell.
## How did you structure the financing of this property?
30yr Amm
5/1 ARM with the first 5 years Interest Only
Non-Recourse
5 year target hold
## Was this a joint venture or syndication?
Joint Venture
## How did you raise the equity?
Networking with Warriors. I had a previous relationship with them & when I found this deal they wanted to partner with me on it.
## What was the equity raise?
$130,000
## What are some hurdles you had to overcome to get this deal done?
Appraisal came in at $380k.
## What are some of the lessons you learned with this deal?
ALWAYS put in an extension into the contract, you never know when you will need it. This deal would have fell through if I didn’t include this in there.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Eric Williams](https://rodkhleif.com/warrior-wins-eric-williams/)
**Published:** May 14, 2024
**Author:** Greciel Moreno
**Content:**
## Warrior Win
## Eric Williams
Created EST EQUITY with my business partner Steven Wright few months ago, where we raise capital. We both have our real estate license on the side. Real Estate is main passion.
## Property Details
**Address:** District 52 Apartments!!!
**Number of Units:** 52
**Value Add Deal?** Yes
**Purchase Price:** $2,650,000
**Estimated monthly increase projected?** 7.5%
**Anticipated value after value add:** $4,100,000
**Estimated Cash on Cash Return:** 8%
**Estimated Internal Rate of Return:** 16%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Best Move I ever made. It’s one big team with all the same goals. We help fill in our weaknesses to close the deal.
## How did you find this property?
Networking with many Warriors before we were full time with EST EQUITY.
## How did you structure the financing of this property?
We obtained an assumable loan of 3,48 until 2031.
## Was this a joint venture or syndication?
Syndication.
## How did you raise the equity?
Networking, reaching out to our investors that we have past experience with.
## What was the equity raise?
$1,700,000
## What are some hurdles you had to overcome to get this deal done?
Many investors turned us down the first time so they can see what work we do first so we could gain their trust.
## What are some of the lessons you learned with this deal?
Joining the Warriors Group is the best decision Steven and I made. We are all on one team. Investors side, and different questions I never heard of in the beginning.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
## Warrior Win
# Eric Upchurch | 80 Units Closed
## Eric Upchurch:
## From Army Special Operations to Multifamily Investor
Eric Upchurch is a former Army Special Operations veteran who transitioned from military service to building financial freedom through multifamily real estate investing. Originally from Central Iowa, he attended college in California before launching his real estate career.
As a **Warrior Coaching student under Rod Khleif**, Eric leveraged mentorship, strategic networking, and expert guidance to scale his portfolio and create passive income. Now, he is committed to helping others achieve financial independence through real estate investing, capital raising, and syndication strategies.
L[earn more about Warrior Coaching → ](https://rodkhleif.com/work-with-rod/)
## Property Overview
**Location:** Alexandria, Indiana
**Number of Units:** 80
**Value Add Deal:** Yes
**Purchase Price:** $3,250,000
**Projected Monthly Rent Increase:** $90 per unit
**Anticipated Value After Value Add:** $5,000,000
**Estimated Cash-on-Cash Return:** 10%
**Estimated Internal Rate of Return (IRR):** 15%
## How This Deal Came Together
### Deal Source
**Broker Relationship:** The property was sourced through strong networking and a broker relationship.
### Equity Raise2
**Total Equity Raised:** $1.25 million
**How It Was Raised:** Private investors.
### Financing Structure
**Loan-to-Value (LTV):** 80%
**Lender:** Freddie Mac SBL
**Syndication Type:** 506 (c)
### Value-Add Strategies
**Rent Increases:** Rents were adjusted upward across the property.
**Ratio Utility Billing System (RUBS) Implementation:** This strategy was initiated to pass utility costs onto tenants and improve NOI.
**Contract Cost Reduction** : The team successfully lowered expenses by renegotiating vendor contracts.
**Garage Rent Optimization:** Increased garage rental fees to generate additional revenue.
### ## Challenges Faced
**Capital Raise Complexity:** Could have remained a 506(b) but made the shift to 506(c) after publicly stating the deal was under contract.
**Seller Communication Barriers:** The seller was based in Japan, which made communication and negotiations more complex.
**Property Management Transition Issues:** Just as the team took over, the property management company merged with another firm, causing operational disruptions.
### Warrior Program Support
Rod and his team provided key guidance and support during the capital raise process, encouraging Eric to push forward when funding proved more difficult than expected. Fellow Warrior members like Gozlan and Gupta also offered insights and expertise to help navigate challenges along the way.
### Lessons Learned & Key Takeaways
**Always Be Raising Capital:** Relationships and investor engagement should begin long before a deal is secured.
**Establish Clear Standard Operating Procedures (SOPs):** Both internally and for property management to ensure smooth execution.
**Stay Flexible and Solution Oriented:** Adapting to challenges in financing, investor relations, and operations is critical.
> Involvement in the Warrior ecosystem has been a life changing path. Creating life long friendships, partnerships, and more.
>
> Eric Upchurch
## Be the Next Warrior Success Story
Eric’s journey is proof that the right mentorship, network, and action can accelerate your success in multifamily real estate. Through strategic connections, expert guidance, and a community of like-minded investors, he turned obstacles into opportunities and scaled his portfolio to thousands of units.
**Success in multifamily investing isn’t about luck.**
Success is about learning from those who have done it, surrounding yourself with the right people, having all the tools and resources you need, and taking decisive action. **Rod Khleif’s Warrior Coaching Program** provides you with a step-by-step system, direct mentorship from experienced investors, and access to a powerful network that can help you close more deals, raise capital, and grow your wealth faster.
If you’re ready to take the next step, apply for mentorship today.
[ Join the Warrior Program ](https://rodkhleif.com/work-with-rod/)
## Warrior Success Stories
[Play Video](https://www.youtube.com/watch?v=6L-ho9oRtUY)
#### [Featuring Elsa Nguyens #682](https://rodkhleif.com/podcasts/single-mom-to-massive-success-in-multifamily/)
### [Immigrant Mom To Massive Success In Multifamily](https://rodkhleif.com/podcasts/single-mom-to-massive-success-in-multifamily/)
[Play Video](https://www.youtube.com/watch?v=Fmqzl9_8Nj4)
#### [Featuring Oliver Fernandez #721](https://rodkhleif.com/podcasts/from-7-to-1000-units-in-3-years-2/)
### [From 7 to 1000 units in 3 years](https://rodkhleif.com/podcasts/from-7-to-1000-units-in-3-years-2/)
[Play Video](https://www.youtube.com/watch?v=J-fDFPBRilY)
#### [Featuring Rasool Mutawakkil #715](https://rodkhleif.com/podcasts/10mm-in-multifamily-assets-under-management-in-one-year/)
### [$10MM in Multifamily Assets Under Management in One Year](https://rodkhleif.com/podcasts/10mm-in-multifamily-assets-under-management-in-one-year/)
[ See more warrior wins ](/warriorwins)
## Add Your Heading Text Here
---
### [Warrior Wins - Rodrigo Valdez Jr](https://rodkhleif.com/warrior-wins-rodrigo-valdez-jr/)
**Published:** May 3, 2022
**Author:** Graciela
**Content:**
## Warrior Win
# Rodrigo Valdez Jr.
Rod Valdez brings 20+ years of experience in engineering and commercial sales into real estate investing and is involved as a partner in 200+ doors. With his ability to be technical, yet personable, his versatility brings value thru deal sourcing, capital raising, underwriting and investor relations. Rod is known for his consistency, dedication and integrity in what he puts his hand to. Rod graduated from the University of Illinois and currently lives in southern California. Blessed with his wife and four children, he enjoys Crossfit, golfing and traveling with his family.
## Property Details
**Address:** Broadway Palms
**Number of Units:** 12
**Value Add Deal?** Yes
**Purchase Price:** $1,278,500
**Estimated monthly increase projected?** $400
**Anticipated value after value add:** Stabilized Appraisal has already come in at $2,150,000
**Estimated Cash on Cash Return:** 7.44%
**Estimated Internal Rate of Return:** 34.2%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
The community is amazing and the teamwork is top notch. The program really allows you to go from zero multifamily knowledge to being able to close a deal and scaling quickly.
## How did you find this property?
Off market via broker.
## How did you structure the financing of this property?
12 month bridge loan at 80% LTV at 8.79% interest (lastminute financing change) with refi Y2 to traditional 30 yr term at 75% LTV at 6.0% interest. CapEx is a draw.
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
Friends and family.
## What was the equity raise?
$450,000
## What are some hurdles you had to overcome to get this deal done?
With rates changing, our initial lender couldn’t meet his quote and went dark, unable to reach him and he didn’t return calls/emails. With no initial extension built in, we were able to extend our closing date and scrambled to get a new lender on board with inspections, appraisals, etc. completed before the new closing date. Our bridge loan rate wasn’t ideal but we were able to get it done and have enough equity in the deal to overcome the initial rate.
## What are some of the lessons you learned with this deal?
Always have an extension built in because things happen. Stick to the lender relationships you’ve built because they’ll go the extra mile to maintain the relationship. The appreciation in the Phoenix market is ridiculous!
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - David Iglewicz](https://rodkhleif.com/warrior-wins-david-iglewicz/)
**Published:** April 15, 2020
**Author:** Matt RK
**Content:**
## Warrior Win
# David Iglewicz
Pediatric Dentist since 2003. Started becoming passionate in 2018 with Real Estate. 2019 passively invested in 800 doors actively looked for properties. 2020 big year. Goal is to close on five complexes. 4 under contract
## Property Details
**Address:** 3720 Walnut St Harrisburg PA
**Number of Units:** 15
**Value Add Deal?** No
**Purchase Price:** $1,215,000
**Estimated Cash on Cash Return:** 6%
## Warrior team
shout outs:
## Which Warriors helped you with this deal, and how?
Powell-he was honest and upfront he tells me how it is. I like to know when I make mistakes
Robert-I know not a warrior but he helped confirm it was good to go
Mustafa-he gave me great advice
The whole team-by watching others close deals freaking got me inspired
Chris and Chelsea- they are awesome and super great people
## Any comments about your experience so far in the Warrior Program?
I love the inputs from other warriors
I absolutely love the high performance calls
## How did you find this property?
Broker
## What are some hurdles you had to overcome to get this deal done?
Getting the real financials. Had to verify. It was tough. Owner was not giving me all the info. When I said I was going to walk away magically I got all the financials and they matched. He just did not want to do the work.
##
What are some of the lessons you learned with this deal?
Get as much information as you can before you get that purchase agreement. Never give up.
## How did you structure the financing of this property?
Fixed 5 yr bank. Will reset every five yr based on 300 over 5yr Federal Home Loan Bank Weekly rate. No financials needed
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [29 Fatal Mistakes Many Apartment Buyers Make](https://rodkhleif.com/29-mistakes/)
**Published:** March 6, 2020
**Author:** Rod Khleif
**Content:**
[  ](https://rodkhleif.com)
# Free Download
## 29 Fatal Mistake Apartment Buyers Make
“All of these mistakes are common, but very sad and completely avoidable. I wrote this book because I kept seeing the same mistakes over and over again and I saw lives ruined and investors leave the business, when with a little foresight they would have been fine. Take this little extra time to read this book and protect yourself.”
– **Rod Khleif**
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---
### [Warrior Wins - Javier and Yessenia Gonzalez](https://rodkhleif.com/warrior-wins-javier-and-yessenia-gonzalez/)
**Published:** September 20, 2022
**Author:** Graciela
**Content:**
## Warrior Win
# Javier and Yessenia Gonzalez
Frontline Investment Partners LLC is a real estate investment firm with a mission to help others make their money work as hard as they do through real estate investing. Javier and Yessenia Gonzalez are the married Founders and Managing Partners of Frontline Investment Partners LLC. They have been real estate investors for over 7 years and have a current focus on multi-family apartments.
## Property Details
**Address:** Las Brisas Apartments
**Number of Units:** 24
**Value Add Deal?** Yes
**Purchase Price:** $5,100,000
**Estimated monthly increase projected?** $300-$700/unit
**Anticipated value after value add:** $7,500,000
**Estimated Cash on Cash Return:** 5%
**Estimated Internal Rate of Return:** 17%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Being part of the warrior program has been all positive! It has helped propel our family throughout our exciting MF real estate journey, as well as having the honor to have learned, grown, and partnered with such great like minded individuals.
## How did you find this property?
Off Market.
## How did you structure the financing of this property?
Seller financing.
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
506 b
## What was the equity raise?
1.7 million
## What are some hurdles you had to overcome to get this deal done?
Seller negotiation, Capital raising.
## What are some of the lessons you learned with this deal?
Proper due diligence on older asset. Seller negotiations.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Jorjio Hopkins](https://rodkhleif.com/warrior-wins-jorjio-hopkins/)
**Published:** April 9, 2020
**Author:** Matt RK
**Content:**
## Warrior Win
# Jorjio Hopkins
Jorjio Hopkins is the host of the Wisconsin Apartment Investors Weekly Meet up in Madison, WI. With a passion for Real Estate Investment Analysis, Jorjio has completed in-depth investment & market analysis for over $400 Million worth of CRE assets primarily focused in the Multifamily space.
As the founder of Full Faith Capital, a private real estate investment company, Jorjio puts an extreme emphasis on the preservation and growth of investor capital. He is a few short months away from completing his Master’s degree in International Real Estate (Worldwide CRE Investments) as well as receiving a Private Equity Certification.
## Property Details
**Address:** Mabbett & Breeds
**Number of Units:** 17
**Value Add Deal?** No
**Purchase Price:** $4,400,000
**Estimated Cash on Cash Return:** 11.8%
**Estimated Internal Rate of Return:** 15.7%
## Warrior team
shout outs:
## Which Warriors helped you with this deal, and how?
Eric, & Garrison with their motivation!
## Any comments about your experience so far in the Warrior Program?
I look forward to building relationships with the warriors going forward.
## How did you find this property?
Partnership
## How did you structure the financing of this property?
Deal still in the works
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
GP networks
##
What was the equity raise?
$1,350,000
##
What are some hurdles you had to overcome to get this deal done?
Retail can be risky, so create a proactive plan to fill any vacant spaces early and seek renewals from current tenants.
## What are some of the lessons you learned with this deal?
Always be raising capital. Create thorough SOPs for PM, but also internally with our team.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Carrie Zatelli](https://rodkhleif.com/warrior-wins-carrie-zatelli/)
**Published:** December 8, 2023
**Author:** Greciel Moreno
**Content:**
## Warrior Win
# Carrie Zatelli
I am an attorney turned real state investor. I was a prosecutor for about 10 years then I moved into Civil litigation. My husband and i started a construction company about 10 years ago that focuses on walkway repair for affordable housing across the country.
## Property Details
**Address:** 2900 South FWY, Fort Worth, TX. 76104. Morningside Apartments
**Number of Units:** 123.
**Value Add Deal?** Yes
**Purchase Price:** $11,250,000
**Estimated monthly increase projected?** $67 for one bedroom and $80 for a 2 bedroom.
**Anticipated value after value add:** $16,414,440
**Estimated Cash on Cash Return:** 6.35%
**Estimated Internal Rate of Return:** 20.95%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
This program has exceeded my expectations. I have loved every minute and every person that I have meet.
## How did you find this property?
Through another warrior.
## How did you structure the financing of this property?
Loan 7,250,625 @6.3 %
Capital 3,999,375.
## Was this a joint venture or syndication?
Syndication.
## How did you raise the equity?
Through friends and family as it was my first raise.
## What was the equity raise?
$3,999,375
## What are some hurdles you had to overcome to get this deal done?
We had to move the closing to get the raise.
## What are some of the lessons you learned with this deal?
I learned a couple of good lessons. First, I realized that getting the actual money that an investor committed to investing can be challenging. Not every investor is in a hurry to get the money wired or transferred and self directed IRA’s take some time to get completed. Second I learned a lot about what qualities make good general partners for me.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Sean Cullen](https://rodkhleif.com/warrior-wins-sean-cullen/)
**Published:** June 11, 2021
**Author:** Matt RK
**Content:**
## Warrior Win
# Sean Cullen
Sean is a Lieutenant Colonel in the United States Air Force and brings 20 years of leadership and management experience to his role as RIZE’s Head of Operations. In that role, he relishes the opportunity to build and manage the systems and teams needed to advance RIZE’s objectives. He is deeply committed to completing tasks with a high degree of quality, attention to detail, and communication.
As an Air Force officer, Sean has excelled in numerous leadership positions, culminating in his current role as a Squadron Commander. In addition to his military service, he has actively invested in real estate since 2005.
Sean is passionate about guiding others in their journey towards financial freedom and is dedicated to helping them create multi-generational wealth. However, his greatest passion is his family. Sean is a proud husband and father to 3 children.
## Property Details
**Address:** Tribble Gap Apartments: 1004 Tribble Gap Road, Cumming, Ga
**Number of Units:** 20
**Value Add Deal?** Yes
**Purchase Price:** $13,00,000
**Estimated monthly increase projected?** $450
**Anticipated value after value add:** $25 mil
**Estimated Cash on Cash Return:** 10%
**Estimated Internal Rate of Return:** 18%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
The relationships made during the program are worth 10x the amount of money paid. The Warriors that are selected are the right caliber of person act as force multipliers for your goals in multifamily investing!
## How did you find this property?
Direct to seller campaign, built rapport, and found ways that we could help each other.
## How did you structure the financing of this property?
Bridge debt, IO for three years with two 1 year options
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
Webinar, website, social media, friends and family
## What was the equity raise?
$550,000
## What are some hurdles you had to overcome to get this deal done?
Finding contractors and insurance quotes that were within a range that we felt comfortable. With the cost impact of COVID on materials, the cost of renovations seems to be increasing, which can affect your underwriting, your bottom line. Insurance was though because the lender was hung up on a clause that was increasing the cost of insurance about twofold. For the construction, we had to shop around and leverage relationships to find the right company at a reasonable price. For the insurance, we had to get everyone on the phone together (lender, insurance, and ourselves) to figure this issue out and come to a resolution.
## What are some of the lessons you learned with this deal?
Nothing good comes quickly or as planned. You have to adapt to the situation. For example, we offer 1.3M but after due diligence, we noticed there was about double the CAPEX expected. After explaining that to the owner and showing him the cost of repair, he agreed to provide a seller credit of $149K. This helped the deal go from a single or double to a homerun!
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Grace Gonzalez](https://rodkhleif.com/warrior-wins-grace-gonzalez/)
**Published:** April 19, 2024
**Author:** Graciela
**Content:**
## Warrior Win
# Grace Gonzalez
Grace received her Real Estate license from the state of California in 2014. Since then, Grace has been involved in real estate and she has expanded her real estate experience from multiple realty groups. In 2018, Grace attended an all-women real estate conference, and she learned the power of education and networking for long term wealth through real estate investing. Now, Grace’s focus is to empower women with investment strategies to accomplish their financial goals. While personally investing across the country for the last ten years, Grace is the Co-Founder and Senior Managing Partner of MillaGo Capital, LLC and MillaGo Investments, LLC.
Grace has a Bachelor of Science in Information Technology.
After rescuing seven dogs and three cats from abuse and hunger during a trip to Mexico in 2022, Grace co-founded Hope for All Paws (www.hopeforallpaws.org). A non-profit organization to better the lives of domesticated animals in the U.S. and other countries.
## Property Details
**Address:** Driftwood Apartments
**Number of Units:** 101
**Value Add Deal?** Yes
**Purchase Price:** $6,000,000
**Estimated monthly increase projected?** 3% yearly
**Anticipated value after value add:** $10,845,111
**Estimated Cash on Cash Return:** 10.6%
**Estimated Internal Rate of Return:** 16.9%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
The Warrior program is great. We’ve had an amazing experience and are grateful for everything we have learned. We also learned to be cautious of who we associate with within the Warrior program and do business with. Be cautious of the deals that are presented, the person and their involvement on the deal.
## How did you find this property?
MMG brought up the property to the key principles.
## How did you structure the financing of this property?
Financing is 6.3 % interest amortize for 25 years at 67% LTV. There is no bridge debt for this deal.
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
Raising equity through syndication. Having several calls to reach potential investors and inform them of this particular deal. Reaching out to fund to fund partners as well.
## What was the equity raise?
$3,000,000
## What are some hurdles you had to overcome to get this deal done?
The biggest hurdle was raising capital. The deal is closed but there is still some equity captal still availble to raise. At this time, too many investors are holding back investing in MF deals.
## What are some of the lessons you learned with this deal?
Being prepared to raise capital. Initially, we were not ready to raise the capital as the KP mention they had investors wanting to inject between $2MM – $3MM onto this deal. When the potential investors did not inject their respective funds, we had to raise capital. Scrambling to reach potential investors was daunting as we were not prepared.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Alekhya Mukherji](https://rodkhleif.com/warrior-wins-alekhya-mukherji/)
**Published:** May 15, 2024
**Author:** Greciel Moreno
**Content:**
## Warrior Win
# Alekhya Mukherji
Alekhya is the co-founder of Evergreen Capital, and has been investing in real estate for over a decade. He moved to the US in 2015 and started investing in US real estate in 2017. He currently personally owns 10 units including a STR business and is an investor in multiple projects involving value-add and new construction multi-family (2000+ doors), Retail, Hotels and ATMs.
He currently lives in Austin, TX with his wife and two young kids.
## Property Details
**Address:** Harvard House/ District 52
**Number of Units:** 52
**Value Add Deal?** Yes
**Purchase Price:** $2,650,000
**Estimated monthly increase projected?** $0 for Yr1
**Anticipated value after value add:** $4M-$5M
**Estimated Cash on Cash Return:** 6-8%
**Estimated Internal Rate of Return:** 14-16%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
A fantastic group of people who are always willing to help and lend a hand for any questions.
## How did you find this property?
On market listing with a major brokerage house. Part of a multi-property package seller was liquidating.
## How did you structure the financing of this property?
Loan assumption with attractive interest rate and 7yrs of loan term left at acquisition.
## Was this a joint venture or syndication?
Syndication.
## How did you raise the equity?
GP team raised capital through LP partners.
## What was the equity raise?
$1.7M
## What are some hurdles you had to overcome to get this deal done?
First MF acquisition and steep learning curve, putting together a winning team, lengthy negotiations with broker and seller on pricing, finding a good PM who knows the market, finding out about 4 down units during DD.
## What are some of the lessons you learned with this deal?
A good team who are on the same page in terms of execution, being able to rely on team members to execute their respective tasks, keeping everybody on track, raising capital in a tough market environment.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Frank Lettiere](https://rodkhleif.com/warrior-wins-frank-lettiere/)
**Published:** February 11, 2022
**Author:** Matt RK
**Content:**
## Warrior Win
# Frank Lettiere
Frank Lettiere is now the Acquisitions Team Leader at Arrows Capital Group, a multifamily syndication team that offers every investor greater opportunities to maximize returns while prioritizing people and positively impacting the communities we invest in.
He comes from a finance background, having spent over a decade as a commodity options trader before transitioning to a software development role focusing on process automation. Since joining Arrows Capital Group, he has used these skills to create efficient acquisitions systems, enabling the team to effectively analyze investment opportunities, provide feedback, and submit quality offers on a large number of multifamily deals. He is incredibly lucky to be doing something he loves alongside a team of people who consistently support, challenge, and elicit growth amongst one another.
## Property Details
**Address:** 3515 Apartments
**Number of Units:** 45
**Value Add Deal?** Yes
**Purchase Price:** $2,368,000
**Estimated monthly increase projected?** $50/unit
**Anticipated value after value add:** $3,850,000
**Estimated Cash on Cash Return:** 10.8%
**Estimated Internal Rate of Return:** 16.3%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
The Warrior Program has changed my life for the better in a number of ways. It has helped me shift my mentality tremendously which has had a positive impact in all areas of my life. I have learned an incredible amount about this exciting industry, met people who I believe I will have significant relationships with for a long time, and moved myself and my capital into a position to growth exponentially greater than before I joined.
## How did you find this property?
Another member of our team (fellow Warrior – Loren Jacobs) was in a different Mastermind call where our future partner presented the deal and mentioned he was looking for help with the underwriting, asset management, and capital raising in order to get it to the closing table.
## How did you structure the financing of this property?
Initially we were going for an agency loan, but after going through the entire process it was rejected due to the size of the purchase, the area not being in a major MSA, and the fact that none of the principles would be living in the state. We ended up getting solid terms with a local bank.
## How did you raise the equity?
506b
## What was the equity raise?
$1,200,000
## Was this a joint venture or syndication?
Syndication
## What are some hurdles you had to overcome to get this deal done?
Other than the debt issues mentioned above, it also took a while to close. We pretty much lost contact with the seller for a bit toward the end which was making it difficult to set an actual closing date.
## What are some of the lessons you learned with this deal?
The team you are working with is crucial to success. I would not have been part of a deal like this had it not been for the Warrior group itself and the specific people I have met and am now partnering with on deals like this.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Dinesh Nayak](https://rodkhleif.com/warrior-wins-dinesh-nayak/)
**Published:** February 11, 2022
**Author:** Matt RK
**Content:**
## Warrior Win
# Dinesh
Nayak
25+ years in IT consulting and Program management. 10 Single Family homes. 1000+ doors in LP. 11 units in JV. Two more (68 units) properties under contract.
## Property Details
**Address:** 6400 Ezras Ct Fayetteville NC 28304
**Number of Units:** 11
**Value Add Deal?** Yes
**Purchase Price:** $685,000
**Estimated monthly increase projected?** $100-150/unit
**Anticipated value after value add:** $1 mil
**Estimated Cash on Cash Return:** 12-15%
**Estimated Internal Rate of Return:** 20%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Great for networking
Sky is the limit
## How did you find this property?
Direct to Seller cold calling
## How did you structure the financing of this property?
Local lender – 20 year amortization 2.75% 513K loan amount
## Was this a joint venture or syndication?
Joint Venture
## How did you raise the equity?
Friends
## What was the equity raise?
$200k
## What are some hurdles you had to overcome to get this deal done?
Negotiations with the seller
## What are some of the lessons you learned with this deal?
It takes time
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Hilary Graves](https://rodkhleif.com/warrior-wins-hilary-graves/)
**Published:** March 18, 2024
**Author:** Graciela
**Content:**
## Warrior Win
# Hilary Graves
Hilary Graves is the founder and managing partner of Bright Sound Investments, a private equity group out of York, Pennsylvania.
Hilary is a General Partner on 830 doors of multifamily real estate as well as over 800 doors as Limited Partner. The value she brings to a team are in raising capital, investor relations, asset management, and making professional offering memorandums and newsletters for syndication teams. She has appeared on various real estate podcasts and spoken at real estate conferences and meetups.
Aside from real estate, Hilary is an accomplished pianist and songwriter/composer. Some of her original songs received radio airplay. She graduated summa cum laude with a masters degree in music education from Lebanon Valley College.
Having taught public school for over 20 years, Hilary now uses her education background to educate passive investors.
Her greatest joy in life is being married to Billy and being mom to MayLeigh and Will.
## Property Details
**Address:** Oakleaf Townhomes, Mt. Pleasant, SC **Number of Units:** 108 **Purchase Price:** $22,680,000
**Estimated monthly increase projected?** $1000
**Anticipated value after value add:** $37,067
**Estimated Cash on Cash Return:** 7.3%
**Estimated Internal Rate of Return:** 16.8%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
It has been life-changing. It has been an honor to learn from some the best operators out there, and to join them in taking down amazing deals, not to mention offering these opportunities to investors. The network has been the most amazing part.
## How did you find this property?
Our team got to know the owners years ago, and kept up the relationship so that when they were ready to sell, our team was the first buyer they considered. A broker also assisted in the process, but there is no way they would have sold to us or entertained seller financing if it weren’t for the relationship.
## How did you structure the financing of this property?
Seller financing at 80 LTV
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
From Limited Partners with whom we had a prior relationship.
## What was the equity raise?
Approx $9MM
## What are some hurdles you had to overcome to get this deal done?
We offered on this deal a few times before our offer was finally accepted. So, patience mostly. Other than that, our team truly thinks this deal was done through divine intervention!
## What are some of the lessons you learned with this deal?
As a capital raiser (among other things….don’t worry:), I learned that you cannot rush your investors. We raised ALL the equity needed for this deal and then some in less than a week. I didn’t join the first webinar, so by the time my investors got to attend a webinar, they literally had 3 days to reserve their spots before they were all filled up. That wasn’t enough time for many of my investors to do their due diligence. So the lesson is to gather as much info about the deal as possible and let your investors get warmed up to it before the webinar, so they have sufficient time to get their questions answered and consult with their spouses/financial advisors, etc.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Chris Hernandez](https://rodkhleif.com/warrior-wins-chris-hernandez/)
**Published:** February 18, 2021
**Author:** Matt RK
**Content:**
# Warrior Win: Chris Hernandez Closes 10 Units
## Chris
Hernandez
I am a 20 year entrepreneur.
I’ve been a business owner of a graphics & screen printing company, a freelance graphic designer, a real estate professional and a couple other side gigs. I have real estate experience as and agent, flipper and landlord of 6 units (3 duplexes). I also managed my current acquired asset for a year prior to purchasing it.
Passion: This business fits me like a glove. It hits on so many levels such as:
a) Keeping my interest
b) It’s Challenging
c) I can use different types of Creativity within the business
d) This WILL help me reach financial freedom
e) Wow! I feel like I’ve finally chosen the right path that achieves everything my life desires
## Property Details
**Address:** 38 East Willow, Monroe MI
**Number of Units:** 10
**Value Add Deal?** Yes
**Purchase Price:** $500,000
**Estimated monthly increase projected?** $2475
**Anticipated value after value add:** $807,000
**Estimated Cash on Cash Return:** 21%
**Estimated Internal Rate of Return:** 39%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
It’s truly the best decision I have ever made! There is so much more support than I could have ever imagined having. The training and the materials are phenomenal. The staff is phenomenal. This Warrior Program is exactly what I needed to help propel me toward success.
## How did you find this property?
I had done some work for the seller when I had my shop and kept in touch with him over the years and then one day he mentioned he had this property and then I persisted I was interested in purchasing his property even when he wasn’t remotely interested in selling.
## How did you structure the financing of this property?
Seller financing. 20% down, 10 yrs, amortized at 30 yrs, 3% interest.
## Was this a joint venture or syndication?
Joint venture with Arlene Winfield
## How did you raise the equity?
Each partner had capital
## What was the equity raise?
$110,000
## What are some hurdles you had to overcome to get this deal done?
Realizing that I didn’t have to do this on my own, that someone will be there to help advise me when I need it. Understanding to put sympathies aside
it’s a business and if I don’t do what needs to be done then someone else will do it anyway.
## What are some of the lessons you learned with this deal?
Patience! Something I don’t normally have
Persistence. I kept top of mind letting the seller know I was seriously interested
Negotiating. Really trying to get what would work best for me but also trying to truly understand his thought process and what he wanted. He was a bit of an odd duck
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Jon Sidoti](https://rodkhleif.com/warrior-wins-jon-sidoti/)
**Published:** July 22, 2022
**Author:** Graciela
**Content:**
## Warrior Win
# Jon Sidoti
I graduated with a degree in Construction Management, and spent the last decade working for General Contractors and Construction Equipment Sales building assets around the country. I started investing in multifamily RE in 2013. I sold my first property and became a partner in 12 units in 2018. In 2021 I joined Rod’s Warrior program and began scaling my portfolio. Over the past year, we have acquired 120+ units as GP and 500+ as GP/LP.
## Property Details
**Address:** 20 Bryce Industrial Dr, Garden City GA
**Number of Units:** 42
**Value Add Deal?** No
**Purchase Price:** $3,650,000
**Estimated monthly increase projected?** $3,000+ in 3 months
**Anticipated value after value add:** $5,000,000+
**Estimated Cash on Cash Return:** 8%
**Estimated Internal Rate of Return:** 18+%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
The Warrior Program has been such an eye opener and a great resource in the many deals that we have closed over the past 9 months. I have learned raising equity, managing assets, lining up debt, taking on partners etc etc. The team is such an integral part of successful deals.
## How did you find this property?
Broker.
## How did you structure the financing of this property?
Small Bank Financing, IO for 24m.
## Was this a joint venture or syndication?
Joint Venture.
## How did you raise the equity?
Friends & Family.
## What was the equity raise?
$1,500,000
## What are some hurdles you had to overcome to get this deal done?
Environmental concerns came up.
Debt re-trades throughout the closing process.
Keep on your dates.
## What are some of the lessons you learned with this deal?
Sprint early.
Plan your timeline and keep in touch with the team and support.
Align with your team. I joined a team with Michael Bailey who is a huge source for knowledge, inspiration, motivation and gets deals done. Mike and I have over 100 units together and $10M+ in assets.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Michael Bailey](https://rodkhleif.com/warrior-wins-michael-bailey/)
**Published:** July 21, 2022
**Author:** Graciela
**Content:**
## Warrior Win
# Michael Bailey
Petroleum Engineer turned Multifamily Real Estate Wealth Creator! Michael began investing in Real Estate in 1999 with a SFH Rental, acquired a Multi-Family Property in 2008, and Storage facilities in 2021.
Longtime project manager with a successful Travel Agency and Water Stations Business. Mike’s goal is to create happy places to live and deliver top value to his Investors.
He is an active member in multiple REI organizations i.e. Brad Sumrock, Grant Cardone, Rod Khleif, & Michael Blank and keeps himself up to date on what’s happening in the CRE world.
## Property Details
**Address:** 2006 Sul Ross
**Number of Units:** 16
**Value Add Deal?** No
**Purchase Price:** $1,675,000
**Estimated monthly increase projected?** $200 already in 3 months
**Anticipated value after value add:** $2,400,000
**Estimated Cash on Cash Return:** 8%
**Estimated Internal Rate of Return:** 17%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
I learned much of the Mechanics about the deals that I had no clue of before on DD, Debt, Terms, UW, etc… Team, team, team.
## How did you find this property?
On a broker site.
## How did you structure the financing of this property?
We have bridge debt 3 years fixed.
## Was this a joint venture or syndication?
Joint Venture.
## How did you raise the equity?
Friends & Family.
## What was the equity raise?
$550,000.
## What are some hurdles you had to overcome to get this deal done?
We had to go through a second phase environmental and we were out of extension by the time it finished.
## What are some of the lessons you learned with this deal?
Sprint early in the process this was the first of 4 I have closed this year with Jon Sidoti Jon and I have 4 deals together with 100 Units and $9M AUM.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Kevin Easterly](https://rodkhleif.com/warrior-wins-kevin-easterly/)
**Published:** November 9, 2020
**Author:** Matt RK
**Content:**
## Warrior Win
# Kevin Easterly
I had an apartment building I was in contract when I started as a warrior. Being in the program as I closed my deal saved me a bunch of time and money from everyones expertise
## Property Details
**Address:** Merlayne Villas
**Number of Units:** 32
**Value Add Deal?** Yes
**Purchase Price:** $3,200,000
**Estimated monthly increase projected?** $6,400
**Anticipated value after value add:** $4,200,000
**Estimated Cash on Cash Return:** 12%
**Estimated Internal Rate of Return:** 15%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
I love the program its great and you need to have a team doing this profession.
## How did you find this property?
Found it through a realtor
## How did you structure the financing of this property?
I did 10 year fixed 30 year am. through a bank.
## Was this a joint venture or syndication?
Joint Venture
## How did you raise the equity?
Friends
## What are some hurdles you had to overcome to get this deal done?
needed to get alternate proof of funds as I went. needed to switch up my appraiser as I went through it. first one was too busy
## What are some of the lessons you learned with this deal?
always hire a coach through a deal if you can and have a mentor
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Steeve Breton](https://rodkhleif.com/warrior-wins-steeve-breton/)
**Published:** April 15, 2020
**Author:** Matt RK
**Content:**
## Warrior Win
# Steeve Breton
25 years in corporate IT management in finance and biotech industry. Purchased 16 units in my back yard (Boston), mostly duplexes, from 2011-2012. Then turned to passive syndication investments from 2013-2017 Signed up as a Warrior June-2017 First deal, 130 units, under contract by Jan 2018 Left my W2 in June 2019 … 2 years after deciding to “Turn Pro” and 1 year ahead of my target date. Today I have over 1,200 units as a GP/Sponsor
## Property Details
**Address:** The Terrace, San Antonio, TX
**Number of Units:** 130
**Value Add Deal?** Yes
**Purchase Price:** $5,250,000
**Estimated monthly increase projected?** Avg of $90/unit
**Anticipated value after value add:** $9 mil
**Estimated Cash on Cash Return:** 10.9%
**Estimated Internal Rate of Return:** 17%
## Warrior team
shout outs:
## Which Warriors helped you with this deal, and how?
This was early in the Warrior days. I had encouraging discussions with Powell Chee and Jens Nielsen but at the time we were all in the same Newbee boat
## Any comments about your experience so far in the Warrior Program?
I had already done a fair amount in real estate, including trying to syndicate a deal, before signing up. Prior to June 2017 I had plateaued. I signed up for the knowledge, encouragement and the network. I received an abundance of each and that has made the program priceless for me.
## How did you find this property?
I’d had several conversations with a potential partner in the market. They had good local broker contacts. When they were presented with this property we jumped on it.
## How did you structure the financing of this property?
Freddie 10 years with 2 years I/O
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
Private investors
## What was the equity raise?
$2.3 mil
## What are some hurdles you had to overcome to get this deal done?
Finding a trustworthy partner with enough experience that I could feel comfortable leaning on. Then dealing with my limiting beliefs about raising capital.
## What are some of the lessons you learned with this deal?
Turning over a C- tenant class is a ton of work
We’re very happy that we planned for high vacancies in year one. The property is currently under contract to sell in April 2020 … This is the 3rd buyer… We could have done better due diligence the first buyer. I also timed the sale with another deal I was raising for but when the first buyer fell through I was in trouble on my current raise which caused a couple of weeks of sleepless nights.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - James Hughes](https://rodkhleif.com/warrior-wins-james-hughes/)
**Published:** February 11, 2022
**Author:** Matt RK
**Content:**
## Warrior Win
# James
Hughes
Im a District Manager for Speedway (Convenience Store) in Nashville TN. I manage 10 convenience stores throughout the Nashville, TN market. I started investing in RE 2 years ago with single family residential. I built up a little portfolio of SFR & condos in Memphis & Nashville. I then underwent some significant life altering events. I underwent major back surgery & my first daughter was born in the same month. I was recovering from surgery with the thought that if I ever physically can’t go into work how will I ever be able to provide for my daughter. That has been and still is my WHY. I needed to scale up faster to provide an income stream that will provide for my daughter long after im gone!
## Property Details
**Address:** 201-203 Bilbrey St Livingston, TN 38570
**Number of Units:** 8
**Value Add Deal?** Yes
**Purchase Price:** $410,000
**Estimated monthly increase projected?** $200-250/unit
**Anticipated value after value add:** $560,000
**Estimated Cash on Cash Return:** 12-14%
**Estimated Internal Rate of Return:** 18%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
This has been one of the best decisions I have made! The initial investment to get into this program seemed like a lot of money (Which it still is) but its peanuts compared to the value this network of individuals already has brought me and the lifelong friendships I will have because of it. Couldn’t say enough about the program!
## How did you find this property?
I skip traced owners in the area, got their contact info and reached out. This owner wasn’t willing to sell but I followed up with him for 4 months until he finally decided he was ready to sell.
## How did you structure the financing of this property?
30yr Amm
5/1 ARM with the first 5 years Interest Only
Non-Recourse
5 year target hold
## Was this a joint venture or syndication?
Joint Venture
## How did you raise the equity?
Networking with Warriors. I had a previous relationship with them & when I found this deal they wanted to partner with me on it.
## What was the equity raise?
$130,000
## What are some hurdles you had to overcome to get this deal done?
ALWAYS put in an extension into the contract, you never know when you will need it. This deal would have fell through if I didn’t include this in there.
## What are some of the lessons you learned with this deal?
Always have a bigger investor list than you think you should have.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Ian Schmidt](https://rodkhleif.com/warrior-wins-ian-schmidt/)
**Published:** April 10, 2023
**Author:** Graciela
**Content:**
## Warrior Win
# Ian Schmidt
Listing Agent for a Berkshire Hathaway owned (Mungo Homes) new home residential builder. In 2022 I oversaw the construction, financing and sale of 64 new homes. I have invested in single family and 1 duplex prior to joining Warrior Group. I serve on the board of Carolina One New Homes Advisory Connector Council, an organization that serves the homeless in the city of Charleston SC. Spent 10+ years working in hospitality so I could travel.
## Property Details
**Address:** 930 East Estates Blvd, Charleston SC 29414 – Shaftwoods
**Number of Units:** 40
**Value Add Deal?** Yes
**Purchase Price:** $6,050,000
**Estimated monthly increase projected?** $700/unit
**Anticipated value after value add:** $8M+
**Estimated Cash on Cash Return:** 6-8%
**Estimated Internal Rate of Return:** 16-18%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Truly one of the very best and life altering decisions I have ever made was joining the Warrior Program. It’s been enlightening in so many areas of life, not just real estate.
## How did you find this property?
From my Co-GP’s and Warriors, Sam and Jon Wells, and David Iglewicz.
## How did you structure the financing of this property?
6.5% fixed rate ammortized over 30 yrs, zero interest for 24 months.
## Was this a joint venture or syndication?
Syndication – 506 B.
## How did you raise the equity?
Reaching out to my circle of friends, family and co-workers. Lots of in person, breakfasts, lunches, dinners and coffees.
## What was the equity raise?
$3.2 M
## What are some hurdles you had to overcome to get this deal done?
Had a hard time getting my most affluent investors to commit at the end, took some time to fine tune my presentation of the asset.
## What are some of the lessons you learned with this deal?
Anticipate a 30% investor closing rate and not 50% on soft commitments, for example, next deal, for a $1M raise, I will seek $3M in soft commitments. Other lessons would be to keep investors updated on this type of investment BEFORE going under contract. Also, keep investor presentations very simple for those unfamiliar with this type of investment.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Marvin McGuire](https://rodkhleif.com/warrior-wins-marvin-mcguire/)
**Published:** October 20, 2023
**Author:** Graciela
**Content:**
## Warrior Win
# Marvin McGuire
Marv served 25 years in the Navy followed by 10 years in Federal IT sales. Victoria has been a residential real estate agent for more than 18 years. We started with a portfolio of SFR and STRs and now scaling using MFR. Joined Warrior program in early March 2023 and now in 376 doors. Victoria loves running and Marv loves hiking and golf…we BOTH are die-hard Georgia Bulldawgs, Tampa Bay Buccaneers and Dallas Cowboys fans!
## Property Details
**Address:** Savannah Abercorn 160 portfolio
**Number of Units:** 160
**Value Add Deal?** Yes
**Purchase Price:** $22,750,000
**Estimated monthly increase projected?** $100-175/unit
**Anticipated value after value add:** $30,000,000
**Estimated Cash on Cash Return:** 11-13%
**Estimated Internal Rate of Return:** 7.1-7.5%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
We love being Warriors and have recommended it to numerous people!!!
## How did you find this property?
off-market deal
## How did you structure the financing of this property?
FIXED RATE DEBT FOR 5YRS. 3yr I/O period
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
worked the phones for 60 days
## What was the equity raise?
$11,100,000
## What are some hurdles you had to overcome to get this deal done?
Getting investors to actually wire the funds
obtaining full disclosure from seller regarding several plumbing challenges
## What are some of the lessons you learned with this deal?
Phone calls and follow-up are the most effective way to raise capital. Good property management relationship can stall or significantly accelerate closing deals
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Brian Corr and Jay Boersma](https://rodkhleif.com/warrior-wins-brian-corr-and-jay-boersma/)
**Published:** August 10, 2022
**Author:** Graciela
**Content:**
## Warrior Win
# Brian Corr and Jay Boersma
We joined in 2020 Jan LA and the the pandemic hit. So it took a while for us to get our first deal.
## Property Details
**Address:** Cedar Oaks Apartments
**Number of Units:** 72
**Value Add Deal?** Yes
**Purchase Price:** $3,600,000
**Estimated monthly increase projected?** $200/M per unit
**Anticipated value after value add:** $6-$6.5 M at 6 cap in 5 yrs.
**Estimated Cash on Cash Return:** 8-17%
**Estimated Internal Rate of Return:** 18%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Warrior is a great program with excellent education, support and most importantly, community. Highly recommended.
## How did you find this property?
Jay grew up in Stillwater Ok and new the family that owned this property for years. He used to ride his bike and drive by it everyday a a kid.
## How did you structure the financing of this property?
70/30 with investors. 7% pref. We got a loan from a local bank with a rehab LOC
## Was this a joint venture or syndication?
JV
## How did you raise the equity?
Through friends and family and 2 senior GP partners we met at the events.
## What was the equity raise?
$1.3 M
## What are some hurdles you had to overcome to get this deal done?
Raising the money, missed the closing deadline and thought we lost it, reinstated the deal with seller. We had a flood insurance expense come up in underwriting way above our estimate and shopped for a better rate to help save the deal.
## What are some of the lessons you learned with this deal?
Partners are key and having a team is instrumental in doing a larger deal. I was always a one man band and the synergy of having a team and the benefits are amazing.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Baran Menguloglu](https://rodkhleif.com/warrior-wins-baran-menguloglu/)
**Published:** January 9, 2025
**Author:** Graciela
**Content:**
## Warrior Win
# Baran Menguloglu
I am buy and hold MF investors primarily in East TN
## Property Details
**Address:**201 Ave B Knoxville TN 37920 **Number of Units:** 12 **Value Add Deal?** Yes
**Purchase Price:** $1,380,000
**Estimated monthly increase projected?** $1,200/unit
**Anticipated value after value add:** $1,900,000 **Estimated Cash on Cash Return:** 6%
**Estimated Internal Rate of Return:** N/A
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Fantastic collaboration and positive energy.
## How did you find this property?
Crexi
## How did you structure the financing of this property?
Local credit union: 80% LTV, 6.5% interest rate for 5 years over 25 years amortization.
## Was this a joint venture or syndication?
JV.
## How did you raise the equity?
N/A
## What was the equity raise?
None.
## What are some hurdles you had to overcome to get this deal done?
Dealing with seller’s 1031 and collections of security deposits outside of closing.
## What are some of the lessons you learned with this deal?
Communication with seller and title company.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - William Edwards](https://rodkhleif.com/warrior-wins-william-edwards/)
**Published:** May 13, 2022
**Author:** Graciela
**Content:**
## Warrior Win
# William Edwards
William Edwards is a North Carolina native with 33 years of business ownership and management experience. He earned a Bachelor of Science in Business Administration degree from Appalachian State University with double majors in Marketing and Information Systems.
William has founded, successfully operated and sold a number of businesses during his career. He co-founded and served as President of a leading systems integration and consultancy practice from its founding in 1989 through the sale of the business in 2015. This business specialized in ERP (Enterprise Resource Planning) solutions for the supply chain, distribution, discrete and process manufacturing industries in addition to CRM (Customer Resource Management) and B2B/B2C eCommerce solutions.
## Property Details
**Address:** Enclave at Oakhurst
**Number of Units:** 84
**Value Add Deal?** No
**Purchase Price:** $13,500,000
**Estimated monthly increase projected?** 0
**Estimated Cash on Cash Return:** 8%
**Estimated Internal Rate of Return:** 15%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Excellent content and relationship/networking opportunities.
## How did you find this property?
Fellow Warrior.
## How did you structure the financing of this property?
Assumption.
## Was this a joint venture or syndication?
Syndication with TIC.
## How did you raise the equity?
Webinars.
## What was the equity raise?
$5.000.000
## What are some hurdles you had to overcome to get this deal done?
Due Diligence, Capital Raise.
## What are some of the lessons you learned with this deal?
TIC Structures.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Marvin Micthell](https://rodkhleif.com/warrior-wins-marvin-micthell/)
**Published:** October 29, 2020
**Author:** Matt RK
**Content:**
## Warrior Win
# Marvin
Mitchell
I own a financial advisory firm. I starting my real estate journey last year as a supplement to my business. Own 10 doors before closing on the 76 unit.
## Property Details
**Address:** The Reserve of Spanish Lake in St. Louis MO
**Number of Units:** 76
**Value Add Deal?** Yes
**Purchase Price:** $3,600,000
**Estimated monthly increase projected?** $100/unit
**Anticipated value after value add:** $4,400,000
**Estimated Cash on Cash Return:** 17%
**Estimated Internal Rate of Return:** 23%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Warriors have been a great help. I wouldn’t have had this deal without the warriors program. I was able to learn from several people along the way and fellow warrior Lee Fjord is Who founded the deal. Another warrior is Chris Nantista. And Rasool is a limited partner.
## How did you find this property?
We found it through a wholesaler
## How did you structure the financing of this property?
Local loan. 4.2%. No prepayment. Some of the rehab cost is built into the loan
## Was this a joint venture or syndication?
Syndication
## Please outline major inprovements
We plan to add a better security gate, landscape, better lighting, security cameras/ stripe and seal parking lot, dog park. As units turned updated bathroom, cabinets etc.
## What was the equity raise?
500k
## What are some hurdles you had to overcome to get this deal done?
Mom and pop seller, decision on whether to do a joint venture vs syndication, attempting a terrace based on inspection, an insurance claim for hail damage to the roof. Going back and forth with legal for PSA. Delay of closing due to survey and environmental study.
## What are some of the lessons you learned with this deal?
Learned how to do a syndication. Mauricio was great. How much back and forth. Always use a local title company (which we did not)
begin raising money earlier
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Bharat Kona](https://rodkhleif.com/warrior-wins-bharat-kona/)
**Published:** February 20, 2024
**Author:** Graciela
**Content:**
## Warrior Win
# Bharat Kona
4.5 yrs as LP and GP. 6 deals till date. My 7th deal is with the Warriors.
## Property Details
**Address:** Morningside Apartments, 2900 South Fwy, Fort Worth, TX 76104
**Number of Units:** 123
**Value Add Deal?** Yes
**Purchase Price:** $11,250,000
**Estimated monthly increase projected?** $75-$100/unit
**Anticipated value after value add:** $16,500,000
**Estimated Cash on Cash Return:** 7%
**Estimated Internal Rate of Return:** 19%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Excellent educational and networking program.
## How did you find this property?
Warriors introduced this deal to me and I partnered with them.
## How did you structure the financing of this property?
Agency loan.
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
Family & friends, network.
## What was the equity raise?
$5,000,000
## What are some hurdles you had to overcome to get this deal done?
Rent growth, Leasing & occupancy.
## What are some of the lessons you learned with this deal?
Partnering with complementary skills.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Paul Hassebroek](https://rodkhleif.com/warrior-wins-paul-hassebroek/)
**Published:** November 10, 2020
**Author:** Matt RK
**Content:**
## Warrior Win
# Paul Hassebroek
In 2019, I sold a financial planning business that I had built for 15 years. I’m now focused solely on syndicating commercial real estate.
## Property Details
**Address:** Wilton Manors 73
**Number of Units:** 73
**Value Add Deal?** Yes
**Purchase Price:** $11,000,00
**Estimated monthly increase projected?** $13,200
**Anticipated value after value add:** $14,00,000
**Estimated Cash on Cash Return:** 9%
**Estimated Internal Rate of Return:** 16%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
I like Rod’s material and signed up because I believe so much in the importance of mindset, which Rod speaks so much about.
## How did you find this property?
Through a broker
## How did you structure the financing of this property?
Fannie Mae note at 70% LTV, planning a supplemental loan when rents are stabilized at market rates
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
$2.5mm from a family office, $1.8mm from my network
## What was the equity raise?
$4,300,000
## What are some hurdles you had to overcome to get this deal done?
Getting initial funds together, negotiating a “COVID clause”
## What are some of the lessons you learned with this deal?
I’m still working on putting a great team into place. I had a partner disappear when it got down to go time and I think that planning for such an event is really important.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Anchal Dwivedi](https://rodkhleif.com/warrior-wins-anchal-dwivedi/)
**Published:** August 20, 2021
**Author:** Matt RK
**Content:**
## Warrior Win
# Anchal Dwivedi
I am investing in single-family RE since 2013. When I found out about Lifetime Cashflow Academy I got very excited. I attended Rod Khleif MF bootcamp last year in June and started my MF investment journey. I have invested in 5 MF as an LP.
## Property Details
**Address:** 6400 Ezras Ct, Fayetteville, NC 28304
**Number of Units:** 11
**Value Add Deal?** Yes
**Purchase Price:** $685,000
**Estimated monthly increase projected?** $100/unit
**Anticipated value after value add:** $970,000
**Estimated Cash on Cash Return:** 10%
**Estimated Internal Rate of Return:** 20%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
It is great seeing warriors adding value to each other and making them win on daily basis. I always thought that it is impossible until I join this program.
## How did you find this property?
Cold calling, direct to seller
## How did you structure the financing of this property?
3-year balloon/25-year amortization and 6year IO
## Was this a joint venture or syndication?
Joint venture
## How did you raise the equity?
Friends & Warrior (Partnered with Dinesh Nayak who is also a warrior)
## What was the equity raise?
$172,000
## What are some hurdles you had to overcome to get this deal done?
Negotiating with the seller took a lot of time because they were not planning to sell. Since it was the first JV, it took us time to find a lender who can finance at a good rate & a property manager who can execute our business plan well.
## What are some of the lessons you learned with this deal?
It always seems impossible until it is done. I thought we will never get this deal but thinking of the seller first and creating terms keeping the seller in mind worked for us.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Mickey Braithwaite](https://rodkhleif.com/warrior-wins-mickey-braithwaite/)
**Published:** November 9, 2020
**Author:** Matt RK
**Content:**
## Warrior Win
# Mickey Braithwaite
I started investing in Real Estate in 2013 and built my portfolio to 50+ units in just a few years using my own money and using the strategy BiggerPockets calls the Brrrr Method. My portfolio at this point consisted of mainly duplexes, a 4-plex and 2 SFR. I started following Rod on Facebook and YouTube around the beginning to mid 2018. After really digging into Rod’s content and a lightbulb going off in my head, I decided that multifamily was the direction I wanted to go so I signed up to attend Rod’s Bootcamp in Tampa, Florida on January 18th, 19th and 20th. This event was a life changer for me and full of amazing information that changed my life. After attending his bootcamp, I signed up for the Warriors Program and again, I was blown away by the content and the network Rod has built. During my time as a Warrior, I stayed laser focused and met with brokers and constantly analyzed deals with no thought of giving up until I had my first multifamily property under contract. After a year of searching, analyzing and touring over 100+ deals, I finally had a 12 unit under contract in December 2019. I closed on this property on March 31, 2020 and currently just rehabbing the 7th unit and increasing rents by $250/month per unit. Things have been going better than I ever could have imagined. Especially during this pandemic mess.focus solely on large multi-family purchases. Since then they have closed on 2 complexes with 4 more under contract through partnering.
## Property Details
**Address:** 360 Oak Rd.
**Number of Units:** 12
**Value Add Deal?** Yes
**Purchase Price:** $375,000
**Estimated monthly increase projected?** $250/unit
**Anticipated value after value add:** $850,000
**Estimated Cash on Cash Return:** 20-26%
**Estimated Internal Rate of Return:** 41.42%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
My experience with the Warrior program was awesome. I learned so much and connected with so many like minded people. You don’t realize how many people out there are passionate about real estate the way I am. And seeing so many people buying so many units, it helps me believe that it’s definitely possible for me to do the same. I am from Pittsburgh, PA and I’m around a lot of people who are just blue collared hard working people who don’t dream big the way I do. When I tell them I own 50+ units they are blown away. Yet in my mind, I haven’t even begun yet and my goals would scare them and they would think it’s impossible.
## How did you find this property?
I found this property from sending direct mailers to owners. Took 3 times to hit the owner before I got a response. Owner turned down my initial offer and then a few months went by where we didn’t talk. After 2-3 months went by, I decided to reach back out to the owner to see if we could make a deal happen. After taking the owner to lunch and buttering him up, I got him to accept an offer. The owner was in no hurry to close and made it very easy for me to go through my first experience with closing on a commercial multifamily property.
## How did you structure the financing of this property?
I was able to use a small commercial lender and had to put 20% down to close. I was able to lock down very good lending on this property because it cash flowed so well. The loan terms were as followed: 80% LTV, 10 year term, 25 year amortization, 3.9% interest rate. This lender also refinanced my original portfolio, and I was able to cash-out enough to cover all my costs to close on the 12 unit, plus rehab costs, plus a healthy reserve. I didn’t have to bring a check to the closing table which was amazing.
## Was this a joint venture or syndication?
Neither. Bought this deal on my own. I plan to go bigger on the next deal and do a Joint Venture.
## How did you raise the equity?
No equity raised
## What was the equity raise?
No equity raised
## What are some hurdles you had to overcome to get this deal done?
Staying consistent with seller after 1st offer turned down. Broker was giving me bad news in the first 60 days of being under contract and lending was approved at the last minute. Very stressful being that this was my first deal like this.
## What are some of the lessons you learned with this deal?
During Due Dilligence, have contractor spend more time inspecting the property so he can give me a more accurate estimate on the renovation costs. I went over budget on a few units and now I’m having to do some of the work myself, which I’m ok with, to make up some of those costs to get me back on track.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Doris Ng](https://rodkhleif.com/warrior-wins-doris-ng/)
**Published:** September 22, 2020
**Author:** Matt RK
**Content:**
## Warrior Win
# Doris Ng
Sisters, Alice & Doris Ng, are partners at 2SavvySisters, a real estate investment company. Their real estate journey in real estate started in 2012 in both residential and commercial multi-family. Their experience has led her to form partnerships with experienced real estate professionals and trusted advisors. Currently, 2SavvySisters Investments has been involved, owns and invests in over 350 units across multiple states.
## Property Details
**Address:** 2602 N Bennett St, Appleton WI 54911
**Number of Units:** 6
**Value Add Deal?** Yes
**Purchase Price:** $235,000
**Estimated monthly increase projected?** $250/unit
**Anticipated value after value add:** $380,000
**Estimated Cash on Cash Return:** 10.59%
**Estimated Internal Rate of Return:** 18.72%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
The quality has been amazing! I’ve had the opportunity to met so many like-minded folks in this space that makes me feel that I’m not alone.
## How did you find this property?
Driving for dollars. Process took over 12 months to finalize and close.
## How did you structure the financing of this property?
Used our own money and private money.
## Was this a joint venture or syndication?
Bought it on our own
## How did you raise the equity?
We raised 100% private money to help acquire the property via cash from the seller.
## What are some hurdles you had to overcome to get this deal done?
The seller was very difficult to get a hold of since he doesn’t use technology much. We relied heavily on fax and calls to through to him. We had to adapt and work on his mode of communication in order to complete the deal. Additionally, the seller requested for an earlier close date and if we didn’t, he will retract the deal. We did anticipate to use private money, but had to resort to it just to close on time.
## What are some of the lessons you learned with this deal?
Persistence! We kept in touch with the seller during this whole time and timing was everything. We continued to reach out until he was ready to sell and when the time came, he asked us.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Trey Powell](https://rodkhleif.com/warrior-wins-trey-powell/)
**Published:** April 21, 2022
**Author:** Graciela
**Content:**
## Warrior Win
# Trey Powell
Trey has been a real estate investor since 2016 and owns an array of assets including single-family homes, over 32,000 sq ft of commercial office space, and vacation rental properties. He is a limited partner in 12 senior living community assets and in 2021 decided to focus on multifamily apartments.
Trey grew up in Little Rock, Arkansas and attended the University of Arkansas at Fayetteville for college. He later attended medical school at the University of Arkansas for Medical Sciences has been an Emergency Medicine physician since 2015. He continues to practice medicine in Southwest Missouri and Northwest Arkansas. He lives in Missouri with his wife Nikki and their two children, ages 6 and 2.
## Property Details
**Address:** The Apartments on Vanstory
**Number of Units:** 42
**Value Add Deal?** Yes
**Purchase Price:** $3,150,000
**Estimated monthly increase projected?** $250+
**Anticipated value after value add:** $4,900,000
**Estimated Cash on Cash Return:** 7%
**Estimated Internal Rate of Return:** 16.59%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
The Warrior Program has greatly accelerated the rate at which I would have accomplished a deal and allowed tremendous networking and relationship building. It has encouraged me to stay motivated and surround myself with like minded individuals with similar goals.
## How did you find this property?
Local Warrior Teammate (Anchal and Dinesh) brought me in on the deal.
## How did you structure the financing of this property?
Bridge Debt, 70% LTV and 100% cap-ex, 3+1+1, I/O 3 yrs.
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
506b.
## What was the equity raise?
$1,303,027
## What are some hurdles you had to overcome to get this deal done?
Rapid increased costs with Rate Cap purchase (more than doubled from the time LOI was sent), higher than expected Lender Fees with closing.
## What are some of the lessons you learned with this deal?
Plan for increased unexpected closing costs and costs outside of your control.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Georgy Marrero](https://rodkhleif.com/warrior-wins-georgy-marrero/)
**Published:** February 28, 2024
**Author:** Greciel Moreno
**Content:**
## Warrior Win
# Georgy Marrero
Georgy grew up in the Dominican Republic and currently works as an AI software engineer at Meta. He began his real estate journey in 2019 when he passively invested in a flip in Los Angeles and he has not stopped ever since. Today, Georgy runs a portfolio of 10+ properties split between Florida, North Carolina, and the Dominican Republic. Georgy’s passions include coding (since the age of 10), social dancing, traveling, reading, investing, and entrepreneurship.
## Property Details
**Address:** YourWay Columbia Self-Storage
**Number of Units:** 517
**Value Add Deal?** Yes
**Purchase Price:** $3,500,000
**Estimated monthly increase projected?** $195/unit
**Anticipated value after value add:** $15,200,000
**Estimated Cash on Cash Return:** 10%
**Estimated Internal Rate of Return:** 37%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
I love it! I’d recommend it to anyone interested in multifamily!
## How did you find this property?
Networking with other Warriors.
## How did you structure the financing of this property?
Construction loan for 75% LTV.
## Was this a joint venture or syndication?
Syndication.
## How did you raise the equity?
I called friends, family, and colleagues.
## What was the equity raise?
$2,300,000
## What are some hurdles you had to overcome to get this deal done?
Learning self-storage coming from a multifamily background, selling the asset type to my investor base when I hadn’t talked to them about self-storage before.
## What are some of the lessons you learned with this deal?
You must start raising early. Friends and family isn’t sufficient to raise. You need a marketing strategy.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Michael Lewis](https://rodkhleif.com/warrior-wins-michael-lewis/)
**Published:** February 11, 2022
**Author:** Matt RK
**Content:**
## Warrior Win
# Michael
Lewis
CPA for 15 years. Work for publicly traded insurance company. Been involved with real estate off and on since 2014 – that was single family homes. Passions are family, personal growth, personal finances, sports and fitness.
## Property Details
**Address:** Rivers Edge. North Augusta, SC.
**Number of Units:** 72
**Value Add Deal?** Yes
**Purchase Price:** $5,400,000
**Estimated monthly increase projected?** $23,393
**Anticipated value after value add:** $9,315,277
**Estimated Cash on Cash Return:** 17%
**Estimated Internal Rate of Return:** 39%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Love it. Joined last year and the first 6 months was all about information intake. Learning. Now last 3-6mo has been about networking.
## How did you find this property?
Part of a team. I am on the equity raising side.
## How did you structure the financing of this property?
Agency Loan
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
Reaching out to network of investors
## What was the equity raise?
$1,800,000
## What are some hurdles you had to overcome to get this deal done?
Finding the deal. That is the hardest part right now.
## What are some of the lessons you learned with this deal?
Teamwork. Find great partners. Integrity – do what you say and say what you will do. Transparency – important to be totally transparent with investors.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Michael and Regina Lucero](https://rodkhleif.com/warrior-wins-michael-and-regina-lucera/)
**Published:** May 20, 2022
**Author:** Graciela
**Content:**
## Warrior Win
# Michael and Regina Lucero
2019 is a turning point for out lives, we started our journey with real estate flipping single family houses, we manage to scale up and working 20-25 houses at a time. Flipping is a short term solution to our financial goals, so we join the warrior program because we would like to have a lifetime cashflow through multifamily investing, this was February 2021. Now we are doing real estate full time, manage to retire before 40, from $300 pocket money ten years ago to multi million dollar assets in 3 years. Now we are JV, GP, KP 172 units, LP in 397 units. Money is a great resource for service. We would like to extend out blessings to the children that have rare conditions in the Philippines. To God be the glory!
## Property Details
**Address:** Thomas Ridge Luxury Apartment, Augusta Georgia
**Number of Units:** 104
**Value Add Deal?** Yes
**Purchase Price:** $8,320,000
**Estimated monthly increase projected?** $130/unit
**Anticipated value after value add:** $12,466,000
**Estimated Cash on Cash Return:** 7%
**Estimated Internal Rate of Return:** 17%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Best decision of our lives.
## How did you find this property?
Broker relationships.
## How did you structure the financing of this property?
Adjustable rate bridge loan with bank loan, syndication and 1031 exchange.
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
Family and friends, local network.
## What was the equity raise?
$2,800,000
## What are some hurdles you had to overcome to get this deal done?
Having multiple deals, and sharing the same investor pool with other capital raisers.
## What are some of the lessons you learned with this deal?
As capital raiser always increase and master your investor relationships.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Carolina Botero](https://rodkhleif.com/warrior-wins-carolina-botero/)
**Published:** March 10, 2023
**Author:** Graciela
**Content:**
## Warrior Win
# Carolina Botero
Carolina Botero has experience primarily in single family real estate, currently in process of opening her first short term rental property. Prior to transitioning into real estate, Carolina devoted herself to the study of anesthesia as a Certified Registered Nurse Anesthesiologist (CRNA) and caring for patients across multiple healthcare settings.
Carolina is a first generation Colombian-American, US Army Combat Veteran and devoted mother of three. Carolina specializes in networking, speaking opportunities and education for healthcare professionals. Her primary focus in syndications is in raising capital and investor relations.
## Property Details
**Address:** 8731 North 30th Street, Tampa FL
**Number of Units:** 40
**Value Add Deal?** Yes
**Purchase Price:** $7,080,000
**Estimated monthly increase projected?** $300-350 per unit per month
**Anticipated value after value add:** 12-13M
**Estimated Cash on Cash Return:** 14-17%
**Estimated Internal Rate of Return:** 18-21%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
The networking and collective resources are absolutely invaluable.
## How did you find this property?
Through networking with other Warriors
## How did you structure the financing of this property?
3 year refinance, 5 year sell, 6% preferred return, 70/30 GP/LP equity split
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
Capital raisers.
## What was the equity raise?
$4,900,000
## What are some hurdles you had to overcome to get this deal done?
Stepping outside of my comfort zone talking about specific deal financials.
## What are some of the lessons you learned with this deal?
Patience. The deal took quite a bit longer to close than expected.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Chris Miller](https://rodkhleif.com/warrior-wins-chris-miller/)
**Published:** October 31, 2022
**Author:** Graciela
**Content:**
## Warrior Win
# Chris Miller
Chris is a real estate investor with experience acquiring properties, managing renovations, raising private capital, and managing single family & multifamily investment properties. Chris began investing in 2012 with single family and shifted focus in 2019 to multifamily.
Chris is co-founder of Smart Wealth Equity which, currently has interest in over 1171 units located in Texas and valued at over $150MM.
Chris, an experienced investment partner, is known for helping, educating, supporting, and communicating to investors during all phases of their investment lifecycle.
Chris’ passion for educating investors can be traced back to his many years in leadership, where he has spent significant time mentoring, coaching, and helping people reach their goals.
## Property Details
**Address:** 518 Linda Dr, San Marcos, TX 78666 (Sutton Apartments)
**Number of Units:** 104
**Value Add Deal?** Yes
**Purchase Price:** $12,500,000
**Estimated monthly increase projected?** $125 (Currently acheiving $100+ over our projected updated units rents on non renovated units)55
**Anticipated value after value add:** 21,000,000 with a 6 exit cap. market cap at purchase 4.5. 17,245,000 at a 7 exit cap
**Estimated Cash on Cash Return:** 7%
**Estimated Internal Rate of Return:** 17%+
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Love the Warrior Program. Great Warriors who are always looking to help everyone. I love giving back and helping others in the group and just joined as a coach.
## How did you find this property?
Broker relationship. The existing buyer was dragging their feet on PSA and the broker brought us in to take over and get the deal done.
## How did you structure the financing of this property?
Bridge debt.
## Was this a joint venture or syndication?
Syndication.
## How did you raise the equity?
We raised and some other partners raised as well.
## What was the equity raise?
$4M
## What are some hurdles you had to overcome to get this deal done?
Our biggest hurdle is we had to pull a large check writer (25% of the equity) out of the deal a week before closing and had to scramble to fill the gap.
## What are some of the lessons you learned with this deal?
Several:
– The risk of a large check writer falling out
– The specific city we are in has a 90 eviction notice period.
– We have a very experience asset manager on our team. Get out of his way and let him work his magic.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Multifamily Property Toolbook](https://rodkhleif.com/multifamily-property-toolbook/)
**Published:** March 3, 2020
**Author:** Rod Khleif
**Content:**
[  ](https://rodkhleif.com)
# Multifamily
Property Toolbook
### The Guide for Deal Evaluation and
Due Diligence We Use Every Day!
## PLAY VIDEO
## This 67 page Multifamily Book helps you To Deal Evaluation And Due Diligence
## is what we use to find and close on the RIGHT multifamily properties. Please take this as my gift to you.
Please enter your info below to get instant access to this comprehensive guide. By clicking, you accept our [Terms Of Service And Privacy Policy](https://rodkhleif.com/privacy-policy-terms-of-use/).
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## Up Your Game!
My name is Rod Khleif,
I’ve owned and managed over 2,000 properties across the nation. I’ve seen it all and I’ve learned how to change the game to avoid financial trouble. I organize multifamily bootcamps from time to time and provide guidance on real estate multifamily investing. Get this FREE, easy to follow checklist and get started today.
[ GET THE TOOL BOOK NOW! ](#sec2-form)
** Rated 5 out of 5
*“Buy this book! Read it, apply it, and prosper! Rod has vast experience in the real estate world, both in up and down markets. Rod is a strategic thinker who knows how to reduce risk and increase gains in both types of markets. It’s rare to find someone who brings this kind of experience to real estate and is willing to share their knowledge.”*
**Diane Kennedy,**
Rich Dad Advisor to Robert Kiyosaki and Bestselling Author
## This comprehensive guide
is 100% FREE just for you!
More than just a checklist, this step by step toolbook is for aspiring and experienced real estate investors. It contains zero fluff!
When you have this toolbook, you no longer need to look for multi-family real estate investing books or multifamily investing course for help.
This is the essential guide for multifamily real estate investors at any level. It carefully walks you through the details of putting together your 1st, or even your 5th multifamily property.
This is the **exact toolbook** we use when we do our own preliminary evaluation and due diligence on a multifamily property we are looking to purchase or invest in.
**With this free guide you get a fill-in-the-blank approach to demographics, finances, market overview, occupancy and more. It asks all of the important questions:**
- Property Details
- Market Research
- Worst Case Scenario
- Vacancy Rates
- Competitive Analysis
- Red Flags
- Rent Roll
- Additional Income Opportunities
- Property Management
- Walk Through
- Mechanical Inspections
- Service Contracts
- Taxes
- Insurance
- And so much more…
It also includes a “Who to Call and What to Ask” section to help you uncover every important detail of property due diligence.
We’re closing on deals every month and we created this checklist to keep our team on track, on time and super competitive.
If you are in multifamily investing and you don’t have a comprehensive guide like this one, you may miss important areas and property details. That’s why I’m giving it to you FREE. I do not want to see you purchase the wrong property and potentially fail.
When utilizing this toolbook you will be confident that you are capturing what’s important and not missing important details while performing your preliminary evaluation and due diligence processes.
[ GET THE TOOL BOOK NOW! ](#sec2-form)
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---
### [Warrior Wins | Chat Sarmiento-Steinwald | 101 Units](https://rodkhleif.com/warrior-wins-chat-sarmiento-steinwwald/)
**Published:** August 4, 2020
**Author:** Matt RK
**Content:**
# Warrior Win
Chat Steinwald | 101 Units
## Chat Sarmiento-Steinwald
Started my Real Estate training from Rod Khleif’s Bootcamp in Los Angeles on April 6, 2018, and the trajectory of my life has changed since then. I am invested in 800 units as Limited partner and 208 units as a General Partner.
I am passionate about helping others so I co-founded a women’s group focusing in multifamily investing. I am also a member of the Advisory Board for a charitable organization that is near and dear to my heart called Our House Grief Support Center, and I support 2 orphanages in the Philippines to make a difference in life.
## Property Details
**Address:** FAIRFIELD LAKES, Dayton Ohio
**Number of Units:** 101
**Value Add Deal?** Yes
**Estimated Cash on Cash Return:** 9-11%
**Estimated Internal Rate of Return:** 13-14%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Great mindset for me and lots of actionable values to learn aside from feeling like you belong to a safe group where you feel like a family. Every Warrior is a go-getter and winners and leaders in their own right and you want to be surrounded by like minded people to become the winner and achieve success.
## How did you find this property?
Through Rod Khleif and his team.
## Was this a joint venture or syndication?
Syndication
## What are some hurdles you had to overcome to get this deal done?
This was ruined by a Tornado a year after it was acquired.
## What are some of the lessons you learned with this deal?
Being that it was my first investment I had Huge learning curve on this.
First off, I took massive action by overcoming my Fear and invested my money.
Also, I was fortunate to be included in the due diligence with Rod and Robert’s team among other investors, and that was definitely a lot of thing learned.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Hector Arteaga and Michelle Eggleton](https://rodkhleif.com/warrior-wins-hector-arteaga-and-michelle-eggleton/)
**Published:** May 9, 2024
**Author:** Greciel Moreno
**Content:**
## Warrior Win
# Hector Arteaga and Michelle Eggleton
Hector Arteaga, with over two decades of experience in the technology sector, brings strategic vision to the Real Estate market. His hands-on experience in operations management and his patented contributions to business process efficiency have created a solid foundation for the meticulous, data-driven approach at Open Trails Capital. With extensive background as an international consultant. His work through the US, Europe and LATAM gives him a multicultural background to dealing with real estate issues.
Married 10+ with Michelle Eggleton. We started our REI journey 2 years ago .
Our passions are our family first and be persons of service by being involve in nonprofit for foster kids.
## Property Details
**Address:** 5191 Hwy 67 access Rd, Midlothian Tx
**Number of Units:** 564
**Value Add Deal?** Yes
**Purchase Price:** $7,600,000
**Estimated monthly increase projected?** $300/unit
**Anticipated value after value add:** $10,500,000
**Estimated Cash on Cash Return:** 7,5-9%%
**Estimated Internal Rate of Return:** 19-21%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
It’s been an awesome experience we have grown personally, as a married couple and Bussines wise .
## How did you find this property?
Networking and hosting a meetup.
## How did you structure the financing of this property?
75% LTV seller finance equity and capex race from investors.
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
506C
## What was the equity raise?
$2,400,000
## What are some hurdles you had to overcome to get this deal done?
Survey and title was a mess, racing capital was harder than expected.
## What are some of the lessons you learned with this deal?
Having the right partners is critical, educate investor ahead time , plan realistic time lines for closing.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Become an Affiliate](https://rodkhleif.com/become-an-affiliate/)
**Published:** May 17, 2023
**Author:** Brooke Danilchuk
**Content:**
# Help Change Lives And Make Some Money As An Affiliate
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### [Warrior Wins - Hemant Pawar](https://rodkhleif.com/warrior-wins-hemant-pawar/)
**Published:** August 30, 2022
**Author:** Graciela
**Content:**
## Warrior Win
# Hemant Pawar
Hemant Pawar is the Principal of Zen Abode Capital Group and, lives in the Bay Area of California. He is owner and operator of apartments in Ohio, Florida, Colorado, Georgia, Tennessee, Texas and New Mexico. He works full-time as a IT Program Director with the largest integrated healthcare organization in the US. He has adopted 7 families with 24 kids in Africa, Central Asia and Middle east. His interests include travel, health and fitness, spirituality, and volunteering for charities.
## Property Details
**Address:** 830 CLarkson Drive, Denver, CO
**Number of Units:** 7
**Value Add Deal?** Yes
**Purchase Price:** $1.3K
**Estimated monthly increase projected?** $245 average
**Anticipated value after value add:** $1.9K
**Estimated Cash on Cash Return:** 5%
**Estimated Internal Rate of Return:** 19%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Tremendous networking oppurtunity and consistent deal flow amongst fellow warriors to make fast progress. The giving attitude of so many warriors I met is exemplary.
## How did you find this property?
I found my partners and they found this property in their backyard in Denver.
## How did you structure the financing of this property?
Bridge debt for upgrades and construction at 80% LTV.
## Was this a joint venture or syndication?
Joint Venture.
## How did you raise the equity?
All partners pooled in money.
## What was the equity raise?
$400K
## What are some hurdles you had to overcome to get this deal done?
Structuring our joint venture to create a win win was a challenge.
## What are some of the lessons you learned with this deal?
Local partnerships are key to forming a good profitable joint venture.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Multifamily Wholesale Real Estate Course](https://rodkhleif.com/multifamily-wholesale-real-estate-course/)
**Published:** April 9, 2025
**Author:** Alex Khleif
**Content:**
# Multifamily
Wholesale Real Estate Course
## Learn How to Find & Flip Multifamily Deals Without Using Your Own Money
**Want to break into multifamily real estate but don’t have capital or experience?
This course shows you how to wholesale apartment deals and earn $10k – $20k per deal without ever owning property.
Learn how to find motivated sellers, lock up contracts, and flip them to active investors.
It’s the fastest way to generate income and launch your multifamily journey.
[  ](https://rodkhleif.mykajabi.com/offers/UGoAwNyz/checkout)
** Rated 5 out of 5
$ 2495.00
[ Buy Now ](https://rodkhleif.mykajabi.com/offers/UGoAwNyz/checkout)
## Why Multifamily Wholesaling?
Most people think wholesaling is just for single-family homes. But multifamily wholesaling offers bigger deals, more motivated sellers, and larger assignment fees. And the best part?
> **You don’t need a real estate license, your own money, or years of experience.
This is the gateway to the multifamily world used by hundreds of investors to fund their first big deals or launch full time careers in real estate.
[ Get Started Now ](https://rodkhleif.mykajabi.com/offers/UGoAwNyz/checkout)
## What You'll Learn
### Inside the Multifamily Wholesale Real Estate Course
**✔** Intro to Wholesaling Multifamily
**✔** Getting Started in Multifamily Wholesaling
**✔** Finding Deals
**✔** Finding Buyers
**✔** Wholesale Offers
**✔** Valuing Properties
**✔** Closing
**✔** Systems & Delegation
**✔** Secrets to Success
**✔** Mistakes to Avoid
**✔** Wholesaling Tips
**✔** 6 Week Action Plan
[ Buy Now ](https://rodkhleif.mykajabi.com/offers/UGoAwNyz/checkout)
***“My real estate portfolio has gone from 16 units to 3,000”*** *I wanted to be around a group of people that was already at the level I wanted to be at.*
## Chris Wooten
***“The warrior program was everything I was looking for”*** *The warrior program not only has the education but also the mindset piece of it as well.*
## Greg Chew
***““Rod’s warrior program gave me a way of to do a deal review before submitting a LOI”*** *Rod has created a community of people that grow by supporting each other, there’s tons of resources, live case studies, education sessions, bi weekly sessions, Q&A sessions, everything you need to get started very very quickly.*
## Why this course works?
### No fluff. Real results.
You don’t need a license. You don’t need your own capital.
You just need a proven system and the willingness to take action.
**This course gives you the roadmap. You bring the drive.**
These are the same systems and frameworks Rod and his students have used to own approx. **260,000 multifamily units** and create lifetime cash flow.
**✔** Step by step video modules
**✔** Proven Strategies for Success
**✔** Real Estate Wholesale Case Studies
**✔** Templates, check lists, scripts and more!
**✔** Backed by Insane Results
**✔** Learn from Expert Mentor, Rod Khleif
### Get StartedNow
### **The #1 Multifamily Wholesale Real Estate Course Backed by Real Results**
[  ](https://lifetimecashflowacademy.clickfunnels.com/mf-wholesaling)
** Rated 5 out of 5
$ 2495.00
[ Buy Now ](https://rodkhleif.mykajabi.com/offers/UGoAwNyz/checkout)
### Check Out Rod's Other Courses
[  ](https://lifetimecashflowacademy.clickfunnels.com/finding-deals-course)
** Rated 5 out of 5
$ 1495.00
## Finding
Deals
Course
[ Learn More ](https://lifetimecashflowacademy.clickfunnels.com/finding-deals-course)
[  ](https://lifetimecashflowacademy.clickfunnels.com/c-c-course)
** Rated 5 out of 5
$997.00
## Courage & Confidence
Course
[ Learn More ](https://lifetimecashflowacademy.clickfunnels.com/c-c-course)
[  ](https://rodkhleif.com/multifamily-investing-course/)
** Rated 5 out of 5
$997.00
## [Multifamily
Investing
Course](https://rodkhleif.com/multifamily-investing-course/)
[ Learn More ](https://rodkhleif.com/multifamily-investing-course/)
## Keep Up With Rod
& Stay Up To Date On Everything Multi-Family
[ Join my tribe ](https://www.facebook.com/groups/multifamilyrealestateinvesting)
[ get free Youtube training ](https://www.youtube.com/RodKhleif)
[ connect & network ](https://www.linkedin.com/in/rodkhleif/)
[ follow me around @rod\_khleif ](https://www.instagram.com/rod_khleif/)
[ Follow my activity @RodKhleif ](https://twitter.com/RodKhleif)
[ Follow my activity @RodKhleif ](https://www.tiktok.com/@rodkhleif)
---
### [Multifamily Bootcamp Reviews](https://rodkhleif.com/reviews/multifamily-bootcamp/)
**Published:** July 3, 2025
**Author:** Alex Khleif
**Content:**
# Multifamily Bootcamp Reviews
Find Out Why People Call it
“The Most Valuable Weekend in Multifamily”
[ Get your bootcamp ticket ](#elementor-action%3Aaction%3Dpopup%3Aopen%26settings%3DeyJpZCI6IjM1NjM5IiwidG9nZ2xlIjpmYWxzZX0%3D)
## Real Results. Real Feedback.
Real Freedom.
Whether you join us in a packed room or tuned in from your living room, one thing is certain:
**Rod Khleif’s Multifamily Bootcamp changes lives.
From first time investors to experienced syndicators ready to scale, students across the country are walking away from this weekend with something bigger than knowledge…
**They’re walking away with *confidence, community, and a clear path forward*.**
## The ROI is Real
*“This was a fantastic two day session of 19 hours but delivered 100’s of hours worth of knowledge. Thank you Rod!!”* – Sri Sarnath
*“I invested in a 26 unit since the bootcamp. Thanks for the boost to get started!”* – Trent Reynolds
*“Signed an LOI on a 70+ project. Thanks for the education Rod Khleif. The bootcamp was the foundation I needed.”* – Aaron Silverman
*“”Since the bootcamp I have purchased 8 units and currently have LOIs on another 6 units.”* – Michael Lefavor
*“After I attended your event last April. I ended up partnering with another attendee. We closed on a 12 unit in Toledo.”* – Lor Vang
*“This weekend at Rod’s Multifamily Bootcamp has been amazing! Took massive action and got under contract with two homes, 5 doors total. First Real Estate Investments Ever!”* – Timothy Eng
*“Great content and learned a ton from the Bootcamp today!!! Totally worth it!!! Rod you rock!!!”* – William Tam
*“I attended the Bootcamp with 0 units and not even six months later I’m up to 16 Units! IT WORKS!”* – Brandon Henderson
*“I was initially hesitant and skeptical about your intentions. However, I’m genuinely pleased to discover your genuine commitment to making a difference in people’s lives.”* – Amy Broadnax
*“The bootcamp in January really gave me a boost to get into gear! February I actually went under contract with two partners on an 81 unit portfolio deal.”* – Matthew Dunn
*“Since your event my partnership has bought a 61 unit. In addition, you taught me to reward myself. At 39, I bought my wife and four children her 5,000 square foot dream home.”* – Nic Evans
*These are verified Multifamily Bootcamp Testimonials. Results are not guaranteed. Real estate investing involves risk and requires work.*
## Bootcamp Testimonials
## What You'll Learn During the Bootcamp
Unlike most webinars, this event is packed with ton’s of actionable information and insider secrets to help you get started our level up in multifamily investing.
✔︎How to Find, Fund and Close Apartment Deals
✔︎How to Build a Team (Even if You’re Brand New)
✔︎How to Analyze Deals and Run the Numbers
✔︎Multiple Ways to Raise Capital
✔︎How to Structure Your Deals
✔︎Comprehensive Due Diligence Strategies
✔︎Mindset and Goal Setting Training
✔︎How to Manage Your Properties or Hire a 3rd Party Manager
✔︎How to Avoid the Biggest Beginner Mistakes
✔︎and Much More!
## Plus multiple panels with industry experts to answer all your questions live!
## Meet Some of the Panelists
## Here are some of the experts who are there to answer your questions!
**Many of these experts started their investing journey by first attending one of Rod’s Bootcamps.**
## He Retired Less Than 1 Year After the Bootcamp
### Watch this success story clip of the interview of Loren Jacobs who was able to RETIRE in less than ONE year starting from ZERO after attending the Multifamily Bootcamp!
## For Beginners and Experienced Investors
## Whether you’re brand new to real estate or looking to scale fast…
**The right guidance doesn’t just save you money,
it saves you years.**
**New?**
You’ll get mindset help so you take immediate action, step-by-step blueprints, proven systems, scripts, templates, and more.
**Experienced?**
You’ll learn how to systemize your business, raise more capital, structure better deals, and scale in syndication with confidence.
## Want to Lean More About the Bootcamp?
## The Multifamily Bootcamp is more than an event...
It's the next step to creating the life of your dreams!
[ Learn More About the Bootcamp ](/bootcamp/)
[ Get your bootcamp ticket ](#elementor-action%3Aaction%3Dpopup%3Aopen%26settings%3DeyJpZCI6IjM1NjM5IiwidG9nZ2xlIjpmYWxzZX0%3D)
[Still wondering if Rod Khleif is a scam? Check out this page from an independent source. ](https://beastpreneur.com/rod-khleif-review-scam-or-legit/)
Note: Real estate investing carries risk. Past performance does not guarantee future results. Testimonials reflect individual experiences; typical students put in significant time and work. All statistics updated June 2025 and verified by internal records.
---
### [Financing Your Multifamily Purchase One Sheet](https://rodkhleif.com/multifamily-financing-overview/)
**Published:** July 8, 2025
**Author:** Matt RK
**Content:**
## Thank you for requesting
## the Financing your multifamily purchase ebook
We emailed you a copy!
[ Click here to view full ebook ](https://rodkhleif.com/wp-content/uploads/2025/07/Financing-Your-Multifamily-Purchase-workbook-2025.pdf)
[ Click here to Download full pdf ](https://rodkhleif.com/wp-content/uploads/2025/07/Financing-Your-Multifamily-Purchase-workbook-2025.pdf)
Below is an overview of the book.
# Multifamily Financing Overview
**Unlock the Essentials for Securing Your Multifamily Investment Loan**
1. **Capital Stack Breakdown (money needed to buy a multifamily property):**
- **Senior Debt**: 65-75% of the purchase price, low risk, secured first lien. Offered by banks, GSEs like Fannie Mae and Freddie Mac. Commonly associated with bank loans.
- **Mezzanine Debt**: Fills the gap between senior debt and equity, higher risk and return, secured by ownership interest.
- **Preferred Equity**: Paid after debt but before common equity, requires higher returns.
- **Common Equity**: Riskiest position, repaid last in liquidation scenarios, demands highest returns.
2. **Key Financing Options:**
- **Government Sponsored Entities**: Public departments that provide financing. They are Fannie Mae, Freddie Mac, the Federal Housing Administration, and the United States Department of Agriculture.
- **Private Lenders**: Includes conventional loans(banks), CMBS, and insurance mortgages with varying criteria and benefits.
3. **The Loan Request Process:**
- **Credit Memo**: Outline of the loan transaction reviewed by a Credit Officer.
- **Document Preparation**: Post-approval, documentation prepared by Loan Operations or external counsel.
- **Closing**: Final signing of loan documents through a title company or closing agent.
**Pro Tips for a Smooth Loan Process:**
- **Be Prepared**: Assemble a complete documentation package.
- **Know the Numbers**: Provide realistic projections and back them with data.
- **Communicate Early & Often**: Keep all parties updated throughout the process.
4. **Understanding Loan Criteria:**
- **The Five Cs of Credit**:
- **Character**: Borrower’s reputation and credit history.
- **Capacity**: Property’s income generation capability.
- **Capital**: Borrower’s equity and Loan to Value (LTV) ratio.
- **Conditions**: Property and market conditions.
- **Collateral**: Property’s value and saleability.
- **Maximum Supportable Loan Amount**: This is how big of a loan a property can qualify for. It’s calculated using the Net Operating Income (NOI), Cap Rate, and Debt Service Coverage Ratio (DSCR).
**Your Next Steps to Securing Financing:**
- Gather all necessary documentation.
- Create pro forma projections and a solid business plan.
- Identify and approach potential lenders.
- Review and compare loan offers carefully.
- Close the deal with a thorough review of loan documents.
**Ready to Master Multifamily Financing?**
Unlock the secrets to successful multifamily real estate financing and streamline your loan process today!
## Want to learn more?
## Join us at the next Multifamily Bootcamp!
[ get your ticket ](https://rodkhleif.com/checkouts/virtual/?sl=financety)
## Recent Podcast Episodes
[
](https://rodkhleif.com/podcasts/public-insurance-adjuster-ralph-sampson/)### [ I Lost $7 Million… Here’s What Saved Me ](https://rodkhleif.com/podcasts/public-insurance-adjuster-ralph-sampson/)
[
](https://rodkhleif.com/podcasts/creative-multifamily-financing-harvey-lockhart/)### [ How a Music Teacher Landed a $3.5M Apartment Deal ](https://rodkhleif.com/podcasts/creative-multifamily-financing-harvey-lockhart/)
[
](https://rodkhleif.com/podcasts/hotel-to-multifamily-conversion-alexander-cartwright/)### [ The Real Estate Strategy Nobody Is Talking About ](https://rodkhleif.com/podcasts/hotel-to-multifamily-conversion-alexander-cartwright/)
[  ](https://podcasts.apple.com/us/podcast/lifetime-cash-flow-through-real-estate-investing/id1097449598)
[  ](https://www.youtube.com/RodKhleif)
- [ 2 DAY BOOTCAMP ](https://rodkhleif.com/checkouts/virtual/?sl=financety)
- [ WANT ME AS YOUR COACH? ](https://rodkhleif.com/strategy-call/?sl=financety)
- © All Rights Reserved
- [ Terms of Service / Privacy Policy ](/terms-privacy%20)
- [ Disclaimers ](/disclaimers)
-
- © All Rights Reserved
- [ Terms of Service / Privacy Policy ](/terms-privacy%20)
- [ Disclaimers ](/disclaimers)
[  ](https://influex.com/?utm_source=rod-khleif&utm_medium=footer-link&utm_content=influexwp-client-site-footer-link&utm_campaign=influexwp-client-site)
---
### [Financing Your Multifamily Purchase](https://rodkhleif.com/financing-your-multifamily-purchase/)
**Published:** April 1, 2021
**Author:** PerryL
**Content:**
[  ](https://rodkhleif.com)
# FREE DOWNLOAD Financing your multifamily purchase
**FREE DOWNLOAD Unlock the Funding You Need to Close Your Next Multifamily Deal**
Download Rod Khleif’s *Financing Your Multifamily Purchase Workbook* and follow the proven roadmap to structure debt, impress lenders, and walk into every closing with total confidence.
Please enter your info below to get instant access to this comprehensive guide.
- FIRST NAME\*
- EMAIL ADDRESS\*
- PHONE
By providing your number, you consent to receive marketing call or texts.
By clicking, you agree to our [Terms Of Service And Privacy Policy.](https://rodkhleif.com/terms-privacy/)
## Inside This Free Multifamily Deal Financing Guide You'll Learn How To:
- **Master the Capital Stack** quickly grasp senior debt, mezzanine, preferred & common equity so you never over-leverage (or leave cheap money on the table)
- **See How the Pros Borrow** side-by-side comparison of Fannie Mae, Freddie Mac, FHA, USDA, CMBS, insurance and conventional loans with current LTV, DSCR and term ranges
- **Accelerate Approvals** use Rod’s 12-point loan-package checklist to hand lenders everything they need the first time with no back-and-forth delays
- **Calculate Your Maximum Loan in Minutes** plug numbers into the included “Maximum Supportable Loan Amount” spreadsheet and know exactly what a property can carry before you make an offer
- **Avoid Personal Liability Surprises** understand recourse vs. non-recourse, “bad-boy” carve-outs, and springing guarantees so you protect your assets even in a downturn
- **Close Faster** follow the 5-step Loan Origination Lifecycle map and keep sellers, brokers, and partners on schedule
[ Download ](#form)
This workbook distills Rod Khleif’s three decades of experience, and the hard-won lessons, into an actionable playbook any investor can follow. Whether you’re syndicating 200 units or buying your very first four-plex, you’ll know exactly how much you can borrow, which lender to call, and what to hand them.
## Free Multifamily Financing Guide Includes:
- Multifamily Glossary
- Capital Stack Deep Dive
- Approval Criteria Cheat Sheet
- Personal Financial Statement Template
- Multifamily Loan Checklist
- Deal Sizing Calculator
## Download Your
Free Guide to Financing
Multifamily Deals
Instant access.
No fluff.
Just everything you need to finance your first (or next) multifamily acquisition.
- FIRST NAME\*
- EMAIL ADDRESS\*
- PHONE
- [ 2 DAY BOOTCAMP ](http://rodkhleif.com/bootcamp)
- [ WANT ME AS YOUR COACH? ](https://rodkhleif.com/strategy-call)
- © All Rights Reserved
- [ Terms of Service / Privacy Policy ](/terms-privacy%20)
- [ Disclaimers ](/disclaimers)
-
- © All Rights Reserved
- [ Terms of Service / Privacy Policy ](/terms-privacy%20)
- [ Disclaimers ](/disclaimers)
[  ](https://influex.com/?utm_source=rod-khleif&utm_medium=footer-link&utm_content=influexwp-client-site-footer-link&utm_campaign=influexwp-client-site)
---
### [Warrior Win:
Crystal & Chris D'Agostino
36 Unit in TX](https://rodkhleif.com/warrior-win-crystal-chris-dagostino-36-unit-in-tx/)
**Published:** July 2, 2025
**Author:** Graciela
**Content:**
## Warrior Win
# Crystal & Chris D'Agostino
36 Units Closed
## Crystal & Chris D'Agostino
## Experienced Real Estate Investors and Entrepreneurs
Crystal D’Agostino is a seasoned real estate broker with 16 years of experience and owner of Start Realty in Rhode Island. Chris D’Agostino brings 25 years of automotive business expertise and a passion for classic cars. Together, they began investing in real estate in 2009, starting with a single-family flip and expanding to 20 multifamily units self-managed between 2011-2018. Since joining the Warrior Program, they have scaled to 122 doors, including 66 as limited partners and 36 as general partners, fueled by their love of travel, family, and community.
[Learn more about Warrior Coaching → ](https://rodkhleif.com/work-with-rod/)
## Property Overview
**Location:** 801 Wheelock St Franklin, TX 77856
**Deal Source:** Networking with Warriors, specifically through Odelia Zalayet who found the deal via a local property manager, facilitated by a connection from Frank Patalano.
**Purchase Price:** $1,850,000
**Value-Add:** Yes
**Major Improvements:** Converting leasing office back into a 2-bedroom apartment, repurposing unused gym into leasing office, updating laundry room with new appliances, adding mini-split AC units to office and laundry room, restriping parking lot, and refinishing the pool.
**Projected Monthly Rent Increase:** $250
**Anticipated Value After Value Add:** $3,000,000
## How This Deal Came Together
### Deal Source
**Warrior Network and Referrals:** The property was sourced through the Warrior community, highlighting the power of networking and trusted referrals within the program.
### Equity Raise
GP-Funded Syndication: The equity raise totaled $1,000,000, fully funded by the general partners, demonstrating strong commitment and confidence in the deal.
### Financing Structure
**Agency Debt Utilization:** The deal was financed using agency debt, providing favorable terms and enabling the syndication structure.
### Value-Add Strategies
**Maximizing Asset Potential Through Renovations:** The team focused on converting underutilized spaces to revenue-generating units, upgrading amenities, and enhancing curb appeal to increase tenant satisfaction and rental income.
### ## Challenges Faced
Financing and Documentation Hurdles: Securing agency debt required gathering extensive documentation and meeting bank requirements, which posed significant challenges during the acquisition process.
### Warrior Program Support
**Guidance, Coaching, and Community:** Massive thanks to Donato Callahan for one-on-one coaching that built underwriting confidence, to Frank Patalano for constant support and community connection, and to Rod Khleif for creating the education and network that made this deal possible. The Warrior Program provided the mentorship, tools, and encouragement needed to overcome challenges and close successfully.
### Lessons Learned & Key Takeaways
**Trust and Team Chemistry Are Critical:** “You need to date before you marry your GP team because you need to be able to trust them. We speed dated and married and lucked out with an amazing team! But we can see how this could have been bad if we didn’t like and trust our team!”
> We already feel as if we got our money worth out of the program and we only just started in Feb of this year!!!! We can't wait to see what else God has in store for us! We are grateful and feel blessed to be apart of the Warrior group!!!
>
> Crystal and Chris D'Agostino
## Be the Next Warrior Success Story
Crystal and Chris D’Agostino’s Warrior Win exemplifies how strategic mentorship, strong community connections, and trust in your team can accelerate multifamily real estate success. From flipping their first single-family home to managing over 120 doors, their journey highlights the power of Rod Khleif’s Warrior Coaching Program to transform investors’ portfolios and lives. Ready to scale your real estate investments and build lasting wealth? Join Rod Khleif’s Warrior Mentorship Program today and unlock your path to financial freedom with expert guidance, proven strategies, and a supportive community. Apply now and become the next Warrior success story!
[ Join the Warrior Program ](https://rodkhleif.com/work-with-rod/)
## Warrior Success Stories
[Play Video](https://www.youtube.com/watch?v=6L-ho9oRtUY)
#### [Featuring Elsa Nguyens #682](https://rodkhleif.com/podcasts/single-mom-to-massive-success-in-multifamily/)
### [Immigrant Mom To Massive Success In Multifamily](https://rodkhleif.com/podcasts/single-mom-to-massive-success-in-multifamily/)
[Play Video](https://www.youtube.com/watch?v=Fmqzl9_8Nj4)
#### [Featuring Oliver Fernandez #721](https://rodkhleif.com/podcasts/from-7-to-1000-units-in-3-years-2/)
### [From 7 to 1000 units in 3 years](https://rodkhleif.com/podcasts/from-7-to-1000-units-in-3-years-2/)
[Play Video](https://www.youtube.com/watch?v=J-fDFPBRilY)
#### [Featuring Rasool Mutawakkil #715](https://rodkhleif.com/podcasts/10mm-in-multifamily-assets-under-management-in-one-year/)
### [$10MM in Multifamily Assets Under Management in One Year](https://rodkhleif.com/podcasts/10mm-in-multifamily-assets-under-management-in-one-year/)
[ See more warrior wins ](/warriorwins)
---
### [From 1st Door to 1st 100 Webinar](https://rodkhleif.com/from-1st-door-to-1st-100-webinar/)
**Published:** June 20, 2025
**Author:** Alex Khleif
**Content:**
You asked about the Multifamily Bootcamp… Here’s a free preview!!!
Check out Rod’s FREE 60 Min Multifamily Fast Track!
This free webinar delivers real investing tactics you can use right away!
Learn how a $100 rent bump turns into $480K of equity and two funding paths that require little of your own cash.
Get a firsthand look at the systems that helped Rod’s students own **260,000+ units.** See how the same tools can power your own next deal and why the 2 day Multifamily Bootcamp is the quickest way to master them.
Plus stay tuned for a special offer!
**Special Offer!**
**2 Day Virtual Multifamily Bootcamp**
July 12th- 13th | Virtual on Zoom
“You truly impacted my life at your Multifamily Bootcamp. After, I got fired up and bought my first multifamily 16 unit. I currently have a 23 unit I am closing at the end of the month. Thank you Rod for putting your heart and soul into the training programs.”
– Brandon Henderson
## Whats Included:
- **Multifamily Bootcamp Ticket: Join me virtually for 2 days where I do hours of LIVE training and answer your questions about everything you need to know about the multifamily real estate business! ***($297 Value)***
- **Deal Evaluator Software:** This easy-to-use tool lets you enter price, rents, and expenses just once. It quickly shows you NOI, cap rate, cash-on-cash, DSCR, and more. ***($297 Value)***
- **Finding Deals Course: Learn the best strategies for finding deals in today’s competitive market. ***($1,495 Value)***
- **Full Document Library:** Our curated vault of every template, checklist, and legal doc Rod’s team uses. Downloadable and ready to plug into your next deal. ***($497 Value)***
## What's Covered:
- Investment Criteria
- Team Building
- Market Selection
- Finding Deals
- Direct Mail
- Preliminary Evaluation
- Dealing with Sellers
- Key Financial Formulas
- Normalizing Expenses
- Goal Setting
- Financing Presentation
- Letter of Intent
- Contracts
- Due Diligence
- Dealing with Brokers
- Entity Structuring
- Property Management
- Syndication
- Investor Presentations
- Sample Deal Package
## 100% Money Back Guarantee
There’s no risk for you, just try it out and see if its for you. If you don’t feel like we absolutely OVERDELIVERED,
We will refund you no questions asked!
## Real People. Real Results.
Watch this success story interview of Loren Jacobs who was able to RETIRE in less than ONE year starting from ZERO after attending the Multifamily Bootcamp!
## Bootcamp Testimonials
[ Play
"This was the best event I've ever been to and I've been to a lot of events."
](https://rodkhleif.com/wp-content/uploads/2025/06/What-is-included-in-letter-of-intent-9.png)
[ Play
"For what the cost is, there's really no better option out there"
](https://rodkhleif.com/wp-content/uploads/2025/06/What-is-included-in-letter-of-intent-8.png)
[ Play
"There's actually action and progress that comes with this."
](https://rodkhleif.com/wp-content/uploads/2025/06/What-is-included-in-letter-of-intent-5.png)
[ Play
"I had high expectations coming in, but this has definitely superseded my expectations."
](https://rodkhleif.com/wp-content/uploads/2025/06/What-is-included-in-letter-of-intent-4.png)
[ Play
"I absolutely love this bootcamp. This is the third one I've been to in a row!"
](https://rodkhleif.com/wp-content/uploads/2025/06/What-is-included-in-letter-of-intent-6.png)
[ Play
"We've been investing in real estate for some years now. But we were ready to take it to the next level."
](https://rodkhleif.com/wp-content/uploads/2025/06/What-is-included-in-letter-of-intent-7.png)
[ Play
"This was the most valuable training I've ever gone through."
](https://rodkhleif.com/wp-content/uploads/2025/06/What-is-included-in-letter-of-intent-3.png)
“Since the Bootcamp, I have closed on 63 units. Thank you for everything.”
-Matt Deboth
“Thank you for your help and inspiration at the event. I bought my first duplex last month. We are closing on four deals this week. Couldn’t have done it without you. Thanks again!”
-Alexander Baldwin
“Since the event, I have purchased 8 Units and currently have LOIs on another 6 units.”
-Michael Lefavor
“The bootcamp really gave me a boot to get into gear. A month later I actually went under contract with two partners on an 81 unit portfolio deal!”
-Matthew Dunn
---
### [Eric Upchurch
80 Unit Close in Indiana](https://rodkhleif.com/warrior-wins/)
**Published:** April 7, 2020
**Author:** Matt RK
**Content:**
## Warrior Win
# Eric Upchurch | 80 Units Closed
## Eric Upchurch:
## From Army Special Operations to Multifamily Investor
Eric Upchurch is a former Army Special Operations veteran who transitioned from military service to building financial freedom through multifamily real estate investing. Originally from Central Iowa, he attended college in California before launching his real estate career.
As a student of Rod Khleif’s Warrior Program, Eric leveraged mentorship, strategic networking, and expert guidance to scale his portfolio and create passive income. Now, he is committed to helping others achieve financial independence through real estate investing, capital raising, and syndication strategies.
[Learn more about the Warrior Program → ](https://rodkhleif.com/work-with-rod/)
## Country Club Estates:
80 Unit Value Add Deal
**Location:** Alexandria, Indiana
**Number of Units:** 80
**Value Add Deal:** Yes
**Purchase Price:** $3,250,000
**Projected Monthly Rent Increase:** $90 per unit
**Anticipated Value After Value Add:** $5,000,000
**Estimated Cash-on-Cash Return:** 10%
**Estimated Internal Rate of Return (IRR):** 15%
## How This Deal Came Together
## Deal Source
**Broker Relationship:** The property was sourced through strong networking and a broker relationship.
## Equity Raise
**Total Equity Raised:** $1.25 million
**How It Was Raised:** Private investors.
## Financing Structure
**Loan-to-Value (LTV):** 80%
**Lender:** Freddie Mac SBL
**Syndication Type:** 506 (c)
## Value-Add Strategies
**Rent Increases:** Rents were adjusted upward across the property.
**Ratio Utility Billing System (RUBS) Implementation:** This strategy was initiated to pass utility costs onto tenants and improve NOI.
**Contract Cost Reduction** : The team successfully lowered expenses by renegotiating vendor contracts.
**Garage Rent Optimization:** Increased garage rental fees to generate additional revenue.
## ## Challenges Faced
**Capital Raise Complexity:** Could have remained a 506(b) but made the shift to 506(c) after publicly stating the deal was under contract.
**Seller Communication Barriers:** The seller was based in Japan, which made communication and negotiations more complex.
**Property Management Transition Issues:** Just as the team took over, the property management company merged with another firm, causing operational disruptions.
## Warrior Program Support
Rod and his team provided key guidance and support during the capital raise process, encouraging Eric to push forward when funding proved more difficult than expected. Fellow Warrior members like Gozlan and Gupta also offered insights and expertise to help navigate challenges along the way.
## Lessons Learned & Key Takeaways
**Always Be Raising Capital:** Relationships and investor engagement should begin long before a deal is secured.
**Establish Clear Standard Operating Procedures (SOPs):** Both internally and for property management to ensure smooth execution.
**Stay Flexible and Solution Oriented:** Adapting to challenges in financing, investor relations, and operations is critical.
> Involvement in the Warrior ecosystem has been a life changing path. Creating life long friendships, partnerships, and more.
>
> Eric Upchurch
## How This Deal Came Together
## Deal Source
**Broker Relationship:** The property was sourced through strong networking and a broker relationship.
## Equity Raise
**Total Equity Raised:** $1.25 million
**How It Was Raised:** Private investors.
## Financing Structure
**Loan-to-Value (LTV):** 80%
**Lender:** Freddie Mac SBL
**Syndication Type:** 506 (c)
## Challenges Faced
**Capital Raise Complexity:** Could have remained a **506(b)** but made the shift to **506(c)** after publicly stating the deal was under contract.
**Seller Communication Barriers:** The seller was based in Japan, which made communication and negotiations more complex.
**Property Management Transition Issues:** Just as the team took over, the property management company merged with another firm, causing operational disruptions.
## Value-Add Strategies
**Rent Increases:** Rents were adjusted upward across the property.
**Ratio Utility Billing System (RUBS) Implementation:** This strategy was initiated to pass utility costs onto tenants and improve NOI.
**Contract Cost Reduction** : The team successfully lowered expenses by renegotiating vendor contracts.
**Garage Rent Optimization:** Increased garage rental fees to generate additional revenue.
## Lessons Learned & Key Takeaways
**Always Be Raising Capital:** Relationships and investor engagement should begin long before a deal is secured.
**Establish Clear Standard Operating Procedures (SOPs):** Both internally and for property management to ensure smooth execution.
**Stay Flexible and Solution Oriented:** Adapting to challenges in financing, investor relations, and operations is critical.
## Be the Next Warrior Success Story
Eric’s journey shows what’s possible when you combine the right mentorship, network, and action. If you’re looking for a proven roadmap and expert guidance to start and scale in multifamily, the warrior program can help.
[See more student success stories -> ](https://rodkhleif.com/warriorwins/)
---
### [David Morgia’s 64 Unit Deal in NC](https://rodkhleif.com/warrior-wins-david-morgia/)
**Published:** April 20, 2022
**Author:** Graciela
**Content:**
## Warrior Win
# David Morgia
Background in Asset Management in Commercial Power Generation ((Nuclear and Combined Cycle). Marathon athlete. Closed our first deal in Salisbury NC. 64 units. Already way over projections
## Property Details
**Address:** Westside Manor Salisbury NC
**Number of Units:** 64
**Value Add Deal?** Yes
**Purchase Price:** $5,120,000
**Estimated monthly increase projected?** $150
**Anticipated value after value add:** $7.5 mm+
**Estimated Cash on Cash Return:** 8%
**Estimated Internal Rate of Return:** 18%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Been great to align ourselves with others moving in the same direction. It keeps you much more calibrated.
## How did you find this property?
Sourced through warriors (Ed Modzel).
## How did you structure the financing of this property?
Bridge 3+1+1 80 LTC.
## Was this a joint venture or syndication?
Syndication.
## How did you raise the equity?
506b.
## What was the equity raise?
$1.5 mm.
## What are some hurdles you had to overcome to get this deal done?
Short turnaround to raise capital.
## What are some of the lessons you learned with this deal?
Network is everything. You can only be in so many markets but if you want access to more opportunities you need to tap into your network and be ready to execute when they need your help.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [David Morgia’s 186 Unit Multifamily Deal](https://rodkhleif.com/warrior-wins-david-morgia-2/)
**Published:** January 24, 2023
**Author:** Graciela
**Content:**
## Warrior Win
# David Morgia
Background in Asset Management in Commercial Power Generation (Nuclear and Combined Cycle Gas)
Principal at David & Travis Capital Group
$46MM in assets under management.
Host of Making Money in Multifamily Real Estate Show.
## Property Details
**Address:** Esplanade Apartment Homes
**Number of Units:** 186
**Value Add Deal?** Yes
**Purchase Price:** $41,000,000
**Estimated monthly increase projected?** $500+
**Anticipated value after value add:** $69mm
**Estimated Cash on Cash Return:** 7-8%
**Estimated Internal Rate of Return:** 16-18%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
If you want to go fast, go alone. If you want to go far, go together. You need a network to get any traction in RE so joining a great group like the Warriors is essential.
## How did you find this property?
Through broker relationships. It also turns out I had a relationship with the seller as he has been a guest on my podcast.
## How did you structure the financing of this property?
Bridge debt.
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
LP investors, TIC structures.
## What was the equity raise?
$15,000,000
## What are some hurdles you had to overcome to get this deal done?
Crazy interest rate environment during close, so working with the lender to get the deal finalized was key.
## What are some of the lessons you learned with this deal?
Good partnerships will move you farther than figuring everything out yourself. Who not how, as they say.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [How to Hire a Property Management Company | Free Guide](https://rodkhleif.com/how-to-hire-a-third-party-property-management-company/)
**Published:** June 3, 2025
**Author:** Matt RK
**Content:**
[  ](https://rodkhleif.com)
# Free Guide Download: How to Hire a Property Management Company
**Tired of chasing down rent payments, handling maintenance requests, or worrying about bad tenants?**
If you own a rental property, hiring the right property management company could be the smartest long-term move you ever make.
This free downloadable guide walks you step-by-step through **how to hire a property management company** that will increase cash flow, lower your vacancy rate, and protect your investment.
- FIRST NAME\*
- EMAIL ADDRESS\*
- PHONE
By providing your number, you consent to receive marketing call or texts.
By clicking, you agree to our [Terms Of Service And Privacy Policy.](https://rodkhleif.com/terms-privacy/)
## What You’ll Learn Inside This Free Property Management Guide:
- **How to choose a property management company** based on performance, not promises
- The questions to ask about their rent collection systems, maintenance and repairs, and lease renewal strategies
- What makes a good property management company and how to spot the red flags of a bad one
- Understanding the fee structure: what’s normal, what’s excessive, and what’s hidden
- How to evaluate their vacancy rate, responsiveness, and communication style
- The role of background checks, the lease agreement process, and how they handle tenant turnover
- The most common mistakes landlords make when hiring a property manager
- How to use this guide to confidently manage your property, even if you’re 1,000 miles away
- What to know about rental market positioning, rental price strategies, and long-term property care
Download
### **🎯 Who This Is For:**
This guide is for:
- **Rental property owners** who are ready to stop doing everything themselves
- Investors who are scaling their portfolio and need reliable **rental management
- Anyone sick of unreliable communication, late rent, or costly repair surprises
- Landlords unsure of **how to choose a property management company** that’s actually worth the fees
Whether you’re managing one unit or an entire portfolio, the right **property management company** can make or break your real estate returns.
### **🚫 Don’t Hire Until You Read This**
Not all property managers are created equal. Some will boost your income. Others will drain it.
**Download this guide now** so you can confidently make the right hire—one that aligns with your goals and protects your rental investment for the long term.
## Get Instant Access to the Free Guide
Just enter your name and email and get access.
Instant access.
No fluff.
Just everything you need to understand and succeed in multifamily property management.
- FIRST NAME\*
- LAST NAME\*
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- © All Rights Reserved
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---
### [Warrior Win:
Jesse Jenifer
44 Unit in Florida](https://rodkhleif.com/warrior-win-jesse-jenifer-44-unit-fl/)
**Published:** April 23, 2025
**Author:** Graciela
**Content:**
## Warrior Win
# Jesse Jenifer | $13M Value-Add Multifamily Syndication Closed
## Jesse Jenifer
## Introduction
Founder and General Partner of MultiLiving Solutions: Jesse “JJ” Jenifer leads a real estate syndication firm focused on large value-add multifamily properties across the Sunbelt.
Academic and Professional Expertise: Holding degrees in Economics and Computer Science from Binghamton University, JJ applies conservative underwriting, thorough due diligence, and asset management expertise to every deal.
Balanced Lifestyle and Commitment: Beyond real estate, JJ enjoys golfing and quality family time with his wife and two daughters, embodying a harmonious blend of work and leisure.
Warrior Program Connection: Leveraging the Warrior Coaching Program’s mentorship and network, JJ has accelerated his syndication success and is dedicated to helping others achieve financial freedom through real estate investing.
[Learn more about Warrior Coaching → ](https://rodkhleif.com/work-with-rod/)
## Property Overview
**Property Name**: Oak Park Villas
**Location**: 4701 31ST ST S, St Petersburg, FL 33712
**Number of Units**: 44
**Value Add Deal**: Yes
**Purchase Price**: $8,130,000
**Projected Monthly Rent Increase**: $300 per unit
**Anticipated Value After Value Add**: $13,000,000
**Estimated Cash-on-Cash Return**: 8%
**Estimated Internal Rate of Return (IRR)**: 16%
## How This Deal Came Together
### Deal Source
**Broker Relationship:** The property was sourced through strong broker relationships, demonstrating the power of networking within the Warrior community.
### Equity Raise2
**Total Equity Raised**: $3,780,000
**How It Was Raised**: 506(b) private syndication offering, engaging accredited investors ready to invest in value-add multifamily deals.
### Financing Structure
**Loan Terms:** 5.78% fixed rate financing secured with the assistance of Tyler Carney-DeBord.
**Syndication Type:** Structured as a syndication, allowing multiple investors to participate and share returns.
### Value-Add Strategies
**Exterior Enhancements:** Spruced up curb appeal with landscaping, updated signage, and roof replacements to attract quality tenants.
**Interior Renovations:** Renovated 24 classic units upon turnover to increase rents by $250-$300, aligning with market rates.
**Section 8 Maximization:** Leveraged existing 13 vouchers at $1,700 with plans to increase to $2,100, boosting rental income with minimal capital expenditure.
**Additional Income Streams:** Implemented a cable package to generate ancillary revenue.
**Operational Efficiency:** Streamlined expenses to improve net operating income.
**Expansion Potential:** Secured an extra acre zoned for 12-18 additional units, positioning for future growth.
### ## Challenges Faced
**Natural Disasters:** Overcame the impact of two hurricanes immediately before closing, requiring resilience and adaptability.
**Property Encroachments:** Resolved an issue with the electric company’s fence encroaching on the property boundaries.
**Seller Delivery Issues:** Managed seller delays and incomplete unit conditions at closing.
**Capital Raising:** Navigated the complexities of raising equity for a first-time syndication.
### Warrior Program Support
**Mentorship and Collaboration:** Received invaluable guidance from the Warrior GP team, including Francesco Orselli, Michael Davidov, Scott Jacobson, Bharat Kona, and Jacob Dermer, whose negotiation skills and transaction coordination were critical.
**Network Synergy:** Connected with fellow Warrior Francesco through Tyler Carney-DeBord, enabling a joint offer that secured the deal at $150,000 less than the initial bid.
**Community Value:** The Warrior Program’s network proved essential in overcoming hurdles and optimizing deal terms.
### Lessons Learned & Key Takeaways
**Building a Ready Investor Audience:** JJ learned that initial interest from friends and family does not guarantee investment; consistent outreach and social media engagement are key to cultivating committed investors.
**Patience and Persistence:** Recognized that growing a syndication business is a slow game requiring steady relationship-building.
**Power of Trusted Partnerships:** Valued working with experienced Warriors over higher fees with unknown partners, emphasizing trust and shared values.
> The Warrior Program truly proved its value with this deal!
>
> Jesse Jenifer
## Be the Next Warrior Success Story
Jesse Jenifer’s journey from first-time syndicator to closing a $13 million value-add multifamily deal exemplifies the transformative power of the Warrior Coaching Program. With expert mentorship, a supportive investor community, and strategic collaboration, you too can overcome challenges and scale your real estate portfolio. Don’t wait to build your financial future—join Rod Khleif’s Warrior Program today and start closing deals with confidence!
[ Join the Warrior Program ](https://rodkhleif.com/work-with-rod/)
## Warrior Success Stories
[Play Video](https://www.youtube.com/watch?v=6L-ho9oRtUY)
#### [Featuring Elsa Nguyens #682](https://rodkhleif.com/podcasts/single-mom-to-massive-success-in-multifamily/)
### [Immigrant Mom To Massive Success In Multifamily](https://rodkhleif.com/podcasts/single-mom-to-massive-success-in-multifamily/)
[Play Video](https://www.youtube.com/watch?v=Fmqzl9_8Nj4)
#### [Featuring Oliver Fernandez #721](https://rodkhleif.com/podcasts/from-7-to-1000-units-in-3-years-2/)
### [From 7 to 1000 units in 3 years](https://rodkhleif.com/podcasts/from-7-to-1000-units-in-3-years-2/)
[Play Video](https://www.youtube.com/watch?v=J-fDFPBRilY)
#### [Featuring Rasool Mutawakkil #715](https://rodkhleif.com/podcasts/10mm-in-multifamily-assets-under-management-in-one-year/)
### [$10MM in Multifamily Assets Under Management in One Year](https://rodkhleif.com/podcasts/10mm-in-multifamily-assets-under-management-in-one-year/)
[ See more warrior wins ](/warriorwins)
---
### [Warrior Win:
Jay & Tana Boersma
124 Unit in OK](https://rodkhleif.com/warrior-win-jay-tana-boersma-124-unit-ok/)
**Published:** May 14, 2025
**Author:** Graciela
**Content:**
## Warrior Win
# Jay & Tana Boersma
124 Units Closed
## Jay & Tana Boersma
## Experienced Real Estate Professionals
Jay and Tana Boersma are managing partners at Neighborhood Capital Resources (NCR), combining decades of expertise in residential lending and real estate investment. Jay holds a BS in Finance and has nearly 30 years of experience in residential lending and multifamily property investment, focusing since 2019 on value-add multifamily deals with an emphasis on affordable housing. Tana brings over 20 years of mortgage lending experience, excelling in transaction coordination and asset management. Together, they are committed to delivering safe, clean housing for tenants and secure, high-yield opportunities for investors.
[Learn more about Warrior Coaching → ](https://rodkhleif.com/work-with-rod/)
## Property Overview
**Bricktown Apartments:** 124 Unit Value Add Deal
**Location:** Stillwater, Oklahoma
**Number of Units:** 124
**Deal Type:** Value Add
**Purchase Price:** $7.8 million
**Projected Monthly Rent Increase:** $150 per unit
**Anticipated Value After Value Add:** $11.7 million
**Estimated Cash-on-Cash Return:** 7-8%
**Estimated Internal Rate of Return (IRR):** 15-18%
## How This Deal Came Together
### Deal Source
**Off-Market Opportunity:** The property was initially in “best and final” in June 2023 but did not sell. It returned off-market in July 2024. The seller’s family connection added unique insight, as the complex was originally developed by the partner’s father in 1972.
### Equity Raise
**Total Equity Raised:** $3.2 million
**How Equity Was Raised:** Through mom & pop limited partners (LPs) and other capital raising partners, leveraging strong investor relationships cultivated through the Warrior Program.
### Financing Structure
**Loan-to-Value (LTV):** Bank financing covered 70% of the purchase cost plus 70% of capital expenditures (CAPEX).
**Syndication Type:** Syndication
### Value-Add Strategies
**Interior Renovations:** Five interior renovation line items averaging $5,000 per unit, totaling roughly $8,000 per unit. Few units require all five improvements; several units require none.
**Rent Increases:** Projected $150 monthly rent increase per unit post-renovation, driving significant NOI growth.
### ## Challenges Faced
**Bank Timing Delays:** Bank financing timing caused delays, putting pressure on the capital raise timeline.
**Poor Bank Communication:** Communication issues with the bank complicated the process.
**Capital Raise Timing:** Not all capital was raised by closing, requiring some partners to “gap fund” the deal temporarily.
### Warrior Program Support
**Capital Raise Assistance:** Whitney McNair provided critical boots-on-the-ground support and helped with capital raising.
**Team Spark:** Hilary Graves contributed vital energy and support during the capital raise, adding momentum to the deal’s success.
### Lessons Learned & Key Takeaways
**Have More Capital Identified Before Contract:** Ensuring capital is secured prior to contract signing is essential to avoid funding gaps.
**Leverage Experienced Partnerships:** Partnering with seasoned Warriors and coaches adds immeasurable value and insight.
**Stay Resilient Through Challenges:** Flexibility and persistence are key when facing financing and operational hurdles.
> Even with 25 years of real estate and lending experience, I didn’t know what I didn’t know. Partnering with my coach and two other experienced Warriors on my first deal has been invaluable—many times worth the price of admission
>
> Jay Boersma
## Be the Next Warrior Success Story
Jay and Tana’s journey exemplifies how expert mentorship, strategic partnerships, and a supportive community can transform real estate investing success. Their ability to overcome financing challenges and execute a complex value-add syndication deal highlights the power of the Warrior Program. If you’re ready to elevate your multifamily investment career, join Rod Khleif’s Warrior Mentorship Program today. Gain access to proven systems, expert coaching, and a network that will help you close more deals, raise capital efficiently, and build lasting wealth. Apply now and start your own Warrior Win!
[ Join the Warrior Program ](https://rodkhleif.com/work-with-rod/)
## Warrior Success Stories
[Play Video](https://www.youtube.com/watch?v=6L-ho9oRtUY)
#### [Featuring Elsa Nguyens #682](https://rodkhleif.com/podcasts/single-mom-to-massive-success-in-multifamily/)
### [Immigrant Mom To Massive Success In Multifamily](https://rodkhleif.com/podcasts/single-mom-to-massive-success-in-multifamily/)
[Play Video](https://www.youtube.com/watch?v=Fmqzl9_8Nj4)
#### [Featuring Oliver Fernandez #721](https://rodkhleif.com/podcasts/from-7-to-1000-units-in-3-years-2/)
### [From 7 to 1000 units in 3 years](https://rodkhleif.com/podcasts/from-7-to-1000-units-in-3-years-2/)
[Play Video](https://www.youtube.com/watch?v=J-fDFPBRilY)
#### [Featuring Rasool Mutawakkil #715](https://rodkhleif.com/podcasts/10mm-in-multifamily-assets-under-management-in-one-year/)
### [$10MM in Multifamily Assets Under Management in One Year](https://rodkhleif.com/podcasts/10mm-in-multifamily-assets-under-management-in-one-year/)
[ See more warrior wins ](/warriorwins)
---
### [Warrior Win:
Patrick Hayter
51 Unit in NY](https://rodkhleif.com/warrior-win-patrick-hayter-51-unit-ny/)
**Published:** May 13, 2025
**Author:** Graciela
**Content:**
## Warrior Win
# Patrick Hayter
51 Units Closed
## Patrick Hayter
## Introduction
Experienced Real Estate Professional with a Passion for Value-Add Multifamily Investing: Patrick Hayter has been a realtor since age 19, earning a finance degree focused on real estate investment and a master’s in real estate development. His background includes analyst roles for a real estate trust, land acquisition and development for a home builder, and running his own contracting/construction company. Patrick has flipped homes and now focuses on syndication deals, closing his first syndication at age 24 with trusted partners.
[Learn more about Warrior Coaching → ](https://rodkhleif.com/work-with-rod/)
## Property Overview
**Property Address:** Kemper House Apartments
**Number of Units:** 51
**Value-Add Deal:** Yes
**Purchase Price:** $2,000,000
**Projected Monthly Rent Increase:** $289 per unit
**Anticipated Value After Renovations:** $4,590,903
**Estimated Cash-on-Cash Return:** 8.08%
**Estimated Internal Rate of Return (IRR):** 18.86%
## How This Deal Came Together
### Deal Source
Warrior Network Deal Referral: Other Warriors identified this opportunity and invited Patrick to participate in the capital raise, leveraging the power of the Warrior community to source quality deals.
### Equity Raise
Networking and Industry Relationships: Patrick raised $1,575,000 in equity by tapping into his real estate network and sphere of influence, relying on his formal education and partners’ experience to build investor confidence.
### Financing Structure
75% Loan-to-Value Financing with Syndication: The deal was financed with 75% debt covering the purchase price, while the remaining funds were raised through syndication to cover renovations and operating expenses.
### Value-Add Strategies
Comprehensive Unit Renovations and Management Overhaul: All 51 units were outdated, with plans to renovate the majority while leaving some value for the next owner after a 3-year hold. Additionally, property management improvements included establishing an online presence and digitizing lease tracking, replacing the previous paper-based system.
### ## Challenges Faced
**Loan Closing Hurdle:** The main GP’s tax returns were delayed, requiring a cash close until the loan was approved and repaid.
**Capital Raise Difficulty:** As Patrick’s first deal, convincing investors was challenging; he relied heavily on partner experience to secure commitments.
### Warrior Program Support
Community and Mentorship Empowerment: Patrick credits Warriors Jason Pero, Daniel Charles, and Harrison Riley for their support. The Warrior Program reinforced his formal education and provided a network of experienced investors willing to share knowledge and guidance.
### Lessons Learned & Key Takeaways
Capital Raising Requires Persistence and Backup Plans: Patrick learned never to fully rely on soft commitments, as many investors backed out last minute. Building trust and demonstrating capability through partners was essential to closing the raise.
> The Warrior program has been great so far. I have learned a lot and reinforced what I already knew from my formal education. The supportive community of experienced warriors is always willing to share their knowledge, helping you overcome hurdles and grow your portfolio. I look forward to the next deal, which I am sure will be with warriors as I continue to grow.
>
> Patrick Hayter
## Be the Next Warrior Success Story
Patrick Hayter’s Warrior Win demonstrates how education, networking, and perseverance can turn a challenging first syndication into a successful multifamily investment. By leveraging the Warrior Program’s mentorship and community, Patrick overcame obstacles and executed a value-add strategy that significantly increased property value and investor returns. Ready to accelerate your real estate journey like Patrick? Join Rod Khleif’s Warrior Coaching Program today to gain the mentorship, tools, and network you need to close your next deal and build lasting wealth.
[ Join the Warrior Program ](https://rodkhleif.com/work-with-rod/)
## Warrior Success Stories
[Play Video](https://www.youtube.com/watch?v=6L-ho9oRtUY)
#### [Featuring Elsa Nguyens #682](https://rodkhleif.com/podcasts/single-mom-to-massive-success-in-multifamily/)
### [Immigrant Mom To Massive Success In Multifamily](https://rodkhleif.com/podcasts/single-mom-to-massive-success-in-multifamily/)
[Play Video](https://www.youtube.com/watch?v=Fmqzl9_8Nj4)
#### [Featuring Oliver Fernandez #721](https://rodkhleif.com/podcasts/from-7-to-1000-units-in-3-years-2/)
### [From 7 to 1000 units in 3 years](https://rodkhleif.com/podcasts/from-7-to-1000-units-in-3-years-2/)
[Play Video](https://www.youtube.com/watch?v=J-fDFPBRilY)
#### [Featuring Rasool Mutawakkil #715](https://rodkhleif.com/podcasts/10mm-in-multifamily-assets-under-management-in-one-year/)
### [$10MM in Multifamily Assets Under Management in One Year](https://rodkhleif.com/podcasts/10mm-in-multifamily-assets-under-management-in-one-year/)
[ See more warrior wins ](/warriorwins)
---
### [Warrior Win:
Larry Carroll
133 Unit in TX](https://rodkhleif.com/warrior-win-larry-carroll-133-unit-tx/)
**Published:** May 13, 2025
**Author:** Graciela
**Content:**
## Warrior Win
# Larry Carroll
133 Units Closed
## Larry Carroll
## Background and Experience
Larry Carroll brings a strong engineering foundation with 13 years in the oil and gas industry before transitioning into multifamily real estate investing just over two years ago. He began with a joint venture on a new construction 62-unit mixed-use property and joined the Warrior Program in July 2023 to accelerate his growth and expertise.
[Learn more about Warrior Coaching → ](https://rodkhleif.com/work-with-rod/)
## Property Overview
**Property Name**: Sawyers Mill
**Location**: 501 Fuller St, Arlington, TX
**Number of Units**: 133 units
**Value Add Status**: Yes
**Major Improvements Planned or Completed:** $1,200,000 CapEx including upgrades to 50 units, minor roof repairs, fascia, trim, and painting. **Purchase Price**: $13,000,000
**Estimated Monthly Rent Increase:** $100 per unit
**Anticipated Value After Value Add**: Approximately $21.5 million at a 5.5% cap rate projected at exit in 5 years.
## How This Deal Came Together
### Deal Source
**Broker Relationship:** The property was sourced through a trusted broker connection, highlighting the value of strong industry relationships.
### Equity Raise
**Total Equity Raised:** $5,669,728
**Method:** Raised under Regulation 506(b) syndication, leveraging private investors to fund the deal.
### Financing Structure
**Bridge Loan:** Structured as a 5-year fixed bridge loan with 3 years interest-only payments, providing flexibility to execute value-add plans and stabilize the asset.
### Value-Add Strategies
**Comprehensive Property Upgrades:** Focused on upgrading 50 units and performing essential repairs such as roof and fascia work to increase property value and tenant satisfaction.
**Rent Growth:** Projected $100 monthly rent increase per unit to boost cash flow and overall asset value.
### ## Challenges Faced
**Raising Capital and Seller Transparency:** Larry encountered significant hurdles raising capital and dealing with an untruthful seller. Initially, Fannie Mae/Freddie Mac financing was lined up, but the seller was counting delinquencies towards occupancy, forcing a pivot to bridge financing.
### Warrior Program Support
**Team Collaboration:** Larry credits Warrior member Shawn Ricehouse for assistance on this deal and praises the program for its educational value and networking opportunities with like-minded investors.
### Lessons Learned & Key Takeaways
**Partner with the Right People:** Larry emphasizes the importance of strong partnerships, noting that no matter how thorough the due diligence, unexpected issues often arise post-purchase.
> The program has been great for educational purposes and networking with likeminded people. Thank you for all you do for the community, education, and opportunities!
>
> Larry Carroll
## Be the Next Warrior Success Story
Larry Carroll’s Warrior Win at Sawyers Mill demonstrates how engineering discipline, strategic mentorship, and a strong investor network can overcome challenges and unlock multifamily real estate success. With a $13 million acquisition, $1.2 million in value-add improvements, and a well-structured syndication raise, Larry is on track for strong cash-on-cash returns and long-term growth. If you’re ready to elevate your multifamily investing journey like Larry, join Rod Khleif’s Warrior Coaching Program today. Gain access to expert mentorship, proven systems, and a powerful community that will help you close more deals, raise capital, and build lasting wealth. Apply now and become the next Warrior success story!
[ Join the Warrior Program ](https://rodkhleif.com/work-with-rod/)
## Warrior Success Stories
[Play Video](https://www.youtube.com/watch?v=6L-ho9oRtUY)
#### [Featuring Elsa Nguyens #682](https://rodkhleif.com/podcasts/single-mom-to-massive-success-in-multifamily/)
### [Immigrant Mom To Massive Success In Multifamily](https://rodkhleif.com/podcasts/single-mom-to-massive-success-in-multifamily/)
[Play Video](https://www.youtube.com/watch?v=Fmqzl9_8Nj4)
#### [Featuring Oliver Fernandez #721](https://rodkhleif.com/podcasts/from-7-to-1000-units-in-3-years-2/)
### [From 7 to 1000 units in 3 years](https://rodkhleif.com/podcasts/from-7-to-1000-units-in-3-years-2/)
[Play Video](https://www.youtube.com/watch?v=J-fDFPBRilY)
#### [Featuring Rasool Mutawakkil #715](https://rodkhleif.com/podcasts/10mm-in-multifamily-assets-under-management-in-one-year/)
### [$10MM in Multifamily Assets Under Management in One Year](https://rodkhleif.com/podcasts/10mm-in-multifamily-assets-under-management-in-one-year/)
[ See more warrior wins ](/warriorwins)
---
### [Eric Upchurch Bio](https://rodkhleif.com/eric-upchurch-bio/)
**Published:** May 12, 2025
**Author:** Alex Khleif
**Content:**
## Eric Upchurch
## From Army Special Ops to Multifamily Expert
Eric Upchurch is a distinguished Army Special Operations veteran who has seamlessly transitioned from military service to becoming a prominent figure in multifamily real estate investing. With a commitment to serving both his country and community, Eric has dedicated his post military career to empowering others through education, strategic investments, and philanthropy. He is now a member of Rod Khleif’s Warrior Coaching program and a frequent panelist at the Multifamily Bootcamp.
GP Multifamily Units
0
LP Multifamily Units
0
Investing in Real Estate
0 Yrs
Commercial Portfolio
$ 0 M
## How Eric Got Started in Multifamily
After leaving active duty, he discovered real estate investing and quickly realized that success required the right education, network, and mentorship. By surrounding himself with experienced investors and taking deliberate action, he scaled his portfolio at an accelerated pace.
## Notable Contributions & Involvement
- **[Co-Founder of Active Duty Passive Income (ADPI)](#b)** – A community of over 60,000 military service members and veterans building wealth through real estate. [Link](https://www.activedutypassiveincome.com/)
- **[Amazon Best Selling Author](#b)** – *Co-author of Military House Hacking,* a step-by-step guide to real estate investing for service members. [Link](https://www.amazon.com/Military-House-Hacking-Passive-Generational/dp/1729232515)
- **[Chair of National Fundraising for Veterans Community Project](#b)** – Helping combat veteran homelessness by raising funds for housing solutions.
- **[Frequent Speaker at the Multifamily Bootcamp](#b)** – Sharing strategies, insights, and lessons learned from scaling his portfolio.
> "Involvement in the Warrior ecosystem has been a life changing path. Creating life long friendships, partnerships, and more."
>
> -Eric Upchurch
## Check Out Eric's Videos
## [Army Veteran with 571 doors his first year](https://rodkhleif.com/podcasts/10mm-in-multifamily-assets-under-management-in-one-year/)
## [**Warrior Wins**](https://rodkhleif.com/podcasts/10mm-in-multifamily-assets-under-management-in-one-year/)
## [The Power of Speed, Coaching & Strategy](https://rodkhleif.com/podcasts/from-7-to-1000-units-in-3-years-2/)
## [**Multifamily Rock Stars**](https://rodkhleif.com/podcasts/from-7-to-1000-units-in-3-years-2/)
## [How You Can Help At Risk Veterans](https://rodkhleif.com/podcasts/single-mom-to-massive-success-in-multifamily/)
## [**Warrior Wins**](https://rodkhleif.com/podcasts/single-mom-to-massive-success-in-multifamily/)
[ See more warrior wins ](/warriorwins)
## Want to See Eric at the Next Bootcamp?
Eric Upchurch is a featured panelist at Rod Khleif’s Multifamily Bootcamp. At the event, you’ll get the opportunity to learn directly from Eric as he answers your questions and breaks down proven investment strategies, common pitfalls to avoid, and the mindset required for success.
**If you’re serious about accelerating your real estate success, don’t miss this chance to gain insights from the industries top investors**
[ Grab Your Ticket Now ](/bootcamp/)
---
### [Steeve Breton Bio](https://rodkhleif.com/steeve-breton/)
**Published:** March 24, 2025
**Author:** Alex Khleif
**Content:**
# Steeve Breton
## From Corporate IT Professional
to Multifamily Expert
Steeve Breton transitioned from a successful corporate IT career into a highly accomplished multifamily real estate investor and General Partner. After experiencing the volatility of the stock market firsthand, Steeve turned to real estate for stability, financial freedom, and wealth creation. With dedicated mentorship and strategic action, Steeve quickly scaled his portfolio to more than 3,000 units as both a General and Limited Partner, totaling over $500 million in commercial real estate.
GP Multifamily Units
0 +
LP Multifamily Units
0 +
Investing in Real Estate
0 Yrs
Commercial Portfolio
$ 0 M
## How Steeve Got Started in Multifamily
After experiencing significant setbacks during the 2008 financial crisis, Steeve sought stability outside the stock market. Starting with duplexes in the competitive Boston market, he soon realized the power and efficiency of multifamily syndication. After committing to professional mentorship through Rod Khleif’s Warrior Coaching Program, Steeve gained the confidence and knowledge to rapidly scale his investments, closing his first 100+ unit multifamily deal in 2017.
## Notable Contributions & Involvement
- **[Student Housing and Construction Projects](#b)** – Successfully transacted two student housing deals and three ground-up multifamily construction projects.
- **[Deals & Exits ](#b)**-Completed 26 multifamily deals, including 14 profitable exits, demonstrating a proven track record of investment success.
- **[Active Multifamily Mentor](#b)** –Actively mentors and contributes insights as an expert panelist within Rod Khleif’s Multifamily Bootcamp and Warrior Coaching community.
> "Rod’s coaching gave me the confidence to move forward on my first 100+ unit multifamily property in 2017, and the network I’ve built in this group has led to over a dozen deals."
>
> -Steeve Breton
## Check Out Steeve's Videos
## [Multifamily Warrior Steeve Brenton talks Real Estate](https://www.youtube.com/watch?v=wTI_rlrbNGw)
## [Multifamily Warrior Steeve Breton with 1300 Doors in 2.5 years](https://www.youtube.com/watch?v=wTI_rlrbNGw)
## [How Steeve Went From 0-3500+ Multi-Family Units In 8 Years](https://www.youtube.com/watch?v=wTI_rlrbNGw)
[ See more warrior wins ](/warriorwins)
## Want to See Steeve at the Next Bootcamp?
Steeve Breton regularly shares his expertise and investment strategies as a featured panelist at Rod Khleif’s Multifamily Bootcamp. Join Steeve and other leading investors to discover actionable insights, avoid common investment pitfalls, and develop the confidence to scale your multifamily portfolio successfully.
**If you’re serious about accelerating your real estate success, don’t miss this chance to gain insights from the industries top investors**
[ Grab Your Ticket Now ](/bootcamp/)
---
### [Chris Wooten Bio](https://rodkhleif.com/chris-wooten-bio/)
**Published:** May 12, 2025
**Author:** Alex Khleif
**Content:**
## Chris Wooten
## From Marine Corps Officer to Multifamily Real Estate Expert
Chris Wooten is a retired U.S. Marine Corps LDO and a seasoned real estate investor with a powerful blend of discipline, leadership, and experience. Though he’s been investing for 13 years, he’s transitioned 9 years ago from single-family investments to building a multifamily portfolio spanning over **4,300 units** and has done more than **$257 million** in real estate transactions.
Chris currently manages a **$170M commercial portfolio**, serving as General Partner or Key Principal in **1,960 units**. Known for his integrity and execution, Chris has never had to issue a capital call across any of his syndicated deals.
GP Multifamily Units
0
LP Multifamily Units
0
Investing in Real Estate
0 Yrs
Commercial Portfolio
$ 0 M
## How Chris Got Started in Multifamily
During his service in the Marine Corps, Chris initially began investing in real estate through remote property flipping. Leveraging his extensive experience in aviation asset management, he quickly applied his skill set to multifamily real estate upon retirement. Recognizing the power of scalability and efficiency inherent in multifamily properties, Chris rapidly scaled his portfolio to over 1,800 units in just a few years by focusing on building strong teams, effective asset management, and disciplined execution.
## Notable Contributions & Involvement
- **[Founder of Chateau Elan Military Support Foundation](#b)** – A nonprofit launched in 2019 that has delivered over $500,000 in projects and support for active-duty military and veterans.
- **[Retired U.S. Marine Corps LDO](#b)** – Brings a mission-focused, no-excuses approach to investing, leadership, and team building.
- **[Full-Cycle Multifamily Operator](#b)** – Proven track record with zero capital calls across his portfolio.
- [Frequent Panelist at Multifamily Bootcamp](https://rodkhleif.com/?page_id=36338&elementor-preview=36338&ver=1744660436#b)– Shares insights on operational excellence, risk management, and scaling with integrity.
> "Rod’s Bootcamps are the only multifamily events that take the time to tap into your mindset and identify your life goals. I believe these exercises increase the number of effective multifamily investors by removing many of the mental obstacles."
>
> -Chris Wooten
## Check Out Chris' Video
## [Multifamily Leadership with Former Marine Chris Wooten](https://www.youtube.com/watch?v=wTI_rlrbNGw&t=2s&pp=ygURbWFyaW5lIHJvZCBraGxlaWY%3D)
## [**Multifamily Rock Stars**](https://rodkhleif.com/podcasts/from-7-to-1000-units-in-3-years-2/)
[ See more warrior wins ](/warriorwins)
## Want to See Chris at the Next Bootcamp?
Chris Wooten is a featured panelist at Rod Khleif’s Multifamily Bootcamp. Join us to hear Chris share firsthand insights on multifamily asset management, effective leadership, and powerful investment strategies. Learn directly from Chris and other top multifamily experts to accelerate your own success in real estate investing.
**If you’re serious about accelerating your real estate success, don’t miss this chance to gain insights from the industries top investors**
[ Grab Your Ticket Now ](/bootcamp/)
---
### [Charlie Peters Bio](https://rodkhleif.com/charlie-peters-bio/)
**Published:** April 3, 2025
**Author:** Alex Khleif
**Content:**
## Charlie Peters
## From Fix & Flips to Multifamily Syndication Mastery
Charlie Peters is a seasoned real estate investor with nearly three decades of hands-on experience. He began his multifamily journey back in 1996 with a single fourplex and has since built a commercial portfolio totaling over $187 million. Today, Charlie is a respected managing partner across multiple real estate investment ventures, known for acquiring and transforming overlooked properties into top-performing assets.
He’s completed 39 deals, gone full cycle on 19 apartment communities, and has never lost investor money. Charlie has scaled his business through a unique mix of value-add acquisitions, ground-up developments, and syndicated partnerships.
GP Multifamily Units
0
Non-Syndicated Units
0
Deals
0
Commercial Portfolio
$ 0 M+
## How Charlie Got Started in Multifamily
After leaving his W-2 job in 2005, Charlie spent years managing his own properties and flipping real estate. But in 2020, he joined Rod Khleif’s Warrior Program to master the syndication model and unlock even greater scale. Within months, he began structuring larger deals and forming partnerships across multiple states including Alabama, Colorado, Florida, Georgia, Illinois, Missouri, North Carolina, and Texas.
## Notable Highlights
- Gone full cycle on 19 communities
- Acquired 76-unit USDA-foreclosed property via auction and turned it around
- Built three complementary real estate businesses: buy-to-flip, personal portfolio, and syndications
- Approved to transact HUD-backed multifamily deals
- Manages a team with robust systems for underwriting, value-add, and asset management
> "Amazing people. Amazing program. I couldn’t be happier with my decision to join Rod’s Warrior Program."
>
> -Charlie Peters
## Check Out Charlie's Video
## [Finding a Dead Body in One of Your Units](https://www.youtube.com/watch?v=ZwyZgc987d0)
## [**Multifamily Rock Stars**](https://www.youtube.com/watch?v=ZwyZgc987d0)
[ See more warrior wins ](/warriorwins)
## Want to See Charlie at the Next Bootcamp?
Charlie Peters is a featured panelist at Rod Khleif’s Multifamily Bootcamp. At the event, you’ll get the opportunity to learn directly from Charlie as he answers your questions and breaks down proven syndication strategies, common pitfalls to avoid, and the tools required for success.
**If you’re serious about accelerating your real estate success, don’t miss this chance to gain insights from the industries top investors**
[ Grab Your Ticket Now ](/bootcamp/)
---
### [Personal and Business Auestions to Ask Yourself Regularly](https://rodkhleif.com/quality-personal-and-business-questions-to-ask-myself-regularly/)
**Published:** May 13, 2021
**Author:** Matt RK
**Content:**
[  ](https://rodkhleif.com)
# Quality Personal And Business Questions To Ask Myself Regularly
“Learn the exact business and personal questions I ask myself every day to keep myself motivated and striving toward success”
**– Rod Khleif**
Please enter your info below to get instant access
to this comprehensive guide. By clicking, you accept our
[Terms Of Service And Privacy Policy.](/terms-privacy)
- FIRST NAME\*
- EMAIL ADDRESS\*
- PHONE
By providing your number, you consent to receive marketing call or texts.
By clicking, you agree to our [Terms Of Service And Privacy Policy.](https://rodkhleif.com/terms-privacy/)
- [ SPEAKING ](/speaking)
- [ MEDIA ](/media)
- © All Rights Reserved
- [ Terms of Service / Privacy Policy ](/terms-privacy%20)
- [ Disclaimers ](/disclaimers)
-
- © All Rights Reserved
- [ Terms of Service / Privacy Policy ](/terms-privacy%20)
- [ Disclaimers ](/disclaimers)
[  ](https://influex.com/?utm_source=rod-khleif&utm_medium=footer-link&utm_content=influexwp-client-site-footer-link&utm_campaign=influexwp-client-site)
---
### [Questions to Ask a General Partner in Syndication](https://rodkhleif.com/questions-to-ask-a-general-partner-in-a-syndication-before-investing/)
**Published:** May 13, 2021
**Author:** Matt RK
**Content:**
[  ](https://rodkhleif.com)
# Questions to ask a general partner in a syndication before investing
“Choosing the right partner will make or break your multifamily career, learn the exact questions to make sure you choose correctly”
**– Rod Khleif**
Please enter your info below to get instant access
to this comprehensive guide. By clicking, you accept our
[Terms Of Service And Privacy Policy.](/terms-privacy)
- FIRST NAME\*
- EMAIL ADDRESS\*
- PHONE
By providing your number, you consent to receive marketing call or texts.
By clicking, you agree to our [Terms Of Service And Privacy Policy.](https://rodkhleif.com/terms-privacy/)
- [ SPEAKING ](/speaking)
- [ MEDIA ](/media)
- © All Rights Reserved
- [ Terms of Service / Privacy Policy ](/terms-privacy%20)
- [ Disclaimers ](/disclaimers)
-
- © All Rights Reserved
- [ Terms of Service / Privacy Policy ](/terms-privacy%20)
- [ Disclaimers ](/disclaimers)
[  ](https://influex.com/?utm_source=rod-khleif&utm_medium=footer-link&utm_content=influexwp-client-site-footer-link&utm_campaign=influexwp-client-site)
---
### [Tim Davis' Multifamily Deal: How He Made It Happen](https://rodkhleif.com/warrior-wins-tim-davis/)
**Published:** December 8, 2023
**Author:** Greciel Moreno
**Content:**
## Warrior Win
# Tim Davis: Warrior Win
I purchased my first rental property when I was 18. I have purchased many single family homes and small apartments over the last 40 years. I am currently a licensed building contractor and licensed broker in the state of Florida. I own a property management company that manages a little over 500 units in central Florida.
## Property Details
**Address:** Hoosier Mobile Home Park 2735 W 10th Street, Lakeland, FL 33805.
**Number of Units:** 19
**Value Add Deal?** Yes….Rents were undermarked and there was some differed maintenance.
**Purchase Price:** $1,375,000
**Estimated monthly increase projected?** 30% first year. 10% next year. 3% after that.
**Anticipated value after value add:** $3,200,000
**Estimated Cash on Cash Return:** 8%
**Estimated Internal Rate of Return:** 15%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
I believe it is the best program out there for apartment syndication.
## How did you find this property?
I found it on the MLS.
## How did you structure the financing of this property?
100% limited partner funding. No bank loan involved. LPs are receiving 7% preferred return from day 1.
## Was this a joint venture or syndication?
Syndication.
## How did you raise the equity?
506B. Friends and family.
## What was the equity raise?
$1,700,000.
## What are some hurdles you had to overcome to get this deal done?
This was owned by a mom and pop and there record keeping was not real good. This made our due diligence process a little difficult.
## What are some of the lessons you learned with this deal?
Start raising money earlier. On closing day we did not have the full amount to close. We had to fund all but $175,000 on closing day. The final part came in a couple days later and everything worked out but it did take some negotiating to get it done.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Tim Davis Closes $7.6M Multifamily Deal with Warrior Program](https://rodkhleif.com/warrior-wins-tim-davis-2/)
**Published:** June 25, 2024
**Author:** Greciel Moreno
**Content:**
## Warrior Win
# Tim Davis
Tim is a Florida licensed real estate broker, licensed building contractor, real estate investor and Amazon Best Selling Author. He owns and operates a Florida Real Estate Brokerage that manages over 600 rental units, a private lending company, a personal rental portfolio of 60+ doors and has an investment in over 897 doors as a Limited Partner and now 137 doors as a General Partner. Tim purchased his first rental property in 1982 and has been investing in residential and commercial properties for over 40 years. He has a huge network of partners and investors that are ready to engage in transactions that meet their criteria.
Tim and his wife Sandi love to travel in their motorhome and spoil their grandchildren when they can. Tim and Sandi have been giving back to the communities they belong to with mentoring and helping people that are in need. He is a long time member and past president of the Lakeland Sunrise Rotary Club, past president of the Polk County Builders Association and member of the Lakeland Association of Realtors.
## Property Details
**Address:** Thousand Roses / 455 Buck Moore Rd., Lake Wales, FL 33853 **Number of Units:** 118
**Value Add Deal?** Yes
**Purchase Price:** $8,000,000
**Estimated monthly increase projected?** $350 per unit in the first 18 months
**Anticipated value after value add:** $13,000,000
**Estimated Cash on Cash Return:** 8%
**Estimated Internal Rate of Return:** 15%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
I have learned a lot during my time as a Warrior. I believe that some of the skills that I have learned and executed will build my net worth for many years into the future. I appreciate what Rod has put together and am very glad to be a part of it.
## How did you find this property?
This property came to me through my network and a wholesaler.
## How did you structure the financing of this property?
We negotiated seller financing for $5,500,000 of the purchase price. Raised capital from limited partners for the balance.
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
Through network of investors.
## What was the equity raise?
$3,800,000
## What are some hurdles you had to overcome to get this deal done?
Did not complete our capital raise by the closing date. General Partner team loaned a bridge to complete the closing. Getting information from the seller was challenging as it was a mom and pop organization who did not know how to use a computer.
## What are some of the lessons you learned with this deal?
Start raising capital way before you need to close.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Shawn Ricehouse](https://rodkhleif.com/warrior-wins-shawn-ricehouse/)
**Published:** January 20, 2023
**Author:** Graciela
**Content:**
## Warrior Win
# Shawn Ricehouse
Been in RE for several years, MF for one year. Have several SF homes after transitioning to MF in Feb 2022. Construction is my background for over 25+ years. Married for 18 years and blessed with 4 children. Love to BBQ, travel and watch my kids soccer games!
## Property Details
**Address:** Sweet Redemption 1600 E Sanford Arlington TX 76011
**Number of Units:** 44
**Value Add Deal?** No
**Purchase Price:** $7,200,000
**Estimated monthly increase projected?** $150/unit
**Anticipated value after value add:** N/A
**Estimated Cash on Cash Return:** 7.5%
**Estimated Internal Rate of Return:** 16.97%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Absolutely BY FAR, the best program out there! The connections are real, the coaching is real, just a phenomenal program if you are wanting to learn and scale your MF REI experience.
## How did you find this property?
Off market thru existing broker relationship
## How did you structure the financing of this property?
Bridge Loan 24mo IO.
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
Friends & Family.
## What was the equity raise?
$3,800,000
## What are some hurdles you had to overcome to get this deal done?
We closed this property in about 50 days in order to close by 12-31-2022.
## What are some of the lessons you learned with this deal?
Start the LLC process EARLY!
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins | Shawn Ricehouse: 120 Units](https://rodkhleif.com/warrior-wins-shawn-ricehouse-3/)
**Published:** August 18, 2023
**Author:** Graciela
**Content:**
## Warrior Win
# Shawn Ricehouse:
Warrior Win
Been in RE for several years, MF for one year. Have several SF homes after transitioning to MF in Feb 2022. Construction is my background for over 25+ years. Married for 18 years and blessed with 4 children. Love to BBQ, travel and watch my kids soccer games!
## Property Details
**Address:** The Maverick Apartments
**Number of Units:** 120
**Value Add Deal?** No
**Purchase Price:** $13,300,000
**Estimated monthly increase projected?** $200/unit
**Anticipated value after value add:** $9,000,000
**Estimated Cash on Cash Return:** 7.82%
**Estimated Internal Rate of Return:** 24.5%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
TOP NOTCH
## How did you find this property?
Thru a RE Meetup
## How did you structure the financing of this property?
Bank Loan
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
Family and friends.
## What was the equity raise?
$5,100,000
## What are some hurdles you had to overcome to get this deal done?
Location, Debt, KP’s, ALOT!! LOL!
## What are some of the lessons you learned with this deal?
MOU’s are important
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Sanjay Patel](https://rodkhleif.com/warrior-wins-sanjay-patel/)
**Published:** August 25, 2023
**Author:** Graciela
**Content:**
## Warrior Win
# Sanjay Patel
SW Engineer for 27 years, left W2 ~2.5 years ago to invest in Real Estate full time after building passive income using Syndications
## Property Details
**Address:** Queen City Ridge – OH Vista West – OH
**Number of Units:** 76
**Value Add Deal?** Yes
**Purchase Price:** $4,400,000
**Estimated monthly increase projected?** $30-$40 per year on 5 year hold
**Anticipated value after value add:** $2 mil
**Estimated Cash on Cash Return:** 6.9%
**Estimated Internal Rate of Return:** 16.5%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Awesome experience, everyone is very helpful
## How did you find this property?
Brought onto the deal because of relationship with warrior Wakefield Li.
## How did you structure the financing of this property?
2 separate loans, 5.81% fixed 2 year IO, 7 yr term 30 yr amortized on Vista, 5.91% fixed 2 year IO, 10 yr term 30 yr amortized on Queen City.
## Was this a joint venture or syndication?
506b syndication.
## How did you raise the equity?
Total of 6 gps did capital raise, each raised 200k-400k each
## What was the equity raise?
$1.6 mil
## What are some hurdles you had to overcome to get this deal done?
Some difficulties with capital raise, added 2 GPs to help. did short term bridge loan to get to close and continued raising after closing.
## What are some of the lessons you learned with this deal?
Networking is key, I was one of the GPs bright on to complete capital raise and now help with asset management and investor relations as well.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins | Shawn Ricehouse: 63 Units in Dallas](https://rodkhleif.com/warrior-wins-shawn-ricehouse-2/)
**Published:** August 16, 2023
**Author:** Graciela
**Content:**
## Warrior Win
# Shawn Ricehouse
Been in RE for several years, MF for one year. Have several SF homes after transitioning to MF in Feb 2022. Construction is my background for over 25+ years. Married for 18 years and blessed with 4 children. Love to BBQ, travel and watch my kids soccer games!
## Property Details
**Address:** Casa San Luis – 3155 Park Lane Dallas TX
**Number of Units:** 63
**Value Add Deal?** Yes
**Purchase Price:** $6,900,000
**Estimated monthly increase projected?** $350/unit
**Anticipated value after value add:** $13,000,000
**Estimated Cash on Cash Return:** 7%
**Estimated Internal Rate of Return:** 19.75%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Best of the Best. I recommend it all the time! Thank you!
## How did you find this property?
Broker Relationship – off market.
## How did you structure the financing of this property?
Agency Fixed Debt.
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
Friends and Family.
## What was the equity raise?
$3,800,000
## What are some hurdles you had to overcome to get this deal done?
Dealing with Agency delays, and managing investors’ expectations.
## What are some of the lessons you learned with this deal?
Agency requirements,
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Michael Mannino II](https://rodkhleif.com/warrior-wins-michael-mannino-ii/)
**Published:** November 10, 2020
**Author:** Matt RK
**Content:**
## Warrior Win
# Michael Mannino II
I am 27 years old with 5 years of real estate experience In the Metro Detroit Market and we have focused on single family fix and flip properties. Now getting into multi-family properties. Love going on the boat during the summer!
## Property Details
**Address:** 112 N Hazelton, 114 N Hazelton, 116 N Hazelton Flushing, MI 48433
**Number of Units:** 11
**Value Add Deal?** Yes
**Purchase Price:** $365,000
**Estimated monthly increase projected?** $5,000
**Anticipated value after value add:** $680,000
**Estimated Cash on Cash Return:** 15%
**Estimated Internal Rate of Return:** 15%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Thank you for the great content.
## How did you find this property?
We found this from a wholesaler
## How did you structure the financing of this property?
We have $150,000 in seller financing and took on a partner to finance the purchase price and rehab.
## Was this a joint venture or syndication?
Joint Venture
## How did you raise the equity?
We have a partner for 40% of the deal to bring $365,000 for the purchase and rehab.
## What was the equity raise?
We have a partner for 40% of the deal to bring $365,000 for the purchase and rehab.
## What are some hurdles you had to overcome to get this deal done?
Negotiating with the seller for a price reduction after inspection and negotiating a $150,000 Land Contract with the seller.
## What are some of the lessons you learned with this deal?
structuring a land contract with the seller
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Win: Karl Schlobohm 24 Unit Storage Acquisition](https://rodkhleif.com/warrior-wins-karl-schlobohm/)
**Published:** December 28, 2023
**Author:** Greciel Moreno
**Content:**
## Warrior Win
# Karl Schlobohm
Warrior Win
I am a teacher by trade and a single parent. I Joined the Warrior Group in 2021 to explore ways to create a financial legacy for my daughter and for the charitable organizations that are dear to me, and to work towards my own financial freedom separate from my W-2. My passions are traveling, playing and building guitars, cycling, coffee roasting and adventuring in general. Over the course of the past couple of years, I have underwritten and pursued acquisitions across many classes of commercial real estate, including apartments, RV/MHPs, RV and Boat Storage and Self-Storage. I’ve settled on pursuing RV/Boat Storage, Self Storage and RV Parks, as these kinds of assets cater more towards my goals. I have closed on on a storage expansion project close to Gainesville, FL with fellow Warrior Scott Gimbert and on a 27-unit apartment complex in Kingsland, GA in partnership with fellow Warrior Charlie Peters. As my #1 goals are to retire from my W-2, build out a bus and travel the country to various properties.
## Property Details
**Address:** Orange and Blue Storage, Hampton, FL
**Number of Units:** 24
**Value Add Deal?** Yes
**Purchase Price:** $425,000
**Estimated monthly increase projected?** $Storage – $50-90/unit
**Anticipated value after value add:** Storage Facility – $3,279,619 at conservative 8% CAP rate
**Estimated Cash on Cash Return:** CoC: 123% at stabilization (start of Y3 – 90% occupancy as per feasibility study) – conservatively assumes no NOI for 4 months of operation Y1.
**Estimated Internal Rate of Return:** 484% estimated (start of Y3 @ 90% occupancy) – Assumes no NOI Y1. Formula Used: $3,279,619 (conservative ARV) + $262, 269 (Y2 NOI), minus $2,315,000 (debt principal), minus $210,000 capital contribution, ($1,016,888) divided by capital contribution of $210,000)
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
I have been overwhelmed by the amount of support I’ve received from fellow Warriors along the way. I’m not sure how long it would have taken me to accomplish what I have in two years if it were not for the support of fellow Warriors.
## How did you find this property?
My partner Scott and I found the storage development site doing business searches and underwriting properties that fit our narrow criteria – we built a relationship with the seller to ensure that this project was the right fit for everyone.
## How did you structure the financing of this property?
We arranged for seller financing to purchase the property. Our construction loan will then pay the remaining principal and take over first position on the property. Our down-payment on the seller financing will serve as our capital injection on the construction loan.
## Was this a joint venture or syndication?
Both JVs
## How did you raise the equity?
Promissory notes offering 8% interest-only over 2 years, plus a 10% flat return after Y2. Investor option to continue hold after 2 years with monthly distributions of 8% interest-only, until refi.
## What was the equity raise?
Storage – $150,000 – $50k/investor. Plus $61,000 contribution from JV partners. ($210,000 to cover loan down-payment of 10% of construction costs).
## What are some hurdles you had to overcome to get this deal done?
I have had countless properties fall out of contract before closing. Sometimes due to lending, sometimes due to hidden concerns about the properties/sellers, sometimes due to wetlands issues or zoning restrictions. I’ve also struggled to make many of the Warrior events and other networking opportunities due to my role as a single parent, as well as restrictions from my W-2. Teaching takes a lot out, and it takes a lot more to continue pursuing dreams after dark.
## What are some of the lessons you learned with this deal?
I’ve learned to keep to my routines every day with a positive/growth mindset, and that the right opportunities will come along at the right times as long as you stick with your plan. Focus on goals and the “Why” allows dreams to unfold.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Win: Karl Schlobohm's 27 Unit Acquisition](https://rodkhleif.com/warrior-wins-karl-schlobohm-2/)
**Published:** January 11, 2024
**Author:** Greciel Moreno
**Content:**
## Warrior Win
# Karl Schlobohm
I am a teacher turning CRE investor and have been a warrior for 2 years. I just closed my first deal on a storage development project in north Florida last week, and just closed today on a 27-unit apartment complex in GA.
## Property Details
**Address:** Pine Haven Apartments – Kingsland GA
**Number of Units:** 27
**Value Add Deal?** Yes
**Purchase Price:** $2,100,000
**Estimated monthly increase projected?** $50-100/unit
**Anticipated value after value add:** $2,900,000-3,000,000
**Estimated Cash on Cash Return:** Infinite – no capital raise or personal capital investment
**Estimated Internal Rate of Return:** Infinite – see above
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
I would not have made it this far this quickly without my learning and networking within the warrior group.
## How did you find this property?
I called the listing agent and discovered that fellow Warrior Charlie Peters was selling.
## How did you structure the financing of this property?
Charlie Peters seller-financed the property to our JV partnership.
## Was this a joint venture or syndication?
Joint Venture.
## How did you raise the equity?
I am gaining an equity stake in the value-add.
## What was the equity raise?
0
## What are some hurdles you had to overcome to get this deal done?
This one didn’t have too many hurdles. Previous management did a great job maintaining the property and elevating occupancy – but they were charging 12%. We just didn’t need a whole management company to cover the 27 units. The other hurdle I faced in closing deals up to this point was that I wanted to build my own equity in commercial RE before investing capital. This gave me a way to earn equity without having to put down my retirement savings.
## What are some of the lessons you learned with this deal?
Network = net worth. If you’re approach is solutions-based, you will always find sellers and/or partners that are looking for solutions.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Win: Edward Lowell 13 Unit Acquisition](https://rodkhleif.com/warrior-wins-edward-lowell/)
**Published:** April 15, 2020
**Author:** Matt RK
**Content:**
## Warrior Win
# Edward Lowell
Edward is a native of North Carolina and holds an MBA from Queens University-Charlotte. He has over 25 years of leadership and management experience in supply chain and operational functions. Edward’s current portfolio consists of a total of 49 doors, two 16 units and a 13 unit. We are actively searching the NC and SC markets for value-add properties ensuring efficient management and operations for superior profitability.
## Property Details
**Address:** Riverwatch Wilmington NC
**Number of Units:** 13
**Value Add Deal?** Yes
**Purchase Price:** $1,380,000
**Estimated monthly increase projected?** $100/unit
**Anticipated value after value add:** $1.5 mil
**Estimated Cash on Cash Return:** 11%
**Estimated Internal Rate of Return:** 18%
## Warrior team
shout outs:
## Which Warriors helped you with this deal, and how?
Andrew Vaughn is my partner on this deal
## Any comments about your experience so far in the Warrior Program?
Great community and always willing to help, someone has done whatever you are going through and they can help answer your questions.
## How did you find this property?
Broker Relationship
## How did you structure the financing of this property?
Local bank
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
1031 exchange and investor/partner
## What was the equity raise?
$300,000
## What are some hurdles you had to overcome to get this deal done?
Long price negotiation process, 6 months.
## What are some of the lessons you learned with this deal?
Be patient offer better terms than the competition, in this case ability to close in 45 days
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Win: Joel Bolomboy 59 Unit Acquisition](https://rodkhleif.com/warrior-wins-joel-bolomby/)
**Published:** April 9, 2020
**Author:** Matt RK
**Content:**
## Warrior Win
# Joel Bolomboy
I am currently a pro basketball player in my 4th year playing professionally. I originally got into and found real estate by looking for other ways to invest and grow my money outside of the stock market. Long story short I first learned about the real estate investing by coming across Grant Cardone and started watching and following him closely. Then took it upon myself to learn the game. Fast forward some more and I am at full swing now due to ROD KHLEIF. I am invested in 405 units total, at this point I am always learning but know enough to only invest in my own deals. 197 of these units I am an actual GP in these deals with my partners. As of 4.6.2020 we have 3 deals under contract, a 68, 22 and 130 all within a years worth of time after taking Rod’s course and learning from him.
## Property Details
**Address:** The Oaks – Tampa Florida
**Number of Units:** 59
**Value Add Deal?** Yes
**Purchase Price:** $5,447,000
**Estimated monthly increase projected?** $150
**Estimated Cash on Cash Return:** 9-10%
**Estimated Internal Rate of Return:** 15-17%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Best program out there! We can all make any of our dreams or wildest imaginations happen through hard work, not giving up and massive action everyday!
## How did you find this property?
On market through broker. CBRE listing
## How did you structure the financing of this property?
Agency non recourse debt, 75% LTV, 5-10 years fixed interest rate
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
Raised money through accredited investors
##
What was the equity raise?
$2,213,185
## What are some hurdles you had to overcome to get this deal done?
Originally started as a 82 unit deal then turned into 59 units due to non disposable info.
## What are some of the lessons you learned with this deal?
Building partnerships are key in this business. I just so happen to be looking to invest a good chunk of my personal funds when I came across these guys who eventually became my partners. They needed extra cash to close the deal due to investors backing out. They offered me a GP spot to come on shadow and help over see everything. We have been working ever since and have 3 deals under contract now(mentioned above). Make sure to raise extra capital so you’re not scrambling looking for money come 1-3 days before deadline!
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Win: Drew Doran 12 Unit Acquisition](https://rodkhleif.com/warrior-wins-drew-doran-2/)
**Published:** April 9, 2020
**Author:** Matt RK
**Content:**
## Warrior Win
# Drew Doran
Drew Doran is a resident of Silicon Valley, California. Drew has represented over $100M in luxury real estate sales in California since 2010. Drew has been investing in value-add multifamily apartment buildings since 2018. Drew is a general partner in 3 apartment buildings (204 units valued at $ 15,600,000) and is a limited partner in (101 units valued at $14,500,000) in Ohio and Kentucky. Currently Drew and his team have 3 properties (505 units) under contract which are set to close within the next 2 months.
## Property Details
**Address:** Lakeshore Pl
**Number of Units:** 12
**Value Add Deal?** Yes
**Purchase Price:** $530,000
**Estimated monthly increase projected?** $150
**Anticipated value after value add:** $725,000
**Estimated Cash on Cash Return:** 14.1%
**Estimated Internal Rate of Return:** 36%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
The Warrior Program has been life changing. I don’t say this lightly, it has absolutely changed my life personally and professionally. Prior to joining the Warrior program, I had always wanted to invest in real estate but didn’t have the blueprint to make it happen. The information provided in the program, the support from the coaches, and the incredible ecosystem of warriors has been paramount in helping me not only purchase my first multifamily property but keep me focused on growing my portfolio to 4 properties and 305+ doors in just 18 months. From a heart full of gratitude, I would just like to say – Thank you!
## How did you find this property?
I sourced this property through a broker relationship
##
How did you structure the financing of this property?
We worked with a local bank to secure financing for this property – its a recourse loan at 75% LTV
## What was the equity raise?
$150,000
## What are some hurdles you had to overcome to get this deal done?
This asset has performed very well for us. I am grateful for the guidence from Rod, Robert, and the coaches to help us buy this asset right foresee potential red flags
## What are some of the lessons you learned with this deal?
One of the lessons that I learned with this deal is the significance of economies of scale. I am thrilled to have purchased this property because it has performed well for us, and as this is my first acquisition, it holds a special place in my heart. That being said, I have discovered the power of economies of scale and the significance of having the property produce enough revenue to support a full-time on-site staff.
## Was this a joint venture or syndication?
Joint Venture
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Win: Drew Doran 174 Unit Acquisition](https://rodkhleif.com/warrior-wins-drew-doran/)
**Published:** April 9, 2020
**Author:** Matt RK
**Content:**
## Warrior Win
# Drew Doran
Drew Doran is a resident of Silicon Valley, California. Drew has represented over $100M in luxury real estate sales in California since 2010. Drew has been investing in value-add multifamily apartment buildings since 2018. Drew is a general partner in 3 apartment buildings (204 units valued at $ 15,600,000) and is a limited partner in (101 units valued at $14,500,000) in Ohio and Kentucky. Currently Drew and his team have 3 properties (505 units) under contract which are set to close within the next 2 months.
## Property Details
**Address:** Park 3099
**Number of Units:** 174
**Value Add Deal?** Yes
**Purchase Price:** $13,150,000
**Estimated monthly increase projected?** $125
**Anticipated value after value add:** $17,500,000
**Estimated Cash on Cash Return:** 11%
**Estimated Internal Rate of Return:** 17%
## Warrior team
shout outs:
## Which Warriors helped you with this deal, and how?
Rod, Robert, Josh, Jarvis, Adam
## Any comments about your experience so far in the Warrior Program?
The Warrior Program has been life changing. I don’t say this lightly, it has absolutely changed my life personally and professionally. Prior to joining the Warrior program, I had always wanted to invest in real estate but didn’t have the blueprint to make it happen. The information provided in the program, the support from the coaches, and the incredible ecosystem of warriors has been paramount in helping me not only purchase my first multifamily property but keep me focused on growing my portfolio to 4 properties and 305+ doors in just 18 months. From a heart full of gratitude, I would just like to say – Thank you!
## How did you find this property?
We sourced this deal through a broker realtionship
## How did you structure the financing of this property?
We purchsed the property with bridge debt
## How did you raise the equity?
We raised the equity through the network of our team.
## What was the equity raise?
$6,200,000
## What are some hurdles you had to overcome to get this deal done?
This deal was pretty straight forward. We have a great team who collectively made this a very smooth transaction.
## What are some of the lessons you learned with this deal?
A learning lesson for me was the significance of the property management company and onsite staff. We have had to work intimately with the property management company to source the right people (boots on the ground) who share the same vision and core values that we do to manage the day to day operations.
## Was this a joint venture or syndication?
Syndication
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Edward Lowell - #2](https://rodkhleif.com/warrior-wins-edward-lowell-2/)
**Published:** April 15, 2020
**Author:** Matt RK
**Content:**
## Warrior Win
# Edward Lowell
Edward is a native of North Carolina and holds an MBA from Queens University-Charlotte. He has over 25 years of leadership and management experience in supply chain and operational functions. Edward’s current portfolio consists of a total of 49 doors, two 16 units and a 13 unit. We are actively searching the NC and SC markets for value-add properties ensuring efficient management and operations for superior profitability.
## Property Details
**Address:** Ridgewood Greenville NC
**Number of Units:** 16
**Value Add Deal?** Yes
**Purchase Price:** $645,000
**Estimated monthly increase projected?** $50/unit
**Anticipated value after value add:** $850,000
**Estimated Cash on Cash Return:** 9%
**Estimated Internal Rate of Return:** 15%
## Warrior team
shout outs:
## Which Warriors helped you with this deal, and how?
The Warriors would answer any questions I had right away.
## Any comments about your experience so far in the Warrior Program?
Great community and always willing to help, someone has done whatever you are going through and they can help answer your questions.
## How did you find this property?
Broker Relationship
## How did you structure the financing of this property?
Local bank
## How did you raise the equity?
Investor/partner
## What was the equity raise?
$150,000
## What are some hurdles you had to overcome to get this deal done?
Working with the old PM company ensuring all inspection findings were completed before closing as we chose I different company to manage going forward.
## What are some of the lessons you learned with this deal?
How to market yourself to an investor, gain trust so they will invest with you.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Win: Edward Lowell 16 Unit Acquisition](https://rodkhleif.com/warrior-wins-edward-lowell-3/)
**Published:** April 15, 2020
**Author:** Matt RK
**Content:**
## Warrior Win
# Edward Lowell
Edward is a native of North Carolina and holds an MBA from Queens University-Charlotte. He has over 25 years of leadership and management experience in supply chain and operational functions. Edward’s current portfolio consists of a total of 49 doors, two 16 units and a 13 unit. We are actively searching the NC and SC markets for value-add properties ensuring efficient management and operations for superior profitability.
## Property Details
**Address:** Pine Forest Burgaw (outside Wilmington) NC
**Number of Units:** 16
**Value Add Deal?** Yes
**Purchase Price:** $545,000
**Estimated monthly increase projected?** $100-150/unit
**Anticipated value after value add:** $750,000
**Estimated Cash on Cash Return:** 12%
**Estimated Internal Rate of Return:** 18%
## Warrior team
shout outs:
## Which Warriors helped you with this deal, and how?
Ed Mozel helped with the initial evaluation
## Any comments about your experience so far in the Warrior Program?
its a team sport and the warriors are the best team to have
## How did you find this property?
Broker Relationship
## How did you structure the financing of this property?
Major bank
## How did you raise the equity?
equity in my home
## What was the equity raise?
$110,000
## What are some hurdles you had to overcome to get this deal done?
Financing took a lot longer than I thought, had to ask for extension twice
## What are some of the lessons you learned with this deal?
make sure you have your financing nailed down
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Win: Chris Moyer’s 34 Unit Creekside Townhomes](https://rodkhleif.com/warrior-wins-chris-moyer/)
**Published:** November 20, 2023
**Author:** Greciel Moreno
**Content:**
## Warrior Win
# Chris Moyer
In 2019, Chris and his wife Kristen decided to jump into real estate together less than a month after marriage. Through the pandemic, Chris earned his Contractors License in the State of Arkansas and continued to purchase properties. By the end of 2021, Chris and his wife owned six units.
After joining Rod Khleif’s Multifamily Real Estate mastermind in 2022, Chris accelerated his learning and took massive action towards real estate. Within 12 months, Chris 3x’d his holdings from 11 units to 33 units. Chris also started vertically integrating their business and now has three employees and handles all property management for their properties.
Today, Chris works for the largest bowling equipment manufacturer in the world by day and is a real estate entrepreneur by night and weekend. Chris and his wife solely own 33 units ranging from single family to commercial multi family.
## Property Details
**Address:** Creekside Village Townhomes
**Number of Units:** 34
**Value Add Deal?** Yes
**Purchase Price:** $1,425,000
**Estimated monthly increase projected?** $175/unit
**Anticipated value after value add:** $2,750,000
**Estimated Cash on Cash Return:** 8% Year 1 & 2, Infinite after
**Estimated Internal Rate of Return:** 33% over 5 Year Hold
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Amazing, no regrets. This is my first big deal being a Warrior.
## How did you find this property?
MLS.
## How did you structure the financing of this property?
Local In-house bank loan.
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
Friends, Family and Warriors.
## What was the equity raise?
$725,000
## What are some hurdles you had to overcome to get this deal done?
Financing, Partnership, Seller was a Lawyer.
## What are some of the lessons you learned with this deal?
Need to get better at raising capital. Learned a few extra systems and check lists to have in place. Learned to work multiple angles on the financing versus thinking just one person is going to come through.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Chris Moyer - 12 Units](https://rodkhleif.com/warrior-wins-chris-moyer-5/)
**Published:** November 6, 2024
**Author:** Matt RK
**Content:**
## Warrior Win
# Chris Moyer
Assets Under Management:
42 Units solely owned including Single Family, Residential Multi Family and One Commercial Multi Family across 18 properties.
Creekside Village Townhomes, Searcy, AR – 34 Units (General Partner)
Let’s Roll Seneca (36 Lanes, 35,000SqFt) & Let’s Roll Derby (24 Lanes, 22,000SqFt), Wichita, KS (President)
Westwood Flats Apartment Homes, Wichita, KS – 92 Units (General Partner)
Safekeep Storage Solutions – 76 Units, Jonesboro, AR – 76 Units (Sole Owner)
Let’s Roll Paragould (12 Lanes, 24,000SqFt) (Owner)
## Property Details
**Address:** Let’s Roll Paragould, 2707 West Kingshighway, Paragould, AR 72450
**Number of Units:** 12
**Value Add Deal?** Yes
**Purchase Price:** $3,000,000
**Estimated monthly increase projected?** N/A
**Anticipated value after value add:** $9,000,000
**Estimated Cash on Cash Return:** infinite!
**Estimated Internal Rate of Return:** infinite!
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
A-M-A-Z-I-N-G
## How did you find this property?
Local Bank, was about to go into foreclosure.
## How did you structure the financing of this property?
Bank Financing with 0% down. Bank rolled over the loan to us since it was about to get into foreclosure, plus gave us money to redo the building and buy equipment. All with $0 down at closing.
## Was this a joint venture or syndication?
JV
## How did you raise the equity?
N/A
## What was the equity raise?
$0
## What are some hurdles you had to overcome to get this deal done?
Had to deal with a seller that wasn’t cooperative since he was in foreclosure. Bank essentially forced him to sell the property.
## What are some of the lessons you learned with this deal?
Have great relationships with banks, and keep expanding those relationships. Without that relationship, we would have never been able to make this deal happen!
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Win:
Victor Collazo
92 Units in KS](https://rodkhleif.com/warrior-win-victor-collazo-92-unit-ks/)
**Published:** March 19, 2025
**Author:** Graciela
**Content:**
## Warrior Win
# Victor Collazo 92 Units Closed
## Victor Collazo
## From US Army Veteran to Multifamily Investor
Victor is a 10-year US Army veteran and a previous successful painting franchise owner. He is currently an IT Program Manager, providing stellar project delivery to customers globally. Married with three kids, Victor loves to work out daily and volunteers for several local veteran charities, including Grey Team and The Barracks Foundation. Transitioning from Single Family to Multifamily in 2020, he has become an LP in over 200 doors, a partner in STRs, and an investor in Grant Cardone’s funds, bringing his business knowledge and asset management skills to the table.
[Learn more about Warrior Coaching → ](https://rodkhleif.com/work-with-rod/)
## Property Overview
**Property Name**: Westwood Flats
**Location**: 6841 West Shade Lane, Wichita KS 67212
**Number of Units**: 92
**Value Add Deal**: Yes
**Purchase Price**: $5,450,000
**Projected Monthly Rent Increase**: $150-200
**Anticipated Value After Value Add**: $8,380,445
**Estimated Cash-on-Cash Return**: 7%-9%
**Estimated Internal Rate of Return (IRR)**: 15%-17%
## How This Deal Came Together
### Deal Source
**Broker Relationship:** The property was sourced through a fellow Warrior, showcasing the power of community and networking within the program.
### Equity Raise2
**Total Equity Raised**: $3,000,000
**How It Was Raised**: Through Limited Partners (LPs), demonstrating effective capital raising strategies.
### Financing Structure
**Syndication Type:** Syndication
### Value-Add Strategies
New or Refaced Cabinets
New Black Appliances
Resurface Counter Tops
New Fans & Lights
Wall Repair & New Paint
New Signage
Repair Fencing
Tree Trimming
Repair Decking
New Exterior Paint
New Grilling Stations
### ## Challenges Faced
**Hurdles Overcome**: One of the General Partners (GP) was closing on his house but was also an LP, so we had him invest post-close, showcasing adaptability in complex situations.
### Warrior Program Support
Victor received invaluable support from fellow Warriors, including Chris Moyer, Jermaine Xavier, Bharat Kona, Nitin John Abraham, Bista Shrestha, and Mark Nagy, who provided insights and encouragement throughout the process.
### Lessons Learned & Key Takeaways
**Always Be Raising Capital**: Capital raising is an everyday task; nothing is guaranteed until the closing is completed and the money is transferred to the bank.
**Establish Strong Relationships**: Building connections with investors and fellow Warriors is crucial for success.
**Stay Adaptable**: Flexibility in overcoming challenges is key to closing deals successfully.
> The experience has truly been life changing in a positive way
>
> Victor Collazo
## Be the Next Warrior Success Story
Victor’s journey exemplifies how mentorship, strategic networking, and expert guidance can lead to significant achievements in multifamily real estate. If you’re ready to transform your life and achieve financial independence, consider joining Rod Khleif’s Mentorship Program. With a step-by-step system, direct mentorship, and access to a powerful network, you can close more deals, raise capital, and grow your wealth faster. Apply for mentorship today and start your journey to success!
[ Join the Warrior Program ](https://rodkhleif.com/work-with-rod/)
## Warrior Success Stories
[Play Video](https://www.youtube.com/watch?v=6L-ho9oRtUY)
#### [Featuring Elsa Nguyens #682](https://rodkhleif.com/podcasts/single-mom-to-massive-success-in-multifamily/)
### [Immigrant Mom To Massive Success In Multifamily](https://rodkhleif.com/podcasts/single-mom-to-massive-success-in-multifamily/)
[Play Video](https://www.youtube.com/watch?v=Fmqzl9_8Nj4)
#### [Featuring Oliver Fernandez #721](https://rodkhleif.com/podcasts/from-7-to-1000-units-in-3-years-2/)
### [From 7 to 1000 units in 3 years](https://rodkhleif.com/podcasts/from-7-to-1000-units-in-3-years-2/)
[Play Video](https://www.youtube.com/watch?v=J-fDFPBRilY)
#### [Featuring Rasool Mutawakkil #715](https://rodkhleif.com/podcasts/10mm-in-multifamily-assets-under-management-in-one-year/)
### [$10MM in Multifamily Assets Under Management in One Year](https://rodkhleif.com/podcasts/10mm-in-multifamily-assets-under-management-in-one-year/)
[ See more warrior wins ](/warriorwins)
---
### [Warrior Win:
Alejandro Chardon
Land Development Project in AZ](https://rodkhleif.com/warrior-win-alejandro-chardon-land-development-project-az/)
**Published:** March 18, 2025
**Author:** Graciela
**Content:**
## Warrior Win
# Alejandro Chardon Land Development Project Closed
## Alejandro Chardon
## Introduction
Alejandro Chardon is a seasoned professional with a robust background in strategy consulting at Accenture, where he collaborated with Fortune 500 executives on advanced data analytics and operational improvements, generating over $200M in value. With a B.S. in Business Administration from the University of Central Florida and an MBA from Rice University, Alejandro has successfully navigated the realms of venture capital and commercial real estate, investing over $10M in equity. His passion for real estate is matched only by his love for family, cooking, and sports.
[Learn more about Warrior Coaching → ](https://rodkhleif.com/work-with-rod/)
## Property Overview
**Property Name**: TBD Bourdon Ranch Road
**Location**: Show Low, AZ 85901
**Number of Units**: 0 (Land Development Project)
**Value Add Deal**: Yes
**Purchase Price**: $5,700,000
**Anticipated Value After Value Add**: $9,800,000
**Estimated Cash-on-Cash Return**: 36%
**Estimated Internal Rate of Return (IRR)**: 21%
## How This Deal Came Together
### Deal Source
**Broker Relationship:**This deal was sourced directly from the lead developer’s network, showcasing Alejandro’s ability to leverage relationships for successful acquisitions.
### Equity Raise2
**Total Equity Raised**: $2,000,000
**How It Was Raised**: Through Alejandro’s Private Investor Network, demonstrating his strong connections and credibility in the investment community.
### Financing Structure
**Syndication Type**: Syndication
### Value-Add Strategies
**Best-Use and Feasibility Study**: Conducted to determine the optimal development plan for the land.
**Entitlement Process**: Engaged in engineering and environmental studies to secure city approval for entry-level housing.
**Site Platting and Landscape Architecture**: Final improvements included executing site platting and enhancing the landscape design.
### ## Challenges Faced
**Establishing Real Estate Investment Brand**: Building a recognizable brand in a competitive market.
**Investor Commitment Issues**: Navigating the challenges of securing and maintaining investor commitments.
**Self-Belief and Persistence**: Overcoming self-doubt and maintaining motivation throughout the process.
**System Management**: Creating and managing effective systems for capital raising and deal execution.
### Warrior Program Support
Alejandro received critical support from the Warrior community, particularly from Georgy Marrero, who provided essential knowledge and guidance throughout the capital raising process.
### Lessons Learned & Key Takeaways
**Always Be Raising Capital**: Establish relationships and engage investors long before a deal is secured.
**Understand Underwriting and Financials**: A thorough grasp of financials is crucial for success.
**Reliable Infrastructure**: Having a dependable system in place is vital for managing the capital raising process.
**Persistence is Key**: Success requires continuous effort and the understanding that you are the driver of your initiatives.
> The Warrior Program enabled me to understand the commercial real estate industry in great detail, beyond the books, it has given me access to amazing individuals that are invested in many different aspects of the business and have great experiences they share. The Warriors program was my gateway to launch my company and build a career in the industry.
>
> Alejandro Chardon
## Be the Next Warrior Success Story
Alejandro’s journey exemplifies the power of mentorship and community in achieving success in real estate. If you’re ready to transform your career and unlock your potential, consider joining Rod Khleif’s Warrior Mentorship Program. With expert guidance, a supportive network, and proven strategies, you can turn your real estate dreams into reality. Apply for mentorship today!
[ Join the Warrior Program ](https://rodkhleif.com/work-with-rod/)
## Warrior Success Stories
[Play Video](https://www.youtube.com/watch?v=6L-ho9oRtUY)
#### [Featuring Elsa Nguyens #682](https://rodkhleif.com/podcasts/single-mom-to-massive-success-in-multifamily/)
### [Immigrant Mom To Massive Success In Multifamily](https://rodkhleif.com/podcasts/single-mom-to-massive-success-in-multifamily/)
[Play Video](https://www.youtube.com/watch?v=Fmqzl9_8Nj4)
#### [Featuring Oliver Fernandez #721](https://rodkhleif.com/podcasts/from-7-to-1000-units-in-3-years-2/)
### [From 7 to 1000 units in 3 years](https://rodkhleif.com/podcasts/from-7-to-1000-units-in-3-years-2/)
[Play Video](https://www.youtube.com/watch?v=J-fDFPBRilY)
#### [Featuring Rasool Mutawakkil #715](https://rodkhleif.com/podcasts/10mm-in-multifamily-assets-under-management-in-one-year/)
### [$10MM in Multifamily Assets Under Management in One Year](https://rodkhleif.com/podcasts/10mm-in-multifamily-assets-under-management-in-one-year/)
[ See more warrior wins ](/warriorwins)
---
### [Warrior Win:
Ronald and Mary Jane Lou
204 Units in TX](https://rodkhleif.com/warrior-win-ronal-and-mary-jane-lou-204-units-tx/)
**Published:** March 17, 2025
**Author:** Graciela
**Content:**
## Warrior Win
# Ronald and Mary Jane Lou 204 Units Closed
## Ronald and Mary Jane Lou
## From Auto Mechanic and Electrical Engineer to Multifamily Investors
Ronald, a former auto mechanic turned software engineer, began his real estate journey with single-family homes before transitioning to commercial properties after joining the Warrior program two years ago. His superpower lies in deal sourcing and capital raising, fueled by passions for sports, fitness, new business ventures, economics, and cars. Mary Jane, with a long career in the Department of Defense as an electrical engineer and manager, shifted to full-time real estate 1.5 years ago. As an Airbnb operator, her strengths are in deal sourcing and underwriting, complemented by her interests in interior design, fashion, economics, and raising their two sons.
[Learn more about Warrior Coaching → ](https://rodkhleif.com/work-with-rod/)
## Property Overview
**Property Name**: The New Horizon Apartments
**Location**: 4848 Goldfield Dr, San Antonio, TX 78218
**Number of Units**: 204
**Value Add Deal**: Yes
**Purchase Price**: $16,900,000
**Projected Monthly Rent Increase**: $49
**Anticipated Value After Value Add**: $26,663,001
**Estimated Cash-on-Cash Return**: 7%
**Estimated Internal Rate of Return (IRR)**: 18%
## How This Deal Came Together
### Deal Source
**Broker Relationship:** The property was sourced through a connection with another Warrior who brought it to Ronald and Mary Jane after it went under PSA, allowing them to assist with capital raising and asset management.
### Equity Raise2
**Total Equity Raised**: $6,600,000
**How It Was Raised**: Through Limited Partner (LP) investors.
### Financing Structure
**Loan-to-Value (LTV)**: 75%
**Lender**: Fannie Mae
**Syndication Type**: Syndication
### Value-Add Strategies
**Exterior Improvements**: New paint, roof, siding, and repairs to patios and balconies.
**Clubhouse Conversion**: Transforming the clubhouse into a new unit.
**Infrastructure Enhancements**: Upgrading parking lots, sidewalks, and adding a new sign.
**Pool Renovation**: Refinishing pools and renovating 28 classic units.
**Security Measures**: Implementing a security guard and adding an Amazon locker.
**Professional Management**: Engaging a professional management team to optimize operations.
**Market Rent Adjustments**: Raising rents to align with market rates.
**Loan Assumption**: Securing a loan assumption at 3.78% interest.
### ## Challenges Faced
**Equity Raise Complexity**: Overcoming the challenge of raising equity during a difficult economic climate.
### Warrior Program Support
The Warrior program provided invaluable support, with guidance from mentors and fellow Warriors like Tom Petreca, Vinicius Ramos, Nacho Merino, Jose Martinez, Mike Bailey, Tarek, and Roushel Eid, who helped navigate the complexities of the deal.
### Lessons Learned & Key Takeaways
**Always Be Raising Capital**: Start building relationships and engaging with investors before a deal is secured.
**Marketing Yourself and Your Brand**: Effective self-promotion and brand marketing are crucial.
**Initiate Conversations**: Engage in discussions with new people to expand your network.
**Host Meetups**: Running meetups can foster connections and opportunities.
**Content Marketing**: Utilize newsletters and websites to share insights and attract investors.
> It’s been a great ride, we couldn't ask for a better group and had made lifelong friends and partners.
>
> Ronald and Mary Jane Lou
## Be the Next Warrior Success Story
Be the Next Warrior Success Story
Ronald and Mary Jane’s journey exemplifies how the right mentorship, strategic networking, and decisive action can lead to remarkable success in multifamily real estate. If you’re ready to transform your real estate aspirations into reality, consider joining Rod Khleif’s Warrior Mentorship Program. With expert guidance, a supportive community, and the tools you need to succeed, you can turn challenges into opportunities and achieve your financial goals. Apply for mentorship today!
[ Join the Warrior Program ](https://rodkhleif.com/work-with-rod/)
## Warrior Success Stories
[Play Video](https://www.youtube.com/watch?v=6L-ho9oRtUY)
#### [Featuring Elsa Nguyens #682](https://rodkhleif.com/podcasts/single-mom-to-massive-success-in-multifamily/)
### [Immigrant Mom To Massive Success In Multifamily](https://rodkhleif.com/podcasts/single-mom-to-massive-success-in-multifamily/)
[Play Video](https://www.youtube.com/watch?v=Fmqzl9_8Nj4)
#### [Featuring Oliver Fernandez #721](https://rodkhleif.com/podcasts/from-7-to-1000-units-in-3-years-2/)
### [From 7 to 1000 units in 3 years](https://rodkhleif.com/podcasts/from-7-to-1000-units-in-3-years-2/)
[Play Video](https://www.youtube.com/watch?v=J-fDFPBRilY)
#### [Featuring Rasool Mutawakkil #715](https://rodkhleif.com/podcasts/10mm-in-multifamily-assets-under-management-in-one-year/)
### [$10MM in Multifamily Assets Under Management in One Year](https://rodkhleif.com/podcasts/10mm-in-multifamily-assets-under-management-in-one-year/)
[ See more warrior wins ](/warriorwins)
---
### [Warrior Win: Chris Moyer Grows to 76 Units](https://rodkhleif.com/warrior-wins-chris-moyer-4/)
**Published:** July 18, 2024
**Author:** Graciela
**Content:**
## Warrior Win
# Chris Moyer
In 2019, Chris and his wife Kristen decided to jump into real estate together less than a month after marriage. Through the pandemic, Chris earned his Contractors License in the State of Arkansas and continued to purchase properties. By the end of 2021, Chris and his wife owned six units.
After joining Rod Khleif’s Multifamily Real Estate mastermind in 2022, Chris accelerated his learning and took massive action towards real estate.
Warrior 2 years
168 Doors Apartments
76 Storage
2 Bowling Centers
weekend.
## Property Details
**Address:** SafeKeep Storage Solutions
**Number of Units:** 76
**Value Add Deal?** Yes
**Purchase Price:** $350,000
**Estimated monthly increase projected?** $5-20/unit
**Anticipated value after value add:** $600,000
**Estimated Cash on Cash Return:** Infinite
**Estimated Internal Rate of Return:** Infinite
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Amazing.
## How did you find this property?
Wholesaler.
## How did you structure the financing of this property?
Bank financing, $0 in the deal.
## Was this a joint venture or syndication?
My wife and I bought it ourselves
## How did you raise the equity?
No.
## What was the equity raise?
0
## What are some hurdles you had to overcome to get this deal done?
Convince a local bank to do the project.
Seller was absentee and awful so had to make their t12 for them to give to the bank.
## What are some of the lessons you learned with this deal?
Get setup with software earlier in the acquisition process.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Chris Moyer Secures Another Deal](https://rodkhleif.com/warrior-wins-chris-moyer-3/)
**Published:** July 11, 2024
**Author:** Graciela
**Content:**
## Warrior Win
# Chris Moyer
In 2019, Chris and his wife Kristen decided to jump into real estate together less than a month after marriage. Through the pandemic, Chris earned his Contractors License in the State of Arkansas and continued to purchase properties. By the end of 2021, Chris and his wife owned six units.
After joining Rod Khleif’s Multifamily Real Estate mastermind in 2022, Chris accelerated his learning and took massive action towards real estate.
Warrior 2 years
168 Doors Apartments
76 Storage
2 Bowling Centers
weekend.
## Property Details
**Address:** Georgetown Court
**Number of Units:** 92
**Value Add Deal?** Yes
**Purchase Price:** $5,450,000
**Estimated monthly increase projected?** $200/unit
**Anticipated value after value add:** $10,000,000
**Estimated Cash on Cash Return:** 7-9%
**Estimated Internal Rate of Return:** 18-22%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Amazing.
## How did you find this property?
Broker.
## How did you structure the financing of this property?
Freddie Mac 10 year fixed.
## Was this a joint venture or syndication?
Syndication
## How did you raise the equity?
Private individual investors.
## What was the equity raise?
$3,000,000
## What are some hurdles you had to overcome to get this deal done?
Tight timeline, capital raising isn’t easy, a very hard owner with limited books, poor prior property management.
## What are some of the lessons you learned with this deal?
Get started on financing ASAP and don’t wait. Be raising outside of a deal.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Win: Chris Moyer’s 60 Bowling Lanes in Wichita](https://rodkhleif.com/warrior-wins-chris-moyer-2/)
**Published:** February 20, 2024
**Author:** Graciela
**Content:**
## Warrior Win
# Chris Moyer
In 2019, Chris and his wife Kristen decided to jump into real estate together less than a month after marriage. Through the pandemic, Chris earned his Contractors License in the State of Arkansas and continued to purchase properties. By the end of 2021, Chris and his wife owned six units.
After joining Rod Khleif’s Multifamily Real Estate mastermind in 2022, Chris accelerated his learning and took massive action towards real estate. Within 12 months, Chris 3x’d his holdings from 11 units to 33 units. Chris also started vertically integrating their business and now has three employees and handles all property management for their properties.
Today, Chris works for the largest bowling equipment manufacturer in the world by day and is a real estate entrepreneur by night and weekend. Chris and his wife solely own 33 units ranging from single family to commercial multi family.
## Property Details
**Address:** Seneca Bowl & Derby Bowl, WIchita KS **Number of Units:** 60
**Value Add Deal?** Yes
**Purchase Price:** $3,650,000
**Estimated monthly increase projected?** $0
**Anticipated value after value add:** $7,750,000 **Estimated Cash on Cash Return:** 100% Year 1 **Estimated Internal Rate of Return:** 50%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Amazing and Life Changing.
## How did you find this property?
Direct to Seller (36 Bowling Lanes @ Seneca Bowl and 24 Lanes at Derby Bowl)
## How did you structure the financing of this property?
SBA and Seller Financing
## Was this a joint venture or syndication?
Joint Venture
## How did you raise the equity?
N/A
## What was the equity raise?
0
## What are some hurdles you had to overcome to get this deal done?
Financing with SBA is very hard, had to keep the seller motivated to sell through all the hurdles. Went through multiple partners to find the right person since it’s a different kind of investment.
## What are some of the lessons you learned with this deal?
I know more about how the SBA works for future. Know what to look for with partners more.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Win: Danny Sallis 12 Units Acquisition](https://rodkhleif.com/warrior-wins-danny-sallis/)
**Published:** August 10, 2022
**Author:** Graciela
**Content:**
# Warrior Win: Danny Sallis' 12 Unit Acquisition
## Danny Sallis
US Army Special Operations for 12 years, transitioning full-time into real estate within the next 6 months. Zero real estate experience prior to first acquisition. I’m an avid outdoorsman, golf fanatic, and family man.
## Property Details
**Address:** 3700 Delancy St. Greensboro, NC
**Number of Units:** 12
**Value Add Deal?** Yes
**Purchase Price:** $1.2 M
**Estimated monthly increase projected?** $390/unit
**Anticipated value after value add:** $2MM
**Estimated Cash on Cash Return:** 8%
**Estimated Internal Rate of Return:** 25%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Great program that is like the bootcamp for getting into the multifamily space. All of the tools, resources, education, and network provided, only thing left to do is take action.
## How did you find this property?
Wholesaler.
## How did you structure the financing of this property?
3.8% 6 month I/O 25% LTV – obtained through local credit union.
## Was this a joint venture or syndication?
JV.
## How did you raise the equity?
JV Warriors and Family.
## What was the equity raise?
$380,000
## What are some hurdles you had to overcome to get this deal done?
Dealing with inexperienced wholesaler and very difficult seller. Took 6 months to close due to seller attempting to back out of the deal.
## What are some of the lessons you learned with this deal?
Property managers can change overnight. We interviewed 4-5 property managers by referral and went with the best one we thought would work at the time. This property management company has been unable to retain employees and we are a lot more involved with the day to day operations than expected.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Win: Charlie Peters’ 88 Unit Acquisition](https://rodkhleif.com/warrior-wins-charlie-peters/)
**Published:** September 22, 2020
**Author:** Matt RK
**Content:**
# Warrior Win
Charlie Peters | 88 Units
## Charlie Peters
Real estate investor for the past 24 years
## Property Details
**Address:** 101 Livingston St, Daleville AL Woodcreek Apartments
**Number of Units:** 88
**Value Add Deal?** Yes
**Purchase Price:** $850,000
**Estimated monthly increase projected?** $37,000 total
**Anticipated value after value add:** $3.6 mil
**Estimated Cash on Cash Return:** 174%
**Estimated Internal Rate of Return:** 57%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Been great so far. Everyone’s seems to solidly support each other’s goals and cheers on success. Coach (Adam Beckstedt) is super nice and has been quick to respond.
## How did you find this property?
One of our property management companies called and let us know it was available.
## Was this a joint venture or syndication?
Joint Venture
## How did you structure the financing of this property?
100% Private Debt
## What are some hurdles you had to overcome to get this deal done?
This one was actually pretty drama free. One page contract. Very simple.
## What are some of the lessons you learned with this deal?
This is the first deal I “put out there” on social media in an attempt to let more people know what I do and that there will be an opportunity to invest in future projects.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Win: Charlie Peters’ 72 Unit Investment](https://rodkhleif.com/warrior-wins-charlie-peters-3/)
**Published:** June 12, 2023
**Author:** Greciel Moreno
**Content:**
# Warrior Win
Charlie Peters | 72 Units
## Charlie Peters
Multifamily owner-investor with 27 years of experience.
## Property Details
**Address:** Creekside Apartments in Rochester, MN
**Number of Units:** 72
**Value Add Deal?** Yes
**Purchase Price:** $5,900,000
**Estimated monthly increase projected?** $17,000
**Anticipated value after value add:** $8,800,000
**Estimated Cash on Cash Return:** 8%
**Estimated Internal Rate of Return:** 19%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Awesome!
## How did you find this property?
Doing comp analysis at another property. This one was one of the comps.
## How did you structure the financing of this property?
Assumed Agency Loan (that was in default).
## Was this a joint venture or syndication?
Syndication.
## How did you raise the equity?
506b.
## What was the equity raise?
$3.2 million.
## What are some hurdles you had to overcome to get this deal done?
One of the buildings got condemned by the City while we were under contract.
## What are some of the lessons you learned with this deal?
It’s a lot easier when everyone else does the raise.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [THE MULTIFAMILY MASTERMIND MEMBERSHIP AGREEMENT](https://rodkhleif.com/the-multifamily-mastermind-membership-agreement/)
**Published:** September 24, 2020
**Author:** PerryL
**Content:**
# THE MULTIFAMILY MASTERMIND MEMBERSHIP AGREEMENT
This Membership Agreement (“Agreement”) is made and entered into between the undersigned Member named below and KL Promotions LLC and The Multifamily Boardroom, (“MB”) as of the date of the last party to execute this Agreement. Member desires to (i) purchase the right to participate in The Multifamily Boardroom Mastermind for one (1) year commencing on the date of MB’s acceptance of this Agreement
PROGRAM TERM
Program Membership shall commence effective upon payment and continue for one (1) year. Membership in this program includes the opportunity for one person to attend all Multifamily Boardroom 2 day Events.
MEMBERSHIP FEE
Membership in the MB program will be effective for one (1) year from the date of payment. Hotel accommodations, transportation costs, and some meals are not included in the Membership Fee.
Member acknowledges and agrees that the One Year Membership Fee is earned upon acceptance in the Program and execution of this Agreement by MB and is non-refundable. In the event any payments are missed, to the extent permitted by law, unpaid amounts shall accrue interest at the lesser of the maximum amount permitted to be charged by law or one and 5/10 percent (1.5%) per month and MB shall be entitled to receive all collections costs and expenses including but not limited to reasonable attorneys’ fees.
If after notification to Member of acceptance to the Multifamily Boardroom and the acceptance thereof by the Member, both parties shall be bound by this Agreement. Member guarantees to fulfill the financial obligations under the terms of this Agreement.
MULTIFAMILY BOARDROOM MEETINGS
Member are expected to attend three (3) two day Multifamily Boardroom meetings each year. Member will be given advance notification of said meetings, and attendance shall be at Member’s election. If Member chooses not to participate in any meeting that is offered during the term of this Agreement, the parties agree that MB is not obligated to provide that opportunity again in the future and there will be no make-up Multifamily Boardroom Meeting.
CANCELLATION
Member may cancel this transaction without penalty or obligation by submitting to KL Promotions LLC., a signed and dated written notice postmarked prior to midnight of the third (3rd) business day after the date of this Agreement. Your notice must be mailed or delivered to: KL Promotions LLC, 11161 E State Rd 70 #110-320, Lakewood Ranch, Florida 34202. Faxed notices are NOT acceptable. Cancellation after the third day shall result in the forfeiture to MB of the Membership Fee paid and Member shall remain obligated for the balance of the Membership Fee.
MB may terminate this Agreement at any time during the term of the Agreement if, at MB’s sole discretion, the Member conducts him/herself in any way inconsistent with the standards or purposes of the Multifamily Boardroom. lf MB elects to terminate this Agreement , then MB, at its sole discretion, may choose to refund a portion of the Membership Fee.
TRAVEL COSTS NOT INCLUDED
Travel expenses, some meals, (most included) and accommodation expenses with regard to the Meetings are the responsibility of Member, and are not included as part of the Multifamily Boardroom one year Membership Fee.
OWNERSHIP
Member understands that all materials, concepts, and information (collectively “Materials”) presented and used by MB during Member’s Membership in the The Multifamily Boardroom, either orally of in writing, are the property of MB and are protected by copyright, trade secret, and other applicable laws. Member acknowledges that the Materials constitute commercially valuable, proprietary, confidential properly of MB, the design and development of which required the investment of substantial effort, time, and money by MB. All rights in the Multifamily Boardroom and the Materials are expressly reserved by MB .Member agrees not to reproduce, copy, or otherwise duplicate, and not to distribute, lend, or otherwise transfer, the Materials without the prior written permission of MB.
INDEMNIFICATION
Member agrees to indemnify and hold harmless MB., and its affiliated companies, their officers, directors, employees and assigns from any and all claims, demands, suits, expenses, costs, reasonable attorneys’ fees, judgments or other charges incurred by Member as a result of Membership in any event, program, coaching or other activity associated with this Agreement.
DISPUTES
The parties agree to use their best efforts to resolve any and all disputes arising from this Agreement. The laws of the State of Florida shall govern this Agreement and the Member and MB agree that the exclusive venue shall be state and federal courts located in Sarasota County, Florida.
WARRANTIES
Member acknowledges that they are not relying upon any warranties, promises, guarantees, or representations made by MB, or Rod Khleif, individually, or anyone acting or claiming to act on behalf of MB, unless same is in writing or as a part of this Agreement.
PERSONAL RESPONSIBILITY AND ASSUMPTION OF RISK
Member acknowledges that they take full responsibility for themselves and all decisions made before, during and after their membership. They accept full responsibility for their choices, actions and results before, during and after this membership, and knowingly assume all of the risks of the membership related to their use, misuse, or non-use of the Program or any of the membership materials. They understand and agree that they are solely responsible for their results. They attest that they are mentally fit to participate in this Program and acknowledge that they are exclusively responsible for their financial well-being.
MODIFICATIONS
Except as provided herein, this Agreement cannot be modified unless such modification is reduced to writing and signed by the parties.
ENTIRE AGREEMENT
This Agreement, when executed by the parties, shall become a binding Agreement, which represents the entire agreement between the parties. No other representations, promises, or agreements, whether oral or written, shall be of any effect or validity. The parties may amend this Agreement in writing signed by both parties. This Agreement is not binding on MB until it has been executed by an authorized agent or officer of MB.
---
### [Goal Setting Workshop](https://rodkhleif.com/goal-setting-workshop/)
**Published:** May 18, 2021
**Author:** Matt RK
**Content:**
[  ](https://rodkhleif.com)
# Goal Setting Workshop
Setting big goals is one of the most important aspects of success, but it doesn’t stop there you need to take action on those goals to bring them into reality.
Goal setting is so much more than simply saying “I want this” or “This is going to happen”. The art of successful goal setting includes the **why** behind the goal and the **must do** behind the why.
Join me for this on-demand workshop where I help you define and set your life’s goals.
Please enter your info below to get instant access
to this comprehensive guide. By clicking, you accept our
[Terms Of Service And Privacy Policy.](/terms-privacy)
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---
### [Warrior Win: Charlie Peters’ 6 Unit Denver Deal](https://rodkhleif.com/warrior-wins-charlie-peters-2/)
**Published:** June 11, 2021
**Author:** Matt RK
**Content:**
## Warrior Win
# Charlie Peters
Multifamily investor with 25 years of experience. Full time investor for the past 16 years.
## Property Details
**Address:** The Hive at 1015 / 1015 21st St / Denver, CO 80205
**Number of Units:** 6
**Value Add Deal?** Yes
**Purchase Price:** $4,100,000
**Estimated monthly increase projected?** $1,200
**Anticipated value after value add:** $4,800,000
**Estimated Cash on Cash Return:** 20%
**Estimated Internal Rate of Return:** 20%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Awesome! It’s like McDonald’s . . . “I’m lovin’ it!”
## How did you find this property?
A (residential) broker sent it to me
## How did you structure the financing of this property?
Local bank (Solara)
## Was this a joint venture or syndication?
JV
## How did you raise the equity?
I funded it myself – had $2 million sitting with a 1031 intermediary
## What are some hurdles you had to overcome to get this deal done?
Zoning. The city wanted us to install elevators in each unit to do short term rentals. We hired an architect and he walked us through the waiver process.
## What are some of the lessons you learned with this deal?
Banks can blow past the DSCR requirement if the LTV is low enough
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Wins - Bridget Smith-Osbourne](https://rodkhleif.com/warrior-wins-bridget-smith-osbourne/)
**Published:** April 15, 2020
**Author:** Matt RK
**Content:**
## Warrior Win
# Bridget Smith-Osbourne
I am a buy & hold investor. I’ve been buying deeply discounted properties & rehabbing them for the past 10 years. I’ve added a couple of properties to my portfolio every year. I became a Warrior in October (2019). I truly enjoy investing in real estate as well as enjoying all the added benefits it brings along.
## Property Details
**Address:** 5768 – 5774 Aftonshire Drive, Fayetteville, N.C. 28304
**Number of Units:** 4
**Value Add Deal?** Yes
**Purchase Price:** $37,000
**Estimated monthly increase projected?** $550/unit
**Anticipated value after value add:** $140,000- $170,000
**Estimated Cash on Cash Return:** 33%
## Warrior team
shout outs:
## Any comments about your experience so far in the Warrior Program?
Extremely happy I joined. The warriors are so willing to help each other. I love the interconnection & the formation of sub groups to help each other learn & grow together.
## How did you find this property?
A wholesaler contacted me to see if I was interested in selling one of my properties. I said absolutely no. I informed him that I am in the market of finding deals just like him & to let me know of any deals he come across that fit my criteria.
## How did you structure the financing of this property?
Savings & credit cards
## What are some hurdles you had to overcome to get this deal done?
Pulling capital together for the purchase and rehab. Finding trustworthy contractors who would adhere to a timeline.
## What are some of the lessons you learned with this deal?
How important it is to get multiple bids. Although you may have an established relationship with an existing contractor, you should still get bids from others. Another plumbing company outbid my plumber not only by price but completion time.
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Warrior Win: Brian Kochendorfer’s 45 Unit Deal](https://rodkhleif.com/warrior-wins-brian-kochendorfer-2/)
**Published:** April 15, 2020
**Author:** Matt RK
**Content:**
## Warrior Win
# Brian Kochendorfer
Brian Kochendorfer is the Managing Member of Arc Equity Group, a Chicago-based real estate investment firm specializing in acquiring and operating apartment properties in the Midwest. Brian is a general and limited partner in over 800 apartment units with a total value of approximately $60,000,000. He has 13 years of experience as a commercial real estate broker and has been involved in over $600M in real estate transactions throughout his career, primarily in multifamily. At Arc, Brian leverages his investment and brokerage experience to oversee the firm’s acquisition and operational strategy.
## Property Details
**Address:** 1829 N Broadway, Melrose Park, IL
**Number of Units:** 45
**Value Add Deal?** Yes
**Purchase Price:** $3,150,000
**Estimated monthly increase projected?** $150-250/unit
**Anticipated value after value add:** $4,200,000
**Estimated Cash on Cash Return:** 11%
**Estimated Internal Rate of Return:** 15%
## Warrior team
shout outs:
## Which Warriors helped you with this deal, and how?
Rod Khleif – a few weeks after we closed I heard a flood company come on his podcast and talk about their process to remove properties from a flood zone. I called them right away and 2 months later just got a letter from FEMA confirming removal from the flood zone. This will save us 10k per year…that goes right on top of our NOI!
## Any comments about your experience so far in the Warrior Program?
The networking has been great, and since I joined I’ve made offers on deals with others in the group as well as started a local meetup through people I met in this program
## How did you find this property?
I am a broker and a client of mine told me he wanted to sell but did not want to list. I brought the deal to another client and we partnered up on it.
## How did you structure the financing of this property?
Bridge loan with Arbor
## How did you raise the equity?
Friends and family
## What was the equity raise?
$1 Mil
## What are some hurdles you had to overcome to get this deal done?
The bridge loan process was a nightmare compared to Fannie Mae. This property was in a flood zone and the lender made us put on excess flood insurance on top of the main flood policy, plus we have to use DACA accounts for the operating accounts during the bridge term.
## What are some of the lessons you learned with this deal?
Avoid bridge loans if possible 🙂
## Was this a joint venture or syndication?
Syndication
\* These examples depicting income or earnings are NOT to be interpreted as common, typical, expected, or normal for an average student. Although we have numerous documented successful deals from our coaching students, we cannot track all of our students’ results, and therefore cannot provide a typical result. You should assume that the average person makes little to no money or could lose money as there is work and risk associated with investing in real estate. The students depicted have participated in Rod’s training and coaching. The participants shown are not paid for their stories.
---
### [Forms](https://rodkhleif.com/forms/)
**Published:** March 30, 2020
**Author:** Rod Khleif
**Content:**
# Forms
Please find the forms, as mentioned in the ‘How to Create Lifetime CashFlow Through Multifamily Properties’ Book, below for free download.
[ LOI PDF Sample ](/wp-content/uploads/2020/03/Letter-of-Intent-LOI-2.pdf)
[ LOI Doc ](/wp-content/uploads/2020/03/Letter-of-Intent-with-seller-carrying-second-example-2.doc)
[ Sample Rental Application ](/wp-content/uploads/2020/03/SAMPLE-RENTAL-APPLICATION.docx)
[ Property analysis form ](/wp-content/uploads/2020/03/Multifamily-Due-Diligence-Checklist.docx)
---
### [Goal Setting Workbook](https://rodkhleif.com/goal-setting-workbook/)
**Published:** May 13, 2021
**Author:** Matt RK
**Content:**
[  ](https://rodkhleif.com)
# Goal Setting Worksheet
“Success is 80% mindset and 20% technical ability, if you want to be successful you need to be setting proper goals and take action in order to achieve them”
**– Rod Khleif**
[ Download Here ](https://6267139.fs1.hubspotusercontent-na1.net/hubfs/6267139/Planning%20to%20Crush%202023%20and%20My%20Life%20(1).pdf)
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---
### [Finding Deals Workshop](https://rodkhleif.com/finding-deals-workshop/)
**Published:** May 18, 2021
**Author:** Matt RK
**Content:**
[  ](https://rodkhleif.com)
# Finding Deals Workshop
In this on-demand workshop I cover how to find deals. Frankly, if you find a good deal, investors will line up to help you take it down. In this economy, that’s a fact…
But to find great deals you need to do what others won’t so you can live like other’s can’t! So, that’s what I cover in detail in this three-part workshop.
Why am I giving my BEST content and training away? Because I want to give you a small taste, a **preview**, a behind-the-curtain view of what I do in my Live Multifamily Bootcamps. And if I can show you how to find cash-flow-positive deals and get you started, I know you will begin to see how valuable multifamily real estate is.
Please enter your info below to get instant access
to this comprehensive guide. By clicking, you accept our
[Terms Of Service And Privacy Policy.](/terms-privacy)
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---
### [Strategy Call Thank You (Conscious Copy)](https://rodkhleif.com/strategy-call-thank-you-2/)
**Published:** June 17, 2020
**Author:** PerryL
**Content:**
# Thank You
## For Booking Your Call!
**We look forward to helping you set up a 90-Day Action Plan, so you can start to create lifetime cash flow through multifamily real estate!**
I just sent you an email with important info for you to review before our call.
If you have any questions, please don’t hesitate to reach out.
During our time together, we’ll go over:
- The first step to take when investing in multifamily real estate, no matter what level of experience you have (you don’t need to learn how to create documents or forms; you just have to focus on a few key concepts of dealmaking that Rod’s perfected over 40 years).
- How to get started in multifamily with resources you already have
- The biggest mistakes most people make when it comes to getting started with multifamily, and how you can avoid them
- The best way for both experienced investors and those newer to real estate investing to find deals, regardless of the market
- The Motivation & Success Exercise that will show you how to stay committed and focused on your investment journey (this is the same tool Rod has used to help him run over X businesses simultaneously)
- An easy way to get crystal clear about your goals, and how to use multifamily investing to make them into reality instead of a daydream
- Your Customized 90-Day Action Plan: A step-by-step plan you can use to start creating lifetime cash flow through multifamily real estate
I look forward to helping you change your life over the next 90 days!
Rod Khleif
## Raving Reviews For Rod’s Programs
## Chat Steinwald
## Ed Modzel
## Eric Upchurch
## Jens Nielsons
## Mark Blass
## Matt Spangenberg
## william yoder
---
### [Questions to Ask When Forming a Partnership](https://rodkhleif.com/questions-to-ask-when-forming-a-partnership/)
**Published:** April 28, 2021
**Author:** PerryL
**Content:**
[  ](https://rodkhleif.com)
# Questions to Ask When Forming a Partnership
“This is a list of important questions to ask yourself, your potential partner, and very specific items to tackle together. If you are going into any kind of partnership, you need this list.”
**– Rod Khleif**
Please enter your info below to get instant access
to this comprehensive guide. By clicking, you accept our
[Terms Of Service And Privacy Policy.](/terms-privacy)
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---
### [Guide to Multifamily Structures One Sheet](https://rodkhleif.com/multifamily-structures-overview/)
**Published:** December 8, 2024
**Author:** Matt RK
**Content:**
[  ](https://rodkhleif.com)
# Multifamily Real Estate Deal Structures: Key Concepts
The structure of a multifamily real estate deal is crucial for aligning the interests of both owners/operators and investors. Proper structuring ensures that all parties benefit from the property’s performance.
1. **Incentive Alignment**
- - **Objective**: Align interests between investors and operators.
- **Example**: In a syndication, investors get priority on income. Operators might earn more if performance targets are exceeded.
2. **Capital Stack**
- - **Senior Debt**: First claim on property income, typically covering 75% of the purchase price. Typical senior debt is a bank loan.
- **Common Equity**: Represents ownership in the property. Higher risk but potential for higher returns after senior debt obligations are met.
3. **Deal Structures**
- - **Partnership/Joint Venture**:
- **Structure**: Few investors pool resources.
- **Benefits**: Lower costs, quicker decisions.
- **Risks**: Fewer people to share costs, potential disagreements.
- **Syndication**:
- **Structure**: General Partners (GP) manage the property; Limited Partners (LP) provide capital.
- **Benefits**: GPs may earn extra income for exceeding targets. LPs benefit from professional management.
- **Risks**: Higher costs for GPs; LPs have less control.
4. **Offering Documents**
- - **Importance**: Critical for understanding deal specifics, including ownership, rights, and income distribution.
- **Action**: Review thoroughly before investing.
5. **Key Considerations**
- - **Ownership Structures**:
- **Joint Venture/Partnership**: Typically 2-4 owners with shared ownership.
- **Syndication**: Many equity holders with detailed ownership and voting rights.
- **Capital Calls**:
- **Description**: Additional funding may be needed unexpectedly.
- **Impact**: Non-compliance can lead to ownership dilution.
- **Return Metrics**:
- **Internal Rate of Return (IRR)**: A good IRR target is 15%+
- **Equity Multiple**: Ratio of capital returned to capital invested.
- **Income Splits**:
- **Partnership/Joint Venture**: Income split based on ownership percentage.
- **Syndication**: May include performance-based splits (e.g., preferred return and promote structure).
**Examples**
1. **Partnership/Joint Venture**:
- Two partners each contribute equally and share income equally.
2. **Syndication**:
- **Structure**: GP (10% ownership) and LPs (90% ownership). LPs receive an 8% preferred return first; remaining income is split.
3. **Sweat Equity**:
- **Structure**: GP contributes expertise without capital; LPs cover all capital. LPs receive an 8% preferred return first, with excess split 50/50.
**Performance Metrics**
- **IRR**: Measures annualized return rate.
- **Equity Multiple**: Measures total return relative to initial investment.
- **Cash on Cash Return**: Annual cash flow return on the invested cash.
**Conclusion**
Understanding multifamily deal structures, including ownership arrangements, fees, capital calls, return metrics, and income splits, is essential for making informed investment decisions. Thoroughly review offering documents and consider the experience of the management team to ensure a successful investment outcome.
“For owner/operators, the details of the deal structure have a material impact on the ability to attract investment capital while ensuring that the risk/return profile of the deal meets return criteria. For investors, the details of the deal structure – including fees charged by the manager – have a material impact on the cash available for distribution. So, both parties have a vested interest in a deal’s structure to ensure that they both benefit.” **– Rod Khleif**
I wrote a whopping 220 pages that covers this all in much more detail.
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- [ 2 DAY BOOTCAMP ](http://Multifamilybootcamp.com)
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---
### [Multifamily Checklist Thank You](https://rodkhleif.com/multifamily-checklist-thank-you/)
**Published:** January 31, 2020
**Author:** Rod Khleif
**Content:**
## thank you
# so much for requesting your
**Multifamily Property Checklist.**
It will be arriving in your inbox shortly.
This powerful tool will help you protect
your deals, your team and your reputation, so please go through it carefully.
In the meantime, check out my latest podcast episodes below and start taking action to create cash flow for life.
-Rod
## Recent Podcast Episodes
[
](https://rodkhleif.com/podcasts/public-insurance-adjuster-ralph-sampson/)### [ I Lost $7 Million… Here’s What Saved Me ](https://rodkhleif.com/podcasts/public-insurance-adjuster-ralph-sampson/)
[ Listen Now  ](https://rodkhleif.com/podcasts/public-insurance-adjuster-ralph-sampson/)
[
](https://rodkhleif.com/podcasts/creative-multifamily-financing-harvey-lockhart/)### [ How a Music Teacher Landed a $3.5M Apartment Deal ](https://rodkhleif.com/podcasts/creative-multifamily-financing-harvey-lockhart/)
[ Listen Now  ](https://rodkhleif.com/podcasts/creative-multifamily-financing-harvey-lockhart/)
[
](https://rodkhleif.com/podcasts/hotel-to-multifamily-conversion-alexander-cartwright/)### [ The Real Estate Strategy Nobody Is Talking About ](https://rodkhleif.com/podcasts/hotel-to-multifamily-conversion-alexander-cartwright/)
[ Listen Now  ](https://rodkhleif.com/podcasts/hotel-to-multifamily-conversion-alexander-cartwright/)
[  ](https://podcasts.apple.com/us/podcast/lifetime-cash-flow-through-real-estate-investing/id1097449598)
[  ](https://www.youtube.com/RodKhleif)
---
### [Multifamily Asset Management](https://rodkhleif.com/multifamily-asset-management/)
**Published:** August 12, 2022
**Author:** Matt RK
**Content:**
[  ](https://rodkhleif.com)
# Multifamily Asset Management
“Once a purchase is consummated and a property is taken into custody, an entirely new phase of the investment begins – the asset management phase. At a high level, this phase is the steady state process of managing an investment with the goal of making it as profitable as possible.”
**– Rod Khleif**
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---
### [Guide to Multifamily Asset Management One Sheet](https://rodkhleif.com/multifamily-asset-management-overview/)
**Published:** December 8, 2024
**Author:** Matt RK
**Content:**
[  ](https://rodkhleif.com)
# Multifamily Asset Management: Essential Overview
**Three Types of Management**
1. **Property Management**
- **This includes:** Rent collection, repairs, landscaping and trash, leasing, & tenant services.
2. **Asset Management**
- This is the management that you will need to do to manage the property managers.
3. **Portfolio Management**
- This is when you have multiple properties and need to manage performance across multiple properties.
**Key Responsibilities of an Asset Manager**
1. **Building a Team**
- **Members Needed**: Acquisitions Manager, Accounting & Finance, Real Estate Attorney, Property Manager, Bank/Lender, Insurance Broker, Contractor, Admin Staff, Underwriter, Conservation Specialist.
- **Finding Talent**: Network, post on job sites, seek recommendations.
- **Managing & Incentivizing**: Foster a positive work culture and link compensation to performance.
2. **Planning & Budgeting**
- **Capital Planning**: Manage cash flow and fund allocations.
- **Rental Rates**: Adjust rents competitively.
- **Repairs/Renovations**: Prioritize projects and manage budgets.
- **Inspections/Vendors**: Coordinate property services and protocols.
- **Documents & Filings**: Ensure compliance and accurate reporting.
3. **Financial Management**
- **Review & Reconciliation**: Ensure accuracy in financial records.
- **Taxes**: Manage timely tax payments.
- **Daily Operations**: Track cash flow and handle transactions.
4. **Metrics & Performance**
- **Occupancy Metrics**: Track physical and economic vacancy rates.
- **Financial Metrics**: Monitor NOI, debt service coverage, and cash on cash return.
- **Operational Metrics**: Assess resident satisfaction, operating costs, staff performance, and property condition.
1. **Leasing Activity**
- **3 Things to Focus on**: Monitoring the rent roll/expirations, leads/appointments/applications, and turning units
- **Networking**: Leverage relationships for additional resources and support.
2. **Managing the Property Manager**
- **Planning**: At the start of each year you should be discussing the operating budget, capital expenditures, planned renovations, rent rates, tenant satisfaction, and safety issues.
3. **Investor Relations**
- **Communication**: Whether it is good or bad news, you should always be constantly communicating with your investors.
- **Distributions**: Sending investors returns back to them is one of the most important tasks to accomplish.
4. **Marketing**
- **Channels**: Social media, paid search, organic search, direct mail, creating signage, and TV/radio.
5. **Market Monitoring**
- It is very important to keep an eye on the entire market as a whole. There are 6 metrics you want to watch: Rental rates, occupancy rates, new construction, cap rates, interest rates, and rental incentives.
6. **Measuring Performance**
- **The metrics to pay attention to:** Physical occupancy, economic vacancy, historical vacancy average, vacancy relative to market comps, monthly rental income, NOI, annual debt service, loss to lease, debt service coverage ratio, cash on cash return, budget vs. actual, quick ratio, current ratio, maintenance reserves vs. capital needs, residence satisfaction, operating costs, staff performance, property condition, # of maintenance requests/response time, # of leasing prospects & conversions, lease expirations, & move ins/move outs. Yes this can seem like a lot of things to track, but with the right property management team in place, it can make the process a lot smoother and easier.
This overview provides a streamlined guide to multifamily asset management, covering key responsibilities, planning, financial oversight, and critical performance metrics.
“Once a purchase is consummated and a property is taken into custody, an entirely new phase of the investment begins – the asset management phase. At a high level, this phase is the steady state process of managing an investment with the goal of making it as profitable as possible.” **– Rod Khleif**
I wrote a whopping 220 pages that covers this all in much more detail.
Please enter your info below to get instant access to the full comprehensive guide. By clicking, you accept our
[Terms Of Service And Privacy Policy.](/terms-privacy/)
- FIRST NAME\*
- EMAIL ADDRESS\*
- PHONE
By providing your number, you consent to receive marketing call or texts.
By clicking, you agree to our [Terms Of Service And Privacy Policy.](https://rodkhleif.com/terms-privacy/)
- [ 2 DAY BOOTCAMP ](http://Multifamilybootcamp.com)
- [ WANT ME AS YOUR COACH? ](https://rodkhleif.com/strategy-call)
- © All Rights Reserved
- [ Terms of Service / Privacy Policy ](/terms-privacy%20)
- [ Disclaimers ](/disclaimers)
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---
### [MASTERING MULTIFAMILY DEAL STRUCTURES](https://rodkhleif.com/mastering-multifamily-deal-structures/)
**Published:** April 1, 2021
**Author:** PerryL
**Content:**
[  ](https://rodkhleif.com)
# MASTERING MULTIFAMILY DEAL STRUCTURES
“For owner/operators, the details of the deal structure have a material impact on the ability to attract investment capital while ensuring that the risk/return profile of the deal meets return criteria. For investors, the details of the deal structure – including fees charged by the manager – have a material impact on the cash available for distribution. So, both parties have a vested interest in a deal’s structure to ensure that they both benefit.”
**– Rod Khleif**
Please enter your info below to get instant access
to this comprehensive guide. By clicking, you accept our
[Terms Of Service And Privacy Policy.](/terms-privacy)
- FIRST NAME\*
- EMAIL ADDRESS\*
- PHONE
By providing your number, you consent to receive marketing call or texts.
By clicking, you agree to our [Terms Of Service And Privacy Policy.](https://rodkhleif.com/terms-privacy/)
- [ 2 DAY BOOTCAMP ](http://Multifamilybootcamp.com)
- [ WANT ME AS YOUR COACH? ](https://rodkhleif.com/strategy-call)
- © All Rights Reserved
- [ Terms of Service / Privacy Policy ](/terms-privacy%20)
- [ Disclaimers ](/disclaimers)
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---
### [Mastering Multifamily Acquisitions](https://rodkhleif.com/mastering-multifamily-acquisitions/)
**Published:** April 1, 2021
**Author:** PerryL
**Content:**
[  ](https://rodkhleif.com)
# Mastering Multifamily
Acquisitions
“Completing the acquisition of a multifamily asset is a milestone event because it means that you now have the opportunity to generate additional income for your investors and family. It can be a fun and exciting time. To mitigate the risk of missing a detail and to create the ability to scale, it is necessary to establish a thorough and repeatable acquisition process. Doing so will provide a roadmap to navigate those final days before closing.”
**– Rod Khleif**
Please enter your info below to get instant access to this comprehensive guide. By clicking, you accept our
[Terms Of Service And Privacy Policy.](/terms-privacy)
- FIRST NAME\*
- EMAIL ADDRESS\*
- PHONE\*
By providing your number, you consent to receive marketing call or texts
- [ SPEAKING ](/speaking)
- [ MEDIA ](/media)
- © All Rights Reserved
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- [ Disclaimers ](/disclaimers)
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---
### [LCFA Application](https://rodkhleif.com/lcfa-application/)
**Published:** June 17, 2020
**Author:** PerryL
**Content:**
[  ](https://rodkhleif.com)
# Learn Multifamily From The Ground Up
Please fill out this short application to for enrollment into The Lifetime CashFlow Academy.
By answering these 3 quick questions below, we can better serve you understand where you are on your multifamily journey.
I look forward to working with you!
- FIRST NAME\*
- LAST NAME\*
- EMAIL ADDRESS\*
- PHONE\*
- Learning Interest\*What would you be most excited about learning? Check all that apply:
- How to get started
- Where to find deals
- How to evaluate a deal
- How to get money to fund deals
- How to evaluate deals
- How to invest into commercial property passively
- How to reduce taxes
- Motivation\*Which best describes why you want to learn how to invest in real estate?
Build a better retirement planReplace my income so I can leave my current jobCreate a legacy to pass down to my familyCreate additional income for myself and my familyGet a safer and better return on the wealth I've already built over the yearsOther
- Investment Capital\*How much capital do you have saved that you could use to start investing in real estate?
$0 to $10,000$10,000 to $20,000$20,000 to $50,000$50,000 to $100,000$100,000 to $250,000$250,000 to $500,000$1,000,000+
- By checking this box you agree to our Liability, Confidentiality, Earnings Disclaimers which can be viewed [here](https://rodkhleif.com/virtual-event-terms-policies/).
- I Agree\*
- I Agree
- [ SPEAKING ](/speaking)
- [ MEDIA ](/media)
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---
### [Finding Money Workshop](https://rodkhleif.com/finding-money-workshop/)
**Published:** May 18, 2021
**Author:** Matt RK
**Content:**
[  ](https://rodkhleif.com)
# Finding Money Workshop
Finding the money for your deals is so much easier than most people think. In this on-demand workshop I’ll show you how you can buy multifamily properties and why investors are always looking for cash-flowing deals.
Why am I giving my BEST content and training away? Because I want to give you a small taste, a **preview**, a behind-the-curtain view of what I do in my Live Multifamily Bootcamps. And if I can show you how to find cash-flow-positive deals and get you started, I know you will begin to see how valuable multifamily real estate is.
Please enter your info below to get instant access
to this comprehensive guide. By clicking, you accept our
[Terms Of Service And Privacy Policy.](/terms-privacy)
- FIRST NAME\*
- EMAIL ADDRESS\*
- PHONE
By providing your number, you consent to receive marketing call or texts.
By clicking, you agree to our [Terms Of Service And Privacy Policy.](https://rodkhleif.com/terms-privacy/)
- [ SPEAKING ](/speaking)
- [ MEDIA ](/media)
- © All Rights Reserved
- [ Terms of Service / Privacy Policy ](/terms-privacy%20)
- [ Disclaimers ](/disclaimers)
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- © All Rights Reserved
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- [ Disclaimers ](/disclaimers)
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---
### [Careers](https://rodkhleif.com/careers/)
**Published:** January 23, 2020
**Author:** Rod Khleif
**Content:**
# Ready to take your career AND your life to the next level?
## The MultiFamily Team is looking for the right fit candidates
to join our family.
For those of you looking to make good money WHILE getting one of the world’s best educations in MultiFamily real estate… we encourage you to apply to below.
## The Key Areas of Expertise That We Look For Include Include:
- Experience in real estate
- Experience in filmmaking
- Experience in digital marketing
- Experience leveraging social media
- Experience organizing and promoting live events
- And more
## Think you’re the right fit?
Apply Below:
- First Name\*
- Last name\*
- Email\*
- PHONE NUMBER
- What interests you most about multifamily?
- What is your experience with real estate?
- What is your experience with live events?
- What are your strongest skills?
- What is your background?
- Please attach your resume or cv here:
- By providing your number, you consent to receive marketing call or texts
##### By providing your number, you consent to receive marketing call or texts
---
### [A Guide to Multifamily Investment for Medical Professionals](https://rodkhleif.com/a-guide-to-multifamily-investment-for-medical-professionals/)
**Published:** November 6, 2024
**Author:** Matt RK
**Content:**
[  ](https://rodkhleif.com)
# A Guide to Multifamily Investment for Medical Professionals
Our guide tailored for healthcare professionals—download now to discover how passive income, tax benefits, and portfolio growth can secure your financial future
Please enter your info below to get instant access
to this comprehensive guide. By clicking, you accept our
[Terms Of Service And Privacy Policy.](/terms-privacy)
- FIRST NAME\*
- EMAIL ADDRESS\*
- PHONE
By providing your number, you consent to receive marketing call or texts.
By clicking, you agree to our [Terms Of Service And Privacy Policy.](https://rodkhleif.com/terms-privacy/)
- [ SPEAKING ](/speaking)
- [ MEDIA ](/media)
- © All Rights Reserved
- [ Terms of Service / Privacy Policy ](/terms-privacy%20)
- [ Disclaimers ](/disclaimers)
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- © All Rights Reserved
- [ Terms of Service / Privacy Policy ](/terms-privacy%20)
- [ Disclaimers ](/disclaimers)
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---
### [Whitelist](https://rodkhleif.com/whitelist/)
**Published:** August 18, 2020
**Author:** PerryL
**Content:**
### Provided courtesy of SuretyMail Email Reputation Certification
How to Whitelist Email from Rod Khleif for AOL, Yahoo, Gmail, Hotmail, Outlook, Thunderbird, Apple Mail, Postini, Bell/Sympatico, Rogers, Shaw, Telus.net & More
To ensure that the email we send you ends up in your inbox, and isn’t mistakenly sent to the junk folder, please whitelist our email address, which is info@rodkhleif.com.
Below is information on how to whitelist us with AOL, Yahoo, Gmail, Hotmail, Outlook, Apple Mail, ThunderBird and Postini. Even if your ISP or email program is not listed, with these instructions you should be able to figure out how to whitelist our email address at any ISP or with any email program.
Also, if you find email from info@rodkhleif.com in your spam or junk folder, please take that opportunity to tell your mail program that it is not spam by hitting the “not spam”, “not junk” or similar button, as that will train your program to whitelist it.
**AOL**
To add info@rodkhleif.com to your AOL address book:
1\. Open an email from us and then click the ‘This Is Not Spam’ button 2. Click the Mail menu and select Address Book 3. Wait for the Address Book window to pop up, then click the ‘Add’ button 4. Wait for the Address Card for New Contact window to load 5. Paste info@rodkhleif.com into the ‘Other E-Mail’ field 6. Make our “From” address, info@rodkhleif.com, the Primary E-Mail address by checking the appropriate box 7. Click “Save”
**Yahoo!**
To whitelist info@rodkhleif.com with Yahoo!, you will need to set up a “filter” after first taking the following steps:
1\. If you find email from info@rodkhleif.com is going to your Yahoo! bulk folder, open it and click “Not Spam” 2. Be sure that the address info@rodkhleif.com is not in your “Blocked Addresses” list. If info@rodkhleif.com is on your “Blocked Addresses” list, select it and click “Remove Block”
Now to create the filter:
3\. Open your mail and click on “Mail Options” in the upper right hand corner 4. Select ‘Filters’ (in the bottom left corner) 5. On the Filters page, click “Add” 6. Select the “From header:” rule, and add “contains” and info@rodkhleif.com, which tells the system to put email with info@rodkhleif.com in your inbox and not the bulk folder. 7. Click the “Choose Folder” pull down menu and select ‘Inbox’ 8. Pick the Add Filter button
**Hotmail**
To whitelist our address with Hotmail you will need to add info@rodkhleif.com to your Hotmail Safe List. Here’s how:
1\. First, if you find email from us in your Hotmail junk folder, open the email and click “Not Junk” 2. Next, check to see if if the email address info@rodkhleif.com is on your Blocked Senders list. If you find info@rodkhleif.com on your Hotmail blocked senders list, select it and click on the “Remove” button. 3. Next, open your mailbox and click “Options” in the upper right hand corner 4. At the top of the page, click on the “Junk E-mail Protection” link 5. Next, click on “Safe List”, which is down near the bottom 6. Copy and paste info@rodkhleif.com where it says “Type an address or domain” 7. Click the “Add” button
**Gmail**
1\. First, if you find email from us in your Gmail spam folder, select our email and click the “Not Spam” button 2. Next, open an email that you have received from us 3. Click on the little down-pointing-triangle-arrow next to “Reply”: 4. Click “Add Rod Khleif to Contacts list”
**Microsoft Outlook**
1\. On the Tools menu, click Options 2. On the Preferences tab, click Junk E-mail 3. On the Safe Senders tab, click Add 4. Add info@rodkhleif.com where it says “Add address” 5. Click OK
**Thunderbird**
To whitelist in Thunderbird, you will need to add info@rodkhleif.com to your address book, and then set up your Thunderbird Junk Mail Controls to whitelist your address book.
1\. First, if you find email from info@rodkhleif.com in your Junk folder, right-click on our email and choose “Mark as Not Junk” 2. Next, click the Address Book button 3. Highlight the Personal Address Book 4. Click on “New Card” 5. In the “Contact” tab of the new card, copy and paste info@rodkhleif.com to the email dialog box 6. Click “Ok” 7. Next, to whitelist your address book, select “Tools > Junk Mail Controls” from the drop down menu 8. Update the “White Lists” module under the “Settings” tab by selecting “Personal Address Book” from the drop down menu, and then check the box next to “Do not mark messages as junk mail” 9. Click “Ok”
**Apple Mail for OS X**
1\. First, if email from info@rodkhleif.com ends up in your junk folder, highlight or open it and click “Not Junk” at the top of your screen. Then: 2. Go to Mail > Preferences from your Mail menu 3. Go to the Rules tab 4. Select Add Rule 5. Give this rule a name such as “Rod Khleif” 6. Create a rule that says “If any of the following conditions are met: ‘From’ ‘Contains’” and then paste in “info@rodkhleif.com” 7. From the actions, select ‘Move message’ to mailbox ‘Inbox’. 8. Click “OK”
**Bell/Sympatico**
To whitelist info@rodkhleif.com with Bell / Sympatico:
1\. Using www.bell.ca/ webmail sign in to your Sympatico account. 2. On the Sympatico web page, click on the Options tab at the top of the page. Select the ’More Options’ link at the bottom of the drop down menu. 3. On the new page, under ’Junk e-mail’ click the ’Safe and Blocked Senders’ link. 4. On the next page, click the ’Safe Senders’ link. 5. Enter info@rodkhleif.com in the box. 6. Click the ’Add’ button beside it. The screen will refresh and the email address should appear in the Safe List. This will tell Sympatico that email from info@rodkhleif.com should not be treated as spam.
**Rogers**
In Rogers Mail, log into your email account and follow these steps to add info@rodkhleif.com to your address book:
1\. On the main screen, select the ’Add’ link next to the Contacts item, on the left hand side of the page. 2. A form will appear in the middle of the screen. On this form, enter Rod Khleif and info@rodkhleif.com and select ’Save’
If you’re still not receiving email you are expecting, there are two things you can do: 1. Use the ’Not Spam’ button in your Bulk folder. 2. Create a filter to automatically send email from info@rodkhleif.com to your Inbox. This is the only way to really ensure delivery.
Report as “Not Spam” 1. Check your Rogers Bulk folder 2. If you see the email from info@rodkhleif.com, highlight it and click ’Not Spam’ 3. This does not guarantee that your mail will be delivered in the future, but it does help.
Create a Filter 1. Click ’Options’ in the top right navigation bar 2. Select ’Mail Options’ from the list that drops down 3. Choose ’Filters’ located on the left side of the page 4. Click the ’Add’ button on the Filters page 5. Choose the field you want to match in the incoming message. For example, “header” or “to”. 6. Choose the criterion by which you want a match to be made, such as “contains” 7. Enter the text string to compare. For example: info@rodkhleif.com 8. Choose the destination folder to which you would like the message delivered. For example: Inbox
**Telus.net Webmail**
Make sure that our messages arrive in your inbox by adding info@rodkhleif.com to your address book and confirm that our email is not spam by reporting so in Telus Webmail.
Add Sender to Address Book
1\. Click on ’Address list’ on the sidebar menu. 2. Type info@rodkhleif.com into the text box. 3. Click ’Save.’
Report non-spam – TELUS Webmail
1\. Open and log into TELUS Webmail. 2. Select the email(s) you would like to report. 3. Click on the ’Not Spam’ button above the email(s). 4. The message will be automatically reported as Not Spam.
**Shaw**
In Webmail for Shaw, log into your email account and follow these steps to add info@rodkhleif.com to your safe list and to ensure that our emails are not automatically deleted. This ensures that you never miss out on any of our emails!
1\. On the main screen, select the ’Address Book’ tab at the top 2. This page will list any/all of your contacts within your address book. On this page, at the bottom, enter Rod Khleif and info@rodkhleif.com 3. Then, Select ’Add Contact’ Once you see our email listed in your personal address book, it means that we’ve been white listed, and will help ensure that you continue to receive our emails straight to your inbox.
Shaw has the practice of deleting any message that appears to have spam-like qualities, even if you’ve asked to receive them. With this turned on, emails can be deleted automatically without ever been seen. To disable this automatic filter, please follow these steps:
1\. On the main screen, select ’Settings’ 2. Then, select the ’Spam Filter’ link 3. On this page, you have the ability to adjust your spam filter settings. Select ’Disable Junk Email Filtering’ so no emails are blocked or deleted automatically. 4. Press the ’Save’ Button
**Postini**
You do not need to whitelist email from Rod Khleif in Postini unless you find it trapped in the “Junk” area by Postini.
1\. Log into your Postini account 2. Look to see if any email from info@rodkhleif.com is listed in your Junk area 3. If you find email from info@rodkhleif.com in the Junk area, check the check box next to the email from info@rodkhleif.com 4. Click the “Deliver Selected” link at the very top of the Junk screen 5. On the next screen, click the “Approve Sender” check box next to the email from info@rodkhleif.com 6. Click the “Approve Selected Senders” button
---
### [Event Terms & Policies](https://rodkhleif.com/virtual-event-terms-policies/)
**Published:** April 24, 2020
**Author:** PerryL
**Content:**
**TERMS OF ATTENDANCE OF MULTIFAMILY BOOTCAMP**
Please carefully read the following terms and conditions relating to your participation in Rod Khleif’s Multifamily Bootcamp (the “Bootcamp”) which is conducted by K L Promotions LLC (“Promoter”). By accepting these terms, you (the “Attendee”) signify your acceptance of and obligation to these terms and conditions. If you have objections to the following Terms and Conditions, you should not attend the Bootcamp.
# Attendee Conduct
Promoter requires all Attendees to be respectful and professional to our staff, location hosts, speakers, and other
attendees and their guests or families throughout the Bootcamp, even during non-scheduled downtime and breaks.
Promoter reserves the right to ask Attendee and/or their guests to leave the conference room and Hotel immediately
should they be deemed rude, uncooperative, unprofessional, intoxicated , or in possession of alcohol or any illegal
substance. In such case, the Attendee’s tuition/fees for the Seminar will not be reimbursed under any circumstances
and they will not receive any future products, services, or correspondence from Promoter.
# Liability Waiver
While we take every possible measure to ensure Attendee safety at the Bootcamp, we cannot control everything. For
this reason, Attendee is legally responsible for their safety and behavior and agrees to, and is held legally liable to,
the below statements. For good and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, I agree to the following:
I, the willing Attendee of the Bootcamp, hereby accept all risk to my health and of my injury or death that may result
from participating in the Bootcamp and I hereby release Promoter, Rod Khleif, Lifetime Cash Flow Academy LLC, and
their officers, employees, interns, contractors, sponsors, and representatives from any and all liability to me, my
personal representatives, estate, heirs, next of kin, and assigns for any and all claims and causes of action for loss of
or damage to my property and for any and all illness or injury to my person , including my death, that may result from
or occur during my participation at the Bootcamp, whether caused by negligence of the Promoter, its governing board,
officers, employees, or representatives, or otherwise. I further agree to indemnify and hold harmless Promoter, Rod
Khleif, Lifetime Cash Flow Academy LLC and any third-party company from liability for the injury or death of any
person(s) and damage to property that may result from my negligent or intentional act or omission while attending and
participating in the Seminar. Under no circumstances will Promoter or Rod Khleif or Lifetime Cash Flow Academy or
their assigns be held liable for my injury or death or any loss or damage of my personal belongings resulting from my
participation in the Bootcamp. Should I require emergency medical treatment as a result of accident or illness arising
during my attendance and participation in the Bootcamp, I consent to such treatment. I acknowledge and I agree to be
financially responsible for any medical or legal bills that may be incurred as a result of emergency medical treatment. I
will notify Promoter verbally and in writing if I am at any time injured prior to, during, or after the Bootcamp in my travels
or attendance, or if I have medical conditions about which emergency medical personnel should be informed; however
, I understand that Promoter is not legally obligated to act on that information in any way or to providing any medical
service whatsoever to me. I agree that if I have any medical or psychological conditions that may hamper me from
fully and healthfully participating in the Bootcamp that I will notify the Promoter and that the Promoter retains the right to
ask that I not participate in portions of or the entirety of the Bootcamp.
# Liability Disclaimer: No Professional Advice
The information contained in or made available by the Promoter, Rod Khleif, Lifetime Cash Flow Academy LLC or any third-party through the Bootcamp or their websites or services cannot replace or substitute for the services of trained professionals in any field, including, but not limited to, mental, financial, medical, psychological, tax or legal fields. Promoter does not offer any professional personal, medical, financial, tax or legal advice and none of the information contained in the Bootcamp should be confused as such advice. Neither Promoter, Rod Khleif, Lifetime Cash Flow Academy LLC, nor their assigns, sponsors, speakers, partners, contractors, or any of their affiliates will be liable for any direct, indirect, consequential, special, exemplary, or other damages to the Attendee or the Attendee’s business, including economic loss, that may result from participation in the Bootcamp or from the use of, or the inability to use, the materials, information, or strategies communicated through the Bootcamp or any products or services provided pursuant to the Bootcamp, even if advised of the possibility of such damages. Under no circumstances, including but not limited to negligence, will Promoter or Rod Khleif or Lifetime Cash Flow Academy LLC be liable for any special or consequential damages that result from Attendee’s participation in the Bootcamp. To be clear: You, the Attendee, alone are responsible and accountable for your decisions, actions, and results in life, and by your participation in our Bootcamp, you agree not to attempt to hold us, the Promoter or Rod Khleif, or Lifetime Cash Flow Academy LLC, liable for any decisions, actions, or results that you make or experience in business or in life due to your participation in this Bootcamp at any time, under any circumstance.
# Confidentiality
Attendee hereby understands that the tools, processes, strategies, materials, and information presented in the Bootcamp are confidential, copyrighted, and proprietary to the Promoter and agrees not to record, duplicate, distribute, report on, teach or train from the Bootcamp materials in any manner whatsoever without the express written permission of Promoter. Attendees may not use any device to video, photograph, or record any aspect of the Bootcamp. Attendees who do not abide by this policy will be asked to destroy any recorded materials and may be asked to leave the Bootcamp and will not be eligible for a refund. Attendees may not report on any of the concepts taught at the event, including providing a summary or review of the event on/in any media outlets, blogs, websites, or stages without written permission from Promoter. Any unauthorized use or distribution of the proprietary concepts, materials, and intellectual property by the Attendee or his/her representatives is prohibited and Promoter will pursue legal action and full damages if these terms are violated in order to protect its rights.
# Privacy Policy and Terms of Use
By participating in the Bootcamp, Attendees acknowledge and agree that they are subject to the Privacy Policies of the Promoter. The Privacy Policy and Terms of Use for the Promoter’s company are listed at: [http://rodkhleif.com](http://rodkhleif.com/)
# Earnings Disclaimer
We’ve taken every effort to ensure we accurately represent this event and its potential to help you grow your business. However, there is no guarantee that you will earn any money using the techniques displayed here, and we do not purport this as a “get rich scheme.” Nothing presented is a promise or guarantee of earnings. Your level of success in attaining similar results is dependent upon a number of factors including your skill, knowledge, ability, dedication, business savvy, and financial situation. Because these factors differ according to individuals, we cannot guarantee your success, income level, or ability to earn revenue. You alone are responsible for your actions and results in life and business. Any forward-looking statements presented are simply our expectations or forecasts for future potential, and thus are not guarantees or promises for actual performance. These statements are simply our opinion. No guarantees are made that you will achieve any results from our ideas or models presented at the event, and we offer no professional legal or financial advice.
**Public Domain**
Nothing in this Consent and Release shall ever be construed to restrict, diminish or impair the rights of either Promoter or Attendee to use freely, in any work or media, any story, idea, pilot, theme, sequence, scene, episode, incident, name, characterization or dialogue which may be in the public domain from whatever source derived.
# For correspondence, contact:
KL Promotions LLC
242 S. Washington Blvd.
Suite 319
Telephone: 941-225-8477
**Review and Jurisdiction**
These Terms will be governed by and construed in accordance with the laws of the State of Florida, County of Sarasota. Attendee agrees that any dispute that arises out of or relates to these Terms will be resolved via non-binding mediation in the State of Florida via a professional mediator obtained by the Promoter and if a successful mediation is not reached, to binding arbitration arbitrated in the State of Florida in accordance with the policies set forth by the American Arbitration Association. If any of these Terms of use are found unlawful, void, or for any reason unenforceable, then that provision will be considered severable from the remaining terms of use, and will not affect the validity and enforceability of the remaining provisions.
---
### [Strategy](https://rodkhleif.com/strategy/)
**Published:** March 30, 2020
**Author:** Rod Khleif
**Content:**
Thanks for your interest in a free Strategy Session!
---
## Podcasts
### [Bigger Pockets Host Brandon Turner Shares His Insights](https://rodkhleif.com/podcasts/bigger-pockets-host-brandon-turner-shares-his-insights/)
**Published:** September 23, 2020
**Author:** PerryL
**Excerpt:** Bigger Pockets Host Brandon Turner Shares His Insights
**Content:**
Brandon Turner, the longtime BiggerPockets host and best selling author, sits down with Rod Khleif to share how he built lasting wealth through rental real estate. You will hear his mindset on taking action, the habits that helped him scale, and why he believes ordinary people can win in real estate. This is one of the most popular Brandon Turner multifamily conversations in the [Lifetime CashFlow podcast](https://rodkhleif.com/lifetime-cashflow-podcast/) library.
## Brandon Turner Multifamily Takeaways
Here are the ideas from this conversation that new investors come back to most:
### **Ep #479 – Brandon Turner – Bigger Pockets Host Shares His Insights**
Brandon is the Vice President and Co-Host of Bigger Pockets and shares his insights with Rod about goal setting, the current market and much more.
- House hacking
- How BP got started
- Run toward difficulty
- The value of accountability
- Driven by lifestyle
- Tracking your efforts and time
- Parkenson’s law
- Goal Setting
- “It’s more important that you decide than what you decide”
- The value of commitment
- What do you want and what do you need to get there?
- Aligning toward vision
- Understanding the value of your own time
- Happiness comes from the climb
To find out more about our guest:
**Full Transcript Below**
## About Brandon Turner
Brandon Turner is a real estate investor, author, and the longtime host of the BiggerPockets Real Estate Podcast. He wrote The Book on Rental Property Investing and The Book on Investing in Real Estate with No and Low Money Down, and he founded Open Door Capital to invest in larger multifamily deals. His action first approach pairs naturally with the message Rod Khleif shares with new investors.
New to apartments? Start with our [complete beginner guide to multifamily investing](https://rodkhleif.com/multifamily-investing-the-complete-beginners-guide/), then see [the best resources for learning apartment syndication](https://rodkhleif.com/what-are-the-best-resources-for-learning-apartment-syndication/).
## Frequently Asked Questions
### Who is Brandon Turner?
Brandon Turner is a real estate investor and author best known as the longtime host of the BiggerPockets Real Estate Podcast and the founder of Open Door Capital.
### What do Brandon Turner and Rod Khleif discuss in this episode?
They cover building wealth through rental real estate, the mindset behind taking action, and practical habits for scaling a portfolio, with a focus on multifamily.
### Where can I listen to the Lifetime CashFlow podcast?
Find every episode on the [Lifetime CashFlow podcast hub](https://rodkhleif.com/lifetime-cashflow-podcast/), plus Apple Podcasts, Spotify, and YouTube.
### Is multifamily investing good for beginners?
Yes. Many investors start with small multifamily and scale up. Our [beginner guide](https://rodkhleif.com/multifamily-investing-the-complete-beginners-guide/) walks you through the first steps.
Ready to act on what Brandon Turner shares here? Grab the free [Lifetime CashFlow ebook](https://rodkhleif.com/lcfa-ebook/) and join the [Multifamily Bootcamp](https://rodkhleif.com/bootcamp/) to build your first deal.
---
### [I Lost $7 Million... Here's What Saved Me](https://rodkhleif.com/podcasts/public-insurance-adjuster-ralph-sampson/)
**Published:** August 3, 2026
**Author:** Bryan Hoover
**Excerpt:** I Lost $7 Million... Here's What Saved Me
**Content:**
## Why a Public Insurance Adjuster Can Save Commercial Real Estate Investors Millions
For multifamily owners and commercial real estate investors, insurance is one of the largest expenses they hope they never have to use. But when disaster strikes, whether from a fire, hurricane, tornado, or other catastrophic event, how an insurance claim is handled can determine whether an investor fully recovers or suffers major financial losses. In this episode of *Lifetime Cash Flow Through Real Estate Investing*, Ralph Sampson shares why working with a **public insurance adjuster for commercial property claims** can dramatically improve both the outcome and speed of the claims process.
Using a real-world case study involving one of Rod Khleif’s Nashville apartment communities, the conversation explores how a devastating fire destroyed 22 apartment units and led to an 18-month rebuilding process. Ralph explains how proper claim representation helped recover not only the physical rebuilding costs but also substantial business interruption income and code compliance expenses that could have otherwise been overlooked.
## Understanding the Role of a Public Insurance Adjuster
Many property owners assume the insurance company will fairly calculate every aspect of a loss. Ralph Sampson explains that insurance companies hire adjusters to represent their own interests, while a public insurance adjuster works exclusively for the policyholder.
Rather than inflating claims, a public insurance adjuster performs a detailed evaluation of every covered loss, including:
- Building damage
- Business interruption and lost rental income
- Code compliance costs
- Engineering evaluations
- Hidden structural damage
- Property restoration timelines
This comprehensive approach helps commercial real estate owners recover the full value they are contractually entitled to receive.
## Why Business Interruption Coverage Matters
One of the biggest educational takeaways is the importance of business interruption insurance. Losing apartment units means much more than repair costs because rental income immediately disappears while expenses continue.
Ralph discusses how insurance companies often delay business interruption payments, creating financial pressure that encourages owners to accept lower settlements. By properly documenting projected occupancy, rent growth, renovations, and realistic restoration timelines, investors can significantly improve their income recovery during the rebuilding process.
The discussion also highlights how lease-up projections, occupancy improvements, and recently renovated units can materially impact lost income calculations when properly documented.
## Insurance Policies Often Have Hidden Coverage Gaps
Another valuable lesson focuses on insurance policy structure before a disaster ever occurs. Ralph encourages investors to thoroughly review policies with their insurance broker instead of simply shopping for the lowest premium.
Several important areas deserve close attention:
- Ordinance and law (code compliance) coverage
- Business interruption limits and duration
- Replacement cost assumptions
- Management agreement compatibility
- Restoration period limitations
Older multifamily properties can require extensive code upgrades after major damage. Without adequate ordinance and law coverage, owners may face hundreds of thousands of dollars in unexpected expenses despite carrying insurance.
## Common Mistakes Investors Make During Insurance Claims
Throughout the conversation, Ralph shares several mistakes that frequently reduce claim values. Many owners wait to see what the insurance company offers before seeking professional representation. Others unknowingly answer questions that limit future claim recovery or overlook hidden damage that is never included in the initial settlement.
Drawing on decades of experience, Ralph explains how experienced claim representation helps identify issues early, preserve negotiating leverage, and ensure every covered loss is properly documented before settlement positions become difficult to change.
## About Ralph Sampson
Ralph Sampson is a public insurance adjuster with Goodman Gable Gould/Adjusters International. With more than 35 years of experience in property insurance claims, he has represented commercial property owners through complex fire, hurricane, tornado, and large-scale catastrophe losses. His firm specializes in first-party property damage claims, business interruption, building valuation, inventory services, and complete claim management for commercial property owners.
If you want to hear the full conversation and detailed insights, watch the podcast video or read the complete transcript below.
## Frequently Asked Questions About Public Insurance Adjusters for Commercial Property Claims
**What is a public insurance adjuster for commercial property claims?**
A public insurance adjuster is a licensed professional who represents commercial property owners during the insurance claims process. Unlike insurance company adjusters, public adjusters work exclusively for the policyholder to evaluate property damage, calculate business interruption losses, document every covered expense, and negotiate a fair settlement with the insurance company.
**Why should commercial real estate investors hire a public insurance adjuster?**
Commercial real estate investors often face complex insurance claims involving building damage, lost rental income, code upgrades, and extended restoration timelines. A public insurance adjuster helps ensure that every covered loss is properly documented and negotiated so investors receive the full benefits available under their insurance policy.
**When should you contact a public insurance adjuster?**
The best time to contact a public insurance adjuster is immediately after discovering a significant property loss. Early involvement helps preserve evidence, accurately document damages, and prevent costly mistakes that can occur before negotiations with the insurance company begin.
**What types of property losses can a public insurance adjuster help with?**
Public insurance adjusters assist with many types of commercial property claims, including fire damage, hurricanes, tornadoes, water damage, storm damage, vandalism, and other insured losses. They also help calculate business interruption claims and additional expenses related to rebuilding.
**How does a public insurance adjuster help recover lost rental income?**
A public insurance adjuster analyzes occupancy history, rental rates, lease up projections, restoration timelines, and business interruption coverage to properly calculate lost rental income. This documentation can help commercial property owners recover income while damaged units are being repaired or rebuilt.
**Can a public insurance adjuster help with code compliance costs?**
Yes. Major property damage often requires buildings to be rebuilt to current building codes. A public insurance adjuster identifies code compliance requirements and works to ensure eligible ordinance and law coverage is included in the insurance claim when the policy provides that protection.
**Do public insurance adjusters negotiate with insurance companies?**
Yes. Public insurance adjusters manage negotiations with the insurance company throughout the claims process. They prepare detailed documentation, support claim valuations, respond to insurance company questions, and advocate for the policyholder to help achieve a fair settlement.
**How are public insurance adjusters different from insurance company adjusters?**
Insurance company adjusters work for the insurance carrier, while public insurance adjusters work solely for the policyholder. Their responsibility is to evaluate the full scope of covered damages and represent the property owner’s interests during the claims process.
**What should investors review in their insurance policy before a loss occurs?**
Commercial real estate investors should review replacement cost coverage, business interruption limits, ordinance and law coverage, restoration periods, deductibles, and other policy provisions with their insurance professional to better understand how their coverage would respond after a major property loss.
**Can hiring a public insurance adjuster improve a commercial insurance claim outcome?**
For complex commercial property claims, a public insurance adjuster can help identify covered damages that might otherwise be overlooked, properly document financial losses, and manage negotiations throughout the claims process. Their goal is to help property owners recover the benefits available under their insurance policy.
00:00:30:16 – 00:00:54:26
Rod Khleif
Welcome back to lifetime cash flow through real estate investing. I’m Rod Khleif, and I’m thrilled you’re here. Now this is going to be a unique interview. I’ve got my friend and Ralph Sampson here. Now Ralph is with Goodman, Gabel and Gould International, which is a public adjusting firm. And if you own any property or you plan to own any property, you really need to listen to this, this episode.
00:00:54:27 – 00:01:23:21
Rod Khleif
Because if you ever have something happen, like a fire, like a hurricane, like a tornado, all three of which I’ve dealt with more than once, you need someone like Ralph. Okay. And so Ralph’s with a it’s a he’s a public adjuster, basically with a public adjusting firm. And and we’re going to explain why this is so important to utilize someone like Ralph when you have a loss basically.
00:01:23:21 – 00:01:26:01
Rod Khleif
And insured loss. Ralph. Welcome, brother.
00:01:26:01 – 00:01:27:20
Ralph Sampson
Thank you rod. Good to see you again.
00:01:27:21 – 00:01:44:04
Rod Khleif
Good to be seen. Yeah. Welcome. So maybe you can elaborate a little bit on my introduction because I really don’t know all of your backgrounds. So maybe we could talk about maybe we can talk about why you’re qualified to have this conversation. So give us a little background.
00:01:44:05 – 00:01:52:24
Ralph Sampson
Absolutely. Thank you for having me today. Of course, being been a while we talked about doing this. I’m glad that we could get this on calendar.
00:01:52:29 – 00:01:56:24
Rod Khleif
How long has it been since we started? When we worked together?
00:01:56:26 – 00:02:00:03
Ralph Sampson
About three years. Three years maybe. Maybe a little more. Maybe a little.
00:02:00:06 – 00:02:21:05
Rod Khleif
Let me give him some context. So, guys, I have an asset in Nashville, Tennessee, 145 doors and 22 of them burned pretty much to the ground. Thank God nobody died. Some woman had to jump out of the third floor balcony and hurt her knees and sued us and didn’t get anything because we weren’t at fault for this fire, thank God.
00:02:21:08 – 00:02:36:25
Rod Khleif
And, you know, it was it was it was scary. Honestly. There was in fact, there was a little boy in one of the units as the fire was progressing, that his mom had told him not to answer the door, come to the door, and they’d pound it on the doors to get people out. And thank God he left the unit.
00:02:36:26 – 00:02:55:28
Rod Khleif
Did you hear about that? I did, yeah. You know, did lose some pets I’ve heard, which is no fun, but no human loss of life, thank God. But it burned to the ground, and and that’s how I met Ralph. Because, you know, I’ve learned a long time ago, when you have a claim of any significance, you need a public adjuster.
00:02:55:28 – 00:02:58:11
Rod Khleif
So anyway, back to you, please. That’s how we met.
00:02:58:12 – 00:03:28:14
Ralph Sampson
Yes, yes. Thank you. Yeah. So a little about our firm, Goodman. Gable Gould, a Justice International, has been around for 85 years. We represent the policyholder only. Often confused where people hear that we’re adjusters and they think we represent insurance companies. We do not. We work solely for the policyholder as their advocate in the claims arena. And we specialize in first party property damage claims.
00:03:28:16 – 00:03:58:08
Ralph Sampson
Our firm is a boutique outfit insofar as we offer a full turnkey service from the actual adjustment of the process, inclusive of building valuation, loss of income, valuations for your business interruption component, which is obviously critical to you staying afloat and having cash to keep moving during the recovery process in commercial losses where it’s required. We also handle excuse me.
00:03:58:09 – 00:04:20:18
Ralph Sampson
We handle the inventory process through our sister firm, Roland’s Accounting and Inventory Services. So that is somewhat unique in this space because there are a lot of firms out there that do what we do, none that are the size of us or have been around for 85 years the way we have, or that can offer the full suite of services in-house.
00:04:20:21 – 00:04:23:05
Let’s talk about that for a second, because you brought up a couple.
00:04:23:05 – 00:04:49:19
Rod Khleif
Of things, and I don’t want to gloss over them. I remember, you know, when you’ve got when you’re down 22 units, I think it was 22 units. When you’re down 22 units, you know, that’s a big loss of rent. It is. And so that was one of the big pieces of, of your assistance was evaluating that rent. And and I remember there were some nuances around you know, we had some back and forth as to what was reasonable based.
00:04:49:19 – 00:04:56:10
Rod Khleif
And I’m trying to remember what all transpired in that particular. Do you recall? Yes. Okay. Can you speak to that a little bit? Sure.
00:04:56:11 – 00:05:09:05
Ralph Sampson
Okay. You know, the insurance companies position was, you know, well, surely you can just relocate these people to other components to other places in, in the property because we weren’t at 100% occupancy at the time.
00:05:09:05 – 00:05:10:11
Rod Khleif
That’s what it was, correct?
00:05:10:12 – 00:05:36:27
Ralph Sampson
The occupancy levels. But they were not wanting to give you credit for the fact that we were losing opportunity by moving somebody to a vacant unit because that unit was up for rent. That’s our business, right? Heads in beds, basically, we we keep our doors occupied and that’s the way we generate income. And they were dismissive of that in your case where they were not wanting to afford you the credit, they also weren’t willing to afford you the trajectory that we were planning.
00:05:36:27 – 00:05:39:05
Ralph Sampson
If you recall, you had recently taken.
00:05:39:08 – 00:05:39:14
Rod Khleif
Up.
00:05:39:14 – 00:05:53:06
Ralph Sampson
Trajectory, the lease up trajectory, correct. You had recently taken over the property with a view to improving all that. Right. And had implemented renovations. You were doing renovations throughout the entire property. In fact, four of the units in the 22 that burned had already been renovated.
00:05:53:07 – 00:05:54:19
Rod Khleif
Yeah, they were brand new. And they.
00:05:54:19 – 00:06:21:11
Ralph Sampson
Dismissed those facts as well, which gave us an increased ADR, right? We increased our revenue per door because we had better units that were better facilitated. And so we had to really educate them on that and bring them around to that narrative. And that was an interesting component of this. Added to which you had an elongated period of restoration, because we had so many code compliance problems where we had to bring up to scratch our life safety and introduce all things like that, so that all impacted the loss of income.
00:06:21:13 – 00:06:21:21
Ralph Sampson
Yeah.
00:06:21:23 – 00:06:44:04
Rod Khleif
So let me let me interject. So yeah, the city of Nashville or I forgot city or county. They made us upgrade some things on the codes, which is not uncommon when you’re basically rebuilding a building, which is what we did. We took it right down to the concrete foundation and rebuilt it. And those that delays things. And so, you know, you have additional loss of rent.
00:06:44:04 – 00:07:10:23
Rod Khleif
And so I remember that negotiation. This is a trigger in my memory. I’ve got a horrible memory. Forgot what I had for breakfast. But but I remember some of this now. So the loss of income was a big piece. And you helped us get you helped us, collect that and not just collected, but collect it as we needed it as well, if I recall, because, you know, we this, this this whole process took well over a year, if I recall.
00:07:10:25 – 00:07:12:07
Ralph Sampson
Or it was around 18 months.
00:07:12:08 – 00:07:12:28
Rod Khleif
18 months.
00:07:12:29 – 00:07:13:17
Ralph Sampson
18 months.
00:07:13:23 – 00:07:19:24
Rod Khleif
And so we got income intermittently there rather than waiting for the end of the 18 months as well.
00:07:19:25 – 00:07:37:23
Ralph Sampson
Correct. I mean, one of the insurance companies frequent responses, and it’s a red flag, if that happens to any of you. Is that oh, we’ll get to the loss of income. We’ll sort of deal with it later. Right. And they have a bunch of valid sounding reasons for doing that. But that doesn’t help you as the person that’s shelling out the money every month without it coming in.
00:07:37:23 – 00:07:45:13
Ralph Sampson
So yes, that was something that worked out really well. We were able to secure a really substantial advance upfront, inclusive of your loss of rate.
00:07:45:15 – 00:08:00:00
Rod Khleif
That’s right. And correct me if I’m wrong. That’s a strategy the insurance company uses to get you in a place where you’re struggling, where you’re more likely to accept a settlement more quickly. That’s to their benefit. Is that an accurate statement?
00:08:00:01 – 00:08:26:28
Ralph Sampson
It is. To a certain degree, yes. I don’t think you’d find an insurance company acknowledge that that’s what they do. But the reality is there is a lot of delay, delay, delay. And in essence, what that does is put that type of pressure on you, right? You you find yourself in a corner. You know, well, I’ve got to make a decision and you make different decisions than you would have had you been in a stronger footing with financial backing, with some money in the bank to to make a decision, your decision process changes.
00:08:26:29 – 00:08:29:27
Ralph Sampson
And that’s an advantage that they play to the utmost.
00:08:29:28 – 00:08:48:08
Rod Khleif
I mean, well, the insurance will never admit to that. But but but you know, that’s been my experience a couple of times in the past. You know, I, I remember when Hurricane Charley hit Port Charlotte, Florida, here I had 350 damaged houses, and the insurance company screwed me around so badly. And I did get a public adjuster, thank God.
00:08:48:09 – 00:09:15:08
Rod Khleif
But every one of my houses had damage. And that’s just one example. But back to back to this complex in Nashville. Talk about the process that you go through with the insurance company, you as a public adjuster, go through with the insurance company to make sure everything’s up to snuff. Because guys, remember this, okay? Insurance companies are a profit driven business.
00:09:15:08 – 00:09:34:29
Rod Khleif
They’re not an altruistic business, okay? They need to save money. So they want to they want to minimize their, their their, you know, their claim payment as much as they possibly can, I guess. Speak to that, elaborate on what I just said and then how you plug in there.
00:09:35:01 – 00:09:52:23
Ralph Sampson
Sure. I think, you know, some of the misconceptions about what we do is that, you know, we’re out there to inflate the claim and create a lot of strife and headache and that it’s always a big fight, right? I mean, you can speak to whether or not you experienced that, but.
00:09:52:23 – 00:09:53:18
Rod Khleif
Not at all.
00:09:53:18 – 00:10:19:18
Ralph Sampson
It’s most of the time it’s a it’s a very collaborative process. We as a firm and me personally as an adjuster, my, my approach because maybe, maybe it’s time. It’s a good point for me to sort of back up a little. I’ve been doing this for 35 years. Wow. I started my career in South Africa, working for an insurance company, came straight out at the military 19 years old, saw this and said, man, this is for me.
00:10:19:20 – 00:10:42:26
Ralph Sampson
And you know, I’m fortunate in that regard. Not many people are able to figure out at that young age what they want to do for the rest of their lives, and I was lucky enough to be that person. But the reason I bring that up is because my experience is so broad. From working for an insurance company to working for an independent adjusting company, which is the insurance adjusting firms that represent insurance companies only.
00:10:43:00 – 00:10:47:21
Ralph Sampson
So when you have a claim and they send out somebody that’s an independent adjuster, they.
00:10:47:24 – 00:10:52:05
Rod Khleif
They’ll they’ll use a vendor for that sometimes. Okay. Yes. In an in-house adjuster.
00:10:52:07 – 00:11:14:11
Ralph Sampson
Correct. Well and they’ll assign both okay. They’ll assign an in-house adjusted to manage it internally for them. And then they’ll assign what they nowadays refer to as a field adjuster, which is an independent adjusting firm that goes out on their behalf. And that’s a part of the other complex issues with claims that nobody’s got authority anymore and that they can hide behind this shield of.
00:11:14:13 – 00:11:34:15
Ralph Sampson
Oh, we’re just here to look and take notes. That’s not accurate. They’re making recommendations. They’re just not telling you. So how we combat that is we balance the scales because we know exactly what they’re doing. I know exactly when they start going down the line of conversation, what they’re trying to achieve. Whereas somebody who doesn’t do this every single day, there lives wouldn’t know.
00:11:34:15 – 00:11:36:28
Ralph Sampson
And you just play along and then you find yourself in.
00:11:37:03 – 00:11:52:11
Rod Khleif
I love it if you if you can think of an example or two of that where you’re seeing them going a direction with something, I know you’re not prepared for this, but if anything comes to mind, because I remember a couple of these things and I’m trying and I my memory is so bad I can’t remember.
00:11:52:14 – 00:12:12:17
Ralph Sampson
I can unfortunately, regrettably, it’s something I deal with every day. So it’s not hard for me to give you an example. Okay. You know, here’s something innocent that’ll occur. That’s a that’s a fairly big red flag is, you know, the adjustable start having a very casual conversation with you. And they’re going to be congenial and friendly. And you’ll be like, I want to have a beer with this guy.
00:12:12:19 – 00:12:28:27
Ralph Sampson
This guy’s great. You know, what they’re actually trying to do is just trying to lay out what their best approach is to minimize the claim. So you’ll have a conversation like, right, you know, what are you going to do with this? You know, how are you going to put it back and are you going to build it back.
00:12:28:28 – 00:12:45:02
Ralph Sampson
Are you going to build it back the same way? And you don’t know at that point you haven’t even had time to process this. You’re in crisis mode and you go, you know what, I don’t know? I didn’t like this and this and this didn’t work well, or this access point wasn’t great, or I could get more square footage if I did this.
00:12:45:03 – 00:13:07:23
Ralph Sampson
And all the time what they’re doing is setting you up to go, well, that’s not covered. We’re not paying for that. You’re improving the building. That’s elective. That’s not what we owe you for. So I’m not going to pay for any of that, which is inaccurate, right? What they owe you is to return your building to the pre loss condition, the way it was the day before this incident, whatever it was in your case of fire that day before that happened.
00:13:07:25 – 00:13:24:18
Ralph Sampson
Right. How you end up implementing the funds is entirely up to you right. Right. They don’t have a say in that. But they try and take a hand in it and they try and direct you to a, okay, well, we can rebuild this and you don’t need that extra square footage anyway because it was a pain. Let’s build it this way.
00:13:24:18 – 00:13:48:19
Ralph Sampson
What does that do for them. Reduces the cost that they have to pay and reduces how they go about doing it. And that’s really what they ultimately trying to get at. And these are little traps that people fall into every day. It also affects how your income flows. Right. Because now you can have different rentals. You can have, well, you know, if you were going to get two grand a unit, they’re saying, well, it’s actually really only 1600 bucks a unit.
00:13:48:23 – 00:13:54:19
Ralph Sampson
Only way you’re going to get two grand is to do all these upgrades, which is not on us. That’s on your pocket. Right. But that’s not necessary. Yeah.
00:13:54:19 – 00:13:55:02
I remember.
00:13:55:02 – 00:14:20:02
Rod Khleif
You guys did some exhaustive rental analysis, and and there was a lot of back and forth with your team that handled the loss of rents. I remember that piece. Talk for a minute about the commonality of someone that has this happen, kind of sit on their laurels to wait to see what the insurance company will do and speak to that a little bit, because I know that that happens.
00:14:20:02 – 00:14:20:17
Rod Khleif
Yes.
00:14:20:18 – 00:14:36:24
Ralph Sampson
Yeah. The famous I’m going to wait and see. Right, right. Let me I hear you, Ralph. I understand what you’re saying, and that sounds good, but I want to wait and see what the insurance company does. Okay, that’s one approach. Certainly not in my opinion.
00:14:36:25 – 00:14:55:28
Rod Khleif
Well, let me interject. It’s a horrible approach because they’re coming at this to save as much money as they can. Now, you may be surprised by the amount of the of of you know, what they’re willing to offer you. But I can tell you and I’ve been at this a long time, guys. Okay. I used a public adjuster probably 30 years ago.
00:14:55:28 – 00:15:19:08
Rod Khleif
For the first time, I’ve had a tornado destroy 101 units, completely destroy it. And and, you know, in the 350 houses here, this fire here, I’ve had numerous house fires. And so, you know, every single time I’ve gotten a lot more money using a public adjuster every time, without question, less the fee, still more money, less the public adjusting fee.
00:15:19:08 – 00:15:30:09
Rod Khleif
I’ve always gotten more money. And so, you know what would you speak to the people that say, wait and see, what would you tell those people?
00:15:30:11 – 00:15:49:18
Ralph Sampson
You know, it’s the first thing is that, you know, most of our clients are sophisticated business people like yourself. And I don’t know, one businessman that’s going to sit and wait for an opportunity. You see something, you pounce on it. You don’t wait to see what happens. You know, wait to see what somebody else is going to do to react.
00:15:49:19 – 00:16:07:02
Ralph Sampson
They beat you to the punch that way, right? This is a very similar scenario. It’s kind of like I use the analogy sometimes in discussions with clients. It’s like, would you go to the IRS and say, here’s my accounts, tell me, how much are you? Right. Right. You’re not doing that.
00:16:07:03 – 00:16:07:24
Rod Khleif
No way.
00:16:08:00 – 00:16:24:27
Ralph Sampson
This is the same thing. This is basically saying, I know what I need, I know what I want, I know what’s going to get me back to where I was. But why don’t you tell me what it is? Because you think you’re going to get an advantage. And that’s the the psychology of it, right? As human beings, we’re more inclined to gravitate to what a loss would do to us than what an upside.
00:16:24:28 – 00:16:48:26
Rod Khleif
Would do. Let me interject, because I could see as a business person thinking, okay, let me, let me let them make their first offer. Because in a negotiation that’s not a bad thing. However, I see how it’s a bad thing in this scenario because it’s collaborative. And if and if, if you don’t get an A, just a public adjuster on your side involved immediately, it’s not going to be collaborative.
00:16:48:28 – 00:17:05:29
Ralph Sampson
It’s not. It’s also a matter of you can’t approach. You know, I think I told you this, and I tell most of my clients this when an insurance claim you’re in the middle of an entrance claim, take logic, toss it out the window and don’t look for it again because it’s not likely to resurface in the process. They’re not logical processes.
00:17:05:29 – 00:17:26:10
Ralph Sampson
They’re not commonplace negotiations. It’s not the same. You’re not negotiating from the same place that you are when you’re trying to buy a new property or you know, you know what your parameters are. You don’t know your parameters. You don’t even know what they’re in gaming is most of the time. So how do you negotiate against that? And that’s what people are thinking is like, well, like you said, it’s not always a bad thing.
00:17:26:12 – 00:17:40:24
Ralph Sampson
Let them make an offer and see where it is. Right. What you don’t understand is when that happens, they’ve set in stone the parameters within which you’re going to work and you can move them. But man, it is like moving a mountain. And if you.
00:17:40:26 – 00:17:41:29
Rod Khleif
Think it’s a lot harder.
00:17:41:29 – 00:18:02:15
Ralph Sampson
It is significantly harder. And statistically you’re not going to get to the same place. You know, you’re not going to be able to move them enough to make the same impact that you would immediately. And I understand I understand concern that it’s not something that I can have as a tangible and go to your, yes, a guarantee of this and a guarantee of that, because it’s going to be different in every scenario.
00:18:02:23 – 00:18:12:02
Ralph Sampson
But what I can speak to with absolute certainty is that the outcome, as you’ve alluded to in your own experience, is always better when you have a representative.
00:18:12:03 – 00:18:35:02
Rod Khleif
Every single time it’s and, and even, you know, think, oh, I got to pay 5% or 10% of, of the claim, you know, it’s always more than you would have gotten from the insurance company. That’s always been my experience. And everybody that I’ve that I know that’s ever used a public adjuster, I mean, I had my house here, my compound here, I had just under $1 million with the damage here.
00:18:35:08 – 00:18:55:26
Rod Khleif
And if I hadn’t, and he was a good public justice before I knew you. But if he if if I didn’t have him, I probably would have been about a half that literally half that, because he had identified things that I hadn’t even thought of damage in my kitchen. He identified things that, you know, that that brought it up around $900,000 here for Hurricane Ian.
00:18:55:26 – 00:19:14:20
Ralph Sampson
So that’s actually a really great point. Right. And I’d like to spend some time there, if you don’t mind. Yeah. A lot of what I hear from people when I speak to them initially is that they’re concerned about this image and this perception that my job is to come in and fleet the claim, create headaches. It is not.
00:19:14:22 – 00:19:37:04
Ralph Sampson
And we talked about that a little bit earlier, but maybe we can jump into that in a bit more depth. Tell me one time that you know of in your lifetime that an insurance company has come back to you at the end of the year and said to you. Hey, rod, you guys did an excellent job in your risk management this year and you had no claims and everything went so well.
00:19:37:06 – 00:19:57:01
Ralph Sampson
Here’s a discount on your premium or yes, some of your premium refunded because it wasn’t really the risk we thought it was. Can you think of a single time that that may have happened? Of course not. No, it doesn’t happen because that’s not the way the underwriting is scheduled. But what they want you to do when you have a claim is they want you to afford them all the discounts in the world.
00:19:57:01 – 00:20:16:17
Ralph Sampson
So let’s use a simple example. Let’s say you have a relationship with a contractor that you’ve done development with for the last 30 years. And because of the volume, he says to you, right, I’m prepared to make less profit on your work because I love you and I want to keep doing your work. And that’s something you’ve built over 30 years, right?
00:20:16:19 – 00:20:42:06
Ralph Sampson
The insurance company’s position is they’re entitled to that discount. I vehemently opposed that principle. The reason being is you weren’t charged a premium based on that. Now, if the insurance company come to you and said, rod, I understand you have these relationships and that it costs you less to build than it does Joe soap on the street and we’re going to do a premium discount for you because your square foot cost is going to be less than the guy down the road.
00:20:42:07 – 00:21:02:20
Ralph Sampson
That’s not how they do it. Your rating, your underwriting is based on a market average. So if I went out into the street and got three general contractors to give me a bid, the average of those three general contractors is the price they use when they set your premium. So let’s say that’s 100 bucks a square foot, but you can build at 70 a square foot, right?
00:21:02:21 – 00:21:08:03
Ralph Sampson
The insurance company charged you a premium at 100 a square foot. But when you have a claim they want to pay you 70.
00:21:08:04 – 00:21:08:22
Rod Khleif
That’s what happened.
00:21:08:23 – 00:21:09:15
Ralph Sampson
That’s sound fair.
00:21:09:16 – 00:21:10:22
Rod Khleif
No it’s not. Of course not.
00:21:10:23 – 00:21:27:25
Ralph Sampson
Unless you get that discount, right. Which you never do. So my position is they owe you for what the contract says. It’s a contract at the end of the day, and it’s a year by year contract. I get all that. But you are charged a premium that if you have a loss, you transfer the risk to them and they’ll compensate you for the loss.
00:21:27:26 – 00:21:47:25
Ralph Sampson
That compensation is is the topic of discussion today, that compensation is based on what the market value of that is, right? The other thing is what you brought up there, which sparked the thought here, is that as somebody who’s a claims professional and you know me, I wrote my sleeves up, I’m in the field, I’m on site with these guys.
00:21:47:25 – 00:22:06:09
Ralph Sampson
I’m at the contractor meetings. Reason being, I want to know what’s going on. I want to know what is affecting your claim, what is affecting how long it’s going to take. Right. Is there a. Remember we had this conversation on yours about the foundations, right? We were concerned the foundations wouldn’t hold up because they got a lot of heat exposure.
00:22:06:09 – 00:22:26:25
Ralph Sampson
And the rebar was, was, was, was compromised. They insurance company wanted to glance over that. We insisted that they come back and do an engineering survey of it. And what did we find? 30% of the footings were inadequate and had to get redone, which they would have glanced over. In your scenario with your your compound here, you thought it was about half a million.
00:22:26:25 – 00:22:46:22
Ralph Sampson
It’s actually a million because there were a bunch of things that weren’t obvious to you. Right? And so what happens in that scenario is they go, don’t worry, rod, you can file a supplemental claim. Yeah. Let me tell you, statistically, less than 60% of supplemental claims are paid to the value that they’re at. So you’re still out of pocket now, had you not had somebody there representing you who knew what to look for, that would have been a missed thing.
00:22:46:24 – 00:22:54:21
Ralph Sampson
And it’s not that you got more money. It’s got you actually got what was fully entitled. You are fully entitled because they understood the full scope of damage.
00:22:54:22 – 00:23:19:19
Rod Khleif
Right. And you guys go in literally as a public adjuster and you adjust, you basically evaluate the same way the insurance company does. I mean item by item by item, I mean it’s exhaustive. I mean heavy detail. I forgot the name of the software. Exactly, exactly, exactly use exactly. And and and so yeah. And guys, I’m just telling you, you’re an idiot.
00:23:19:19 – 00:23:36:14
Rod Khleif
If you don’t get a public adjuster and you’ve got any sort of a sizable claim whatsoever. You’re crazy not to. But let’s talk about coverages. Let’s let’s go back let’s go back and broker relationships. Let’s talk about that for a minute. So talk about that for a minute.
00:23:36:20 – 00:23:43:09
Ralph Sampson
So look you know broker relationships are a.
00:23:43:11 – 00:23:45:07
Rod Khleif
We’re talking insurance broker guys.
00:23:45:10 – 00:24:12:17
Ralph Sampson
Insurance brokers are a you know for me it’s a little bit of a landmine field of landmines. But looking at it from your perspective as as a property owner, right. As a business person who’s out there trying to generate wealth from from what you’re doing every day, the sweat equity you’re putting in all the time you’re putting in the brokers relationship is a very important one, because, again, insurance is a is a vehicle by which you transfer risk.
00:24:12:23 – 00:24:31:22
Ralph Sampson
You basically are just saying, look, if something untoward happens in the first few days of owning this property, I don’t want to be on the hook for all that money. I want somebody else to pay for it. They said, hey, I’ll take that on for X amount. So you pay them the premium, they accept the risk. God forbid the worst happens you find now you’re out of pocket and you got to pay that.
00:24:31:24 – 00:24:40:23
Ralph Sampson
The broker’s function and role there is to set you up so that that risk transfer is as smooth and efficient and if.
00:24:40:24 – 00:24:41:13
Rod Khleif
Adequate.
00:24:41:13 – 00:25:07:10
Ralph Sampson
And adequate. Yeah. Great word as adequate as is past humanly possible. What we see very frequently is that there’s a big disconnect where the broker understands the underwriting world. How do I shop this risk out to the to the market at large, to the major? They understand that. Well, what they don’t understand as as efficiently or as fully is what that really means to you.
00:25:07:10 – 00:25:27:00
Ralph Sampson
At the end of the day, you know, so that if they say, look, you know what? It’s a lot of premium. I don’t want to pay that amount of premium, okay. How do I get to a number? That’s good. I got to carve out some things. And unfortunately a lot of times the things they carve out are things that are crucial to you, like code compliance coverage or increased cost of compliance.
00:25:27:01 – 00:25:27:21
Ralph Sampson
Right. If you didn’t.
00:25:27:21 – 00:25:29:12
Rod Khleif
Have killed us on the Nashville.
00:25:29:14 – 00:25:48:21
Ralph Sampson
Would have been. Yeah, would have been a three quarter of $1 million hit to you if you didn’t have that. Wow. Right. And I see it all the time where people come with older buildings because the broker didn’t ask the question originally or doesn’t understand the concept that if you’re buying a a multifamily community that is an older building, right?
00:25:48:23 – 00:25:53:23
Ralph Sampson
It can be class A, class B class, it doesn’t matter. But they’re from the late 80s or mid 80s.
00:25:53:24 – 00:26:00:15
Rod Khleif
When you rebuild it, you’re going to have to bring it up to code precise. And if you don’t have coverage for that, you’re screwed. So I would have lost almost $1 million in my deal with.
00:26:00:15 – 00:26:23:12
Ralph Sampson
That on just that one building on just the sprinklers. And we upgraded all the wiring. Obviously we want everything up to code, but that’s such an important thing. And then how that marries to your business interruption. The other thing I see so frequently is that there’s not enough coverage in the business interruption, or it’s limited to to such a short period of time that it’s a little benefit to you, because there’s no way you can do a total rebuild in 12 months anymore.
00:26:23:16 – 00:26:24:27
Rod Khleif
Right, right, right.
00:26:24:29 – 00:26:26:22
Ralph Sampson
It doesn’t happen. The cities are so.
00:26:26:23 – 00:26:32:24
Rod Khleif
All of these, these are all things you need to look at carefully. You actually have to read your freaking policy. You need to read into it.
00:26:32:25 – 00:26:33:25
Ralph Sampson
You need to read it. And you need.
00:26:33:25 – 00:26:37:20
Rod Khleif
To trust the broker. That okay, he’s got he’s got me covered. But no.
00:26:37:21 – 00:26:51:02
Ralph Sampson
Well, you need to have a more in-depth conversation with your broker than just, hey, I need coverage for these buildings. You need to be asking sort of like, okay, how are you looking at them? Do you understand what I do? Do you understand how I look at this? And it’s about what you need at the end of the day.
00:26:51:02 – 00:27:04:11
Ralph Sampson
Because, you know, just like in the claim, I have to understand your objectives before I can service the claim for you. Sure. Because how I structure the the outcome and how I go about a strategically depends on what you need out of it, you know.
00:27:04:12 – 00:27:24:04
Rod Khleif
So you better ask what’s not included. You better ask what you know, what’s being pulled out or you know what is included and and think through it. Any other any other landmines like code compliance. Well length of time on the on the loss of income is a big one. Yeah. Yeah.
00:27:24:08 – 00:28:01:14
Ralph Sampson
I mean, I would, I would urge you to review your management contracts with your broker to make sure that the language in your management contracts are compliant with the language of the business interruption policy, right. So as your management company, you know, if it’s a smaller facility or if you have a tornado go through and it trashes the whole place, you’re going to have expenses that continue that are quite frequently excluded, or your management company is going to come to you and hit you with extra charges that are not in the contract or that are not necessarily well spelled out, that fall outside of the traditional definitions within the business interruption coverage.
00:28:01:14 – 00:28:17:28
Ralph Sampson
And if you don’t know that going into it, you can end up very short. Right? And those are their very minor things, but they are so important. The other thing is when the when your broker assist you, hey, we can reduce this amount of coverage or we can do this, ask what that impact is going to be to you.
00:28:17:29 – 00:28:21:17
Ralph Sampson
Think about it. In a worst case scenario, if you make the reduction.
00:28:21:17 – 00:28:25:23
Rod Khleif
Piece right there. Think about it. In a worst case scenario, is the key piece correct?
00:28:26:00 – 00:28:36:25
Ralph Sampson
You know you can’t. You should buy insurance as if you’re going to need it tomorrow every single time. Because that’s what people don’t do. They buy it based on economy only. And I get it. That’s important. You got.
00:28:36:25 – 00:29:04:22
Rod Khleif
To run a business. It’s such a small amount comparatively. I mean, listen, guys, okay? I’ve had a tornado destroy 101 units. I’ve had my compound here over almost $1 million in damage. I’ve had 350 damaged houses. I had a fire that was about a I don’t know, ultimately, what, 6 or $7 million claim with the loss. Yeah. And so, guys, take it from me, do not short circuit your coverage, okay?
00:29:04:23 – 00:29:30:16
Rod Khleif
To save a couple of bucks, it’s not worth it. Well, we’ve covered a lot, I think. I know you’ve definitely added value. Guys, if you have a claim or need some help. His website is G.G. hyphen AI, and it’ll be in the show. Notes JG hyphen ai and yeah, again, if you got a claim, for God’s sakes, get someone like Ralph in your corner or you’re making a big mistake.
00:29:30:22 – 00:29:32:17
Rod Khleif
Thanks for coming down here, brother. It’s good to see you.
00:29:32:19 – 00:29:34:19
Ralph Sampson
Right. Thanks for having me, man. Of course.
---
### [How a Music Teacher Landed a $3.5M Apartment Deal](https://rodkhleif.com/podcasts/creative-multifamily-financing-harvey-lockhart/)
**Published:** July 31, 2026
**Author:** Bryan Hoover
**Excerpt:** How a Music Teacher Landed a $3.5M Apartment Deal
**Content:**
## How Creative Multifamily Financing Helped Secure a 28 Unit Apartment Deal
Creative multifamily financing continues to be one of the strongest competitive advantages for investors facing higher interest rates and tighter lending standards. In this episode of **Multifamily Rockstars**, Harvey Lockhart explains how his team acquired a 28 unit apartment community in St. Louis by combining loan assumption financing with seller financing, dramatically reducing financing costs while creating significant upside through a value add business plan.
The transaction demonstrates that investors do not need to pursue massive apartment communities to build wealth. Smaller multifamily properties often provide opportunities to negotiate directly with motivated sellers, structure creative financing, and uncover overlooked value that institutional buyers may ignore. As Rod Khleif points out, these smaller assets can become exceptional investments when paired with the right acquisition strategy.
## Using Loan Assumptions and Seller Financing
One of the biggest advantages in this acquisition was assuming an existing low interest mortgage while negotiating additional seller financing. Rather than obtaining an entirely new commercial loan at today’s higher interest rates, the team assumed approximately $2.25 million of existing debt while the seller carried an additional $200,000 note. This significantly reduced financing costs and improved overall deal economics.
Creative financing strategies like these can make otherwise difficult deals highly profitable. Investors willing to negotiate financing terms directly with sellers often gain an advantage over buyers relying solely on conventional commercial lending.
## Finding Value in Underperforming Properties
The property contained 28 two bedroom units located between two Class A apartment communities in one of St. Louis’ strongest neighborhoods near Saint Louis University. While surrounding apartments were renting for approximately $2,500 per month, the subject property averaged only about $1,000 per month despite requiring minimal renovation.
The business plan focused on:
- Assuming favorable existing financing
- Increasing rents through renewals before major renovations
- Renovating only the few units that required significant work
- Gradually repositioning the property closer to market rents
The team immediately increased renewal rents by approximately $250 without making improvements, while projecting renovated units could achieve rents around $1,450 per month. Conservative underwriting assumed lower future rental income, providing an additional margin of safety.
## Why Boots on the Ground Partners Matter
Harvey’s role extended far beyond underwriting. As a local St. Louis investor, he served as the team’s boots on the ground partner by touring properties, coordinating contractors, monitoring maintenance issues, communicating with city officials, and helping improve daily operations after acquisition.
For new investors, becoming a local operating partner can be an excellent way to join experienced acquisition teams while learning every stage of multifamily investing. Local market knowledge and consistent property oversight provide meaningful value even for investors without extensive experience.
## Creative Ways to Source Smaller Apartment Deals
Another valuable lesson from the discussion involves deal sourcing. This opportunity originated through a residential real estate agent rather than a traditional commercial broker. Many owners of smaller apartment properties have long-standing relationships with residential agents who may have little experience marketing multifamily assets, creating opportunities for investors who actively build those relationships.
Developing relationships with residential agents can uncover:
- Off market apartment opportunities
- Motivated sellers
- Smaller multifamily properties with limited competition
- Creative negotiation opportunities unavailable through larger broker networks
## Taking Action Before You Know Everything
Harvey openly shares that his first real estate purchases were educational experiences rather than immediate successes. Instead of allowing early mistakes to stop his investing journey, he invested in education, surrounded himself with experienced investors, and continued taking calculated action.
His advice for aspiring investors centers on overcoming fear, accepting temporary discomfort, and leveraging experienced partners rather than waiting until every question has been answered. Building relationships and joining experienced teams can dramatically shorten the learning curve while reducing costly mistakes.
## Guest Bio
Harvey Lockhart is a Grammy nominated music educator, professional saxophonist, composer, nonprofit founder, and multifamily real estate investor based in St. Louis, Missouri. Inspired by his grandfather’s experience owning apartment buildings, Harvey transitioned into real estate investing to create long term cash flow while supporting his nonprofit organization, the HEAL Center for the Arts. His investing focuses on creative multifamily financing, value add apartment acquisitions, and emerging opportunities in residential assisted living.
If you want to hear the full conversation and detailed insights, watch the podcast video or read the complete transcript below.
## Frequently Asked Questions About Creative Multifamily Financing
**What Is Creative Multifamily Financing?**
Creative multifamily financing is the use of alternative funding strategies to acquire apartment buildings without relying entirely on traditional commercial loans. These strategies can include loan assumptions, seller financing, master leases, partnership structures, and other financing methods that help investors reduce borrowing costs and improve cash flow.
**Why Is Creative Multifamily Financing Important?**
Creative multifamily financing allows investors to acquire properties even when interest rates are high or lending standards become more restrictive. By negotiating flexible financing terms, investors can preserve capital, improve deal profitability, and create opportunities that may not be available through conventional financing alone.
**What Is a Loan Assumption in Multifamily Real Estate?**
A loan assumption allows a buyer to take over the seller’s existing mortgage instead of obtaining a brand new loan. If the existing loan has a lower interest rate than current market rates, assuming the loan can significantly reduce financing costs and improve the property’s cash flow.
**How Does Seller Financing Work for Apartment Buildings?**
Seller financing occurs when the property owner agrees to finance a portion of the purchase price instead of requiring the buyer to obtain all of the financing from a lender. This can reduce the amount of capital needed at closing while creating more flexible deal terms for both parties.
**What Types of Properties Benefit Most From Creative Multifamily Financing?**
Older value add apartment communities, smaller multifamily properties, and assets owned by long term landlords often present the best opportunities for creative financing. Owners who have significant equity or favorable existing loans may be more willing to negotiate flexible financing structures.
**Can New Real Estate Investors Use Creative Multifamily Financing?**
Yes. New investors can successfully use creative multifamily financing by partnering with experienced operators, building relationships with brokers and sellers, and learning how to identify financing opportunities during the acquisition process. Many first time investors begin by joining experienced teams before leading their own transactions.
**How Can Creative Multifamily Financing Increase Investment Returns?**
Creative financing can lower interest expenses, reduce upfront capital requirements, improve monthly cash flow, and increase overall returns. Combined with a value add business plan that increases rental income, these financing strategies can significantly improve a property’s long term value.
**How Do Investors Find Creative Multifamily Financing Opportunities?**
Many investors find creative financing opportunities through direct relationships with property owners, commercial and residential real estate agents, networking events, referrals, and off market apartment deals. Motivated sellers are often more willing to negotiate loan assumptions or seller financing when traditional buyers cannot meet their needs.
**What Are the Risks of Creative Multifamily Financing?**
Like any real estate strategy, creative multifamily financing requires careful due diligence. Investors should review loan terms, seller financing agreements, property financials, market conditions, and business plans to ensure the financing structure supports the investment objectives and long term cash flow goals.
**Why Is Creative Multifamily Financing a Growing Trend in 2025?**
Creative multifamily financing has become increasingly popular as investors seek alternatives to higher interest rates and tighter lending standards. Loan assumptions, seller financing, and other flexible acquisition strategies help investors remain competitive while preserving profitability in today’s commercial real estate market.
00:00:28:23 – 00:00:54:24
Rod
Welcome back to multifamily Rock star. So as you guys know, this is where we dive deep into our, guest deals. And they’re not always huge deals. This is a smaller deal we’re going to talk about today in Saint Louis, where where my tiffy is from. And, you know, this is where we talk about, you know, try to give you actionable items, especially if you’re brand new to the business and you know how to get started, and give you some practical tips and things like that.
00:00:54:24 – 00:00:59:00
Rod
So let’s get into it. I’ve got my co-host, Mark Nagy with me, as usual.
00:00:59:02 – 00:01:05:02
Mark
Come on, rod, that’s that’s why I’m excited for this one. I love the I love the small to medium size deals. It’s different than a lot of times what we talk about.
00:01:05:04 – 00:01:27:00
Rod
Yeah. Well it’s a sweet spot really. It’s actually a sweet spot. And because you can very often deal with mom and pop sellers, you know, there’s ways to be creative with these deals. And, I think it’s a it’s an incredible way to get started. So today we’ve got Harvey Lockhart, and, Harvey’s kind of a cool guy, and that he plays the saxophone, which I think is one of the coolest instruments there is.
00:01:27:03 – 00:01:35:22
Rod
He’s a composer. He’s an educator, a Grammy nominated educator, which is really cool. And, lives in Saint Louis. Welcome to the show, brother.
00:01:35:24 – 00:01:37:07
Harvey
Thank you. Thanks for having me.
00:01:37:09 – 00:01:55:08
Rod
Yeah, for sure. And I think I want to just say something else here, and that is, you know, you founded a nonprofit called Heal Center for the Arts, and, and you told me before we started recording that you got into this business with me and became a warrior to to build cash flow to fund that, which I just think is incredible.
00:01:55:10 – 00:02:10:18
Rod
So I just want to salute you. But, you know, why don’t you do a much better job than I just did, telling us who you are, brother, where you came from, and and, you know, why real estate? I mean, I kind of stole your thunder a little bit on that, I guess, but, just,
00:02:10:20 – 00:02:16:22
Rod
Yeah. Bring us, bring us current and and do a little better job describing where you came from. If you would.
00:02:16:24 – 00:02:34:21
Harvey
In. Sure. Yeah. Well, I’m born and raised in Miami, Florida. And I grew up in a single family household. My parents got divorced when I was five, but it put a lot of character in me. Built a lot of character in me. Growing up to be. To have to be the man of the house.
00:02:34:21 – 00:02:57:21
Harvey
You know, my dad was always there for me, but it just just lived in a different household, you know? And, growing up, I, got a lot of my inspiration, by, you know, being exposed to the arts. You know, my mother introduced me to a place called the African Heritage, culture, Arts. And. And that’s when I kind of grew up and, learned about, playing the saxophone and, you know, all of those things.
00:02:57:21 – 00:03:19:21
Harvey
So I’ve been playing the saxophone for, little over 30 years now. Wow. So professionally and, you know, I’ve just been doing a lot in music. My my, all of my training and my degrees are in music. But to fast for. You know what got me into real estate? My grandfather was a real estate investor.
00:03:19:23 – 00:03:45:22
Harvey
He used to own, several apartment buildings, actually. So, I grew up watching him run his business. And I saw sometimes he would bring home wads of money for his account because he had me winning. Collected rent, and that’s how we had to count money. So I saw that. And so I grew up in a, very entrepreneurial background with my grandfather being, you know, the example.
00:03:45:24 – 00:04:11:06
Harvey
And then as I grew older, I found out that my, all of my family members in the Bahamas were also heavily entrepreneurial. They’re very entrepreneurial and, were investors. And I’m now starting to connect with that side of my family even more on the business side. And we could talk about that a little bit later. But my why and how I came to real estate investing, is because I grew up seeing it.
00:04:11:08 – 00:04:21:12
Harvey
My wife and I decided to get involved with it, you know, started to, invest in single family properties. We flipped a few properties. Was.
00:04:21:12 – 00:04:25:23
Rod
There was this in Miami or a, up up in Saint Louis, where you are now.
00:04:26:00 – 00:04:41:11
Harvey
In Saint Louis, where we are now in Saint Louis? Well, opportunity, to get involved in properties. And just to let you know, we started with, we bought our first properties, for like $10,000 each. It was two of them.
00:04:41:13 – 00:04:43:15
Rod
One was this one was this.
00:04:43:17 – 00:04:45:09
Harvey
2018?
00:04:45:11 – 00:04:47:04
Rod
Yeah. No kidding. Wow.
00:04:47:06 – 00:05:09:14
Harvey
Yeah. You talk about your seminars? Yeah. I had a big seminar learning experience, and, you know, it took that, you know, because we were newbies, we didn’t really know what we were doing. But the opportunity presented itself, and I had just decided to move outside of my school district as a teacher. So I was able to roll my retirement over into a Roth IRA.
00:05:09:16 – 00:05:21:02
Harvey
So I did, then decided to go ahead and purchase, real estate. And I, I did it and, I went and we did this without looking at the properties first.
00:05:21:04 – 00:05:34:00
Rod
Which was you bought them without looking at them. I thought I was the only knucklehead that did that. I did that once on one fact when I. When I showed up, I didn’t realize everything from the roof line up was gone. Okay? It was just a hole. Okay. Oh, yeah.
00:05:34:01 – 00:05:53:03
Harvey
Yeah. Exactly the same story I have, you know, similar, we one of the properties, I went to tour it after my wife, kind of briefly, told me about it, and so I went and saw it, and I found out that one of the, properties, it was a two story, single family house. The second story was sinking in.
00:05:53:05 – 00:06:15:18
Harvey
It was about, like somebody removed the load bearing wall and it was about the floor. Ouch. Well, anyway, we learned a lot. So those properties for a little bit more than what I, paid for them because I didn’t want to lose money, and I didn’t want to, make any mistakes. So I’m not in this business for me to lose money.
00:06:15:20 – 00:06:32:09
Harvey
I mean, and so I didn’t want to, we didn’t want to make any mistakes, so we decided to get educated. So, we started watching a lot of podcasts, came across your podcast, and, few years later, I decided to, attend one of your boot camps.
00:06:32:11 – 00:06:35:20
Rod
And so where was the boot camp?
00:06:35:22 – 00:06:40:03
Harvey
I think it was in, yeah, it was in Orlando.
00:06:40:05 – 00:06:52:12
Rod
Orlando? You did the Orlando event. Okay. Fantastic. And and so, I know that you, just closed on a 28 unit. Why don’t you tell us about that?
00:06:52:14 – 00:07:25:18
Harvey
So, one of, the Warriors resume, that I worked with, he brought me into the deal, told me that somebody brought him a deal, that he works with. And I said, okay, sure. I’ll go and check it out. And, you know, he said it was an opportunity. Opportunity for me to, you know, get into my first deal because I’ve been actively, working with, some of our other warriors trying to, you know, just get involved with my first deal, the riding, learning about underwriting and all the, the, the concepts that we need in order to be able to, take down some deals.
00:07:25:20 – 00:07:46:23
Harvey
And the best way to get started is to just, you know, be invited to a team and just jump in. So, being in Saint Louis, I can be a, person has boots on the ground, and, that will be my role. And I’ve been doing a lot of touring properties. And, you know, so I was familiar with the process.
00:07:47:04 – 00:07:50:14
Harvey
And so I can be an added resource.
00:07:50:16 – 00:08:10:01
Rod
Yeah. Let me interject something if I could, so I apologize for interrupting. I, you know, that’s one of the benefits of the warrior program is we literally have warriors in every single danger, every single city in the country. I think we’re pushing almost 2000 warriors at this point. And, and so, you know, when you offer to be boots on the ground, then you can get involved in deals like you did here.
00:08:10:03 – 00:08:11:17
Rod
Please continue.
00:08:11:19 – 00:08:32:07
Harvey
Yeah. It was it was a great opportunity. So I was able to, get involved with the team and found out that there were, I think about five other general partners, who are, also involved in, different capacities. And I learned that two of these, people are warriors. So I was, ecstatic to be a part of it.
00:08:32:07 – 00:08:53:21
Harvey
And then to learn, about the fundamentals of the deal. It’s just a it’s a just a great deal. And I know the area and, you know, to be able to get the deal for what we’re getting for and, to find a deal of that with a sign of property where it was underperforming in the area that we got it in, was just it was a blessing, you know?
00:08:53:21 – 00:08:55:00
Harvey
So,
00:08:55:02 – 00:08:57:01
Rod
Awesome. Awesome. Yeah.
00:08:57:03 – 00:09:21:17
Mark
All right. I know you mentioned up front, right. Smaller deals a lot of times can have these, better financing harvest. See here that we have some creative financing on this deal here. And I think that’s going to be especially useful over the next 6 to 12 months. I don’t know if you guys have been paying attention, but mortgage rates today are at a, 18 year high since 2006, even though rates have been cut, mortgage rates have gone up.
00:09:21:17 – 00:09:25:01
Mark
So creative financing like this, it’s going to be fantastic over the next.
00:09:25:01 – 00:09:35:02
Rod
Yeah. Describe describe that. Describe the deal there if you would RV describe you know, what you paid and why and how you got creative. Because it is good.
00:09:35:04 – 00:09:57:21
Harvey
Yeah. So, sales price was about 3.5 million. And we’re able to get to sell to, you know, to, carry 200,000, for us. Well, we’re assuming the loan is on. This is, 4.52% loan that we’re assuming, right. And I believe it had 2.7. Yeah.
00:09:58:00 – 00:10:16:00
Rod
2.27, 2.27 is what we had in your notes here. So, so two 2.25 million, as a balance, under 5% interest rate. Fantastic. And you got the seller to carry 200 grand. Now, how many years were left on the loan?
00:10:16:02 – 00:10:18:15
Harvey
I think it would may have been 3 to 5 years, I think.
00:10:18:15 – 00:10:35:18
Rod
Three. Fantastic. Fantastic. And and so talk about, what the going in rents were if you, if, you know, off the top of your head. I know I’m holding your feet to the fire here, but you know what sort of rent bumps you’re anticipating. And, you know, I’m assuming this was a value add deal. What, what what’s the plan?
00:10:35:18 – 00:10:36:17
Rod
There?
00:10:36:19 – 00:11:15:24
Harvey
Yeah. So it’s a value add deal. 28 units, two bedrooms, one bath. They are, 900ft². And they were going for, $1,000 a month. Now, the property itself is sandwiched in between two A-Class assets, that are renting about $2,500 a month for the same type of unit. And so we’re right next to, major university in Saint Louis, one of the higher performing university, Saint Louis University, and a well sought after, affluent part of town, the central West End.
00:11:16:01 – 00:11:43:07
Harvey
So, again, to be sandwiched in between two properties that are a class and they are, offering 2500 a month, and rent. And then here we are in between them offering $1,000 a month. That’s crazy. So. Right. We came in and we did. We’re able to raise rents, on renewals to about $250. Just we’re just trying.
00:11:43:09 – 00:11:48:00
Rod
So you got an extra an extra 250. Just just on renewals without doing any work.
00:11:48:02 – 00:12:20:05
Harvey
Without doing any work. Wow. We can get that. We can get even harder. Higher. Mark, your rent is 1450, 1460, I believe. And we can get that in rent now without doing any renovations because, the seller did do a good job at, renovating the property. There was only one unit that we really needed to, fully rehab and turn, and, we did that, and, so when we get new people come in, new tenants, we’re going to raise those rents to, about 1450.
00:12:20:05 – 00:12:30:10
Harvey
Our business plan was conservative, enough in our underwriting to only, anticipate, raising rents at 1350.
00:12:30:12 – 00:12:47:09
Rod
Right. So, but you’re but you’re getting tougher. You go into 1450. So that’s a $400 increase. I just want to do the math for my listeners. So here’s how you do the math on what that means to value. So you take that $400 a month, you multiply it times 28. And then you then you annualize it. You multiply it times 12.
00:12:47:13 – 00:13:15:02
Rod
So that’s $134,400. That’s the annual increase in rents that’s anticipated and projected here that you’re talking about. And then let’s say you divide that by a six and a half cap okay. Which is being or six cap, let’s say do six cap divided by a six cap. That is a $2.240 million increase in value for your rent increases on a property you only paid, what, three and a half for your,
00:13:15:04 – 00:13:27:21
Rod
Wow, that’s a fantastic deal, buddy. So again, these small deals don’t suck, guys. Okay, this is a this is a screaming deal here. Fantastic. Yeah. So? So, yeah. So anyway, go ahead, Mark, I’m curious.
00:13:27:21 – 00:13:39:07
Mark
The seller did, loan assumption and seller financing and they hadn’t raised rents in a while. They must have been motivated to sell. Do you happen to recall why they were selling or if there was any pain points there.
00:13:39:10 – 00:13:42:13
Rod
And how the deal was found as well? Please, if you know.
00:13:42:15 – 00:14:06:00
Harvey
Yeah, yeah, yeah. So, the deal was brought to us by actually a realtor. Okay. Good friends. Okay. So yeah. Okay. For sellers and, as we have gone through this process a little bit further, we found out that the seller had a couple of reasons, why he was selling. One is, you know, he’s about to go to prison for,
00:14:06:05 – 00:14:10:14
Rod
Oh. Okay. That’ll do it. That’ll do it.
00:14:10:16 – 00:14:30:02
Harvey
And then the other is that he just had so many properties, that he really didn’t need to. This is what I’m hearing. I don’t know why. I mean, right, manage them. Managing them that much to the point where he didn’t really feel the need to, raise rents. He was more concerned with, full capacity than he was with.
00:14:30:04 – 00:14:45:14
Rod
And so it’s very common, by the way, that’s very common where they don’t want to screw with turnover and stuff like that. They’ll keep the rents low so they don’t have to deal with things. They can be a little less, responsive on maintenance request because the people know they’re getting a good deal. And, and so that’s, that’s very common.
00:14:45:14 – 00:15:07:21
Rod
I want to add something. You said that a realtor brought the deal. That is actually a unique ninja strategy for finding deals. Okay. Because here’s the thing. Very often, especially on these smaller deals, let’s say somebody uses a broker, let’s say they own a 20 unit or a 30 unit or like this 128 unit, ten unit, whatever.
00:15:08:02 – 00:15:26:22
Rod
And they buy a house from a realtor. Right? So when they go to sell their ten, 20 or 30 unit, they contact that realtor residential realtor who hasn’t got a freaking clue what to do with the multifamily property. But they’ll take the listing because they get paid if it sells, so they’ll take it regardless. And that is a ninja trick.
00:15:27:02 – 00:15:46:12
Rod
Whatever market you’re in, guys. And this is along the lines of stuff that I teach you to boot camp. Whatever you market in, you’re in. Create a relationship with a residential agent or broker. Let them know if they come across a multifamily deal. You’ll let them write the contract, you’ll spiff them, whatever. And you get some phenomenal deals that way.
00:15:46:12 – 00:16:03:01
Rod
Sometimes some large deals. My friend Kevin, who owns a bunch of mobile home parks, got a 200 space mobile home park here in Florida that way as well. My brother bought his farm up in the Blue Ridge Mountains. It was in the wrong place, wrong MLS, all of that and a very similar scenario. So that’s I just want to interject that.
00:16:03:03 – 00:16:21:18
Mark
So, Harvey, I know you’re in that market and you mentioned, you know, boots on the ground as part of the role that you’ve been playing. Could you share for other people that might be playing a similar role? What what does that involve in terms of the due diligence? Are you working with any contractors? What do you know? What is the boots on the ground mean and how how have you been involved in that?
00:16:21:21 – 00:16:27:00
Rod
Which is a which is a great way to get involved in this business. So so yeah, the great question.
00:16:27:02 – 00:16:53:05
Harvey
Yeah. So, I’ve done a lot of things as, you know, in this role, some of the things are, you know, really, like you said, working with contractors. And then just being present, you know, just walking around, you know, seeing. And I got noticed, because of the delayed maintenance that was happening on this, asset, there were a lot of people just thought it was okay to, you know, just dump their cigaret butts, on the, in the common areas.
00:16:53:05 – 00:17:22:14
Harvey
And I’m like, man, this is, you know, we’re not tolerating that. You know, it’s trash all over the place. People are, you know, we have the dumpster in the back of the building, but they’re going back there, and they just putting their trash in front of the dumpster instead of, you know, putting inside the dumpster. And on top of that, the two property complexes, that were sandwiching their tenants were doing the same thing because apparently our trash dumpster was closer, to where there it was.
00:17:22:14 – 00:17:46:03
Harvey
So, I mean, just being in there, and then we’re getting called by the city and we’re being blamed for, you know, having all the trash all over the place. And it’s really not our fault. So being able to, be in position to, you know, find out what exactly was happening and how to fix it, we were able to communicate with the, the city and the city can help us contain.
00:17:46:09 – 00:18:07:03
Harvey
It has helped us to contact those other owners to make sure that their residents are putting the trash where their needs to go. And so that’s the small things I had to replace theirs. Some steps, you know, like, the it was raining real bad one time and then the steps just were, you know, we have wooden deteriorate.
00:18:07:03 – 00:18:10:19
Rod
They were deteriorated, and you just had to get in there, so nobody hurt themselves. Yeah.
00:18:10:21 – 00:18:12:09
Harvey
They’re replacing steps.
00:18:12:11 – 00:18:37:09
Rod
So you brought a hammer and you just swung a hammer and did what you got to do. Okay, so let me ask you this. You know, we have a lot of people that want to get into this business that haven’t taken action. They know they need to go do something. You know, what’s an action item or some area that you could deep dive into that a benefit a listener to, to get started, you know, with, with this pathway that Sharon.
00:18:37:11 – 00:19:02:17
Harvey
Yeah. So when I got into this business, you know, we were doing a lot of research, and I really, like, scared my wife, you know, she she was disappointed, you know, that I made the investment to invest in our education. But I just knew that if I didn’t, I was going to stay where I was, and I wasn’t willing to stay where I was.
00:19:02:19 – 00:19:23:24
Harvey
And, you know, to me, you have to take, like, you all with your catchphrases, take massive action. And now, you know, either I’m not big. I’m just not trying to live in fear. You know, I’m not trying to, I just don’t do that. So I believe in taking calculated risk. But, you know, you have to.
00:19:24:01 – 00:19:27:21
Harvey
You have to take a step foot out of it. You have to do something, or you’re not going to do anything, and you.
00:19:27:21 – 00:19:31:08
Rod
Never have to get a little bit uncomfortable. You got to get a little bit uncomfortable. Yeah.
00:19:31:08 – 00:19:51:02
Harvey
It’s not right. And you’ll never know what you’re capable of doing until you try. So, we we tried, you know, I eventually got out of the doghouse. But we did, all right, you know, and we’re trying, and it’s paying off. You know, I’m learning so much. I learned about so many other asset classes that I had no clue about.
00:19:51:04 – 00:19:53:11
Harvey
I met some incredible people.
00:19:53:13 – 00:20:12:22
Rod
In the warrior program. You mean. Is that what you’re talking about? Yeah. I mean, let me let me interject. I mean, right now we have warriors doing, industrial flex space. We have warriors doing retail centers, mixed use where there’s retail and and in homes. We have warriors doing mobile home parks, converting hotels to resident to multi family.
00:20:12:24 – 00:20:27:10
Rod
Self-storage. I mean, I could go on and on and and so, you know, it’s not just multifamily, but anyway, so, so again, so, so, so talk to the people that haven’t taken action yet.
00:20:27:12 – 00:20:49:22
Harvey
Yeah. I think you should just do it. If you feel that gut feeling, if you feel that man, if you feel really strong, just don’t don’t don’t lead into fear. You know, just go ahead and take that step. You know, anything worth doing is worth doing well. So I know that you can. Being in the warrior program, it just definitely helped me to get over that, mindset that, oh, I have to know everything.
00:20:49:24 – 00:21:06:23
Rod
Yeah. You know, there’s so many people you can lean on that’s that’s the key. Well, let me just say this, since we’re talking about it, if you’re interested in applying to the warrior program and pushing through that fear, you know, considering getting, possibly getting some guidance so you can experience the life you want this year rather than later.
00:21:07:00 – 00:21:24:12
Rod
You know, I would I would text the word crush right now to seven, two, three, 4 or 5 and see if the warrior program might be able to help you overcome that fear, you know, and so that you can accomplish what you want, you know, with lifetime cash flow. And that’s what we do. We help develop help develop lifetime cash flow.
00:21:24:12 – 00:21:44:20
Rod
And, you know, you got a screaming deal here, buddy. I got to tell you that those rent, those rent numbers you threw out there to, to have that kind of a value add on a 28 unit is extraordinary. But yeah, again, guys, if you’re interested in learning this business, text the word crush to seven, two, three, 4 or 5 and we will absolutely talk to you about it.
00:21:44:22 – 00:21:59:24
Mark
Now, a couple a couple of final things here that I wanted to to, to talk with you about here. Harvey. Number one, I see you wrote Hot Topic here, residential assisted living. That’s something that we don’t talk about very often on here, but I have seen a lot more warriors been doing it lately. Why do you like that?
00:21:59:24 – 00:22:03:11
Mark
Why did you put that here? Is kind of one of the things that you’re interested in.
00:22:03:13 – 00:22:24:15
Harvey
Yeah. Well, one of the biggest reason is because, you know, the baby boomers are getting older, and they’re going to need a place to be. But the biggest reason is that I’m, I’m a caregiver for my mother. He she lives with me now and has been for maybe almost eight years now, and I’ve had to be a caregiver to her.
00:22:24:17 – 00:22:44:01
Harvey
And then Manus, my wife and I looking to, you know, there has to be an asset class or somebody that is investing in this. And we did learn, about that residential assisted living. And it’s an incredible investing, investment strategy and, asset class to get involved with. So, so you’re.
00:22:44:01 – 00:23:04:19
Rod
Talking about taking a house and converting it to assisted living. Yes. Yeah. Residential assisted living is incredible. Okay. And and that’s where you take a house and you basically fill up your as many bedrooms as you can that legally that you can and, and do assisted living in it. I’ve got a fantastic friend that has, I don’t know, I think about six of those in Sacramento, California.
00:23:04:19 – 00:23:24:10
Rod
And she kills it. I met her, actually, and Tony Robbins mastermind, which costs a fortune. So she has a lot of money. And so I know, I know, that’s a great strategy, to you take a house, you convert it to assisted living. You know, but I will tell you, you know, in the warrior program, we’ve got warriors that are killing it in assisted living, larger facilities, and and it’s something I’m very interested in.
00:23:24:10 – 00:23:43:05
Rod
I was very interested in it, like ten years ago. In fact, I had the domain name affordable senior housing.com. I let it go like a knucklehead, but I, I had that. I also went got my administrator’s license here in Florida. I did a three day class and I could be an administrator of an alpha, but that’s something I’m very interested in personally because there’s a silver tsunami coming.
00:23:43:05 – 00:23:51:12
Rod
Okay. And there’s, there’s, you know, 800. I’m sorry, 8 million. 80 million. Is it 80 million? How many baby boomers are the 8 million I lose 28.
00:23:51:12 – 00:23:53:00
Mark
It’s got to be 88.
00:23:53:01 – 00:24:08:10
Rod
Yeah. 888. Is it okay? So. Yeah. Yeah, I think it’s 80 million, baby. Well, there’s a ton. Let’s just put it that way, okay? There’s a ton of baby boomers. They’re getting old and they’re getting cold. I want to do this south. Okay? Old and cold, but, anyway, if.
00:24:08:10 – 00:24:19:22
Mark
You live in a blue state as well, and you’re dead set on investing in your backyard, it’s a great strategy for blue states because you don’t deal with evictions as much. Obviously, for seniors, right, right. To be more stable. So just as an aside, but.
00:24:19:24 – 00:24:34:02
Rod
No, no, that’s very true. It’s very true. Now now of course there’s liability involved. You got to take care of grandma. I mean, you know, you can’t you can’t be a slumlord with with assisted living. You know, I have a real affinity for the elderly, which is why I looked into it ten years ago, but. Well, I love it, brother.
00:24:34:02 – 00:24:40:20
Rod
I think that’s a a great strategy for you to consider. And, I think that that could be an absolute home run.
00:24:40:21 – 00:24:47:24
Mark
Quick, before we end here, Harvey, for people that like your story connect with, you want to reach out to you. Where? Where can they reach out to you? How can they do that?
00:24:48:01 – 00:24:53:14
Harvey
Well, you can reach me, at, by email at Harvey, at Harvey lockhart.com.
00:24:53:16 – 00:24:54:11
Rod
Okay.
00:24:54:13 – 00:25:00:22
Harvey
And social media, Facebook, Instagram a lot I know.
00:25:00:23 – 00:25:18:03
Rod
Okay. Love it, love it brother. Well, listen, I appreciate you coming on, my friend. It’s great to see you and, excited to see where you take this and and love the why you’re doing it. I mean, that’s to me, that’s the way. That’s the way the world, man. Power moves to those who serve, and you serve.
00:25:18:05 – 00:25:20:11
Rod
Anyway, I appreciate you coming on here, buddy.
00:25:20:13 – 00:25:22:14
Harvey
Thank you. I really appreciate the opportunity. Thank you.
00:25:22:14 – 00:25:23:03
Rod
Yeah. Thanks.
**Podcast Categories:** Multifamily Rock Stars, Podcasts
---
### [The Real Estate Strategy Nobody Is Talking About](https://rodkhleif.com/podcasts/hotel-to-multifamily-conversion-alexander-cartwright/)
**Published:** July 27, 2026
**Author:** Bryan Hoover
**Excerpt:** The Real Estate Strategy Nobody Is Talking About
**Content:**
# Hotel to Multifamily Conversion: Unlocking Value in Distressed Hotels
Hotel to multifamily conversion is emerging as a creative real estate investment strategy for investors looking to acquire properties below traditional multifamily pricing while addressing the growing demand for affordable housing. On Lifetime Cash Flow Through Real Estate Investing, economist and real estate investor Alexander Cartwright explains how his team identifies distressed and underperforming hotels, converts them into multifamily housing, and creates value through a combination of low acquisition costs, strategic renovations, and strong market demand. The strategy is especially compelling in expensive markets where traditional multifamily acquisitions can offer limited margins for error.
## Why Hotel to Multifamily Conversion Can Create a Competitive Advantage
Alexander Cartwright began exploring hotel conversions after seeing multifamily cap rates compress significantly in 2021 and 2022. Instead of competing for traditional apartment buildings at increasingly expensive prices, he began looking for a different strategy that could create more margin and downside protection. The key insight was that hotels can sometimes be acquired at a dramatically lower cost per unit than comparable multifamily properties, creating an opportunity to renovate and reposition the asset while maintaining a much lower cost basis.
One of the most important lessons from Cartwright’s approach is to quantify complexity rather than automatically dismiss it. A hotel conversion may involve rezoning, construction, unit reconfiguration, financing, and leasing, but each challenge can be analyzed as a financial problem. In one example discussed during the podcast, a property purchased at approximately $30,000 per unit could require another $30,000 to $50,000 per unit in renovations while still maintaining a significantly lower basis than newly developed housing. That lower basis can provide both upside potential and downside protection.
## How Investors Convert Hotel Rooms Into Multifamily Units
Hotel to multifamily conversion requires careful consideration of unit layouts, local demand, construction costs, and the eventual financing strategy. A hotel room can potentially become a studio, while two adjoining hotel rooms can be combined to create a one-bedroom apartment. However, the most profitable configuration is not always the one with the highest theoretical rent. Investors must also consider how quickly units can lease, what renters in the market actually want, the future refinancing strategy, and the needs of the eventual buyer.
In one Houston project, a 250-room Holiday Inn had already been converted into approximately 120 extended-stay units with one-bedroom layouts. The project continued operating as an extended-stay hotel while renovations were completed, allowing the property to remain occupied during the construction process. The renovation included expanding existing wet bars and small refrigerators into full kitchens, while the overall project was designed with a future HUD refinance in mind.
A successful conversion also requires adapting the property to the target demographic. In some projects, one-bedroom units may include individual washers and dryers, while studios may use shared laundry facilities. The right design depends on the neighborhood, the target renter, and the existing architecture of the hotel. In a Denver project, for example, Cartwright described plans to convert a 310-room hotel into a combination of studios and one-bedroom apartments, with the larger units receiving individual laundry facilities.
## The Importance of Buying at the Right Basis
One of the biggest advantages of hotel to multifamily conversion is the potential to acquire existing structures at a cost that would be impossible to replicate through new construction. Cartwright described a Denver property purchased for approximately $29,000 per unit that was expected to have an all-in cost in the low $80,000s per unit after renovation. The property was also located in an opportunity zone, adding another potential consideration for investors evaluating the overall investment structure.
This low-cost basis can create a meaningful competitive advantage in markets where new apartment construction is extremely expensive. A converted hotel may offer smaller units than a traditional apartment development, but the lower cost structure can allow the owner to offer housing at a more accessible price point while still maintaining attractive economics. Cartwright explains that the strategy works best in markets where housing is relatively unaffordable and renters are willing to accept a smaller unit in exchange for a lower price and strong amenities.
## Choosing the Right Market for a Hotel Conversion
Market selection is critical to hotel to multifamily conversion. According to Cartwright, the best opportunities are often found in markets where housing costs are high, rents are expensive, and traditional multifamily cap rates are compressed. Markets discussed in the conversation included Denver, Phoenix, parts of the Texas Triangle, northern New Jersey, Philadelphia, and the broader Mid-Atlantic region. More affordable markets can be more challenging because converted hotel units may have difficulty competing on price against larger traditional apartments.
The strategy also depends on understanding the specific demand drivers in a market. For traditional multifamily, investors often focus heavily on population growth, job growth, and income growth. Hotels can operate according to different economic fundamentals, with demand potentially driven by airports, casinos, hospitals, tourism, or other major destinations. Understanding why a hotel originally succeeded, why it declined, and whether the underlying demand remains can help investors determine whether the property is a candidate for conversion or another investment strategy.
## Why Distressed Hotels Can Become Conversion Opportunities
A major part of Cartwright’s investment thesis centers on the unique economic life cycle of hotels. Branded hotels are often required to complete expensive property improvement plans, commonly known as PIPs, to maintain brand standards. As a property ages, these required upgrades can become increasingly expensive. If ownership cannot justify the capital investment, the hotel may lose its brand, decline in quality, reduce rates, and eventually enter what Cartwright describes as a hotel death spiral.
This decline can create an opportunity for a different type of investor. A hotel may no longer be competitive as a hotel but could still have valuable physical infrastructure, a desirable location, and a building that would be prohibitively expensive to construct from scratch. The hotel to multifamily conversion strategy seeks to identify those situations where the property’s existing use has deteriorated while the underlying real estate still has significant potential.
## Financing and the Role of HUD Loans
Financing is another important consideration in hotel to multifamily conversion. Cartwright discussed the potential use of HUD financing for qualifying multifamily properties, including long-term financing that can extend up to 40 years. However, the process also includes significant regulatory, disclosure, property management, and compliance requirements. His team works with consultants, architects, and property managers to ensure the converted property meets the necessary requirements for the financing strategy.
The financing strategy can influence the physical design of the property from the beginning. For example, a diverse unit mix may be strategically useful when pursuing certain financing options, even if a different unit configuration might produce a higher theoretical rent. This highlights an important principle for real estate investors: the best renovation plan is not always the one that maximizes immediate income. It should also consider the property’s financing, operations, long-term ownership strategy, and potential exit.
## A Hybrid Strategy for Real Estate Investors
Cartwright is also exploring a strategy that combines hotel conversion investments with traditional hotel investments within a single fund. The rationale is that hotel conversions can require 24 to 36 months before a refinance or other liquidity event, while an operating hotel can potentially provide more immediate cash flow. Combining the two types of assets may create a portfolio with both near-term income and longer-term value creation potential.
For investors, this approach demonstrates how different real estate strategies can potentially complement each other. A conversion project may offer significant upside but require patience and substantial execution. An operating hotel may provide current income but expose investors to different operational risks. Understanding how assets with different cash flow profiles can work together is an important consideration when designing a real estate investment strategy.
## Alexander Cartwright’s Background in Economics and Real Estate
Alexander Cartwright is an economist and former professor who taught economics for approximately ten years, including MBA and undergraduate courses. His academic background informs the way he evaluates real estate investments, market inefficiencies, pricing, and risk. After spending years teaching and maintaining an interest in real estate, he transitioned into full-time real estate investing and developed a specialized focus on hotel acquisitions, hotel to multifamily conversion, and the economics of alternative real estate strategies.
During the conversation, Cartwright also applies his economic perspective to broader questions involving inflation, money supply, technological innovation, and artificial intelligence. His central argument is that investors should be cautious about making overly confident predictions about complex economic events while also recognizing the long history of markets adapting to technological change. For real estate investors, these ideas reinforce the importance of focusing on fundamentals, understanding risk, and remaining open to opportunities created by structural changes in the market.
Hotel to multifamily conversion represents a highly specialized investment strategy, but the broader lessons apply to investors across commercial real estate. Look for assets where the current use no longer reflects the property’s highest and best potential, quantify the complexity instead of automatically avoiding it, and focus on the relationship between acquisition cost, renovation cost, market demand, financing, and long-term risk. If you want to hear the full conversation and detailed insights, watch the podcast video or read the complete transcript below.
**What Is Hotel to Multifamily Conversion?**
Hotel to multifamily conversion is the process of transforming an existing hotel into residential apartments or other multifamily housing. Investors may acquire hotels at a lower cost basis, renovate rooms into studios or one-bedroom apartments, add kitchens and other residential amenities, and reposition the property to serve long-term renters.
**Why Is Hotel to Multifamily Conversion an Attractive Real Estate Investment Strategy?**
Hotel to multifamily conversion can be attractive because investors may acquire existing buildings at a significantly lower cost per unit than the cost of developing new apartments. When the acquisition and renovation costs remain below the cost of new construction, the project can offer both upside potential and downside protection while helping meet demand for more affordable housing.
**How Do Investors Convert a Hotel Into Multifamily Housing?**
Investors typically evaluate the existing hotel layout, zoning requirements, construction needs, local housing demand, and financing options. Hotel rooms may be used as studios, while adjoining rooms can sometimes be combined into one-bedroom apartments. Renovations may include expanding wet bars into full kitchens, adding electrical capacity, installing laundry facilities, and making other improvements required for residential use.
**What Types of Hotels Are Best for Hotel to Multifamily Conversion?**
The best candidates are often distressed or underperforming hotels with a strong location, usable physical infrastructure, and a potential mismatch between the property’s current use and the market’s housing demand. Hotels that have declined because of aging facilities, expensive brand improvement requirements, changing demand drivers, or increased competition may offer conversion opportunities when the underlying real estate remains valuable.
**Where Does Hotel to Multifamily Conversion Work Best?**
Hotel to multifamily conversion may work best in markets with high housing costs, expensive rents, and limited affordable housing options. Markets such as Denver, Phoenix, parts of the Texas Triangle, northern New Jersey, Philadelphia, and other expensive areas may create opportunities because renters may accept smaller units in exchange for lower rents and desirable amenities.
**How Does Hotel to Multifamily Conversion Create Value?**
The strategy can create value by acquiring an existing hotel at a low basis and repositioning it into a product that meets stronger residential demand. Investors may increase the property’s value through renovations, improved unit layouts, higher occupancy, and a more efficient use of the existing building. The ability to create housing without paying the full cost of new construction can be a significant competitive advantage.
**What Are the Biggest Challenges of Hotel to Multifamily Conversion?**
The biggest challenges can include zoning and regulatory requirements, construction costs, unit design, financing, property management, and the need to lease the property to residential tenants. Investors must also carefully evaluate whether the local market supports the proposed unit sizes and rents. The complexity of the conversion can be significant, but that complexity may also create a barrier to entry for competitors.
**Can Hotel to Multifamily Conversion Qualify for HUD Financing?**
Some converted properties may be eligible for HUD financing depending on the property, financing program, and applicable requirements. The process can involve extensive regulatory and compliance requirements, as well as the need for qualified consultants, architects, and property management. Investors should evaluate the financing strategy early because it can influence the property’s design and renovation plan.
**What Is the Difference Between Hotel and Multifamily Investment Risk?**
Hotel investments can offer higher cash flow potential but may have less durable income streams than traditional multifamily properties. Multifamily investors often benefit from the ability to increase rents over time, while hotel performance can be more sensitive to changing demand, competition, brand requirements, and management quality. Hotel to multifamily conversion can potentially reposition an asset from one risk profile into another.
**Is Hotel to Multifamily Conversion a Good Strategy for Real Estate Investors?**
Hotel to multifamily conversion can be a compelling strategy for experienced real estate investors who understand acquisition, construction, zoning, financing, and property operations. The strategy is not suitable for every property or market, but investors who can identify distressed hotels with strong underlying locations and convert them into housing at a competitive cost basis may uncover opportunities that traditional multifamily investors overlook.
00:00:26:28 – 00:00:50:22
Rod Khleif
Welcome back to lifetime cash Flow through real estate investing. I’m Rod Khleif and I’m thrilled you’re here. Very interesting guest today. Interesting in the fact that I love what he’s doing. So very excited to get into it. His name is Alexander Cartwright and he’s an economist, a PhD in economy and economics. I would take it and converts hotels to workforce housing.
00:00:50:23 – 00:01:05:22
Rod Khleif
Welcome to the show, brother. Thank you. Thanks for having me. You bet. Well, why don’t we start by having you really kind of give us some background? You’ve definitely done a shift from your education to what you’re doing now, so maybe we can. You can talk about that a little bit. Yeah.
00:01:05:24 – 00:01:21:18
Alexander Cartwright
This is one of the first years that I haven’t gone back to school in the fall, so I’m adjusting. I used to joke with my students that I went from undergrad to grad school, went from grad school to being a professor, and so I had a lot of summer breaks, but spent a lot of time in the classroom.
00:01:21:18 – 00:01:46:03
Alexander Cartwright
And I taught economics for ten years at a state school in Michigan, taught a lot of MBA classes, and of course, to the undergrad. And it was was fulfilling. I loved being people’s introduction to economics, which is not everyone’s favorite subject, but I love defending capitalism and the free market and talking about how prices are formed and what governments can and can’t do, and economic history.
00:01:46:04 – 00:01:55:10
Alexander Cartwright
It was an energizing and fulfilling career, but always had one hand in real estate and finally decided to to make the jump and do it full time.
00:01:55:11 – 00:02:28:13
Rod Khleif
Wow. Wow. Yeah. My father was a PhD in sociology and so was my stepmother. And and I actually had four, three uncles besides my father. Two were PhDs as well. So been around the academe for a long time. And my father always wanted me to teach. And sadly, he died before he saw, you know, me teaching and, but yeah, now I, you know.
00:02:28:15 – 00:02:29:05
Alexander Cartwright
Plenty of teaching.
00:02:29:07 – 00:02:31:07
Rod Khleif
You got plenty of influence teaching now, but but.
00:02:31:08 – 00:02:32:11
Alexander Cartwright
You don’t have to give out grades.
00:02:32:13 – 00:02:56:15
Rod Khleif
I didn’t, I didn’t back then. Yeah. No. The grades have to worry about getting the grades of the student success. And I’m blessed to say our success exceeds everybody else combined by a lot. Student success, that is. But but yeah. Awesome. So. So when did you decide? Because you buy distressed hotels. We do. And you convert them to affordable, affordable housing, which of course the cities love to see.
00:02:56:23 – 00:02:57:09
Alexander Cartwright
I would most.
00:02:57:09 – 00:03:03:15
Rod Khleif
Times, most of the time. Yeah, yeah I guess it would. So talk about your first deal. Let’s go there. Talk about.
00:03:03:18 – 00:03:06:02
Alexander Cartwright
The on the hotel conversion side just in general.
00:03:06:03 – 00:03:11:21
Rod Khleif
Well, if it if it would help to talk about something in general to start, we could start there.
00:03:11:22 – 00:03:36:15
Alexander Cartwright
Sure. Well, I’ll start by saying that I was doing more and more multifamily and wanted to do bigger and bigger deals, and had done some consulting with a couple big groups that no doubt your listeners would know and and wanted to do it myself. But I watched in 2021 and 22, these cap rates go straight down, and there’s just not a lot of margin for error.
00:03:36:15 – 00:03:58:10
Alexander Cartwright
When you’re buying something at a four and five cap could be a great asset. You could be great operators. It’s not a lot of margin for error. And I thought markets are efficient right. And who am I to get a really good deal. The only way I was going to get a good deal is to find something off market and, and kind of get lucky, and maybe that was a little bit of a sour mindset.
00:03:58:10 – 00:04:05:10
Alexander Cartwright
And I did get lucky a few times and found something, but I went, but I knew that I needed a strategy that was different.
00:04:05:14 – 00:04:09:22
Rod Khleif
So my multifamily number one and what size asset classes were you buying?
00:04:09:23 – 00:04:14:12
Alexander Cartwright
This is like like 1 to $3 million multifamily in West Michigan okay.
00:04:14:13 – 00:04:15:25
Rod Khleif
Oh in West Michigan okay.
00:04:15:26 – 00:04:21:19
Alexander Cartwright
I was living in Grand Rapids, was a professor at Ferris State University in. West Virginia. Okay.
00:04:21:21 – 00:04:24:03
Rod Khleif
You flew in from Texas today. That’s why I asked, are you serious?
00:04:24:04 – 00:04:27:14
Alexander Cartwright
Well, now we’re based in in Dallas. Okay. But you see me in West Michigan.
00:04:27:15 – 00:04:27:25
Rod Khleif
Gotcha.
00:04:27:27 – 00:04:49:05
Alexander Cartwright
Okay, so I actually went to a conference and a broker said to me, hey, why don’t we go and see a hotel that’s for sale in your neighborhood? I think it makes for a great conversion to multifamily. And I had, I guess, heard of it, but I’d never really thought about it. And I thought, this sounds like an enormous pain in the rear end.
00:04:49:06 – 00:04:50:22
Rod Khleif
So how many keys was this hotel?
00:04:50:22 – 00:04:51:11
Alexander Cartwright
That was 100.
00:04:51:11 – 00:04:52:11
Rod Khleif
And 40, 150.
00:04:52:17 – 00:05:03:24
Alexander Cartwright
Right. So most economy, it’s called limited service hotels, meaning there’s no banquet center, no restaurant. Right. Just kind of your no frills. Think about your Marriott Courtyard type hotel.
00:05:03:25 – 00:05:07:11
Rod Khleif
Okay. They might they might have a, like a breakfast area.
00:05:07:13 – 00:05:24:09
Alexander Cartwright
Might have a breakfast area. Exactly. But there might be a pool. But other than that, the hotel service is just the room. Gotcha. So that’s called the limited service or select service. So those kind of hotels are rarely over 150. They’re usually 120 250. Right. The economics really break down afterwards because they’re so labor intensive.
00:05:24:10 – 00:05:29:17
Rod Khleif
Got it. Okay. And you know, so so you went and looked at this hotel.
00:05:29:18 – 00:05:29:26
Alexander Cartwright
I went.
00:05:29:26 – 00:05:30:06
Rod Khleif
Into the.
00:05:30:06 – 00:05:47:22
Alexander Cartwright
Story and I thought, this is just an enormous pain in the butt, right? We’re going to tear this hotel apart. We’re going to rezone it, which I didn’t know anything about doing. And then after all this construction, we’re going to lease it up from zero. But of course, as a good entrepreneur, you just got to put prices on these different problems numbers.
00:05:47:23 – 00:06:06:24
Alexander Cartwright
And it’s just numbers, right? Right. Like, you don’t say this house is too ugly to flip. You sit down and try and put a number on every problem. And I learned that when you can buy something at $30,000 a door, right. Even if you spent 30, 40, $50,000 a door on renovation, you’ve got a cost basis. A third of what the guys down the street have.
00:06:06:25 – 00:06:29:20
Alexander Cartwright
And that gives you not just upside potential, but downside protection. And nobody can develop something at that basis. So you’re you’re able to supply housing at a price point where no one else, no new development is competing with you. And I thought, this is so complicated that the complexities of virtue, you’ve got to do some homework on the front end, but that’s a barrier to entry.
00:06:29:22 – 00:06:36:11
Rod Khleif
Let me let me speak to that for one second. Sure. You know, I tell I tell my students if you see.
00:06:36:14 – 00:06:44:07
Rod Khleif
One, if you see something that’s complex or you see something that you don’t have all the information, get excited because everybody else gives up at that point.
00:06:44:09 – 00:06:45:00
Alexander Cartwright
100%.
00:06:45:00 – 00:06:47:28
Rod Khleif
Right. Okay. So I just wanted to hammer that piece, that piece there.
00:06:47:29 – 00:06:51:16
Alexander Cartwright
Yeah. That doesn’t mean that it’s easy. Right? Right. Or that doesn’t take time.
00:06:51:18 – 00:06:52:22
Rod Khleif
But but is it worth it?
00:06:52:22 – 00:07:00:02
Alexander Cartwright
But is it worth it? Yeah. Right. And you don’t always know at first, at first blush, that maybe it’s not as hard as you think it is, and everybody else has given up.
00:07:00:04 – 00:07:05:03
Rod Khleif
So. So drilling down a little bit. So did you do that hotel or.
00:07:05:03 – 00:07:12:13
Alexander Cartwright
We ended up we ended up not doing that hotel but but learned a lot of things okay. And and moved on to the next one.
00:07:12:14 – 00:07:15:28
Rod Khleif
So what was what was the first one you did? First I’d like to ask some questions about it.
00:07:15:29 – 00:07:27:14
Alexander Cartwright
Yeah, sure. We bought a 250 unit Holiday Inn in Houston, Texas that had been that had every room combined. So it’s 120 units.
00:07:27:16 – 00:07:29:00
Rod Khleif
Gotcha. It’s already been combined.
00:07:29:01 – 00:07:34:11
Alexander Cartwright
It already been combined to like an extended state product. So they were all true one bedrooms. Perfect.
00:07:34:12 – 00:07:40:06
Rod Khleif
Perfect. Because I was going to ask you if that’s what you did. Literally that was my question. Did you combine rooms so they’d already been done?
00:07:40:07 – 00:07:56:14
Alexander Cartwright
It’s a pretty complex question on do you combine rooms? How many do you combine? Because think of it like this. When you’ve got a studio, right. If you take that’s a hotel room, we can a big hotel room, we can make a studio. Right. So you can take two hotel rooms and make a one bedroom. But you’re never to Xingu.
00:07:56:14 – 00:08:16:12
Alexander Cartwright
The rent going from studio to one bedroom. No. Right. So the NY is always highest. If you can do a hotel of pure studios. But the numbers aren’t everything. We’ve also got to think about how quickly can we get these things least we got to think about what kind of refinancing program can you get? If you’ve only got one kind of unit and you’ve got to think about your end buyer at some point in time.
00:08:16:12 – 00:08:18:03
Alexander Cartwright
So figuring out the unit.
00:08:18:11 – 00:08:22:19
Rod Khleif
I think it’s more than that, honestly. You also got to think about what that demographic needs in that area.
00:08:22:22 – 00:08:23:27
Alexander Cartwright
It might not be demand for all.
00:08:24:03 – 00:08:40:05
Rod Khleif
I’m going to tell you something. My experience with studios is a lot of turnover. People don’t love those small units. So but I guess it would depend on the price point exactly depending on the price, price point and the demographic. If they can’t find anything else, they’ll stay.
00:08:40:08 – 00:08:58:05
Alexander Cartwright
If you’re if you’re the best price in the market and you’re delivering an all bales paid type experience, right, and you’re in the right location, then people are really sticky. But just because we’re 15 to 20% cheaper than the cheapest thing they’re able to find, which we can do because of the basis.
00:08:58:06 – 00:09:07:05
Rod Khleif
Gotcha, gotcha. So you bought that 250 basic 125 unit. Did you make any did you make any of them bigger than one bedrooms. Did you stick with all one bedrooms.
00:09:07:07 – 00:09:24:18
Alexander Cartwright
We did put a couple two bedrooms in okay. And only because with with that one we’re going for a HUD refinance, which I can dig into if you’re interested. And they like to see a diverse unit mix there. Like to be able that we can check the box. We’ve got some two bedrooms. So not for an economic reason purely.
00:09:24:19 – 00:09:26:06
Alexander Cartwright
We’re kind of a strategic refinish.
00:09:26:06 – 00:09:41:07
Rod Khleif
For the refund. So what sorts of things did you have to do to that? I mean, it already been, you know, some heavy lifting have been done. If they converted it, you know, if they combine units when they combine the units, did they just have the doorways like you see in adjoining rooms? Exactly right. That’s all it was.
00:09:41:08 – 00:09:41:18
Alexander Cartwright
That’s all.
00:09:41:18 – 00:09:44:04
Rod Khleif
It was. Did you have did you open it up or did you leave it like that?
00:09:44:06 – 00:09:46:09
Alexander Cartwright
No. We left, so we left the.
00:09:46:12 – 00:09:47:23
Rod Khleif
Living room and then you’d have the bedroom.
00:09:47:23 – 00:09:57:18
Alexander Cartwright
Got it. And so one where you’ve got two hotel rooms next to each other, where you’ve got the adjoining door, one bathroom was removed and that plumbing and that space is used for the kitchen.
00:09:57:20 – 00:10:01:10
Rod Khleif
Oh. Got it, got it, got it. Now they didn’t do that already. You had to do that.
00:10:01:10 – 00:10:14:25
Alexander Cartwright
They did that. Oh they did that. And they just had a little wet bar and small refrigerator in there. So we expanded that kitchen. We’re always adding circuits for electrical. Every major appliance needs its own circuit. Right. And expanded that into a full kitchen.
00:10:14:26 – 00:10:24:19
Rod Khleif
Gotcha. Okay. Got it. Yeah. I mean, I’ve rented I usually sleep in a sweet and it’s usually got it’s usually the two rooms put together like that. You’ve got a little living room and you’ve got the bedroom.
00:10:24:20 – 00:10:25:01
Alexander Cartwright
Exactly.
00:10:25:03 – 00:10:31:14
Rod Khleif
Okay, okay. And and when was this. When did you do that in Houston.
00:10:31:15 – 00:10:33:24
Alexander Cartwright
That. We started that in 24.
00:10:33:26 – 00:10:39:27
Rod Khleif
Okay. Oh, recently. Wow. And is it filled up now? I mean, your occupancy is good.
00:10:39:28 – 00:11:01:27
Alexander Cartwright
Where that one. We continue to run it as an extended stay hotel as we remodel because it’s cosmetic. Okay. And and so that’s available has been occupied. Okay. Because it’s such a desirable product in the market. And we’re about three quarters of the way through the construction.
00:11:01:27 – 00:11:02:14
Rod Khleif
I see.
00:11:02:15 – 00:11:05:07
Alexander Cartwright
And charging toward our refinance toward the end of the year.
00:11:05:08 – 00:11:13:16
Rod Khleif
Okay. So you plan to try to refight HUD once you’re once you got it going, which is about as good as it gets as far as financing, although it’s a pain in the ass, but it’s about as good as it gets.
00:11:13:18 – 00:11:20:12
Alexander Cartwright
Yeah. Another another barrier to entry, right? You just got to sit down and find the consultant and learn partners.
00:11:20:13 – 00:11:26:09
Rod Khleif
Yeah. If you’re doing head. By the way, guys, HUD financing, is it 40 years or 35 years.
00:11:26:09 – 00:11:29:08
Alexander Cartwright
So they they’ll go up to 40. They’ll go up to 40.
00:11:29:11 – 00:11:45:28
Rod Khleif
And it’s but it’s what. But it’s also fixed interest as well. Your interest isn’t going to and there’s no term. It’s the full term. Like you know most most commercial real estate has a term five, seven, ten years, meaning a balloon payment in five, 7 or 10 years. And without you don’t have that, which is fantastic. But there’s a lot of regulatory components.
00:11:45:28 – 00:11:50:25
Rod Khleif
There’s a lot of disclosure requirements, even on an ongoing basis, I think.
00:11:50:26 – 00:12:00:18
Alexander Cartwright
And you got to have a HUD compliant property manager, and we brought in a HUD consultant to work with the architect to make sure we’re doing things just so to comply with what they require.
00:12:00:19 – 00:12:04:22
Rod Khleif
So these these rooms all have the mini splits, I take it.
00:12:04:23 – 00:12:06:07
Alexander Cartwright
They call it tack unit.
00:12:06:09 – 00:12:23:03
Rod Khleif
Your tax. That’s right. They all have tax just like in senior. Yeah I mean listen I love that model. I’m doing it right now on a senior housing project, six assisted living facilities in Texas. And I’m paying including Dallas. I’m paying 40,000 a unit and you can’t build them for less than 250. Right. So, I mean.
00:12:23:03 – 00:12:24:07
Alexander Cartwright
It’s the same model.
00:12:24:09 – 00:12:32:13
Rod Khleif
Say it really is. It just is different. Different product. So what’s your second one? I’m just curious if there’s if you’ve come across any other complexity. I’m just curious.
00:12:32:15 – 00:12:54:09
Alexander Cartwright
Yeah. So then we we then tried to look for it. Got another one in Houston. Extended stay property. Another one okay. And that one was was actually being remodeled as an extended stay. And before they signed a 20 year franchise agreement with the flag, we found the property, bought it, remodeled, added sprinklers, and then just leased it up so.
00:12:54:12 – 00:12:56:25
Rod Khleif
Close to be able to do that. It’s one of the things.
00:12:56:25 – 00:12:57:27
Alexander Cartwright
You need for multifamily.
00:12:57:29 – 00:13:13:04
Rod Khleif
For multifamily, by the way. Flag Guys is like Hilton Holiday Inn. You know, it’s it’s these big franchise brands of hotels. You know, you think they’re all owned by that brand? No, they’re using the name and they get a business model and all that, just like a franchise.
00:13:13:05 – 00:13:18:12
Alexander Cartwright
That’s right. I slip up using the lingo. I didn’t even recognize it right then. We just say the flag Marriott.
00:13:18:15 – 00:13:27:16
Rod Khleif
And it’s not doors and hotels, it’s keys as well. So you got to know the nomenclature, the verbiage. But so so how big is that one is that is that.
00:13:27:18 – 00:13:45:21
Alexander Cartwright
That’s 100 units we took to 109. That’s a big thing in the hotel conversion space is you can really crank the value. If you can squeeze in a few more units by converting commercial laundry space or some meeting space or some storage space. Hotels have a lot of extra space for multifamily. Just want it.
00:13:45:22 – 00:14:00:07
Rod Khleif
Need that makes sense. You know, they have closets. They have. They’ve got the linen rooms, they’ve got the all that stuff. Very interesting. Now are you putting laundry facilities in or is it, I mean, in the unit or are you doing like a laundromat kind of thing?
00:14:00:09 – 00:14:23:19
Alexander Cartwright
It depends on the neighborhood, right. Who we’re going after as a demographic and the architecture of the building. So for example, we’ve got another property in Denver, and in that property it’s 310 unit hotel. Wow. We put 91 bedrooms. Every single one bedroom is going to have its own washer dryer. But the studios will have a common area washer dryer.
00:14:23:19 – 00:14:25:25
Alexander Cartwright
But we have them on every single floor.
00:14:26:00 – 00:14:29:08
Rod Khleif
Well, just out of, you know, because I know Denver like the back of my hand. Where is it at?
00:14:29:09 – 00:14:33:12
Alexander Cartwright
This is on Quebec Street, right across from where there was the Stapleton Airport.
00:14:33:14 – 00:14:50:08
Rod Khleif
An airport. So around around 38th, 40th up in maybe further north than that. Yeah. No, my my dad worked for Continental Airlines for 36 years. So I went to Stapleton all the time. Okay. Yeah. And I had a bunch of houses there in Park Hill. It’s called that area is called Park Hill. Yeah, yeah, I had a bunch of houses there, so.
00:14:50:10 – 00:14:52:16
Alexander Cartwright
Well, you know, it’s so Stapleton airport.
00:14:52:17 – 00:14:54:01
Rod Khleif
I may know the freaking hotel.
00:14:54:02 – 00:14:57:18
Alexander Cartwright
Sure you do. This is the. It’s one of the large hotels. The big one.
00:14:57:18 – 00:14:59:27
Rod Khleif
Right there. Yeah. No, I know that would be.
00:15:00:01 – 00:15:00:21
Alexander Cartwright
A big in the.
00:15:00:24 – 00:15:02:28
Rod Khleif
Middle of the street. It would be on the west side of the street.
00:15:02:28 – 00:15:03:13
Alexander Cartwright
Side of the street.
00:15:03:19 – 00:15:13:02
Rod Khleif
I know the hotel, I swear I know the hotel. In fact, I think I went to my class reunion at that hotel, believe it or not. Oh, cool. Yeah, yeah. That’s funny. I don’t remember the the flag, but.
00:15:13:04 – 00:15:14:16
Alexander Cartwright
Well, we bought as a Holiday Inn.
00:15:14:17 – 00:15:16:22
Rod Khleif
No, no, it was something else back before.
00:15:16:24 – 00:15:20:00
Alexander Cartwright
It was built as a Howard Johnson that.
00:15:20:03 – 00:15:22:21
Rod Khleif
God, I could be wrong. Maybe it wasn’t the same hotel.
00:15:22:22 – 00:15:34:00
Alexander Cartwright
But this hotel, it’s got a great big atrium. Okay. It’s a Levon stories tall. Wow. Balconies on every room. You can’t build 11 stories tall. Yeah. That’s cool. If I could mention for a moment with Stapleton Airport. Right.
00:15:34:01 – 00:15:37:23
Rod Khleif
So what do they. What do they convert it to? I haven’t been back there in years, so. Well.
00:15:37:23 – 00:15:42:25
Alexander Cartwright
It’s just become a new planned development, right? It’s beautiful. So a lot of new housing in there and retail.
00:15:43:00 – 00:15:43:22
Rod Khleif
Retail in there too.
00:15:43:24 – 00:15:50:17
Alexander Cartwright
But you think you’ve got a 310 unit hotel, right. And then the airport closes and moves further outside of the city grows.
00:15:50:19 – 00:15:52:29
Rod Khleif
You’re screwed. Yeah. It’s a long way away.
00:15:53:01 – 00:16:02:21
Alexander Cartwright
You got it. So, 310 hotel. That’s not quite downtown, nor is it at the airport. Just didn’t make sense. Right. And hence we could buy that for $29,000 a unit.
00:16:02:22 – 00:16:04:12
Rod Khleif
29,000 a unit.
00:16:04:17 – 00:16:06:06
Alexander Cartwright
Wow. And they’re all and most.
00:16:06:09 – 00:16:08:23
Rod Khleif
Are you paid for 300 and some units though. So it’s.
00:16:08:29 – 00:16:09:06
Alexander Cartwright
Three.
00:16:09:07 – 00:16:13:25
Rod Khleif
Ten, three, ten. So what did it work out to once you paired it down?
00:16:13:29 – 00:16:17:12
Alexander Cartwright
We are all in for in the low 80s.
00:16:17:13 – 00:16:20:24
Rod Khleif
Well that’s a good deal in Denver. Yeah, that’s a good deal in Denver. Wow.
00:16:20:25 – 00:16:23:01
Alexander Cartwright
Right. And it’s in an opportunity zone.
00:16:23:02 – 00:16:39:24
Rod Khleif
Yeah I was I was just telling Alex that, you know, I can still name every street across the whole town because they’re all alphabetical. And I owned 500 houses there at one time. You want to hear something painful? If I hadn’t sold those 500 houses, I would be netting $1 million a month right now. Bottom line. Net. Yeah, yeah.
00:16:39:26 – 00:16:52:28
Rod Khleif
But yeah, a lot of other things wouldn’t have happened. So no regret. But that’s that’s the truth of it. I sold them to buy 1300 here in Florida. Cool. So. So yeah, the Denver one sounds exciting. So you’ve got a bunch of these in the works right now.
00:16:53:01 – 00:17:11:21
Alexander Cartwright
We’ve got a little over 500 units being converted right now okay. About 1000 in the pipeline. What we’re starting to do is work with some hotel operators that are maybe underwater on their hotel or banks that have got a hotel loan that’s gone bad, right? Kind of partner with them on getting them converted because they put.
00:17:11:21 – 00:17:20:06
Rod Khleif
The finance on all that. Yeah. Sure, sure. So you do these as 5 or 6 indications, I take it. We do. Yeah.
00:17:20:07 – 00:17:47:20
Alexander Cartwright
Yeah we do. Just like single asset syndications. It’s not not fancy on that side. Right. Okay. I don’t mean to jump around too much. One of the things that we’re, we’re starting to do is pair the conversion with a traditional hotel investment in a single fund, because the hotel conversion doesn’t provide any immediate cash flow, like we’re going to refinance, get all our money back, but may take 24 to 36 months if we compare that with a with a hotel.
00:17:47:21 – 00:17:48:05
Rod Khleif
That’s still.
00:17:48:07 – 00:17:50:22
Alexander Cartwright
Operating, that’s still operate to.
00:17:50:25 – 00:17:53:14
Rod Khleif
Operate, continue to operate it while you’re doing the conversion.
00:17:53:15 – 00:17:58:22
Alexander Cartwright
No, no, the separate product. So a separate property that works best as a hotel.
00:17:58:24 – 00:18:02:16
Rod Khleif
Oh. So you’re actually you’ll combine a working hotel with one of these.
00:18:02:17 – 00:18:06:05
Alexander Cartwright
Working hotel not on the same parcel. Right. Just in the.
00:18:06:05 – 00:18:08:23
Rod Khleif
Same same same fund. Right. Okay.
00:18:08:23 – 00:18:14:23
Alexander Cartwright
You’ve got immediate cash flow and you’ve got the upside. And we’ve got the team that understand.
00:18:14:25 – 00:18:17:21
Rod Khleif
Something like that working already where you’re managing a hotel.
00:18:17:23 – 00:18:31:08
Alexander Cartwright
We are. So we’ve partnered with a group that is built 110 hotels ground up and does hotel investment. And so we’re just about to launch our first where we’ve got hotels and conversion offered in one product.
00:18:31:15 – 00:18:38:16
Rod Khleif
That’s a lot of it’s a lot of plate spinning on that. I’m just going to say to run a hotel while you’re doing that. Well.
00:18:38:17 – 00:18:39:26
Alexander Cartwright
Not not the same team, right?
00:18:39:26 – 00:18:40:01
Rod Khleif
Yeah.
00:18:40:03 – 00:18:42:18
Alexander Cartwright
That’s third party management runs the hotel.
00:18:42:19 – 00:18:53:23
Rod Khleif
Okay, okay, okay. Interesting, interesting. And where else are you looking? You say you’ve got 1000 that you’ve in that that are at the top of the funnel where we’re at. Curious.
00:18:53:23 – 00:18:54:12
Alexander Cartwright
So there’s.
00:18:54:14 – 00:18:55:29
Rod Khleif
I don’t want you to give anything away.
00:18:56:00 – 00:19:05:02
Alexander Cartwright
No no no no. And I’m glad to talk about so in general, the better the market, the less the less affordable the market, the better it is for hotel conversion.
00:19:05:07 – 00:19:06:21
Rod Khleif
Because Denver, for example.
00:19:06:22 – 00:19:26:11
Alexander Cartwright
For example, because people are putting up with a little bit smaller unit right now in Denver, that property is going to be highly amenities. We won’t we won’t lack any amenity that the A-Class guys across the street have. Okay. But it’s a smaller unit. So and you’re not having a bunch of walk in closets for example. So you’ve got to compensate for that with a lower price point.
00:19:26:16 – 00:19:45:20
Alexander Cartwright
Now in an Oklahoma City or in Indianapolis. Or even Houston, right. It’s relatively affordable. You got larger units. You got to really compete on price to fill rooms in those kind of cities. Whereas if you’re in a northern new Jersey, for example, people are already accustomed to a little bit smaller unit and the rents are high and the cap rates are low.
00:19:45:21 – 00:19:55:05
Alexander Cartwright
So where there’s we’re I like to say we’re a free market solution to affordable housing. So we like markets that are unaffordable, meaning income relative to the.
00:19:55:05 – 00:20:00:21
Rod Khleif
Community generally or or Denver for sure. Phoenix. Phoenix.
00:20:00:27 – 00:20:13:23
Alexander Cartwright
So we love Phoenix Denver. We love the Texas Triangle in the right neighborhood. Yeah, we’re working on northern new Jersey, Philadelphia, Mid-Atlantic. But the more affordable markets in the center of the country, not as good.
00:20:13:24 – 00:20:41:23
Rod Khleif
Of a tougher. Yeah, tougher for sure. Interesting, interesting. So, yeah, you’ve got a very unusual niche, which is why I wanted to talk to you. One of the things that I’m sure you’re encountering is price differentials between multifamily and hotel. As an asset class, why are you able to buy these hotels? I mean, I could if you if I, if I ask you this question around Covid, I’d know the answer.
00:20:41:23 – 00:20:47:28
Rod Khleif
But right now. Why are you able to buy these hotels at a discount. Yeah. Compared to like a multifamily asset.
00:20:48:00 – 00:21:00:15
Alexander Cartwright
That’s great question. So I’ll back up for a second. Like what? Fundamentally, what we’re doing is an arbitrage between a hotel cap rate and a multifamily cap rate. Like we we want to get the property.
00:21:00:18 – 00:21:01:12
Rod Khleif
Economist answer.
00:21:01:15 – 00:21:21:15
Alexander Cartwright
This is the economist answer. But then but then the question is, okay, I can understand why. Maybe there’s one cheap hotel, but why are there a whole bunch of cheap hotels? In other words, why isn’t this arbitrage competed away? If you can buy low and so high? Why is there anybody doing that right? So the answer really lies in the nature of the hotel business.
00:21:21:18 – 00:21:41:19
Alexander Cartwright
Hotels have what I like to call limited economic life. So let’s say you open up a hotel, a marriott Courtyard Marriott comes in. They do an inspection because like you mentioned, it’s a franchise. And they say, okay, you’ve got your Marriott approved staff, you’ve got your Marriott approved linens and soap and breakfast and all the stuff.
00:21:41:19 – 00:21:42:02
Rod Khleif
Right.
00:21:42:03 – 00:21:54:00
Alexander Cartwright
And in five, seven years, they’re going to come back to you and they’re going to say you need to do what they call a Pip property improvement plan. And you need to buy the latest and greatest Marriott.
00:21:54:02 – 00:21:55:02
Rod Khleif
Stuff, stuff.
00:21:55:09 – 00:22:17:00
Alexander Cartwright
Furniture and our tile and have our new facade on your building, etc. so that Pip is expensive, right? Especially if it’s a big property. And especially as it gets older, the pips become more and more expensive. So if your hotel is not running well, or if you have not managed it well and saved for the Pip, or.
00:22:17:01 – 00:22:21:08
Rod Khleif
If times have changed in that geographic area and it’s the demand.
00:22:21:08 – 00:22:22:09
Alexander Cartwright
Is down like the airport.
00:22:22:09 – 00:22:22:27
Rod Khleif
Moves, right?
00:22:22:28 – 00:22:25:04
Alexander Cartwright
Right, right. Or a new hotel was built down the.
00:22:25:04 – 00:22:26:06
Rod Khleif
Street, which is common.
00:22:26:07 – 00:22:35:06
Alexander Cartwright
Which is very common. Then you might say, you know what, I am not going to do this expensive Marriott Pip. I might slip to Western.
00:22:35:08 – 00:22:35:22
Rod Khleif
Or Best.
00:22:35:22 – 00:22:41:18
Alexander Cartwright
Western holiday, right? You name it. And then five, seven years go by I might slip to super eight.
00:22:41:19 – 00:22:41:27
Rod Khleif
Wow.
00:22:41:28 – 00:23:01:12
Alexander Cartwright
And then pretty soon it’s Bob’s pretty good hotel. We call them independent. There’s no flag, right. And there are no brand standards. So some of those are fine, but some are low quality because there’s no brand standards. So then you get in what I like to call the hotel death spiral. They drop the rates, brings in a rougher crowd, sure get bad reviews.
00:23:01:12 – 00:23:19:17
Alexander Cartwright
You got to keep dropping the rates to fill up the hotel. And by this time, Marriott or Hilton has got a new hotel down the street. So in multifamily, you can always kind of keep upgrading your unit and your rents will kind of float upwards over time. But in the hotel world, the supply of new hotels can expand on you.
00:23:19:17 – 00:23:32:18
Alexander Cartwright
And guests always want to stay at the latest, greatest hotel. And if you’re just somebody with a Dazn or a Best Western, like the brand is okay. But fundamentally you’re competing on price. So if there’s a new one, customers just go somewhere else.
00:23:32:19 – 00:23:52:15
Rod Khleif
Yeah, yeah. If the new ones competitive in pricing. Yeah. It just reminds me I used to stay at the Mandarin Oriental in Miami and they blew it up. But that’s this different scenario. They’re going to put condos there. But yeah. No I understand that death spiral. That absolutely makes sense. I’ve actually got a great friend that does hotel refurbishment.
00:23:52:19 – 00:24:11:18
Rod Khleif
And so I know a little bit more than enough to be dangerous about it. But no, that absolutely makes sense. So you’re looking for these these these ones that have started that death spiral but still have the bones are good, but the area is good enough or good. Like if you if you can find one of those in Denver, that’s a home run.
00:24:11:18 – 00:24:35:23
Rod Khleif
Phoenix. Even Tampa, parts of Tampa. Yeah. You know any of these major cities that that have, you know, very, very expensive rents, obviously New York, but you know, that that might be too much. But interesting. So, you know, when you play monopoly, okay, you buy the houses and then you buy the hotels, right? So there’s might be something to be said for hotels.
00:24:35:23 – 00:24:38:17
Rod Khleif
Do you ever keep the hotels. Well.
00:24:38:20 – 00:24:56:07
Alexander Cartwright
Occasionally, but stuff that we’re looking to invest in as a hotel. Right. We’re really are looking for different things than you’d look for in a multifamily like, well, for example, in multifamily, it’s very important to see that you’ve got job growth and you’ve got population growth.
00:24:56:08 – 00:24:57:24
Rod Khleif
Income growth. All right.
00:24:57:26 – 00:25:21:11
Alexander Cartwright
And and as a hotel investment, those things are secondary I see you’re really looking for what’s a core demand driver. You may have a hotel next to an airport or next to a casino, a hospital in a town with a population or job growth that’s declining doesn’t mean the hotel business is deteriorating, for example. Interesting, right? So you’re looking for different trends, but hotel business can be a good business.
00:25:21:11 – 00:25:29:02
Alexander Cartwright
For example, right now you can buy a Hilton Home two suites, which is very nice.
00:25:29:04 – 00:25:43:27
Rod Khleif
I stayed, you know, I had I had a property in Shreveport and that was the nicest hotel in town I could stay at was a home, two suites, which is not saying a lot, but and I yeah, I don’t even want to fly over Shreveport airspace if you live there, you know what I’m talking about.
00:25:43:28 – 00:25:47:11
Alexander Cartwright
But I just drove through. I thought the same thing.
00:25:47:13 – 00:25:53:02
Rod Khleif
Oh, good God, I could tell you horror stories about that asset. But no, home to suites is nice. Sorry. Interrupted.
00:25:53:04 – 00:26:11:25
Alexander Cartwright
Fine. Yeah, yeah, but. So think about you could buy right now. Home to suites. You are tied to the Hilton brand. You’re tied to the Hilton distribution and point system, right? You can buy those at a nine and a half to ten cap. No shit. Right. So think about you put 30% down. Right. Get a 6.5% interest rate.
00:26:12:02 – 00:26:23:18
Alexander Cartwright
It’s almost 20% cash on cash. Wow. Now you’ve got to have the right operator. You hire a third party management, and you’ve got to make sure you set money aside for a pimp. But in terms of cash flow, it absolutely cranks.
00:26:23:18 – 00:26:24:07
Rod Khleif
Interesting.
00:26:24:07 – 00:26:38:15
Alexander Cartwright
So the question is why are the cap rates so high? Right. And it’s because with multifamily, we know we’re going to be able to bump up rents to 3% almost every year, especially over a 1015 year ownership period. Right.
00:26:38:16 – 00:26:42:28
Rod Khleif
This is look at history inflation the dollar going down. Yeah.
00:26:42:29 – 00:27:00:26
Alexander Cartwright
Right. That’s just not the case with a hotel I mean that the hotel may go to zero after 20 years right. It may become the Holiday Inn that I’m buying at $29,000 a door. If you’re not a good manager, if the market shifts on you. Right. So you’re getting paid to take different kinds of risk and you’re being compensated.
00:27:00:26 – 00:27:03:27
Alexander Cartwright
More cash flow, no guaranteed appreciation.
00:27:03:28 – 00:27:06:02
Rod Khleif
The biggest factor in cap rate is risk.
00:27:06:04 – 00:27:06:16
Alexander Cartwright
You got it.
00:27:06:18 – 00:27:06:22
Rod Khleif
Yeah.
00:27:06:23 – 00:27:16:10
Alexander Cartwright
I like to think the cap rates fundamentally a measure of how durable the income stream is. So in the hotel world, income streams really high. But it’s not durable.
00:27:16:12 – 00:27:44:24
Rod Khleif
You know. And how much management is involved and these other things. Yeah. Can we go global for a minute? I mean, what are your thoughts? I mean, you’re an economist, for God’s sakes. I might as well take advantage of that degree for a minute here. So what are your what are your thoughts on where we’re at with inflation and all the money supply and the fact that, you know, I had an economist sitting there and he told me that 80% of the US currency was created during the Biden administration.
00:27:44:25 – 00:27:49:24
Rod Khleif
It was a 20% up to that point. 80% more got created where wondering why there’s inflation. I mean, hell.
00:27:49:27 – 00:28:07:23
Alexander Cartwright
I know, I know, it’s just I just roll my eyes. When I heard the fed chair get on TV a couple years ago and say, we’re not even thinking about thinking about raising rates. And the inflation is transitory and it’s supply chain issues. It’s like you don’t need a PhD in economics to think about these first principle things.
00:28:07:24 – 00:28:32:11
Alexander Cartwright
Right. And the money supply is not the only driver of inflation, but let’s call it 95 to 95, 95 to 99% of what cause inflation is the money supply. And you’re right, they printed almost $400 million an hour for almost two years without stopping. I wish we had a chart of this. So if you look at the money supply M2 and you look at kind of growth, that’s pretty normal.
00:28:32:11 – 00:28:55:05
Alexander Cartwright
And we get to 2008, 2009 financial crisis just spikes. And we had the biggest jump in the money supply that basically we had ever seen. And now if you look at that chart with 2020 on there, you can’t even see that 2009 on the trend line. You can barely see it. Wow. I mean, it just I don’t have words to explain the amount of money that has been printed.
00:28:55:05 – 00:28:58:17
Alexander Cartwright
And we see how painful it’s been raising rates.
00:28:58:17 – 00:29:00:10
Rod Khleif
And the fraud that we’ve seen.
00:29:00:12 – 00:29:05:26
Alexander Cartwright
And the fraud that we’ve seen, and they’ve only brought the money supply down back a little bit. So it’s.
00:29:05:26 – 00:29:10:07
Rod Khleif
Like the end game here from an expert. Alex, what’s the end game in your opinion.
00:29:10:08 – 00:29:11:19
Alexander Cartwright
In terms of what will happen.
00:29:11:20 – 00:29:16:27
Rod Khleif
Yeah. Economically where are we headed for a for a for a big crash. What do you think is going to happen here.
00:29:16:28 – 00:29:50:04
Alexander Cartwright
Well that’s just anyone digital. I will I will answer the question. I just want to say anyone that sounds very confident about predicting recessions. In my opinion, you should be immediately skeptical of because it’s just so complex, right? Like, who can predict something like a Covid or a war, right? They’re just exogenous shocks. But in terms of just credit markets in general where you have pumped up the money supply, so much, does that ultimately go away without a problem?
00:29:50:05 – 00:29:52:15
Alexander Cartwright
Of course not. Right, right.
00:29:52:16 – 00:29:59:03
Rod Khleif
I have to think something’s going to got to get a got a break here. I don’t know if AI will help, you know, massage.
00:29:59:06 – 00:30:19:28
Alexander Cartwright
We hope it does. Right. We hope that that just causes productivity to grow so much. Right? Then we and we just become so much. We become so wealthy that we effectively end up paying down the debt and neutralizing some impact of the money supply. That’s that’s what’s happened historically. But of course, there’s no guarantees that kind of thing happens, which is why it’s scary to think about.
00:30:20:00 – 00:30:34:14
Rod Khleif
Yeah, yeah. Wow. Well, it’s you know, I’m not a doom sayer, but I, I do think about it a lot and, you know, and then you think about the impact of AI on jobs and, and ability of people to pay.
00:30:34:14 – 00:30:35:04
Alexander Cartwright
Rent.
00:30:35:06 – 00:30:37:17
Rod Khleif
You know. And he thoughts on that? Yes.
00:30:37:18 – 00:31:01:02
Alexander Cartwright
Okay. A lot of thoughts I’ve been thinking about a lot lately. So I think this is way overblown. Okay. All right. All right. Let me just give you a story. Okay. The very famous story. Have this professor at Stanford studying biology. You have this professor at University of Illinois is an economist. Okay. And they. And this one guy, Stanford writes a book called the The Population Bomb.
00:31:01:07 – 00:31:22:27
Alexander Cartwright
And he writes about this was published in the late 70s, early 80s. Okay. We’re going to run out of food. We’re going to over populate the Earth. In other words, there’s not going to be enough stuff to go around and we’re going to get poorer. And the economist says, why don’t we make a bet? Because in economics we like to say that a bet is a tax on bullshit.
00:31:22:28 – 00:31:43:15
Alexander Cartwright
So he says we’re going to make a bet, okay. And I bet you that the price of all these different commodities, Mr. Biologist, goes down. You name the commodities, because if we’re going to run out of stuff, we would think the price would go up. As they get more scarce. So he says, let’s take all let’s take silver.
00:31:43:15 – 00:31:55:20
Alexander Cartwright
Copper. They picked out all these commodities okay. And they made this bet. They made kind of a public show of it. And you go ten years in the future, 15 years in the future, 20 years in the future. What happened to the price of all these? They went down.
00:31:55:21 – 00:31:56:03
Rod Khleif
Did they?
00:31:56:03 – 00:31:58:15
Alexander Cartwright
Right. And they went down. And I’ll give you an example of one.
00:31:58:21 – 00:32:00:01
Rod Khleif
Doesn’t make any sense with inflation.
00:32:00:06 – 00:32:07:10
Alexander Cartwright
Oh, well, even with so an injustice they went down. But even with inflation the price of these things go down.
00:32:07:11 – 00:32:08:06
Rod Khleif
Okay.
00:32:08:08 – 00:32:37:00
Alexander Cartwright
I’ll give you an example. Copper. Copper prices 1920s 1930s or going straight up because telephone is becoming widely available. We’re running copper wire to everyone’s home. And that high price is a signal to entrepreneurs. Hey, we need to find a substitute for this copper wire. And copper ultimately comes back down in price. Why? Because we invent fiber optic cable, which is made of sand, which there’s no shortage of.
00:32:37:02 – 00:32:58:00
Alexander Cartwright
Right? Okay, so here’s here’s my point. Human ingenuity and creativity is unlimited. Even though our physical resources are scarce. So there’s always been these scares. We’re going to run out of jobs. We’re going to run out of food. We’re going to run out of oil. We’re going to run out of X, y, z. It just doesn’t pass. First principles of economics.
00:32:58:00 – 00:33:21:28
Alexander Cartwright
It’s actually never happened. Maybe for a few like for moments in time, prices have shot up. But long term that’s not been the case. Imagine a world where 80% of the country is employed in one industry, like farming. That happened, right? And people were terrified when power farming equipment came out. People were terrified of all the jobs that were going to be lost because of computers.
00:33:21:29 – 00:33:40:06
Alexander Cartwright
Right. You know, we used to have we used to pay people to operate telephones and even elevators. Those jobs are destroyed, right? And when we come out with jobs numbers every month and we show that we create something like 120,000 jobs a month, that’s net we destroy every month, hundreds of thousands of jobs and create hundreds of thousands of jobs.
00:33:40:07 – 00:33:43:27
Alexander Cartwright
That is a normal, growing, innovative economy.
00:33:43:28 – 00:33:48:25
Rod Khleif
Interesting. So you don’t think AI is going to impact it more than some of these other things?
00:33:48:26 – 00:33:50:13
Alexander Cartwright
Well, so I just want to be specific.
00:33:50:13 – 00:33:52:25
Rod Khleif
I don’t necessarily disagree with you. I have an abundance mindset.
00:33:52:26 – 00:34:10:29
Alexander Cartwright
People will lose their jobs. Right, right. But every single technological innovation has saved labor and therefore destroyed someone’s job. Right? There will be people that lose their jobs. Just like how we no longer have got certain factory workers in this country. We don’t have blacksmiths or.
00:34:11:01 – 00:34:16:09
Rod Khleif
Taxis in Miami with without drivers pulling into my parking lot. Great example.
00:34:16:11 – 00:34:16:25
Alexander Cartwright
Crazy.
00:34:16:26 – 00:34:17:27
Rod Khleif
Great example. Yeah.
00:34:17:29 – 00:34:40:21
Alexander Cartwright
And guess what? We will create additional jobs where people will get paid even more money because they will be paid to do something where they are, in fact actually productive, something that the machine cannot do that will be more economically fruitful. That is the history of economic growth. I know it’s hard to we can’t. What’s hard to believe about this story is it’s hard to remember.
00:34:40:22 – 00:34:48:28
Alexander Cartwright
Hundreds and hundreds of years of economic history. And it’s also hard because I can’t tell you what everyone who loses their job due to AI is going to do. Right?
00:34:48:29 – 00:35:06:10
Rod Khleif
Right. And there’s going to be a lot of there’s already been a lot of job loss. You look at some of the big tech companies, but these people, if they embrace AI, you know they’re there. They can they can figure it. They’ll figure something out. Yeah. Interesting. Well, listen, Alex, this has been a real treat. Completely different than I typically talk about on this show.
00:35:06:12 – 00:35:09:16
Rod Khleif
Good. You’re doing some good stuff. How can people reach you?
00:35:09:17 – 00:35:27:04
Alexander Cartwright
Our firm is called Hotel shift shift. And at hotel shift Capital. Okay. Always happy to chat about hotels and economics. Or somebody finds a hotel and they need some help looking over it. That’s our favorite thing to do is analyze hotels. Glad to be helpful.
00:35:27:05 – 00:35:29:26
Rod Khleif
Love it. Well, thanks for coming down. Appreciate you being here.
00:35:29:28 – 00:35:31:01
Alexander Cartwright
Yeah. Thanks for the opportunity.
**Podcast Categories:** Podcasts
---
### [They Raised Rents Without Renovating a Single Unit](https://rodkhleif.com/podcasts/multifamily-asset-management-jay-tana-boersma/)
**Published:** July 24, 2026
**Author:** Bryan Hoover
**Excerpt:** They Raised Rents Without Renovating a Single Unit
**Content:**
# Multifamily Asset Management Lessons From Jay and Tana Boersma
Multifamily asset management is one of the most important parts of creating long-term value in apartment investing, and Jay and Tana Boersma provide a practical look at how investors can manage renovations, property managers, occupancy, delinquency, and operating performance after closing on a deal. On Multifamily Rockstars, the couple discusses their journey from residential mortgage lending into multifamily real estate and shares lessons from their 124-unit Class C apartment acquisition in Stillwater, Oklahoma.
## From Mortgage Lending to Multifamily Real Estate Investing
Jay and Tana Boersma built their real estate experience through decades in the residential mortgage industry before transitioning into multifamily investing. Jay had been interested in real estate from an early age because both his grandfather and father were involved in real estate, but he initially entered residential lending because he believed he did not have enough capital to invest directly in property. After years in the mortgage business, the couple began looking for a way to build passive income and create a long-term path beyond working in sales.
Their transition into multifamily real estate began with education, networking, and relationships. After listening to the Multifamily Rockstars podcast for more than a year, Jay joined the Warrior community and began building the knowledge and connections that eventually led to larger apartment acquisitions. The couple first purchased smaller multifamily properties before closing on a 72-unit property in 2022 with a team that included other members of the Warrior community. Their experience demonstrates how investors can progress from smaller deals to larger multifamily acquisitions by developing the skills, relationships, and confidence necessary to operate at a higher level.
## A 124-Unit Class C Value-Add Apartment Deal
The featured deal was a 124-unit Class C apartment community in Stillwater, Oklahoma, built in 1972. Jay and Tana acquired the property for approximately $7.8 million, or just under $63,000 per unit. The property was sourced off market through local relationships, including their property manager, whose father had originally developed the community.
The original business plan included approximately $800,000 in capital expenditures, with roughly half allocated to interior renovations. Planned unit improvements included flooring, countertops, cabinet refacing, appliances, and lighting fixtures or fans. However, the investors quickly discovered that the market was providing valuable feedback. Within the first two weeks after closing, six units were leased at rents that matched the property’s projected post-renovation targets without requiring the planned renovations.
That development led Jay and Tana to reconsider how much money should be invested in each unit. Instead of automatically completing every planned renovation, they began testing the market to determine whether certain upgrades were actually necessary to achieve higher rents. This is a key multifamily asset management lesson: the original underwriting and renovation plan should guide the strategy, but actual leasing results should influence how capital is deployed after acquisition.
## Why Investors Should Avoid Over-Renovating Class C Apartments
One of the most valuable lessons from the discussion is the importance of matching renovations to the actual market and resident base. Jay and Tana originally expected to spend approximately $4,000 to $5,000 per unit on many renovations, with some units requiring more and others requiring no work at all. But when classic units began achieving the projected post-renovation rents, the investment team had to reconsider whether spending additional capital would generate an adequate return.
The goal was to test renovations on selected units and determine whether additional improvements could justify higher rents. Jay discussed the possibility of spending around $4,000 to $5,000 on renovations in exchange for approximately $100 in additional monthly rent, while also recognizing that some units had little or no opportunity for rent growth due to lower demand. For investors purchasing older Class C properties, this approach highlights the importance of avoiding unnecessary capital expenditures and focusing renovation dollars where they are most likely to produce measurable returns.
Key takeaways for value-add multifamily investors include:
- Test the market before completing every planned renovation.
- Avoid over-improving units for the resident demographic and submarket.
- Compare renovation costs with the expected rent increase and payback period.
- Allocate capital toward the improvements that create the greatest operational impact.
The discussion also emphasizes that exterior improvements and essential building systems may sometimes provide more value than excessive interior upgrades. Parking lot work and potentially replacing older Federal Pacific Stab-Lok breaker boxes were among the exterior and property-level considerations discussed for the asset.
## Multifamily Asset Management Requires Weekly Oversight
After closing, Jay and Tana moved into the asset management phase, where their focus shifted from acquiring the property to executing the business plan. They work with a third-party property management company that they have used on other assets and emphasized the importance of having a management partner they can trust.
Tana explained that the ownership team meets with the property management company regularly after closing, often on a weekly basis, to stay aligned on the execution of the business plan. While the property manager coordinates much of the day-to-day work, the ownership team remains closely involved in monitoring progress, reviewing results, and ensuring that the planned improvements are being implemented.
Some of the most important multifamily asset management metrics discussed include:
- Occupancy and the plan for filling vacant units
- Delinquency percentages
- Leasing and marketing performance
- Number of showings and applications
- Application approvals and screening
- Open maintenance work orders and completion times
- Lease renewals and upcoming move-outs
These metrics provide investors with a more complete picture of how a property is performing. Strong multifamily asset management goes beyond simply looking at occupancy. Investors should understand the entire leasing funnel, from marketing and lead generation to showings, applications, approvals, move-ins, renewals, and resident retention.
## Communication and Accountability Are Essential
For Tana, communication is one of the most important factors in determining whether a property management relationship will succeed. A good property manager should be willing to communicate openly, discuss problems, and work with the ownership team to develop solutions when unexpected issues arise.
The discussion also highlights the importance of accountability. If a property manager misses a target, owners should not simply receive excuses. They should receive an explanation of what happened and a clear plan for correcting the issue. This is particularly important when tracking metrics such as occupancy, delinquency, maintenance, leasing activity, and renewals.
Multifamily asset management works best when the owner and property manager operate as partners while maintaining clear accountability. Owners need enough visibility to understand what is happening at the property, while the management company needs the authority and support to execute the operating plan effectively. Jay and Tana’s experience shows how consistent communication and regular reporting can help investors stay ahead of problems instead of discovering them after performance has already deteriorated.
## The Importance of Learning Multifamily Underwriting
One of the final lessons from the conversation is that underwriting is foundational to nearly every role in multifamily real estate investing. Jay explained that investors need at least a basic understanding of underwriting to evaluate a property, participate in a general partnership team, or make informed decisions about an investment.
That knowledge also applies to capital raising and asset management. Investors who understand the numbers can better answer questions from limited partners, evaluate operating expenses, understand the assumptions behind a deal, and determine whether a property is performing according to the original business plan. For Jay and Tana Boersma, learning underwriting is one of the most important steps for anyone who wants to become more effective in multifamily real estate.
Jay and Tana’s story demonstrates how investors can build a multifamily portfolio by combining education, local relationships, disciplined underwriting, and active asset management. Their experience with a 124-unit Class C property also provides a valuable reminder that the best business plan is not always the one created before closing. Investors who pay attention to real-time leasing results and operating performance can adjust their strategy, avoid unnecessary spending, and focus capital on the improvements that create the greatest value.
If you want to hear the full conversation and detailed insights from Jay and Tana Boersma, watch the Multifamily Rockstars podcast video or read the complete transcript below.
## **Multifamily Asset Management FAQ**
### **What Is Multifamily Asset Management?**
Multifamily asset management is the process of overseeing an apartment property’s financial performance, operations, capital improvements, leasing activity, and property management after acquisition. The goal is to execute the business plan, improve the property’s performance, control expenses, increase occupancy, and create long-term value for investors.
### **Why Is Multifamily Asset Management Important?**
Multifamily asset management is important because purchasing an apartment property is only the beginning of the investment process. Effective asset management helps investors monitor whether the property is performing according to the original underwriting and allows them to make adjustments when actual market conditions differ from projections.
### **What Metrics Should Multifamily Investors Track During Asset Management?**
Important multifamily asset management metrics include occupancy, vacancies, delinquency, leasing activity, marketing performance, maintenance work orders, renewals, and capital expenditure progress. Tracking these metrics regularly helps investors identify problems early and determine whether the property management team is executing the business plan effectively.
### **How Does Multifamily Asset Management Help Control Renovation Costs?**
Multifamily asset management helps control renovation costs by comparing planned improvements with actual market demand and leasing results. Instead of automatically completing every renovation included in the original business plan, investors can test improvements and determine whether the additional rent justifies the cost.
### **Should Investors Over-Renovate Class C Apartment Units?**
Investors should generally avoid over-renovating Class C apartment units without first confirming that the market will support the higher rents. As demonstrated by Jay and Tana Boersma’s experience, some classic units may achieve projected post-renovation rents without extensive upgrades, allowing investors to preserve capital and focus on improvements that produce the greatest return.
### **What Is the Role of a Property Manager in Multifamily Asset Management?**
A property manager handles many of the day-to-day operational responsibilities involved in running an apartment community, including leasing, maintenance, resident relations, and coordinating capital improvements. The asset manager or ownership team remains responsible for monitoring performance, maintaining accountability, and ensuring that the property manager is executing the investment strategy.
### **How Often Should Investors Meet With Their Property Management Company?**
Investors should meet regularly with their property management company, especially during the early stages after acquiring a property. Jay and Tana Boersma described meeting weekly during the initial onboarding and execution period to stay aligned on operations, capital expenditures, leasing, and other important aspects of the business plan.
### **What Makes a Good Multifamily Property Management Relationship?**
Strong communication, trust, accountability, and a shared commitment to solving problems are essential to a successful multifamily property management relationship. Owners should receive timely information about issues and expect property managers to provide solutions and action plans when performance does not meet expectations.
### **Why Is Underwriting Important for Multifamily Asset Management?**
Underwriting is important for multifamily asset management because it helps investors understand the assumptions behind a deal and determine whether the property is performing as expected. A strong understanding of underwriting also helps investors evaluate expenses, monitor returns, answer questions from partners, and make informed decisions about capital improvements and operations.
### **How Can Multifamily Asset Management Increase Property Value?**
Multifamily asset management can increase property value by improving occupancy, increasing rental income, reducing delinquency, controlling expenses, completing strategic renovations, improving operations, and strengthening property management performance. The most effective strategies focus capital and attention on improvements that generate measurable improvements in the property’s financial performance.
00:00:29:00 – 00:00:48:18
Rod
Welcome back to Multifamily Rockstars. So as you guys know, this is where we deep dive into our guests deals and we give you some practical and actionable items for getting started and and really doing your first deal or learning about how to do these deals. And, yeah, no, but especially helpful if you’re brand new to the business.
00:00:48:20 – 00:00:53:16
Rod
And I’ve got my co-host, Mark Nagy on with me as usual. Mark what’s up bud? Good to.
00:00:53:16 – 00:00:54:12
Mark
See you. Good to be here.
00:00:54:12 – 00:01:13:10
Rod
Another one for the year. Yep. Happy new year. So today we’ve got Jay and Tana Boersma on. You know I’m not going to steal too much of their thunder. But they’re in over 300 doors now as warriors and you know, they’re, they’re just a beautiful couple. So I’m excited to hear their story and dig into their, into one of their deals.
00:01:13:10 – 00:01:37:02
Rod
So welcome, guys. Thanks. Glad to be here. Awesome. So why don’t, you know, Jay, if you’d like, why don’t you tell us a little bit, of your story, as you know, as it relates to maybe a little background, high level background, and then talk about why real estate and then maybe ultimately, why multifamily? Because I think you had one property when you got into the group and then now you’re over 300.
00:01:37:02 – 00:02:02:14
Jay
So yeah. Okay. So, well let’s see. So Tana and I met each other in the late 80s at Oklahoma State University. We’re both Okies. We went to college there, and then we moved to Arizona to go to graduate school and did that, studied finance. And we ended up soon getting into the residential mortgage lending business.
00:02:02:14 – 00:02:20:14
Jay
And that interest in that was initially founded by having an interest in real estate, but not having any money. So I didn’t, as a 25 year old, didn’t think I could do anything in real estate. And but I saw residential lending as an opportunity. So I got into that and started doing that.
00:02:20:14 – 00:02:22:24
Rod
And then what year was that? What would you realize?
00:02:22:24 – 00:02:26:16
Jay
1990? The beginning of 1986?
00:02:26:18 – 00:02:27:19
Rod
Long time ago. Yeah. Okay.
00:02:27:20 – 00:02:57:23
Jay
96\. So, so I did that for three years, and then, Tanya joined me. And right when we met, the, the qualifications to get our own broker’s license and start our own company, Tanya quit her job and joined me, and we started a mortgage company that quickly turned from a mortgage broker into a mortgage banker. And then we continued to do that, right up until the meltdown, which for us happened in early oh seven.
00:02:58:00 – 00:03:20:14
Jay
So we had our company was about an eight year old company that that, got caught up in that went down, started another company. So we owned a couple different mortgage companies over a 15 year period that that culminated for us ten years ago. But we’ve stayed involved in the mortgage industry as loan originators, working a W2 for a different company.
00:03:20:16 – 00:03:41:02
Jay
But the interest was always in real estate at my grandpa and my dad were both in real estate, both as developers. It was it was neither of their primary business, but they were involved as as my grandpa was a developer. And my dad has my almost my whole life has had rental property. So that’s where the interest was.
00:03:41:04 – 00:04:05:07
Jay
And as we got into the late, I think it was like 2018 and I actually started listening to your podcast broad in late 2018. Listened to it for more than a year, right around a year, and then joined the warrior community in, December of 2019, came to the LA event in January of 2020. Then, of course, Covid happened.
00:04:05:09 – 00:04:29:12
Jay
And so but also right around that time or the original thought was, hey, I’m in my late 40s, I’m a sales person. I chase realtors and builders for referral business and residential lending. I’m not sure I want to do that when I’m 60, but I definitely want to still be working. Started to have the thoughts of passive income and started to think about multifamily.
00:04:29:12 – 00:04:47:18
Jay
And a friend of mine, I said, hey, let’s get together, friend, and let’s talk about doing multifamily. He said, let’s not let’s not get together. We don’t need to. We don’t need to get together. You need to listen to this podcast. And it was your podcast, so I’ll listen to it for a year. Join the community. And then right away of course Covid happened.
00:04:47:20 – 00:05:09:15
Jay
And but also when Covid happened, mortgage rates which were already low got even lower. So we weren’t able to, implement what we were learning and be as involved in the community as we would have normally been those first couple of years, because we were still in residential lending, and those were two of our best years out of 25 years in that business.
00:05:09:15 – 00:05:26:00
Rod
Oh yeah. Oh yeah. Those interest rates are were insane. I wish they were still here. You want to hear something funny? Just as an aside, I just got to throw this in there. I don’t know if, you know, in a previous life, I had a huge mortgage company. I had 60 loss loan officers. We were mailing a half a million postcards a week.
00:05:26:00 – 00:05:41:07
Rod
We had a printing operation, a truckload. Yeah, yeah. Anyway, just as an aside, yeah, I’m sure you didn’t know that, but we could talk about another time. But yeah, that’s one of my many, seminars, one of my mini seminars. But, I had a lot of fun with it, but this is, like, a lifetime ago. Anyway.
00:05:41:09 – 00:05:42:15
Rod
Please continue.
00:05:42:17 – 00:05:51:05
Jay
Well, and so then, so we did buy, on multifamily. We bought a six plex with a partner that is also a warrior in.
00:05:51:05 – 00:05:53:19
Rod
Where where were you living and where did you buy?
00:05:53:21 – 00:06:15:01
Jay
So we were living in the Phoenix metro area in a north, eastern suburb called Fountain Hills. And we bought in a tertiary community that’s actually just removed from the the metro area down to the south. So it’s about an hour and 15 and 20 minutes away from me. It’s about 30 or 40 minutes away from my partner.
00:06:15:01 – 00:06:21:17
Jay
So we we bought that. It was a, what do we call it when we upgrade the property.
00:06:21:17 – 00:06:24:18
Rod
We upgraded value add. It was a value. And you know, you.
00:06:24:18 – 00:06:39:21
Jay
Add we do value adds. And so we had to you know, we bought the property. It was built in. This part of it was built in the 60s. Part of it was built in the 80s I think. We didn’t know going in that the city was going to require us to do major landscaping and put in a parking lot.
00:06:39:21 – 00:06:41:19
Jay
So that was that was a city.
00:06:41:23 – 00:06:43:15
Rod
The city required that. The city.
00:06:43:15 – 00:06:44:17
Jay
Required it.
00:06:44:19 – 00:06:52:09
Rod
Oh, yeah. Yeah, I can understand the parking lot. They’re they’re they’re anal about, having the parking based on the number of units, but, please. Yeah. Okay.
00:06:52:11 – 00:07:15:07
Jay
So we so we did that. We also, have had a, a short term vacation rental condo on the beach in Mexico for 23 years now. But in 2021, with this same partner, we bought another one of those. Where in Mexico, it’s called Puerto Penasco. It’s up in the Sea of Cortez, otherwise known as the Gulf of California.
00:07:15:13 – 00:07:17:20
Jay
It’s the body of water between.
00:07:17:20 – 00:07:26:23
Rod
It’s not it’s not the new Gulf of America. Yeah. Oh, no. I’m sorry. Sorry I couldn’t get to the. So that is okay. Yeah, yeah. So that was a political joke.
00:07:27:00 – 00:07:31:10
Jay
Probably going to name it the Gulf of America two the following me two got married. Yeah.
00:07:31:12 – 00:07:34:11
Rod
Sorry, sorry, I couldn’t resist. Please continue.
00:07:34:13 – 00:08:03:08
Jay
It’s the closest body of water to Phoenix. It’s 3.5 hours by driving from the airport. So it’s closer than than San Diego and closer than the LA. Wow. So? So we go there. Anyway, we bought another condo down there in 21, and then in 2022, late, probably late, 2021, we got into escrow on a seller direct deal that the seller was a friend of mine.
00:08:03:08 – 00:08:21:13
Jay
It was his parents that had owned the property. And he he was a buddy that was one of my best friends from the third grade on. And he knew that we had gotten into the multifamily business and, a couple years before I had just made a remark, I said, we want to buy Cedar Oaks. It was a joke because we were total rookies.
00:08:21:13 – 00:08:35:16
Jay
I didn’t know anything about how to even underwrite or do any of those things yet, so I just was planning that seed. Well, he took it seriously. We got into escrow. And closed on that property in March of 22.
00:08:35:18 – 00:08:38:04
Rod
And so how many units, how many units was that? One.
00:08:38:06 – 00:08:40:08
Jay
That was 72 units. And so.
00:08:40:08 – 00:08:41:22
Rod
Fantastic.
00:08:41:24 – 00:09:04:14
Jay
Yeah. So we took that, you know, I had been involved in coaching for that first year in the warrior program. And then we were a full year at more than a full year already removed from having been in coaching. But I was in good touch with my coach. And so the first thing that I did was I called my my former coach, who was in the warrior community and said, hey, help me with this deal.
00:09:04:14 – 00:09:30:01
Jay
And he said, I’d love to. And so he and another warrior came alongside me and my, my friend who he and I had joined the warrior community together. So it was it was a four warrior team myself, Greg Deal, in that we closed in March of 22 right before the rates went up. And so that was the first kind of, bigger multifamily deal that we did.
00:09:30:03 – 00:09:31:23
Rod
Congratulations. That’s beautiful.
00:09:32:00 – 00:09:33:01
Jay
Yeah, it was fun. Well, let’s.
00:09:33:01 – 00:09:47:02
Mark
Jump into the most recent one that you wanted to talk about. I believe it was, I think, well, a year and a half ago now that you guys talked about a different deal, bring us into that, that most recent deal, how you closed it, how you found it, how you put the team together. Give us the basics on that one.
00:09:47:04 – 00:09:49:15
Rod
Yeah. Where is it? How’d you find it to start there.
00:09:49:17 – 00:10:08:04
Jay
Okay, so the most recent deal, is in the same market as the last deal I just talked about. It’s a tertiary market. Stillwater, Oklahoma. It’s my hometown. I was born and raised there. My parents live there still. I got a brother and his family who live there. My sister and her family lives there. Oklahoma State is there.
00:10:08:06 – 00:10:28:12
Jay
Tana and I met at Oklahoma State, so this is in the same community. And we had actually just closed on, 96 light tech units in July. And this property, this latest deal came back to us off market in July, and we were okay.
00:10:28:12 – 00:10:32:14
Rod
Before you go on, before you go on to explain to my listeners what light tech is, please.
00:10:32:16 – 00:10:56:06
Jay
Okay. So light tech is low income tax credit housing. And what it what it means is that there is a restriction. There’s a cap on rents and there’s also a cap on income. So that was our first one of those. And the only reason I mention that mostly is just because timing was not great. And I’m setting the stage by telling the rest of the story of the deal.
00:10:56:06 – 00:11:17:04
Jay
It just closed by mentioning that timing was not ideal. We had just come out of a of a deal that we had done with a single capital source. It was a JV deal. And so that was a great, great deal. But we weren’t really ready. But we had actually been in, in best in final in June of 23 on this latest deal.
00:11:17:04 – 00:11:46:11
Jay
And it came back to us off. And the seller decided not to sell back in June of 23. So it came back. Well, our, our property manager in this market, who was also born and raised in Stillwater, Oklahoma, he, he was our property manager and his, his father actually developed this latest deal. It’s called Bricktown. So his dad developed developed the property, built it in 1972.
00:11:46:13 – 00:12:10:01
Jay
And he this this partner, Howard is super active in the market. He wanted we wanted to collaborate. So we did. So we dove into it. Knowing that we really didn’t have probably didn’t have our capital necessarily as well-organized as we should have going in. And there’s some story around that. Maybe not a full scale seminar, but, we’re still dealing with that.
00:12:10:01 – 00:12:17:12
Jay
That property closed, I think, on the 11th of December. And, we’re still raising, so.
00:12:17:14 – 00:12:44:21
Rod
Okay. And so, so let me explain that for a second. So what will happen sometimes, guys, is, is you’ll close on a deal and you haven’t raised all the money yet. It was let’s say that you’ve got a CapEx budget that you’re raising. Let’s say you’ve got operating reserves that you’re raising. You know, and maybe you’re collecting an acquisition fee that, that you don’t capitalize on or take until you’ve raised the entire, amount that you’re going after.
00:12:44:21 – 00:13:01:06
Rod
So it’s not uncommon at all to close on a deal and still be raising money for it. I in fact, I did it on my last deal in San Antonio. We raised 12 million. And a little bit of it was after closing. So it’s not uncommon. So I just wanted to explain what that meant. Okay. So so you closed on it.
00:13:01:08 – 00:13:07:13
Rod
And and this is the 124 class C construction in 1972. Is that right?
00:13:07:15 – 00:13:08:13
Jay
That’s right.
00:13:08:15 – 00:13:18:03
Rod
And so you’re and what I’m reading here is that, so talk about the CapEx budget on that and what you’re what you’re planning to do, you know, to to fix it up and add value to it.
00:13:18:09 – 00:13:44:04
Jay
So the CapEx budget was originally about $800,000, and about half of that was for and was designated for interior CapEx. We’ve subsequently we’ve gotten into the property, and the reason there was so little CapEx on the interior is the strategy of the seller had been to make some of the upgrades on an ongoing basis. So they had upgraded the property.
00:13:44:04 – 00:14:00:16
Jay
There’s some units that we wouldn’t touch that we weren’t, but we’re not planning on touching at all. And then there’s some units that are going to get, five different line items of interior renovation. So there’s it ranges from some that need everything to some that need none. So that we.
00:14:00:18 – 00:14:04:10
Rod
And give an example the five line items. Just so people are tracking you here.
00:14:04:12 – 00:14:19:16
Jay
So we’re going to do flooring. We’re going to do countertops. We’re going to re face some of the cabinetry. We’re going to do new appliances. And the last one was lighting fixtures fans. Nice.
00:14:19:18 – 00:14:21:11
Rod
Nice nice.
00:14:21:13 – 00:14:39:22
Jay
Yeah. So that was the plan. There’s been a development since we closed that changes that somewhat. So we closed a month ago, and in the first two weeks, we leased six units at post renovation and rents without renovating.
00:14:39:24 – 00:14:55:00
Rod
Without renovating. So. So what that’s called is classic units. Classic as if they haven’t worked on them yet. And and so you’re rethinking the whole renovation budget at this point. So like why spend the money if you’re getting the rents that you anticipated before? Yes.
00:14:55:02 – 00:15:10:10
Jay
Exactly. So so we’re going to test the market. We’re going to do the renovation as planned ASAP on some of the units. And see if we can add $100 a unit to our previous post renovation targets.
00:15:10:10 – 00:15:16:00
Rod
And so what is your new renovation per unit budget? Forgive me Mark, what is it per per unit.
00:15:16:02 – 00:15:29:08
Jay
So per unit it was around. Let’s see. It was around five between 4 and $5000. And some of them again will require 8000. Right. But some of them won’t require anything.
00:15:29:10 – 00:15:55:17
Rod
Okay. Well, you know, rule of thumb. You’ve probably heard me preach. This is you try to get or you try to get your renovation back in 36 months, ideally. Now you can go longer than that. So if you’re getting 100, then ideally you’d spend 30, 600, you know, 4000, something like that. Now I know you’re spending a little more than that, but it sounds to me like you’re already getting rent bumps underneath that, that, that new bump that you’re going after.
00:15:55:17 – 00:16:00:22
Rod
So it looks to me like you’re you’re in good shape. What’s the exterior work you’re doing?
00:16:00:24 – 00:16:26:02
Jay
The exterior is we’re going to do some work on the, the parking lot. So we’re planning on spending 75 to $100,000 in the parking lot. Just to, do the regular upkeep on that. And then we were also planning on, this is still we’re still kind of discussing this as a Jeep team, but it’s got the old federal specific stab lock breaker boxes.
00:16:26:04 – 00:16:36:01
Jay
And, we have raised capital or are raising capital. The initial plan was to replace all those breaker boxes.
00:16:36:03 – 00:16:54:22
Rod
Okay. So that that’s that’s always a good thing when you’ve got old ones like that. You know, one thing I want to mention to you guys and I, I don’t know if you’ve pursued this at all, but very often you can get a tow company to handle the striping and even numbering of parking spaces if you’re going to do reserved parking spaces, striping and numbering, if they get the towing contract.
00:16:55:01 – 00:17:08:02
Rod
So it’s something you may want to look into if you haven’t already. But that’s something that’s, not uncommon. We’ve done it a couple of times and, you know, save a little money, after you’ve resurfaced or lost or whatever. The parking lot.
00:17:08:04 – 00:17:11:16
Jay
Thanks for us. I, we never heard of that. That’s that’s great.
00:17:11:18 – 00:17:26:24
Mark
Okay. And I wanted to touch on one thing real quick that you mentioned that we’re actually doing on a couple assets, especially these C-Class assets, is scaling back the interior renovations with these tenants that are used to like super cheap units. A lot of the times you don’t have to put as much into the interior that you thought to get.
00:17:26:24 – 00:17:48:12
Mark
The rents were doing the exact same thing. We over renovated a lot of the units, and every single unit got leased before we even released it. And so we realized, okay, we’re probably overdoing it, scale back, and a lot of that money has actually gone to the exterior stuff and making sure the building is still working properly and less of it’s going towards the interior and sounds like that’s happening on on your asset as well.
00:17:48:12 – 00:18:03:07
Mark
And so I think that’s just a real golden nugget for people to take away, is when you’re buying C-Class assets. Think about that of not overdoing the interiors and all the other expenses that are kind of going to come along with a, you know, a 1972 that’s almost 50 years old at this point. Right?
00:18:03:07 – 00:18:16:08
Rod
So talk talk about your talk about your going in rents and, and what you’re seeing now, as far as, even on your classics, you say you’re getting your post rents, projected post renovation rents. Yeah.
00:18:16:08 – 00:18:43:11
Jay
So the the rent bump was only going to be $145 on average anyway. And so we’re already getting the targeted rent on both the ones and the and the two bedrooms. There’s some larger twos and some three bedroom units that they’re, in low demand. And so we weren’t going to do anything. There’s not much of an opportunity to raise rent on those.
00:18:43:11 – 00:18:58:16
Jay
So we weren’t going to touch those. But, yeah. So the, the going in rent was let’s see the, the target rents was 816. So what what is that six like 675 or something like that is what. Yeah.
00:18:58:18 – 00:19:12:06
Rod
That’s what you had down on your, on your notes here. So yeah. Okay. Okay. So how did you how did you finance the deal. What sort of debt did you put on it. And what is your pay again.
00:19:12:08 – 00:19:42:13
Jay
So we paid 7.8 million. Okay. A little, little bit less than $63,000 per door. We did bank financing, which we had done before. Specifically to get more leverage to create more return for limited partners. Okay. So we could finance part of the CapEx. So we, the bank said that they would do up to 80, of, acquisition plus CapEx.
00:19:42:15 – 00:19:57:19
Jay
Wow. We never we never counted on that. We were we were underwriting at 75. Okay. And then they came back at 70. So that was that wasn’t that wasn’t great. But that wasn’t that was okay. So okay, now there’s a lot of other big story around.
00:19:57:19 – 00:20:04:04
Rod
So you got seven you got 70% loan to value. Did they include the CapEx or did they not include it after they did?
00:20:04:04 – 00:20:07:21
Jay
So we got 70 years of cost plus 70 of CapEx.
00:20:07:23 – 00:20:19:12
Rod
Gotcha. Gotcha. Okay. So now you’re in the asset management phase, which is Tana’s, bailiwick. So, have you stepped in there to start asset managing already? Tana.
00:20:19:14 – 00:20:32:18
Tana
Yes, we have. We’ve had a couple of meetings and we’re really just, you know, trying to get through all of the details with the property manager to make sure that we are implementing our plan. And.
00:20:32:20 – 00:20:37:09
Rod
Do you have a third party property management company or are you doing it, in-house?
00:20:37:11 – 00:20:54:15
Tana
We do have a third party property management company, that we’ve used on other assets, and we have a really great relationship with them. So, you know, we’ve found that that is such a blessing to have a partnership in that and have a team you can trust and rely on.
00:20:54:16 – 00:21:04:06
Rod
So is the property management company coordinating the, CapEx work or do you have someone else handling that?
00:21:04:08 – 00:21:15:22
Tana
Yeah. So they will coordinate it for us. We are involved quite a bit. So once we close on an asset, we try to meet with the property management group every week. Just so.
00:21:15:22 – 00:21:16:12
Rod
You.
00:21:16:14 – 00:21:40:09
Tana
Stay on track, make sure that we’re all on the same page. We’ll loosen that up a little bit. Went to get stabilized, but, they’re coordinating it for us. So, we just have, you know, we’re we’re in the loop on everything that’s happening, but we let them take the lead. It it helps to, you know, this helps us with managing the, the work that comes with onboarding.
00:21:40:11 – 00:22:00:17
Rod
Talk about some of the metrics that you look at on a weekly basis. Just in general. You know, obviously when you’re doing the CapEx, there’s a lot of other things involved because you’re looking at, you know, which units are being done, you’re monitoring those costs. But talk about some of the other metrics that you evaluate on a weekly basis with your property management company.
00:22:00:19 – 00:22:29:18
Tana
You’re we’re of course, always looking at our vacancies. That’s, you know, the number one thing we’re talking about and making sure we’ve got a plan for filling those units. We’re looking at our delinquency percentages. It’s really important to stay on top of those, especially when you take over a new asset. So we have a whole slew of reporting that we just try to look through and make sure that we’re on track in each of our areas.
00:22:29:20 – 00:23:00:03
Mark
Well, I’d love to get your opinion because I know we again, we haven’t gotten into this too much. But rod, you always talk about, you know, you say, hey, some property managers are better than others. And maybe rod, you know, you and I can maybe chime in with our opinions as well. But Tana, in your opinion, when you’re buying an asset and then you get into the asset management with that property manager, what are some things that you look for just that lets you know as an indicator that this is going to be a good property manager versus maybe a bad one in the long run.
00:23:00:05 – 00:23:22:13
Tana
Yeah. So I think for for me specifically, it’s communication. Like we’ve got to have great communication and we have to be able to discuss issues and be able to develop a plan together about how we’re going to move down the road. We have an asset in Phoenix that we don’t have a great relationship with the property manager.
00:23:22:13 – 00:23:47:18
Tana
It’s just, you know, maybe we’re not clicking whatever the reason, but it just we’re not getting answers to questions very quickly and things like that. So I really feel like communication is the number one thing. If you can just develop a really great relationship that’s open and everybody’s willing to work together and find solutions to things that come up that are unexpected, then, you know, it sets the stage for being successful.
00:23:47:24 – 00:24:09:05
Rod
Let me bring in some other thoughts because you talked about, you know, your occupancy. Obviously, that’s a huge metric that you’re managing. But, you know, as it relates to occupancy, you know, you want to be evaluating the entire leasing process from marketing all the way through to applicant positions. And so, you know, one of the things you’ll look at is, you know, what are we doing for marketing?
00:24:09:05 – 00:24:27:09
Rod
Are we in apartments.com or are we on Zillow. Are they doing Facebook marketing. So that’s one of the things, you know, are we getting enough bodies in the doorway. How how many how many showings are happening as a result of those bodies in the doorway? How many showings are resulting in applications? How many applications are being approved?
00:24:27:12 – 00:24:46:15
Rod
How are those applications being screened? So these are all you know, and that’s an example on the leasing and marketing side. Then you’re also looking at maintenance. You know how long how many maintenance work orders do you have open. How long have they been open. So this is you know, these are some of the metrics that I just want to share with my listeners real quick.
00:24:46:15 – 00:25:10:16
Rod
And then you’re looking at delinquency. Obviously you want to see if they’ve got a delinquency number. You want to see that number go down as, as things progress. And then lastly a big one is renewals, you know, so they should be proactively looking at renewals three months in advance telling you that, you know, if how many have given notice, how many are pending, how many have actually moved, how many, you know, have have have signed renewals.
00:25:10:22 – 00:25:34:19
Rod
So those are some of the metrics that we look at. You know, on a weekly basis as well. And, you know, it’s it’s great that you’ve got a great relationship. So, you know, maybe you don’t have to be quite as on it, with this management company if they’ve really got their stuff together. But, you know, just, I just wanted to elaborate more on, on some of the things that you’re going to look at as an asset manager.
00:25:34:21 – 00:25:35:10
Rod
And I’ll go ahead.
00:25:35:10 – 00:25:51:06
Mark
And one more thing as well is accountability on all those metrics as well. Is, is what I’ve noticed is if they’re not hitting those metrics, do they come to you and just make an excuse and say, oh, it’s somebody else’s fault? Or do they come to you with a solution and say, okay, here’s what we’re going to do and here’s why.
00:25:51:12 – 00:26:07:12
Mark
And a lot of things with software and things like that can be automated, like App Folio with the maintenance, like what rod just mentioned, that the tenants can give, you know, up to five stars or whatever. And those are things we track, with our property managers and so those are all things you want to hold your property manager, accountable for.
00:26:07:18 – 00:26:23:05
Mark
Now, one thing I do want to mention, because we don’t have couples on here very often, is how did you guys operate between yourselves? Do you work kind of as a team and do similar superpowers and say, hey, we work as a team? Or do you each kind of take on different roles within your properties?
00:26:23:07 – 00:26:31:09
Rod
Great question, great question. And, and you know, how do you deal with disagreements as well. Yeah, I would, I.
00:26:31:09 – 00:26:33:19
Jay
Would rather that tend to not answer this question.
00:26:33:19 – 00:26:36:15
Rod
Let me let’s do that.
00:26:36:17 – 00:26:38:04
Mark
See where this is going.
00:26:38:06 – 00:26:39:21
Rod
I fish a lot. Yeah.
00:26:39:22 – 00:26:41:08
Jay
So antenna does a lot of.
00:26:41:08 – 00:27:06:21
Tana
Work and I go diagnose fishing and I sit at my desk, you know, I’m teasing. So we have very I mean, which is where we have such a great partnership. We’ve been married for 32 years. We’ve been working together for 25 years. So we’ve had a lot of time to, you know, work through the kinks and figure out who’s good at what and how to resolve conflict and how to take a break and all that good stuff.
00:27:06:21 – 00:27:34:04
Tana
But we are we’re very different in our skill set. I’m, you know, sit at my desk. I love to be at my desk, pushing around paperwork, answering emails, tracking things, and just great at relationship building, meeting people, looking for deals and writing. So, it’s good that we have a different skill set. And we also like the the skill set that we have.
00:27:34:04 – 00:27:40:04
Tana
So we kind of have each have half a brain, if you will, in, in the partnership.
00:27:40:04 – 00:28:00:01
Rod
So and that’s fantastic. And you know, that’s it’s not you know sometimes it’s easier said than done is to have that kind of a partnership and relationship, in where you’re working together. You know, I tried it with my ex and it’s, I forget it. It’s not going to happen. But, that’s beautiful that you were able to do that.
00:28:00:01 – 00:28:09:16
Rod
Now, have you gotten value out of the warrior program? I have these deals that you’ve done since you’ve joined. Have they been with warriors and, and so on and so forth? Yes.
00:28:09:18 – 00:28:28:18
Jay
So the first deal, as I mentioned, it was an all warrior GPS team, including my code and that and so unequivocally, yes. But what is, super fortunate for us is that now, five years in, we’re finding more value than ever.
00:28:28:20 – 00:28:30:00
Rod
No kidding. Why is that.
00:28:30:01 – 00:28:56:06
Jay
Community? And for example, on this last, this deal that just closed, you know, I’ve, I’ve probably talked to between 15 and 20 warriors that I met during that time. And so just in the last six weeks. So I’ve met as probably and spoken one on one and on zooms and etc. with warriors. In the last six weeks, as I did in the, in the five years before that almost.
00:28:56:06 – 00:29:20:04
Jay
So we, we find huge value in it. I mean, I just was on the, the Facebook page, I look at the Facebook page almost every day. There’s I think there’s 16 or 1700 people there now. It’s gone up like 2 or 300 members just in the last few months. So, and then on this deal, yes, there were warriors and a couple of warriors were involved and are involved as general partners on this last deal.
00:29:20:04 – 00:29:49:03
Rod
So fantastic. It’s fantastic. Yeah. So it’s been good. Well listen. Well thank you. So if you’re, you know, if you’re considering possibly getting some guidance and, you know, then you can get into the life you want this year rather than, you know, five years from now, ten years from now, you know, text the word crush to seven, two, three, 4 or 5 to see if the warrior program might be able to something, you know, might be able to help you get to where you want to be in life to get to accomplish what you want.
00:29:49:05 – 00:30:07:20
Rod
And, and, you know, that’s that’s how you apply. You just text the word crush to seven, two, three, 4 or 5. And we’d love to help you crush it in this business. And, you know, the program is extraordinary. And, you know, I tell my new Warriors, the most successful warriors that I have are the ones that are the most connected in the community.
00:30:07:20 – 00:30:28:03
Rod
And, you know, once we discovered that about four years ago, even, you know, after you joined, we started doing all sorts of things to facilitate those connections. So, you know, we have our warrior only events. We have, you know, every other week we do speed dating, where you can meet warriors and zoom breakout rooms after our Q&A calls and, and, I’m making a lot of big improvements to the program we’re at.
00:30:28:05 – 00:30:43:04
Rod
Mark and I were talking about before we let you guys in, on this call, you know, we’re we’re we’re going to make some more improvements. You’re going to see some really cool stuff coming down the pike. So I’m very excited about what’s happening there. So again, if you’re interested, text crush to seven, two, three, 4 or 5.
00:30:43:06 – 00:30:45:19
Rod
And, we’d love to chat with you.
00:30:45:21 – 00:31:04:04
Mark
Well, one thing I if we could tease on that real quick. Right? I know we were talking about, you know, a weekly thing that we might do is specifically working with underwriting. And I know that, like, if someone were to ask me, what’s the number one thing you should learn in this, that would probably, that would probably be the one thing I’d say, because it applies to everything, every single role in the business.
00:31:04:06 – 00:31:19:24
Mark
Now, Jay. Yeah, I know you guys wrote this on your goals. Here’s what’s the deep dive. And if we could leave the listeners with maybe a practical thing. What did you mean by that? Why did you say underwrite it? And how do you think underwriting learning that applies to, I guess really everything else in the business?
00:31:20:01 – 00:31:40:24
Jay
Well, it’s the foundation of everything. You can’t really fulfill any of the roles in that. There might be on a general partnership team or make any assessment about the property, unless you have some basic, at least basic knowledge of underwriting. So yeah. Yeah, you have to you have to start there.
00:31:41:01 – 00:31:54:08
Mark
Okay, I probably agree. And again, I think it goes to everything. If you’re going to be money raising, you’re going to get questions from people that are going to say, okay, well what does this mean? Right. And you’re going to have to understand that if you’re going to be asset managing, you’re going to need to understand the expenses where all those things come from.
00:31:54:08 – 00:31:58:24
Mark
So I really think it just applies to everything. I think it sounds like you guys would agree there.
00:31:59:01 – 00:31:59:16
Jay
Definitely.
00:31:59:16 – 00:32:04:24
Rod
Yeah. Are you are you guys okay with if listeners have a question, if they reach out to you.
00:32:05:01 – 00:32:06:06
Jay
That’d be great.
00:32:06:08 – 00:32:29:18
Rod
Okay. Yeah I’ll give you a website. It’s, resources.us. Fantastic. Well, listen, guys, I really appreciate you coming on the show. You’ve added some tremendous value. We’ve gotten into some areas that we don’t always get into. So I think the level of detail was really good this time. And and I know this was your first interview, so, you knocked it out of the park, guys, honestly.
00:32:29:18 – 00:32:45:23
Rod
So thank you for coming on. And, you know, we really appreciate you being here. And, look forward to seeing seeing you back on in about a year or so to see where you’re at at that point. Thank you I be great. Thanks, guys. All right. Take care guys. Thanks. All right. Appreciate it. So one other quick thing.
00:32:46:02 – 00:33:04:11
Rod
We encounter so many people that are frankly frustrated. You know they’re looking in the mirror and they’re frustrated that they hadn’t been able to escape the rat race. They haven’t been able to build cash flow to the point where they’re able to have financial and time freedom with their families, you know, and maybe they see other people buying real estate and creating, you know, incredible cash flow.
00:33:04:11 – 00:33:27:05
Rod
And they think, well, it’s just scary. You know, buying apartments is intimidating. And I get it. See, that’s why we created our warrior mentorship program. There are coaching students and they’ve had extraordinary results. My students I’ve been teaching about five years and upwards of 140,000 units. Now that we know of. Right. And we feel like it’s just getting going now, we’re looking to grow this group and really take it to the next level.
00:33:27:10 – 00:33:51:09
Rod
And honestly believe that the greatest transfer of wealth could be upon us right now with this current economic environment. Everything’s going on sale. So we’re looking for people who want to follow a proven framework, really like a blueprint or a map, literally step by step. And then they’re able to leverage our systems and our incredible network to raise money in equity, to find deals and close those deals and build partnerships really nationwide.
00:33:51:09 – 00:34:12:16
Rod
So if you’re interested in finding out more about how you can become more in our incredible network and take advantage of the unbelievable opportunities that are upon us, you can apply to my Warrior Mentorship program by texting the word crush to 72345. Or you can go to mentor with rod.com. And what we’ll do is we’ll set up a call so you can check us out, and we can check you out and see if it’s a fit.
00:34:12:18 – 00:34:20:00
Rod
Now again you can go to mentor with rod.com or text the word crush to 72345 to apply and we will speak.
**Podcast Categories:** Multifamily Rock Stars, Podcasts
---
### [Housing Bubble 2.0 Is Bigger Than 2008](https://rodkhleif.com/podcasts/alternative-economic-data-with-danielle-dimartino-booth/)
**Published:** July 20, 2026
**Author:** Bryan Hoover
**Excerpt:** Housing Bubble 2.0 Is Bigger Than 2008
**Content:**
## Why Alternative Economic Data Matters for Real Estate Investors
Alternative Economic Data is becoming one of the most important tools for investors trying to understand where the economy is truly headed. In this episode of *Lifetime Cash Flow Through Real Estate Investing*, Danielle DiMartino Booth shares why she believes many traditional government economic reports fail to accurately reflect today’s economy. Drawing on her experience at the Federal Reserve and decades in financial markets, she explains how outdated inflation measurements, employment data, and monetary policy can distort investment decisions.
For multifamily and commercial real estate investors, understanding economic trends before they become headlines can create significant advantages. Danielle discusses how alternative data sources provide a more real time picture of inflation, labor markets, and consumer purchasing power, allowing investors to better prepare for market shifts.
## Why Multifamily Real Estate Is Facing New Challenges
One of the biggest topics discussed is the growing distress in the multifamily sector. Danielle explains that while office properties have already experienced widespread distress, multifamily is now entering a similar phase as developers face declining valuations, oversupply in certain markets, and increasing concessions.
Rod Khleif shares real world examples of apartment communities selling at steep discounts after lenders repossessed distressed assets. Rather than viewing these conditions negatively, he highlights the opportunities available for experienced investors who understand how to acquire quality assets below replacement cost.
Some of the major challenges affecting multifamily include:
- Higher financing costs
- Excess new apartment supply in many markets
- Weak rent growth caused by affordability issues
- Reduced purchasing power among renters
- Increasing delinquencies and concessions
The conversation illustrates how macroeconomic conditions directly impact apartment investing and why investors should closely monitor changing market dynamics.
## Housing Bubble 2.0 and the Future of Residential Real Estate
Danielle introduces the concept of what she calls Housing Bubble 2.0. Unlike the 2008 housing crisis, she argues today’s market is being driven by demographic shifts, years of quantitative easing, and significant distortions in home prices created by Federal Reserve policy.
She believes demographics are now becoming a larger driver of housing demand than many investors realize. Lower birth rates, delayed family formation, and growing multigenerational households are changing what buyers and renters actually need. Rather than a nationwide housing shortage, Danielle argues the real issue is a mismatch between available housing inventory and the types of homes today’s buyers can afford.
This demographic perspective offers valuable insight for investors evaluating both single family and multifamily opportunities over the coming years.
## The Federal Reserve, Inflation, and Interest Rates
A major portion of the discussion focuses on Federal Reserve policy and its impact on financial markets. Danielle explains why she believes current inflation measurements fail to accurately capture real world purchasing power and why policymakers need better data to make interest rate decisions.
She discusses:
- How quantitative easing inflated asset prices
- Why traditional inflation measurements can be misleading
- The importance of real time alternative data
- The relationship between monetary policy and real estate values
- Why future policy decisions could reshape investment markets
For investors who rely on economic forecasts, these insights provide valuable context for understanding future interest rate movements.
## AI, Employment, and the Economy
The conversation also explores how artificial intelligence is beginning to reshape the labor market. Danielle believes AI will first have its greatest impact on entry level knowledge workers, potentially reducing opportunities for recent graduates while increasing productivity across many industries.
Rod shares how AI is already transforming his own business operations, automating much of his company’s marketing while expanding into operational efficiencies. Together they discuss how AI may permanently change employment, corporate productivity, and long term economic growth.
## About Danielle DiMartino Booth
Danielle DiMartino Booth is the CEO and Chief Strategist of QI Research and a former advisor at the Federal Reserve Bank of Dallas. After nearly a decade working alongside former Dallas Fed President Richard Fisher, she founded her own research firm focused on macroeconomic analysis, monetary policy, and financial markets. She is also the bestselling author of *Fed Up: An Insider’s Take on Why the Federal Reserve Is Bad for America* and is widely recognized for her expertise in alternative economic data, inflation analysis, and Federal Reserve policy.
If you want to hear the full conversation and detailed insights, watch the podcast video or read the complete transcript below.
## Frequently Asked Questions About Alternative Economic Data
**What Is Alternative Economic Data?**
Alternative Economic Data refers to real time and nontraditional data sources that provide a more current view of economic conditions than standard government reports. These data sets can include private sector pricing information, consumer spending trends, employment activity, and market indicators that help investors identify changes in the economy before official statistics are released.
**Why Is Alternative Economic Data Important for Real Estate Investors?**
Alternative Economic Data helps real estate investors make better decisions by providing earlier insights into inflation, employment, consumer demand, and economic growth. Investors can use this information to evaluate market conditions, identify risks, and uncover opportunities before they become widely recognized.
**How Does Alternative Economic Data Measure Inflation More Accurately?**
Many Alternative Economic Data providers collect millions of real time price points across products and services, allowing them to measure inflation much faster than traditional government reports. This can provide investors with a clearer understanding of purchasing power and changing market conditions.
**How Does Alternative Economic Data Affect Multifamily Real Estate Investing?**
Alternative Economic Data can reveal shifts in renter affordability, wage growth, employment trends, and housing demand that directly impact apartment occupancy, rental rates, and property values. Investors who monitor these indicators may be better positioned to identify distressed buying opportunities and changing market cycles.
**Can Alternative Economic Data Predict Economic Downturns?**
While no data source can predict the future with certainty, Alternative Economic Data often detects changes in consumer behavior, hiring activity, and economic momentum earlier than traditional reports. These early signals can help investors prepare for potential recessions or market slowdowns.
**How Does Alternative Economic Data Improve Investment Decisions?**
Investors use Alternative Economic Data to gain a more complete picture of the economy. Combining traditional financial analysis with real time economic indicators can improve decisions involving acquisitions, financing, portfolio management, and long term investment strategy.
**What Types of Alternative Economic Data Are Most Useful?**
Some of the most valuable Alternative Economic Data includes real time inflation tracking, private employment data, consumer spending patterns, housing market activity, credit trends, rental demand, supply chain information, and business sentiment surveys. Together, these indicators provide a broader understanding of economic conditions.
**Can Alternative Economic Data Help Identify Distressed Real Estate Opportunities?**
Yes. Alternative Economic Data can help investors identify weakening markets by highlighting declining consumer purchasing power, slowing employment, rising vacancies, and reduced demand. These indicators often appear before distressed properties become widely available, giving investors additional time to prepare acquisition strategies.
**Why Are More Investors Using Alternative Economic Data?**
As financial markets become more complex and economic conditions change more rapidly, investors increasingly rely on Alternative Economic Data for timely insights. Access to faster and more detailed information helps investors respond to market changes with greater confidence and make more informed real estate investment decisions.
**How Can Investors Start Using Alternative Economic Data?**
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00;00;11;20 – 00;00;31;12
Rod Khleif
Welcome back to lifetime cash Flow through real estate investing. I’m Rod Cleef and I am thrilled you’re here. Fascinating woman we have on the show today. His name is. Her name is Danielle DiMartino Booth, and she’s the CEO and chief strategist for Key Research, which is an which is what what would you call yourself, Danielle. Welcome to the show.
00;00;31;14 – 00;00;33;21
Rod Khleif
I’m going to let you take it from there.
00;00;33;23 – 00;00;58;19
Danielle DiMartino
No, I’m happy to. So I, I had a career on Wall Street. I ended up moving to Dallas. I signed a non-compete. I worked at a firm where private equity and junk bond investing were big, big, big things before private equity was really a thing. And private credit was really a thing for the rest of the world. But I ended up working, surprisingly enough to me.
00;00;58;19 – 00;01;17;15
Danielle DiMartino
I ended up working at the Federal Reserve Bank of Dallas for about nine years, for a gentleman by the name of Richard Fisher. He was the kind of the nonacademic central banker. He had his start on Wall Street. I did as well were both MBAs in finance. So he looked at the world through kind of a nonacademic lens, which thank you.
00;01;17;15 – 00;01;44;05
Danielle DiMartino
The fed needs more of that. And I think we’re realizing that. And as soon as Richard retired, I found it research and I track kind of every aspect of the financial market, every aspect of the macro economy and how that’s going to influence monetary policy, because I see through the lens of a central banker. So that’s kind of the value out I give to my, my clients and my, my my readers.
00;01;44;07 – 00;02;02;08
Rod Khleif
Very cool, very cool. Well, I know you’re the author of a book called Fed Up, a subtitle, An Insider’s Take on Why the Federal Reserve Is Bad for America. I would love to hear all about that. So please, let’s let’s start there.
00;02;02;10 – 00;02;29;02
Danielle DiMartino
So, you know, during the heyday of what I call housing bubble 1.0, because I, because right now housing bubble 2.0 is bigger. During the, during the heyday of housing bubble 1.0, when I was at the Federal Reserve, they kind of determined that their inflation metrics weren’t picking up on asset price inflation, which has to be incorporated somehow into monetary policy making.
00;02;29;04 – 00;02;49;24
Danielle DiMartino
And once they determined that if they changed the way they viewed inflation, that they wouldn’t be able to break all the rules, print all the money keeping, keep interest rates at artificially low levels, they kind of said, well, that was an interesting thought experiment. We’re going to go back to using the wrong metrics. We’re just going to stick with them.
00;02;49;25 – 00;03;15;22
Danielle DiMartino
And then I got fed up and I wrote a book about it. So there’s way too much academia inside of policymaking. I think that that is something that Jay Powell began to explore and then backed off on, drank the Kool-Aid. I was I kind of had high hopes for him when he first testified to Congress that it wasn’t the Fed’s job to backstop the stock market, but that didn’t last for long.
00;03;15;23 – 00;03;51;03
Danielle DiMartino
So now we turn to his successor, Kevin Warsh, who apparently has a task force for that. So I’m fingers crossed because the fed communicates too much. It distorts markets too much for guidance, I think needs to be banished along with the Dot plot. Federal reserve forecasters are no better, certainly than any others. And I think there needs to be more mystery for the markets in what the central bank is going to do, as opposed to the central bank spoon feeding speculators.
00;03;51;04 – 00;04;10;22
Rod Khleif
Interesting. Now, this last time, he didn’t do any of the forward business. Correct. He held back on that, which is great. I, I have high hopes as well. But he did make a comment, if I recall, that they want to get to that 2% inflation number. Is that accurate or did I misread that. And what’s the what’s the likelihood of that.
00;04;10;25 – 00;04;26;26
Rod Khleif
In fact, let me add one more thing. Is it true because I had an economist here on my couch say that 80% of the US currency was created in the Biden administration in 2020, about 20% was in circulation. They created another 80% in those four years. Is that an accurate assessment?
00;04;27;01 – 00;04;45;17
Danielle DiMartino
It’s a bit of a stretch, but okay, you think about the $19 trillion or so of debt that we had kind of a December 31st, 2019. And where we are now, I mean, we’re on we’re on pace to double that here in the next few years.
00;04;45;20 – 00;04;50;02
Rod Khleif
Okay. Okay. So it was it was big. It was a lot. So maybe not 80 but.
00;04;50;02 – 00;04;50;20
A lot.
00;04;50;27 – 00;04;54;12
Danielle DiMartino
It was time. But by the way that really hasn’t slowed down.
00;04;54;12 – 00;04;57;08
Rod Khleif
So hasn’t it. Okay. Okay.
00;04;57;09 – 00;04;58;15
Danielle DiMartino
Not enough.
00;04;58;17 – 00;05;06;09
Rod Khleif
Fair enough. So. So if it hasn’t slowed down, how are they going to get inflation under 2%?
00;05;06;12 – 00;05;28;17
Danielle DiMartino
Well, now you’re asking me a different question. Now you’re asking about purchasing power and pricing power right. And measurement of jobs, which I think we can all agree that in the last 40 months that the Bureau of Labor Statistics has, has revised the the monthly numbers 30 times.
00;05;28;18 – 00;05;29;05
Rod Khleif
Wow.
00;05;29;10 – 00;05;31;15
Danielle DiMartino
To the downside. So I think.
00;05;31;17 – 00;05;34;12
Rod Khleif
Like massaging them is that is that is that a.
00;05;34;14 – 00;05;57;17
Danielle DiMartino
Well, that gets us back to your first question. You know, why am I fed up? There’s a lot of modeling that goes on. There’s a lot of imputation that goes on. And, you know, one of the things that the labor market does not capture today is kind of the gig worker people who are working two and three jobs just to get my that’s not being measured appropriately.
00;05;57;17 – 00;06;21;01
Danielle DiMartino
And that gets us back to the idea of inflation, because you can only raise prices to the extent that people can afford to pay for them. And that gets you to the dilemma, because if you’re just talking about money printing, that’s going to feed speculators, but it’s still not going to improve purchasing power, right?
00;06;21;03 – 00;06;41;23
Rod Khleif
Yeah. I’m, you know, I’ll be I’ll be full disclosure. My my eyes cross and my head spins in some of these conversations around monetary policy and economics. But, you know, I’m recently single. I go to the grocery store and I look at the clerk and I say, $150 for that. Are you freaking kidding me? And I just wonder how people do it.
00;06;41;24 – 00;07;01;04
Rod Khleif
I know before we started recording, you know, you you were concerned because you know that I teach people how to buy a complex just like I’m bearish on multifamily. And I get it, so am I. I’m bearish on the condition of multifamily, but I’m but I’m absolutely a bull on the opportunity right now because there’s so many distressed assets hitting the market.
00;07;01;06 – 00;07;17;27
Rod Khleif
You know I’ll give you I’ll give you an example. I’ve got a 200 unit asset in San Antonio right next door, 300 units sold in late 21 for 43 million. Bank got it back, offered it for 28 million. I wasn’t interested in it. Went down to 24. Somebody bought it. I wish I could have got it, but. But that’s what’s out there right now.
00;07;17;27 – 00;07;26;20
Rod Khleif
And, you know, my SEC attorney got six foreclosures of apartment complexes in one day. I mean, it’s just a, you know, a lot of distress, but there.
00;07;26;20 – 00;07;37;06
Danielle DiMartino
Is a distress. There’s a there’s a huge headline that’s been wandering around because a multifamily developer just completely wrote down, I mean, the.
00;07;37;09 – 00;07;43;12
Rod Khleif
400 million. Steve. Steve, you’re talking about Steve, right? Yeah, yeah, yeah, 400 million.
00;07;43;15 – 00;07;45;12
And to me.
00;07;45;14 – 00;08;05;22
Danielle DiMartino
To me at least, that’s when you’re starting to. I mean, it’s been a few years now that we’ve been saying office is distressed. Actually, last year of 2025, we saw a ten year high in the sale of distressed office properties. But we’re not there yet with multifamily. But when you start to see headlines like that, you know what’s coming down the pipeline.
00;08;05;23 – 00;08;06;19
And yeah.
00;08;06;22 – 00;08;31;12
Danielle DiMartino
You know, everybody, there were all these predictions that rents were going to bottom in 2026 with, you know, not a lot of supply coming along. But I’m like, but you still have to absorb yester years new supply that’s sitting out there and yet gets us back to purchasing power and concessions and what you can charge for rent. And, you know, a record percentage of adult males living at home with their parents.
00;08;31;13 – 00;08;39;04
Danielle DiMartino
I mean, these are not they’re not flowing into the rental pool. If they’re in Mom and dad’s basement. It’s just reality.
00;08;39;06 – 00;08;58;23
Rod Khleif
I, I haven’t heard it describe that well before. That’s that’s absolutely dead on accurate. And we’re we’re having to make tons of concessions because we bought in Nashville, we bought in San Antonio. And there’s tons of absorption. And so, you know, we’ve been hammered by that ourselves. I mean literally on assets that I own. And so you’re absolutely dead on.
00;08;58;23 – 00;09;12;28
Rod Khleif
And I mean, at some point there’ll be an equilibrium at some point because we’re still a renter nation. Would you agree with that statement? And there’s a there is a shortage of housing, at least supposedly there’s a big shortage of housing. Would you agree with that.
00;09;12;28 – 00;09;14;09
Statement as well?
00;09;14;11 – 00;09;37;13
Danielle DiMartino
See, I pushed back really hard on the idea of there being a shortage of housing. I think there’s a massive disconnect. Because of the collapsing birthrate. So you have large homes out there that are completely irrelevant properties for a first time homebuyer. They don’t need a McMansion.
00;09;37;15 – 00;09;38;04
They don’t need.
00;09;38;04 – 00;10;00;16
Danielle DiMartino
Anything near the size of I mean, some multifamily developers are like, I got too many two bedrooms on my hands. I mean, who knew that I would need more one bedroom apartments? But again, we’ve seen the collapse in the birth rate. People understand that it is very expensive to have have a kid, and so they’re waiting longer. And this is just hard demographic data.
00;10;00;17 – 00;10;23;14
Danielle DiMartino
You know, you’ve got more women who are 38 having kids than their their women who are 28 having kids, people. And when people wait longer a they’re going to have fewer children, and B, they’re going to wait longer to get into that. But we know that baby boomers are sitting on a ton of McMansions we used to call them.
00;10;23;19 – 00;10;24;20
But who is going.
00;10;24;20 – 00;10;37;03
Danielle DiMartino
To buy them? And that’s what I think. I think. That really needs to be why there is a shortage of homes for entry level buyers, but there’s not a shortage of properties.
00;10;37;05 – 00;10;57;27
Rod Khleif
Gotcha. Okay. I was I was actually alluding to a shortage of rentals, period. I wasn’t talking, but but you’re on housing. But that’s okay because I want to talk about housing. You made a comment about housing 2.0 happening right now. Could you elaborate on that? And your version I’m assuming 1.0 was 809.
00;10;58;00 – 00;11;19;21
Danielle DiMartino
1.0 was 0809. The build up, I mean, you know, home prices peaked at six. And it took a long time after that for the market to be normalized. I think it will take a longer time this time, because home prices have increased to a greater extent. If you look at if you look at any home price metric, they went off the rails.
00;11;19;21 – 00;11;41;28
Danielle DiMartino
When my former employer decided to hoover up 40% of the mortgage backed securities market as part of its quantitative easing campaign, and that distorted home prices to an even greater extent. There are very few markets right now where you can say that home prices are truly back to where they were in 2019, so there’s a lot of downside left to go.
00;11;41;28 – 00;11;53;15
Danielle DiMartino
And of course, you can’t talk about multifamily without talking about single family residential because the two markets play off of one another. But for now, it’s still way cheaper to rent.
00;11;53;18 – 00;12;20;21
Rod Khleif
Yeah. Compared to you know, I saw an article that that home builder inventory is at the highest level. It’s been since like 080 9 or 0 nine, I think it was so. And my son’s buying a house right now and, and been some issues with the debt and, and they’ve extended it like four times which indicates to me like we’re talking for we’re 4 to 5 months in indicates to me they’re very pliable right now.
00;12;20;24 – 00;12;24;13
So what do you what do you.
00;12;24;13 – 00;12;35;09
Rod Khleif
Anticipate is going to happen with residential houses? You know, you’re talking about this 2.0. What do you think’s going to happen. You think there’s going to be a big reset in pricing. Is that what needs to happen?
00;12;35;14 – 00;13;00;25
Danielle DiMartino
I think that there has to be a reset in pricing because you cannot reverse what’s happened demographically. I just it’s impossible to do. And, you know, that’s why homebuilders like Lennar have found a niche market where they are constructing new build multigenerational homes. So they’re putting two kitchens in the same home.
00;13;00;27 – 00;13;04;01
Rod Khleif
Oh, kidding. Oh wow I didn’t know that. That’s cool.
00;13;04;02 – 00;13;34;21
Danielle DiMartino
Well look the the pandemic destroyed the working base, childcare workers, nursing home workers. I mean, they’re like, I can go to Chipotle and work for 18 bucks an hour and get full benefits. Why am I changing bedpans? Why am I wiping runny noses and changing diapers of little kids? So this generation is determined that either mom and dad are going to help me in terms of my child care, or I’m not going to be able to have kids.
00;13;34;24 – 00;13;43;20
Danielle DiMartino
So there is a I mean, according to the census, we have record numbers of multifamily, multigenerational household formation going on right now.
00;13;43;22 – 00;13;45;13
Rod Khleif
Wow. Wow.
00;13;45;19 – 00;14;17;05
Danielle DiMartino
That’s that’s that’s a change. That’s huge. I don’t think it’s going to be reversed anytime soon unless we in the last 12 months, you know, the sheer number of full time job losses is incredible as opposed to part time job creation. Again, that gets us back to talking about the gig economy, talking about the gig worker, talking about people who are holding down more than one job and you’re $150 shock moment at the grocery store, right?
00;14;17;06 – 00;14;18;16
Danielle DiMartino
But this is real.
00;14;18;18 – 00;14;39;12
Rod Khleif
Yeah, I don’t know how they do it. I fill up my car and it’s like, are you? It’s just crazy what things cost now. And you know, and we’re seeing it in the C class assets in the apartment industry. You know, these people, you know they can’t make ends meet in their their delinquencies are way up. You know, evictions are up.
00;14;39;13 – 00;14;57;04
Rod Khleif
Yeah. And so and and so let me ask you this. I mean, just your crystal ball. I’d love to ask you some crystal ball questions. Do you think we’re headed for a recession in this country? Like, like something significant? Let’s talk about it. I’m just curious what your thoughts are.
00;14;57;06 – 00;15;21;10
Danielle DiMartino
Well, we know from revisions, and Kevin Warsh alluded to what I’m about to say because he said that nonfarm payrolls were only as good as what they were when they were reported. With the third revision, that that comes 18 months after we actually see that first print. And what we know from those revisions is that in the first, second and third quarter of 2025 that we have net job losses.
00;15;21;10 – 00;15;30;23
Danielle DiMartino
So I think the question you should be asking me is, are we going back into recession? And because you’ve never had three quarters in a row in the United States in history.
00;15;30;24 – 00;15;32;13
Rod Khleif
That’s it. That’s a recession. Yeah.
00;15;32;15 – 00;15;58;01
Danielle DiMartino
Well, I mean, forget about GDP because employment a lagging indicator. But we know that in the first and second and third quarter of 2025 that the US economy shed jobs. Are we going to go back into a recession? It’s interesting because what we look at when we see the ADP data reported on a weekly basis is that job creation kind of we had a big spurt around the World Cup.
00;15;58;03 – 00;16;23;15
Danielle DiMartino
There were a lot of leisure and hospitality, concession type of jobs that were created, and we’ve just seen this cliff since then. So the question is, are we going to go back into recession? And I think that there is a decent chance that that happens, but none of it will be relevant if the stock market hangs in there, because that’s where the money is.
00;16;23;17 – 00;16;41;18
Rod Khleif
Okay. So so I’m sure you’ve been asked this before. What are your what’s your opinion on the impact of AI and job loss in that arena? Because I just saw Microsoft laid off 5000 people yesterday, you know, and that’s been an ongoing thing with the big tech companies, you know, tens of thousands of jobs. I’m just curious what your thoughts there are.
00;16;41;20 – 00;16;43;13
Danielle DiMartino
And their high paying jobs.
00;16;43;14 – 00;16;44;19
Rod Khleif
Yeah, yeah they are.
00;16;44;20 – 00;16;46;03
Danielle DiMartino
We have to pay attention to that.
00;16;46;06 – 00;16;49;11
Rod Khleif
Because that impacts the economy. They’re not spending money.
00;16;49;13 – 00;17;15;18
Danielle DiMartino
Yeah I mean I think we’re AI is having the greatest impact. In fact, my my oldest started college were four plus years ago when AI wasn’t even really a thing. And he’ll be studying up on AI before flowing into the workforce because you have to understand it. Yeah, it in your life some way, shape or form. But it’s the reason I bring up college graduates is because I think that that’s where AI is.
00;17;15;18 – 00;17;24;10
Danielle DiMartino
Having the biggest impact is kind of carving out entry level job positions that can now be done by a computer.
00;17;24;12 – 00;17;26;26
Rod Khleif
So many. There’s so many of those as well.
00;17;27;02 – 00;17;46;00
Danielle DiMartino
I or some combination thereof. Yeah. So I think that I think that AI there’s a lot of pushback in corporate America, because I think a lot of CEOs and CFOs wanted to wave their magic wand and say, execute AI, but, right, unless you know how to do it, you know.
00;17;46;01 – 00;18;02;02
Rod Khleif
That’s it’s the implementation. I was actually thinking about starting AI implementation company because we’re on the forefront of it. We’re in the 1% or 1%, right? I’m actually getting cloned tomorrow. We’re doing the whole cloning process for me tomorrow. You won’t even know if it’s me or not. You know, talking my talk at my talk. But yeah, we’re doing that tomorrow.
00;18;02;02 – 00;18;22;00
Rod Khleif
But, you know, we’ve got a open laptop that’s literally handing handling 95% of our marketing. Now, my, my, the guy that set it all up is just watching it. So yeah, we’re seeing some incredible. And now we’re now we’re going into the operational side of my coaching business and seeing what we can maximize there. But but yeah, I think you’re right.
00;18;22;01 – 00;18;23;19
Rod Khleif
I mean, because I mean even things.
00;18;23;19 – 00;18;26;04
Like medical, medical, legal.
00;18;26;06 – 00;18;47;15
Rod Khleif
Accounting, engineering, architecture, these are all things that AI can do better than a human or will be able to do better than a human in short order. Hell, I had robotic surgery myself like almost 15, 16 years ago. And now they’re, you know, they’re saying the robots will be better than surgeons, the best surgeons. And what do you know, what are your thoughts on.
00;18;47;17 – 00;19;01;21
Rod Khleif
And we’re kind of on a tangent here, but you’re obviously really in the know. What are your thoughts on this whole robotic thing with Elon building all these Optimus robots? And what what do you what is your crystal ball say there? I’m just curious.
00;19;01;22 – 00;19;15;29
Danielle DiMartino
I mean, so I think that there’s obviously a place in the future for everything that we’re talking about, what I don’t think can be displaced in the future’s judgment.
00;19;16;01 – 00;19;26;13
Rod Khleif
Really, you don’t think an AI, an AI judge can evaluate? There was just a movie on about this with Chris Pratt where an AI he’s it’s. Anyway, I digress, but but.
00;19;26;19 – 00;19;48;27
Danielle DiMartino
I mean, I think AI can definitely become a huge influence on individuals, on individual thought patterns. But again, I think that there will I think that there will always be a place for discernment and judgment, because we have to remember that it was a human being, after all that created AI.
00;19;48;29 – 00;20;07;26
Rod Khleif
Yeah, yeah. I just listened to a fascinating interview with Marc Andreessen and Joe Rogan about AI and just all the it was just really about, guys, if you haven’t heard that one, go listen to it. It’s really good. But yeah, I know we kind of went off on a tangent here, but you know, I like to have interesting conversations.
00;20;07;27 – 00;20;25;27
Rod Khleif
So yeah, we could go back into a recession, you know. What do you think again crystal ball based on on washes comment around 2%. It’s my opinion that we’re not going to see interest rate changes. But what do you think. I’m just curious.
00;20;25;29 – 00;20;28;05
Danielle DiMartino
So
00;20;28;08 – 00;20;31;14
Rod Khleif
Or interest rate reductions. Let me be very more precise.
00;20;31;16 – 00;21;02;24
Danielle DiMartino
Yeah. Rate cuts. Right. You know, I’m a big proponent of truth and true because speaking of technological advances, that’s that’s an area where one entity can scrape 30 million prices every day. And there’s there’s a place in the world for that. There’s a place in the world for real time gauges of inflation. And that tells a much different story than the official data do.
00;21;02;25 – 00;21;06;18
Danielle DiMartino
In fact, it’s much closer to 2%. So the question should be I think.
00;21;06;20 – 00;21;08;13
Rod Khleif
It is. Oh, interesting. Okay.
00;21;08;16 – 00;21;24;01
Danielle DiMartino
Yeah. So I mean and again, Kevin Warsh has a task force for that. He’s looking into alternative data sources. And because he knows that the fed has been making monetary policy through a rear view mirror when there’s.
00;21;24;02 – 00;21;28;09
Rod Khleif
And would you say they haven’t included everything either. Right. They haven’t.
00;21;28;10 – 00;21;29;07
Danielle DiMartino
Seen everything.
00;21;29;08 – 00;21;35;28
Rod Khleif
Right. I mean, they pick and choose what they’re going to gauge it on. And you know that’s not accurate. No.
00;21;36;00 – 00;21;47;13
Danielle DiMartino
So I think if he’s able to really implement the changes that he’s talking about, that it would revolutionize monetary policy making. I really do, and I wish him the very best because.
00;21;47;14 – 00;21;50;06
Rod Khleif
That’s exciting. Yeah.
00;21;50;08 – 00;22;09;19
Danielle DiMartino
I mean, when you consider how poorly measured inflation and employment are by the Bureau of Labor Statistics, I mean, come on, we just had a conversation about AI, right? And how AI can do so many things, so much. Why can’t we measure data?
00;22;09;21 – 00;22;18;28
Rod Khleif
Hello? Hello. God. Yeah, exactly. Wow. Yeah. Dead on. So.
00;22;19;00 – 00;22;31;25
Rod Khleif
You know, I tell people it’s interesting. You know, they’re all crying about the interest rates right now. When I was 18, they were 18%. I remember I remember being ecstatic when they hit 7%. So, you know, just for context.
00;22;31;28 – 00;22;38;16
Danielle DiMartino
I mean that that’s relevant, but not to somebody who’s spent most of their lives at the zero bound.
00;22;38;20 – 00;22;39;16
Rod Khleif
Right. Yeah.
00;22;39;18 – 00;22;51;12
Danielle DiMartino
Cause it’s all about the delta. It’s all about, you know, if it’s still, you know, if they knew 1% and now it’s 4%, it’s still, you know, multiple.
00;22;51;15 – 00;23;00;19
Rod Khleif
Fair enough. But don’t things have to kind of reach an equilibrium when the rates stay where there are the prices have to come down. I mean, otherwise nothing sells, right?
00;23;00;20 – 00;23;25;14
Danielle DiMartino
And that’s what that’s what one firm after another is saying. They’re saying yes. Higher input cuts. Yes. Higher energy costs. But we’re eating that in our margins because we can’t pass through the higher prices to end users. And I’m like, well, then we should maybe incorporate gig workers into the BLS employment figures so that you understand that these people are not making that much money.
00;23;25;17 – 00;23;48;10
Danielle DiMartino
Or, you know, everybody gets excited about initial jobless claims every single Thursday morning when they hit the wires and oh, they’re so low and and like, yeah, only 1 in 4 Americans who are classified as unemployed is collecting unemployment benefits, which is absolutely melt it down. It used to not be that case. And it’s just because what the states pay doesn’t cover.
00;23;48;12 – 00;23;48;22
Rod Khleif
You can’t.
00;23;48;22 – 00;24;02;03
Danielle DiMartino
Live like effect at the grocery store. They can’t do it. So they worked for Uber instead they they drive for DoorDash. Instead, they do what they have to do to make ends meet. But they’re not captured as unemployed or underemployed.
00;24;02;06 – 00;24;14;06
Rod Khleif
Maybe that’s the operative word, really is underemployed. Well, so. So where do you see this heading? Where do you see this heading? I mean, Danielle, I mean, do you do you.
00;24;14;09 – 00;24;54;16
Danielle DiMartino
I think I think that the time is right for corporate America to appreciate that they have a part to play in making the labor force more dynamic. If AI is going to have, you know, produce some productivity miracle, we can educate our kids better with AI. But I think we need to have some adult conversations about opportunities in the economy, not just companies buying back their shares or, you know, M&A bankers putting companies together one day, and then they split them apart and they collect fees on both sides.
00;24;54;21 – 00;25;24;20
Danielle DiMartino
It’s there has to be more than financialization. And, you know, I look often at the state of Indiana as an example, because the state economy never did completely disassociate itself from the manufacturing sector from making things, its state economy the most reliant on manufacturing the nation. But it’s a very nicely balanced economy because of that. So I think we can’t just be a services nation, and I don’t think that we can be just a manufacturing nation.
00;25;24;20 – 00;25;30;07
Danielle DiMartino
I think we need to be a better balanced economy than we are.
00;25;30;10 – 00;25;45;24
Rod Khleif
Interesting. That’s above my pay grade. So so your company talk about talk about you’ve got a newsletter that you put out there. Right. Kind of a retail newsletter I think you described it as it’s not very much money.
00;25;45;26 – 00;26;10;07
Danielle DiMartino
Every trading, every trading day of the year, without fail we publish The Daily Feather and it’s got four great charts. We look at the data in a different way than any major bank would look at the because there’s no value at if we don’t see, we see things through the prisms of alternative data sources. We try and be in front of other research houses.
00;26;10;07 – 00;26;18;02
Danielle DiMartino
And we’ve certainly garnered reputation for for being that way. So yeah, it’s it’s pretty incredible the Daily feather.
00;26;18;03 – 00;26;20;19
Rod Khleif
And and where do they go to to to look into that.
00;26;20;26 – 00;26;43;17
Danielle DiMartino
So I’m on Substack like a whole bunch of people in the rest of the world. DiMartino booth.com. And if you don’t already follow me on social media, I mean, I’m not as active as I once was, but I’m certainly much more thoughtful when I do post to social media for my 357,000 followers. But if you don’t already follow me at DiMartino Booth, you should.
00;26;43;19 – 00;27;02;25
Rod Khleif
Okay, DiMartino Booth, there you go. Well, listen, Danielle, this has been a very stimulating, mostly over my head conversation, but I’ve really enjoyed it regardless. And I really appreciate you taking the time out of your very busy day to pop on my show for a few minutes and and. Yeah. Thank you. It’s a pleasure to meet you.
00;27;02;27 – 00;27;03;16
Danielle DiMartino
Oh, my.
00;27;03;19 – 00;27;04;28
Rod Khleif
Likewise. Thank you.
**Podcast Categories:** Podcasts
---
### [Why Smart Investors Are Leaving Multifamily for Senior Housing](https://rodkhleif.com/podcasts/distressed-senior-housing-investing-ali-choucri/)
**Published:** July 17, 2026
**Author:** Bryan Hoover
**Excerpt:** Why Smart Investors Are Leaving Multifamily for Senior Housing
**Content:**
## Why Distressed Senior Housing Investing Is Gaining Momentum
Distressed senior housing investing is emerging as one of the most compelling opportunities in commercial real estate as demographic trends continue to drive long-term demand. In this episode of Multifamily Rockstars, **Ali Choucri** explains why experienced investors are shifting their attention from traditional multifamily properties to senior living communities where operational improvements and occupancy gains can create significant value. With millions of Baby Boomers entering retirement, the need for quality senior housing continues to increase while many facilities remain underperforming due to operational inefficiencies rather than poor real estate fundamentals.
Ali shares how investors who understand both real estate and operations can capitalize on these opportunities by acquiring distressed properties at attractive pricing and repositioning them through stronger management, improved marketing, and better resident experiences.
## Why Senior Housing Offers Unique Investment Opportunities
Unlike traditional apartment investing, senior housing combines real estate ownership with specialized business operations. Ali explains that his team focuses on middle-market private pay communities offering independent living, assisted living, and memory care while avoiding skilled nursing facilities.
Several factors make distressed senior housing investing attractive:
- Growing demand driven by aging demographics
- Lower competition than traditional multifamily investing
- Opportunities to acquire distressed assets below replacement cost
- Significant upside through operational improvements instead of relying solely on rent increases
Rather than chasing luxury developments or government-funded facilities, Ali’s team targets communities where better management can dramatically improve occupancy and financial performance.
## How Operators Create Value in Distressed Senior Housing
One of the biggest takeaways from the conversation is that successful distressed senior housing investing depends on operational excellence far more than cosmetic renovations alone.
Ali explains that his firm’s strategy includes:
- Reducing unnecessary operating expenses without sacrificing resident care
- Improving sales, marketing, and referral systems
- Renovating common areas and resident units
- Increasing occupancy before implementing rate increases
- Partnering with experienced senior housing operators who understand compliance and daily operations
This operational focus allows investors to improve both resident satisfaction and property performance while creating long-term value.
## Why Senior Housing Requires Specialized Expertise
Throughout the discussion, Rod and Ali emphasize that senior housing is fundamentally different from multifamily investing. Communities require licensed operators, trained staff, healthcare coordination, ongoing regulatory compliance, and a much higher level of operational oversight than conventional apartment properties.
The conversation also explores why finding the right operating partner is often more important than finding the property itself. Investors cannot simply purchase a facility and hire management later. Success depends on experienced operators who understand staffing, resident care, licensing requirements, inspections, and risk management.
## Lessons From Today’s Senior Housing Market
Ali discusses how many attractive acquisitions became available following the challenges created by the COVID-19 pandemic. Lower occupancy levels placed financial pressure on many owners, creating opportunities for well-capitalized investors to purchase quality assets at discounted pricing.
Rather than pursuing expensive ground-up development projects, Ali believes current market conditions favor acquiring existing facilities below replacement cost and repositioning them through operational improvements. This strategy provides investors with stronger downside protection while allowing them to benefit from the long-term demographic trends supporting senior housing.
## Capital Raising and Building Relationships
Beyond acquisitions, Ali highlights the importance of capital raising and relationship building in commercial real estate. He describes his greatest strength as connecting people, whether introducing business partners, investors, or strategic relationships that benefit everyone involved.
His experience in investment banking, brokerage, and private equity gives him a unique perspective on evaluating opportunities while communicating effectively with investors. He explains that successful capital raising is ultimately about creating mutually beneficial relationships built on trust and transparency.
## The Mindset Behind Long-Term Success
Ali also shares how his perspective on mindset evolved throughout his investing journey. Initially skeptical of personal development, he eventually realized that confidence, presence, and authentic relationships often produce greater results than technical knowledge alone.
He explains that becoming more present in conversations, focusing on serving others instead of impressing them, and approaching business with genuine curiosity transformed both his professional relationships and investing success. Rod reinforces this philosophy, emphasizing that psychology and mindset are often the biggest drivers of long-term achievement in commercial real estate.
## About Ali Choucri
**Ali Choucri** is a commercial real estate investor, capital raiser, and broker with a background in investment banking and finance. After beginning his career analyzing institutional real estate investments, he transitioned into brokerage, multifamily investing, and private equity. Today, he works with a Boston-based investment firm specializing in distressed senior housing acquisitions while also remaining active in capital raising and condominium conversion projects.
If you want to hear the full conversation and detailed insights, watch the podcast video or read the complete transcript below.
## Frequently Asked Questions About Distressed Senior Housing Investing
**What Is Distressed Senior Housing Investing?**
Distressed senior housing investing is the strategy of purchasing underperforming senior living communities at discounted prices and increasing their value through operational improvements, renovations, better management, and higher occupancy. Investors often focus on assisted living, independent living, and memory care facilities that have strong long term demand but require repositioning.
**Why Is Distressed Senior Housing Investing Attractive?**
Distressed senior housing investing offers investors the opportunity to acquire properties below replacement cost while benefiting from growing demand driven by an aging population. By improving operations and occupancy rather than relying solely on rent increases, investors can create significant value and potentially generate strong long term returns.
**How Is Distressed Senior Housing Different From Multifamily Investing?**
Unlike traditional multifamily investing, distressed senior housing investing requires specialized operators, licensed staff, healthcare oversight, regulatory compliance, and resident care services. Success depends on both real estate expertise and experienced operational management.
**What Types of Senior Housing Properties Do Investors Target?**
Many investors focus on private pay independent living, assisted living, and memory care communities. These property types often provide opportunities to improve occupancy, resident experience, and operational efficiency while avoiding the additional complexity associated with skilled nursing facilities.
**Why Are There So Many Distressed Senior Housing Opportunities?**
Many senior housing communities experienced occupancy declines following the COVID 19 pandemic, creating financial challenges for owners. Rising operating costs, management inefficiencies, and increased labor expenses have also contributed to distressed acquisition opportunities for experienced investors.
**How Do Investors Add Value to Distressed Senior Housing Communities?**
Value is typically created by improving marketing, increasing occupancy, upgrading resident units and common areas, controlling unnecessary expenses, strengthening referral relationships, and partnering with experienced senior housing operators who can improve daily operations without sacrificing quality of care.
**Is Senior Housing Investing a Good Long Term Investment?**
Many investors view senior housing as a strong long term investment because demographic trends continue to increase demand for quality senior living communities. As the Baby Boomer generation ages, the need for assisted living, memory care, and independent living is expected to grow for decades.
**What Should Investors Look For Before Buying a Distressed Senior Housing Property?**
Investors should carefully evaluate occupancy levels, financial performance, market demand, staffing, regulatory compliance, deferred maintenance, local demographics, and the experience of the operating partner. Thorough due diligence is critical because operational performance has a direct impact on investment success.
**Do You Need an Experienced Operator for Distressed Senior Housing Investing?**
Yes. One of the most important factors in distressed senior housing investing is partnering with an experienced operator who understands licensing requirements, staffing, resident care, compliance, and day to day management. Strong operations are often the key difference between a successful investment and an underperforming asset.
**Who Should Consider Distressed Senior Housing Investing?**
Distressed senior housing investing may appeal to accredited investors, real estate syndicators, private equity firms, and experienced commercial real estate professionals seeking diversification beyond traditional multifamily properties. Investors who understand operational value creation and long term demographic trends may find the sector especially attractive.
00:00:28:23 – 00:00:50:23
Rod
Welcome back to Multifamily Rockstars. So as you guys know, this is where we interview people that are just killing it in this business, number one. And we dive deep into their deals and you know, try to give you some practical and actionable items for getting started and, and doing your first deal. Now this this, interview is a little bit different because we’re going to talk about a different asset class that I’m actually very interested in.
00:00:51:00 – 00:01:06:11
Rod
In fact, I was just telling my guest here who’s a warrior on our and our warrior program, that, you know, I’m, I had four calls on this particular asset class this week, and I’ve got another one tomorrow. And in the asset class is senior housing and senior living, assisted living and so on and so forth.
00:01:06:11 – 00:01:24:06
Rod
And so anyway, we’ve got all these sugary free. And today he’s an Egyptian-American. You know, I’m half, Arabic myself. So we’ve got that in common. And, he’s a broker. He’s been in the real estate business quite a bit and, very excited to get, get to know him and, spend some time in this asset class.
00:01:24:06 – 00:01:25:24
Rod
Welcome to the show, brother.
00:01:26:01 – 00:01:29:23
Ali Choucri
Thank you. Ron, it’s it’s great to be here. It’s good to see you. It’s good to see you, Mark. Thank you.
00:01:30:00 – 00:01:41:17
Rod
Likewise. Likewise. So. So why don’t you give us a little background? You know, maybe what you did before real estate, then the real estate just kind of give us a high level overview of your background. If you would.
00:01:41:19 – 00:02:02:23
Ali Choucri
Sure. My family is Egyptian, and I was born in New York City. My dad was working there when I was around 11 or 12. He decided to move back to Egypt to start a company. So my story was a lot of back and forth between the US and Egypt, mainly New York City. But I went to college and school in different parts of the US as well.
00:02:03:00 – 00:02:27:16
Ali Choucri
I, studied English in college, you know, got a B.A. in English literature. That was a passion thing. And but when it was time to graduate, I got nervous, you know, can I, can I make a living from this? And, I ended up going into finance and I stayed in finance, and, you know, I was an analyst and investment banking, in New York and then in Egypt, and, for about ten years.
00:02:27:18 – 00:02:48:15
Ali Choucri
And then I took some time off to pursue creative projects. I went to grad school, moved to Boston in 2013, and that’s when I started getting involved in real estate. And I had been involved in real estate and finance in a more institutional capacity, you know, doing valuations on reeds and hotels and things like that.
00:02:48:15 – 00:03:08:17
Ali Choucri
But I got involved with real estate in Boston on a more personal level of going to the property myself and walking through and not just looking at it in a spreadsheet. And I started in brokerage and did a bunch of things in brokerage, which was a blessing and also a curse in terms of trying to tackle too much.
00:03:08:19 – 00:03:29:20
Ali Choucri
You know, along the way I’ve done, flips and bought smaller multifamily. And where I am now is is helping raise capital and and manage deals for, private equity firm out of Boston that has a background in multifamily but has pivoted, very strongly into senior housing. As of the last few years.
00:03:29:22 – 00:03:56:03
Rod
Very nice, very nice. You know, what’s interesting about you, Ali, is you’re obviously very analytical. If you were, you know, buried in spreadsheets and finance and all that, but but to get into brokerage from that is, is is is a complete pivot, personality pivot because you’re in sales. So, you know, that’s, you really have, strengthen in both of those, areas, which isn’t which isn’t common, honestly, usually it’s one or the other.
00:03:56:05 – 00:04:17:23
Rod
So, so that’s fantastic. And so one of the questions that we asked you that that, appreciate you answering, in in advance is, you know, what’s your superpower as it relates to this business? Because that’s the reason I brought that up. It’s obviously you’re you’re very analytical, but you’re always you’re also a great communicator. So please answer that question.
00:04:18:00 – 00:04:39:24
Ali Choucri
As it relates to commercial real estate. I would say capital raising, but as it relates to just relationships in general, I would say connecting people. I happen to love connecting people. There are people in the world that are married because I introduce them, that are business partners, because I introduce them. And I sort of look at capital raising as a as a similar thing.
00:04:39:24 – 00:04:45:22
Ali Choucri
You know, you’re bringing one party and introducing them to another for something that’s mutually beneficial.
00:04:45:24 – 00:05:08:05
Rod
Yeah. Well, I’ll tell you something. You know, there are networkers and what I call super networkers. And in my opinion, what you’re talking about is super networking because the super networker meet somebody, finds out they have a need to meet someone else that they believe will satisfy that need and connects them and I will tell you, that is an absolute recipe for success.
00:05:08:05 – 00:05:29:10
Rod
And, and, you know, we’ve all met people like that. It sounds to me like that’s kind of the really what it is you do when you connect people. That’s what we’re talking about here. So that’s fantastic. So let’s talk about, you know, we want to dig into a deal. Let’s talk about because we, you know, that’s what we try to do on these episodes is really get more granular on on a deal.
00:05:29:12 – 00:05:36:04
Rod
So, what what’s the deal that, that you’re going to talk about today? Describe the deal, if you would.
00:05:36:06 – 00:06:05:11
Ali Choucri
It’s, 196 unit, senior living facility in Long Island, New York. That I was involved with, it’s pretty typical of what we look at, Cougar Capital. Okay. At the moment, we’re looking at distressed deals. Deals in senior housing that have, high vacancy that that might be running a loss. You know, on an annual basis, that might be mismanaged.
00:06:05:11 – 00:06:22:03
Ali Choucri
And, and the ownership is looking to let them go, and, that’s where we, have our strengths. We’re able to go in and reposition, an acquired and attractive basis and, and create value and, and also raise the standard of living at these facilities.
00:06:22:05 – 00:06:25:18
Rod
Let me ask you a question. What states are you in?
00:06:25:20 – 00:06:38:16
Ali Choucri
Kansas. Kentucky. We’re looking in Missouri, New York, Massachusetts. We’re looking in New Hampshire, I would say northeast and Midwest, predominantly interesting.
00:06:38:18 – 00:07:01:11
Rod
Okay. And, just a question, because this is the topic I actually know quite a bit about, as I was saying, I, I don’t know if I did this before or after we started recording. I actually got my, senior living or assisted living administrator’s license here in Florida a lifetime ago. I did a three day course, learned about, you know, all the dangers and pitfalls and, and and things that you need to know.
00:07:01:11 – 00:07:17:09
Rod
And so I know quite a bit more enough to be dangerous. And and again, it’s something I’m very interested in. You know, there’s a silver tsunami right now. There’s 80 million baby boomers getting old. And candidly, I think there’s going to be a real crisis in this country. I’m sure you agree with senior housing in general. There’s a huge need.
00:07:17:11 – 00:07:33:14
Rod
And, and so my question, my question and so these questions may be a little more advanced than, than we’d planned on for this show, but I just for my own edification, do you manage yourself? Are you, vertically integrated as far as the actual management, or do you third party manage?
00:07:33:16 – 00:07:48:00
Ali Choucri
We, we are the capital side, and, we’re aligned with an operating partner. Okay. And there a senior living operator that, that work alongside us on every deal. But but it is a separate company.
00:07:48:02 – 00:08:12:16
Rod
Gotcha, gotcha, gotcha. Fair enough. So talk. Okay, so you like distressed assets, as do I. What? Talk about, the what segment you focus on because there’s extremely expensive stuff. Then, of course, there’s the Medicare, Medicaid, government programs. And I, I remember going into one of those Medicare, I forgot it was Medicare Medicaid that pays that.
00:08:12:16 – 00:08:36:20
Rod
But but I remember going into one of those facilities, and you could just smell urine the minute you walked in. You just see these people. They look miserable and horrible. And I just got really you dismayed by the quality of the care in one of these government subsidized, facilities? What segment do you focus on? And maybe you can speak to what I just described a little bit as well.
00:08:36:22 – 00:09:07:23
Ali Choucri
Sure. We do middle market private pay. So we’re looking at facilities that are independent living, assisted living and memory care. We don’t do, skilled nursing facilities. That’s, that’s a little bit different. And we’re, we’re private pay. So we’re not doing the the Medicare, Medicaid. Model. Okay. You know, I haven’t seen those, although I, we’ve toured a luxury one that, you know, and that’s sort of a different class as well.
00:09:08:00 – 00:09:24:04
Rod
Yeah, yeah, the luxury stuff. I mean, you see stuff where they’ve got spores and all sorts of things, you know, and, and it incredibly expensive. What’s the price point of the facilities that you like to target? As far as, like a monthly fee for the residents.
00:09:24:06 – 00:09:26:13
Ali Choucri
I would say 4 to 6000.
00:09:26:15 – 00:09:53:05
Rod
Okay. Wow. That’s actually very reasonable. From what I’ve heard. I mean, I’ve heard a lot more than that. You know, there’s another model, by the way. A friend of mine that unfortunately passed away, a guy named Gene Guarino, used to teach this model where you’d buy a house and convert it to senior living, and you just put, you know, 1 or 2 people in the, you know, big bedroom house and, and, of course, the the regulations are much easier for that model.
00:09:53:07 – 00:10:20:21
Rod
But I have a great friend in Sacramento that’s got six of those, and she makes a lot of money from it, and it seems she’s more in the like the 7000 $508,000 a month range. Of course, California’s higher for everything, but but, okay. So you like private pay? And give an idea of, you know, you find a distressed asset, talk a little bit about how you step in and make things happen there and improve things.
00:10:20:23 – 00:10:42:12
Ali Choucri
Well, we’re finding that a lot of these, facilities are owned by REIT’s or fairly large private equities and their model, their business model and their operations are very different than ours. You know, we’re a syndicator. We’re very lean, we’re very nimble. They have, a lot of expenses. You know, there’s a there’s a lot of fat in their in their income statement.
00:10:42:12 – 00:11:14:12
Ali Choucri
And so one of the things that we’re able to do is cost containment. And that doesn’t mean cutting the quality of care in many in all instances, I think we raise the quality of care, but we find that, you know, there are certain positions certain, responsibilities that can be group that can be brought under the, the parent company, the operating company, you know, we can implement more effective sales and marketing programs and referral programs, boost, occupancy.
00:11:14:14 – 00:11:37:24
Ali Choucri
And then another thing we do is just typical, you know, very typical to a multifamily syndication, is a bit of CapEx upgrades, you know, update the common areas and the facade and the rooms. And so there’s there’s a ability to drive value and sort of two different ways, or more than two different ways. You know, we actually don’t, increase rates.
00:11:38:01 – 00:11:48:01
Ali Choucri
Right off the bat, we, we focus on occupancy first and making the upgrades first. And, you know, that drives tremendous value value as well.
00:11:48:03 – 00:11:50:20
Rod
That’s, that’s it’s, amazing.
00:11:50:22 – 00:12:10:15
Ali
So obviously there’s extra work entailed with these in your facilities. You’re dealing with older people, there’s additional standards management. Take it a step back a little bit. What are some of the benefits of senior housing versus multifamily? Why have you even shifted your focus towards senior housing instead of just doing regular multifamily?
00:12:10:17 – 00:12:36:01
Ali Choucri
Well, you know, I joined a private equity firm, that has been around since 2008, and they’ve owned, you know, over a thousand apartments. And so they had this experience and then me on my own before I joined, joined them, had this experience where I was underwriting deals just didn’t make sense. You know, I couldn’t conservatively underwrite a deal and see repeatable profit.
00:12:36:03 – 00:12:59:14
Ali Choucri
You know, if, if anything went, went wrong and, and maybe I wasn’t looking at enough deals, but but it got difficult. And, I’m also a broker in Massachusetts, and we are a, you know, low cap rate, high appreciation area and, and not landlord friendly. So, you know, as a broker, I was pitching deals that were getting harder and harder to sell.
00:12:59:16 – 00:13:07:09
Ali Choucri
So, you know, both separately and together, we sort of found a place where we were having a hard time finding deals.
00:13:07:11 – 00:13:11:13
Mark
Why do you think that is? Do you think do you think senior housing is less competitive?
00:13:11:13 – 00:13:16:00
Rod
Do you think he was he was just speaker. He was just speaking about multifamily right there.
00:13:16:01 – 00:13:31:10
Mark
Okay. But he said he couldn’t find deals that penciled. So why do you think senior housing is penciling. Is it less competition. Is it back to my question of is it less competition? Is it is it harder to manage? Why do you think those are penciling and multifamily? Aren’t?
00:13:31:12 – 00:13:51:21
Ali Choucri
I mean, I think there’s a lot of reasons, but, it is a smaller asset class, you know, and it’s more complicated to manage, especially the larger facility. You need to be aligned with an operator that has the licenses and the experience to manage. You know, a lot of a lot of people living at the facilities and eating and getting medical treatment.
00:13:51:21 – 00:13:53:10
Ali Choucri
And, so, so.
00:13:53:10 – 00:14:12:12
Rod
That’s and the employees and the employees is freaking huge, too, because you’ve got three you got three staff. Some people that 24 hour of care. So it’s a big employee base, right? I mean I do sorry to interrupt, but that’s a big piece. You know, and I got to tell you, it’s a very litigious business as well.
00:14:12:12 – 00:14:33:00
Rod
I mean, people want to make sure grandma is taken care of, and, you know, you hear these or you hear these horror stories of, you know, where, you know, a memory care person accidentally finds a door that’s open, ends up going outside, freezes to death. I mean, you hear these horror stories and and I will tell you, you know, as you know, Ali, I know you know the business much better than I do, is, you know it.
00:14:33:02 – 00:14:56:00
Rod
It’s very heavily regulated and there are regular inspections, and you’ve got to have continual training and and there’s a big turnover in the staffing as well. You know, we talked to an operator a couple days ago and there’s like 60% turnover in the staff, which is so you’re continually hiring, you’re continually training. And, you know, and you’re dealing with meds, you’re dealing with food.
00:14:56:00 – 00:15:16:13
Rod
You have to have activities lined out. You have to have all these different things, you know, fire, you know, how to get them out in case of a fire. You’ve got a, you know, you’ve got to practice these things. So there’s a lot to it. It’s much more involved than multifamily. And it should be because, you know, our elderly are need, need protection and help.
00:15:16:13 – 00:15:24:02
Rod
And I have a real affinity for them, which is why I was thinking about getting into it. And I’m definitely back there again now. So would you agree with everything I just said?
00:15:24:02 – 00:15:43:10
Ali Choucri
I totally agree with everything you just said. And you know, it’s it’s in multifamily. You can go buy a building and figure out the property manager later. For the most part in this business, you need to have your operating partner first. I would say, because you want to make sure that people are being taken care of well, that operations are being run efficiently.
00:15:43:11 – 00:15:51:02
Ali Choucri
You know, that you can rely on, you have to rely on them a lot more than you would just a regular property manager and multifamily.
00:15:51:04 – 00:16:19:17
Rod
Yeah. And you know, I, I’ve again I’ve been talking to I’ve got we’ve got other warriors that do this business, you know, that have bought smaller facilities, 54 to 25. Oh. I want to think like an 80, bed facilities. Not 196. Like you’re like, you’ve got here, but but, you know, they talked about how just like in the multifamily space, you can run across operators that really don’t give it the level of care and oversight that you need.
00:16:19:17 – 00:16:34:19
Rod
And, you know, they talked about some, some challenges, just like we do it with property management companies in the multifamily space. You know, you’ll go through different management companies. And it’s a hell of a lot more involved when you’re switching a management company in this space than it is in the multifamily space. And even in multifamily, it’s involved.
00:16:34:19 – 00:16:38:02
Rod
But this is a whole different animal. You agree with that as well?
00:16:38:04 – 00:17:00:12
Ali Choucri
Yeah. You know, in multifamily I was always attracted to the C and D properties. I never ended up really. You know, C minus D, I never ended up doing those deals. But I would look at the returns and I’ll get excited and then I’ll go visit the properties. And I would say I can’t do this. You know, I think this is a little too, too intense for what I’m looking to do.
00:17:00:14 – 00:17:22:10
Ali Choucri
You know, just unsafe neighborhoods, unsafe buildings in senior housing, it’s even more, you know, I wouldn’t want to be involved in something that wasn’t run very, very well. Because it’s not just that people live there, but, you know, they’re higher in acuity. They’re they’re in a delicate place, and it needs to be managed, you know, gently and carefully and responsibly.
00:17:22:12 – 00:17:49:20
Rod
Lovingly. Yes, absolutely. Couldn’t agree more. Let’s talk about, as you’ve gotten into this assisted living environment, senior housing environment, talk about some, some, some seminars, talk about some good decisions, bad decisions in that sector, if you would please. Not the multifamily. Talk about, you know, some of the things you’ve discovered as you’ve grown in this senior housing component, if you wouldn’t mind.
00:17:51:06 – 00:17:56:00
Rod
And I know you weren’t ready for that question, I apologize, but, I’d love to hear what you have to say about it.
00:17:56:02 – 00:18:11:04
Mark
No, it’s all right. I mean, I have a lot of seminars personally and in my own life. Cougar Capital has been doing pretty well in the space. And in my tenure, they haven’t really, we haven’t had a, seminar yet, you know, and,
00:18:11:06 – 00:18:14:10
Rod
A little stuff, I’m sure, but nothing major. Okay.
00:18:14:12 – 00:18:35:11
Ali
Yeah. Well, on that topic, right. One thing I really want to touch on is the blue stake thing. Right? Because a lot of our warriors, they’ve been doing these senior housing in blue states. And in theory, they’re doing that because, you know, theoretically there’s less turnover, less evictions, etc.. Obviously, I know this deal we’re talking about is in Long Island, New York.
00:18:35:13 – 00:18:48:05
Ali
Has that actually been put into practice? Have you noticed that you’re not running into a lot of those blue state issues that you would with a typical multifamily, or how has that been for people that live in, so they might want to do so.
00:18:48:05 – 00:19:11:13
Rod
So let’s let’s be more specific. Like, like their regulatory issues. But I know that Florida is a red state and their regs are incredibly tight here, for senior housing. But, you know, if it’s regulatory, you know, I don’t think there’s any differences in occupancy, certainly in pricing. I think I think you’re going to spend more money in, in a New York or California.
00:19:11:15 – 00:19:16:09
Rod
But yeah, with that pre frame, what are your thoughts on the differences.
00:19:16:11 – 00:19:38:07
Mark
In New Yorkers is highly regulated. And right. It’s it’s and again it comes back to our, to our senior housing operator that has the licenses and knows the regulations and knows how to operate well in that state, from our perspective, and maybe we’re a little bit lucky to be aligned with, with them, but, you know, it’s a it’s a high barrier to entry market.
00:19:38:07 – 00:19:48:10
Mark
And so that gives us, a competitive advantage to. So we’ve, we’ve been able to look at the, the positive more than the negatives. But, you know, life is life. So it’s it’s not always.
00:19:48:10 – 00:20:05:18
Rod
Going to be, you know, you know, I’ve got a boot camp coming up here shortly. And one of the questions we ask all the panelists is to talk about, you know, when they got their butt kicked and their nose bloodied. And because you learn from that stuff, right? Yeah. And that’s why I asked the question, are you going to do any ground up development?
00:20:05:18 – 00:20:10:07
Rod
I mean, with the scale that you guys are right, I would think you’d want to be doing some ground up stuff.
00:20:10:09 – 00:20:28:04
Ali Choucri
No, I think the cost to build new facilities is, you know, is astronomical. And I think, okay, so in some cases, and there’s an opportunity now to buy some distressed facilities and, and, you know, get in an attractive basis. So for the time being.
00:20:28:06 – 00:20:51:22
Rod
Buying those sorry, sorry I get excited and I interrupt. That’s my worst quality. My coach has me squeezing my leg. So I stopped interrupting. It didn’t help, but anyway, so so why do you think they’re distressed? If you could give us some examples of how what you’ve discovered that causes that distress? Because I have my opinion, but I’d love to hear if if what I’m thinking is accurate.
00:20:51:24 – 00:20:52:14
Rod
Well, we’re.
00:20:52:14 – 00:21:14:01
Mark
We’re you know, we’re looking at nice places and we bought nice places. I think a big reason is Covid is is during Covid 19, you know, it was it was hard for, for for elderly people, in those facilities, you know, people who contracted who got sick. And, you know, I wasn’t involved in the industry at that, you know, right, at that time.
00:21:14:01 – 00:21:32:20
Mark
But, occupancy drastically went down. And, you know, when you’re operating at 50, 60, 70%, even occupancy, you know, this is a building break even. Yeah, yeah, it’s hard to break even. You can go negative. And so there’s you know, there’s a lot of risk there too.
00:21:32:22 – 00:21:37:03
Rod
Let me ask you this. Why did you join the warrior program?
00:21:37:05 – 00:22:00:21
Mark
I, you know, I, I come from the, like, from a background of get a job and a salary and, and, you know, like, that was my mindset until I learned about real estate. And it felt like it was somewhat late in my life, you know, in my mid 30s. But, I went to a multifamily investor network, conference and.
00:22:01:02 – 00:22:05:21
Rod
MFI in the I just yeah, yeah, that’s Brett, Ben and Ferris.
00:22:05:23 – 00:22:06:17
Mark
Yeah.
00:22:06:19 – 00:22:08:05
Rod
Yeah. Okay.
00:22:08:07 – 00:22:26:14
Mark
I, I just loved what I was seeing, you know, and it reminded me of, of investment banking, but just on a smaller scale, you know, it’s mergers and acquisitions, I mean, mainly acquisitions, but it’s a model. It’s an asset. But you get to walk through it, you get to meet your tenants. It’s a lot more personal. And, you know, I, I liked that aspect.
00:22:26:14 – 00:22:49:17
Mark
And, and then the financial freedom, you know, I, I realized that I met some people in the warrior program that are living the dream, so to speak. You know, where they’re they have lifetime cash flow, and they’re free to do whatever they want. And they use that to spend time with family and, you know, and just enjoy life, you know, they’re and they still work hard, but they also work smart.
00:22:49:19 – 00:23:09:13
Mark
And I made a ton of sense to me. And then, you know, in tandem I understood the the tax benefits of real estate and how like, that really is the way to, to, to have tax efficient investments. So it clicked for me long before I was able to really like step it up in activity.
00:23:09:15 – 00:23:36:07
Rod
Nice, nice. By the way, guys, if if you’re considering getting guidance, you know, so you can experience the life you’re wanting this year or next rather than, you know, years from now, you know, just text the word crush to seven, two, three, 4 or 5 to apply to our warrior program. It’s extraordinary. I mean, my warriors now own well over around 250,000 units of multifamily, which just blows my mind because I’ve only been teaching seven years.
00:23:36:07 – 00:24:02:11
Rod
But we’ve also got all these other asset classes senior housing, mobile home parks, retail, mixed use, flex, industrial space, even some office, even though I try to keep them away from office. But, you know, all these other asset classes and, and killing it, developing hotel to multifamily conversions. Yeah. So again, text the word crush to 72345 to see if the warrior program might be able to help you get that.
00:24:02:11 – 00:24:21:15
Rod
You know, that life of freedom that you’re looking for. And if you do, we will be speaking soon. On that note, on, you know, just prompted a thought that when I said all that was, have you ever looked at doing, like, a hotel to senior housing conversion? Because I was looking at that and there was some there were some barriers with the fire in the hallway with some things like that.
00:24:21:15 – 00:24:24:16
Rod
But I was curious if you guys have ever looked at that.
00:24:24:18 – 00:24:39:14
Mark
I think we’ve looked at, like, adaptive reuse of buildings. And I know human capital has done that in different industries that are, you know, different sectors of real estate. But, yeah, we would look at that, you know, a few building can be converted and and it makes sense.
00:24:39:16 – 00:24:52:03
Ali
So, Ali, I know you’re on your bio, you mentioned that. You know, the mindset stuff that Rob talks about, you mentioned was kind of like fluffy or fluffy, right? And you didn’t necessarily believe in it. How did that shift over time as you started to take action in this?
00:24:52:05 – 00:25:17:13
Mark
Yeah, I had a real seminar with that stuff because, you know, it made sense to me. And, but I didn’t realize how deep that could get, you know, and mindset is a word for it. I think heart position is a word for it, too. And, you know, if you’re going through life in a fearful, anxious state, you know, thinking things, feeling like things are not going to work out, you know, that’ll sort of manifest in front of you.
00:25:17:13 – 00:25:38:21
Mark
And, and so I spent a few years in that where it’s like, I really want to be positive and I really want things to work out. And the things that I wanted to work out for a while got further and further away. And it was really about just how am I holding myself in this moment that began to change things, you know, being a lot more present.
00:25:38:21 – 00:26:02:01
Mark
And that translated to when I’m meeting people, you know, talking to brokers or capital or friends or anybody just being a lot more present and being with them and a lot less focused on sounding smart or, you know, some outcome that I think needs to happen, you know, and letting go. And for me, that was just a really big pivot.
00:26:02:01 – 00:26:13:01
Mark
And it sounds simple, but it was more valuable than, you know, learning spreadsheets and cap rates and and finally, you know, just being present and human made a big difference.
00:26:13:03 – 00:26:29:02
Rod
It’s so wonderful to hear you say that, because I shout that stuff from the rooftops, that 80 to 90% of this is your mindset and your psychology and your presence and your purpose and and all of that. Only 10 to 20% of the mechanical stuff that we go through at the boot camps and, you know, in our coaching program.
00:26:29:04 – 00:26:36:13
Rod
But, you know, I really appreciate you acknowledging that because we don’t we don’t I don’t have other people say it enough on the show here.
00:26:36:15 – 00:26:45:21
Ali
So I’ll leave for people that like your story. Maybe you want to do senior housing, invest in a blue state. We just resonate with anything we talked about. Where can they reach out to you to, to have a chat?
00:26:45:23 – 00:27:04:20
Mark
They could reach out to me on my website. These show khou.com. I have the, you know, all my sort of activities there. I have, what I’m doing in senior housing. And I’m also active in condo conversions in Boston. That’s something that I have going around and happy to talk about that or anything else in real estate.
00:27:04:22 – 00:27:20:18
Rod
I appreciate that, brother, and I appreciate you coming on the show and, sharing some wisdom and and, Yeah. Well, sure. We’ll see you at the next warrior event. I appreciate you coming on, my friend. Mark. It’s great to see you as well. Thanks, guys. And all right, take care, guys. Appreciate it.
00:27:20:20 – 00:27:21:22
Mark
Thank you for having me on.
**Podcast Categories:** Multifamily Rock Stars, Podcasts
---
### [Pace Morby Creative Financing](https://rodkhleif.com/podcasts/creative-financing-single-family-vs-multifamily-with-pace-morby-rod-khleif/)
**Published:** March 18, 2024
**Author:** Bryan Hoover
**Excerpt:** Creative Financing & Single family vs Multifamily with Pace Morby & Rod Khleif
**Content:**
## **Creative Financing & Real Estate Investing with Pace Morby: Mastering Seller Financing & Subject-To Strategies**
Ever wondered how investors close multifamily deals without touching their own cash—or even stepping into a bank? In this episode, Rod Khleif sits down with Pace Morby, the king of creative finance, to break down exactly how strategies like seller financing and subject-to can unlock apartment buildings with little to no money out of pocket.
From structuring $0 down multifamily deals to scaling beyond single-family homes, Pace shares his real-world tactics, mindset shifts, and negotiation secrets that are helping investors thrive even in today’s challenging market. If you’re serious about building wealth and want to discover proven ways to buy more doors without traditional financing, this is the episode you don’t want to miss.
## About Pace Morby
Pace Morby, the dynamic host of A&E’s hit show *Triple Digit Flip*, is a trailblazer in the world of real estate investing through creative financing. With an impressive portfolio of 2,100 doors nationwide valued at $450 million, Pace has mastered innovative strategies like Subject-To and Seller Financing to acquire properties without relying on traditional bank loans. His expertise spans single-family homes, multifamily properties, RV parks, and mobile home communities, making him a go-to authority for investors looking to scale.
In this exclusive interview, Pace shares insider strategies on finding off-market deals, negotiating seller financing and other creative financing options, and navigating today’s economic landscape. If you’re an aspiring or seasoned real estate investor, you won’t want to miss this deep dive into creative financing, leveraging existing debt, and building wealth without cash, as outlined in his Wall Street Journal bestseller, “Wealth Without Cash”.
### **Topics Covered in This Episode:**
- Pace Morby’s journey into real estate investing
- Finding high-cash-flow deals in Florida
- Ways to find creative financing
- How to buy multifamily with $0 down
- 1031 exchanges & tax-saving strategies
- Structuring seller-financed deals on multifamily properties
- Overcoming fear of failure in real estate
- Finding & negotiating foreclosures
- Understanding existing debt in multifamily investing
- Refinancing strategies in today’s market
**📩 Interested in investing in a multifamily deal?**
Text **PARTNER** to **72345** or email **Partner@RodKhleif.com** to explore partnership opportunities.
[Listen to this episode on itunes. ](https://podcasts.apple.com/us/podcast/ep-939-creative-financing-single-family-vs-multifamily/id1097449598?i=1000649580959)
## **FAQ: How to Buy Multifamily with $0 Down**
**Can you really buy multifamily with no money down?
Yes. Investors use creative financing strategies such as seller financing, subject-to, and wrap mortgages to purchase multifamily properties without the traditional 20–30% down payment. These methods allow you to leverage the seller’s terms or existing financing instead of relying on banks.
**What exactly is creative financing?
Creative financing refers to nontraditional ways of structuring real estate deals. Instead of using a bank loan, you negotiate terms directly with the seller or use the property’s existing financing. Examples include subject-to, seller financing, lease options, private money, and partnerships.
**Why use creative financing instead of a regular loan?
Creative financing makes it possible to scale faster, especially when banks are restrictive due to credit, income, or high interest rates. It also allows investors to secure better terms, avoid heavy down payments, and sometimes lock in lower interest rates than current market conditions.
**Is creative financing riskier?
It can be if you don’t understand the terms. Risks include balloon payments, due-on-sale clauses, and the need for strong negotiation skills. However, with proper due diligence and clear contracts, creative finance can be just as safe—and sometimes safer—than traditional loans.
**Which is better for creative financing: single family or multifamily?
Both work. Single family homes are often easier for beginners because sellers may be more flexible. Multifamily, however, provides stronger cash flow and economies of scale. Many investors start with single family and transition into multifamily as they build confidence and credibility.
**Why is $0 down investing so popular now?
With rising interest rates and tighter bank lending, creative financing has become a powerful tool for acquiring properties. It allows investors to bypass banks, structure flexible deals, and still grow their portfolios in a challenging 2025 market.
## Full Podcast Transcript Summary: Ep #111 – Pace Morby
### ────────────────────────────── Introduction and Welcome
**Rod Khleif**: Welcome to another edition of Life Time Cash Flow through Real Estate Investing. I’m Rod Khleif and I’m thrilled you’re here. Well, you guys have a big treat today. So I’ve got Pace Morby in the house. And if you don’t know who he is, then I don’t know what rock you’ve been living under. But he’s host of Ian’s most popular show, which is Triple Digit Flip in his third season.
**Rod Khleif**: He’s done thousands of real estate deals and he’s an expert in creative financing. And I’m going to kick his ass because we’re going to do the single family versus multifamily today. I love it. Welcome to the show, brother.
**Pace Morby**: Rod, you’ve been one of my heroes for a long time.
**Rod Khleif**: I appreciate you. Now, what a kind thing to say.
**Pace Morby**: I always looked up to you.
**Rod Khleif**: Think, that’s so kind of you to say that, brother. Well, so, you know, as most interviewers do in podcasts, we have you tell your story first. So why don’t we start there? For those of you, the few handful of people that don’t know…
### ────────────────────────────── Pace Morby’s Journey & Background
**Pace Morby**: No, of course. Yeah. Guys, I grew up in a family of 12 kids. I was not an immigrant wearing wood shoes like Rod was, but I grew up in a family of 12 kids, father obviously working two, maybe three jobs, depending on the time of the year. Well, yeah, Phoenix and Utah got… In, bouncing back and forth, back and forth. I watched my father as a contractor and I got into my twenties. And what do you think I became? I became a contractor, right? And I was a contractor for a long time. I worked for Opendoor, Offer, PAD, Zillow, all those big companies. I was Opendoor’s first contractor they ever hired.
**Pace Morby**: Well, so for those of you guys that know Opendoor massive iBuyer and they changed the game in a lot of ways, but I was their contractor so they came into Phoenix, Arizona. That was their test market. I was the first person they called because at the time I was actually doing a good job on social media. I was using Instagram and my best two employees were my two thumbs and they pulled up a hashtag. This was “Arizona Construction.” They were looking for Arizona contractors, and the name of my company was Easy Contracting, and they found me really easily. I went in their office and man alive. I was just by my company, blew up. We had 250 employees doing 20, $30 million a year in revenue with just the iBuyer.
**Pace Morby**: So I saw how the buyers were just gobbling up all these assets and I had a handful of other clients that were smaller clients and there was a client 11 years ago. Her name is Bethany Willis, and Bethany hired me to do all her flips and about 11 years ago she just yelled at me. She met me at one of her job sites. She yells at me, she’s like, “What the hell are you doing? Being a contractor? You’re making money for the other people; all the money is in owning the real estate.” And maybe two months after I met her, she showed me how to get my first deal. She made me spend money on marketing. She made me go on appointments. She taught me how to handle an appointment. And I got started in single family and within a couple of months of getting my first deal, I got my first deal made $25,000.
**Pace Morby**: I assigned a single family home to Bethany and she flipped it. And I thought, “This is amazing. I get a lead.” She taught me how to generate leads. I go to the house, I get the house under contract. She taught me how to do all that. I assigned the deal to Bethany and I’m thinking, “Rod, this is the funniest thing about this.” I thought I was in hog heaven because I was like, “Yeah, making 25 grand on the assignment was amazing, but I get to be her contractor on the flip.” I was so excited about being her contractor on the flip that I didn’t realize that I had just changed my entire life. And she stops and she goes, “You are forever fired. As my contractor, I just showed you how to do deals, you idiot. Why do you want to continue to be a contractor?” Wow. This woman was like a mother to me. She was amazing. And within two months I was doing creative finance deals because I had another woman. Her name is Eileen. She was my s-cross. Or she’d been doing creative finance deals for 41 years before I met her. And she was asking me, “Hey, I see you doing all these deals. It’s amazing. You’re opening up escrow on all these transactions. This is awesome. Where are all your leads coming from, and what do those leads look like?” And she asked me, “What am I doing with my leads that had no equity or the sellers wanted too much money?” And she taught me Subject-To. She taught me seller financing and man, I just gobbled up 41 years of information so quickly with her. And I basically have spent most of my ten-year career doing almost nothing but creative finance deals. So today I have 300 single family homes in the portfolio, all subject-to and seller finance deals, and we have 1,500 multifamily doors. Some are, we have two RV parks, two mobile home parks and the rest of them are mid-sized multifamily, B class, all seller finance, all subject-to.
**Rod Khleif**: The multifamily as well.
**Pace Morby**: Yep. All the multifamily too. You got to… I stuck with the lane. It just, you know, I’d done a bunch of bird deals just like I’m sure you’ve done a lot of bird deals and refinances and it’s such a massive pain in the ass. And when you see a good deal, you know, you’ll see an asset. For example, I saw a clip you were talking about recently, some guy talking about how he’s selling all his properties in Florida because the insurance is going through the roof. And you are like, “Dude, you’re an idiot.” I hope that’s what I said because he was an idiot.
### ────────────────────────────── Creative Financing Strategies
**Pace Morby**: Yeah, you very intelligently were like, “I will take anything I can get in Florida. The insurance is going to work itself out.” And so there have been times where I’ve seen good deals, but the interest rate just kills the ability to cash flow. And so that’s been my experience — a lot of times I’ll see a seller that’s in pain. They’ve got motivation, but the interest rate doesn’t match up with my ability to buy at the purchase price. So I just have gotten into a habit of just going directly to the seller and working on seller finance terms.
**Rod Khleif**: You know, I told you before we started recording, I’ve done a ton of subject-to myself.
**Pace Morby**: You know…
**Rod Khleif**: Not to your level probably, but at least 100, I think back in the day, maybe a couple.
**Pace Morby**: You’re in the top 1% of 1%. That, yeah, for sure.
**Rod Khleif**: Yeah, I did a lot and I’ve done a lot of seller finance deals as well. And you know, I think it’s an incredible strategy. In fact, you know, it’s one of the things I teach. If you’ve got an elderly seller that’s got a free and clear property, for example, and you don’t offer seller financing, you’re doing them a disservice. With taxes, if they’re fully depreciated on their property, they’re going to end up with $0.70 on the dollar at best when they’re done. And you can have a conversation with them, something like, “Mr. or Mrs. Seller, I’m going to give you enough of a down payment and I’m serious – I’m going to pay you three, four, five, six, seven percent interest. You’re going to get, you know, whatever it is at the bank, it’s less than that. And you’re only going to pay taxes on what you get every year from me.” So many times an elderly seller is going to be afraid of high-risk investments. Their money is just sitting in the bank, which, you know, may even have better rates than it did before. But when you do seller financing, you can double or triple the money they’d get monthly from the bank.
**Pace Morby**: And it’s on an asset that they already understand. They get it. They understand it. They’ve owned it for 20 years or what have you. Like the filter that we use when we go out, we’re buying primarily direct from the seller. And the challenge is that many of your students, I collaborate with a lot of your students as well, will do direct through a broker sometimes. But brokers just don’t understand creative finance, right? And so it’s like playing telephone — you’re calling the broker and asking the broker to educate the seller on tax implications when the broker never learned anything about tax implications. So I primarily go directly to the seller. We filter for 25 years of ownership or longer, and the property typically will also filter — they don’t even own the property in an LLC; they own it in their personal name.
**Rod Khleif**: That’s how long it’s been.
**Pace Morby**: How long it’s been. And they’ve owned the property. They’ve refinanced it a couple of times, just extracted the cash out of the deal. And so we call them up and we say, “Hey, we want to help you with a retirement plan. We want to upgrade you from the landlord to the lender.”
**Rod Khleif**: Nice.
**Pace Morby**: And we want to use this asset as the safest investment you’ve ever made. But remove your responsibility of dealing with the tenants, etc. And that’s what we do. We go directly to the seller — it’s about what taxes they care more about. If I can avoid the broker and all the crap that goes into selling these properties and, more importantly, I can avoid the capital gains tax without doing a 1031 exchange — because that’s the craziest thing — people are like, “Well, I’ll just do a 1031 exchange, like it’ll work out. Now they own another asset. They’re not retiring.”
**Rod Khleif**: Exactly. And by the way, he’s talking about the 1031 tax deferred exchange where you have to pay within a certain amount of time, identify the property you’re going to buy when you sell your property, and close on it within a certain period. That can create a sense of urgency and sometimes pressure you into paying too much for a property. Thank God they’ve brought back bonus depreciation, cost segregation, and so on. But, you know, I don’t like having that kind of pressure. And I love your script, by the way. That’s an awesome script you just shared for four owners.
**Rod Khleif**: And you do that with multifamily as well.
**Pace Morby**: Multifamily — you know it, work it. What’s great about multifamily, and you know this better than I do because you’ve been in the game longer than me, is the sellers are typically savvy with seller finance. A lot of times they acquired the asset with some form of financing, so they get it right. They’re usually business owners deploying capital for their own tax reasons. Whereas I would say with single family, I could argue that single family is actually more challenging to do subject-to and seller finance on because you’re educating a single family homeowner who might only own that one asset. So when you’re negotiating some sort of seller finance, it may go over their head. Whereas a 50-unit or larger owner — 95% of the time they know what seller finance is.
**Rod Khleif**: Sure, there’s no better financing than seller financing. There’s no credit report. If you have a challenged asset that’s not stabilized, you’re going to have a difficult time getting traditional financing. And there’s no better financing. You dictate the terms. I’ve done seller finance deals where I haven’t paid anything down; I’ve done deals where I made a payment for a year because the property was trashed and I told them, “We need to stabilize the property before I make payments to you.” And it was the truth. Now, another thing that’s big with retirees, retired sellers, is seller financing, right? They focus on the relationship first and the asset second because when people get older, they’re relationship-driven. And so, you know, don’t take advantage of them; instead, create a win-win situation, bond with them, and create fantastic deals. I’m sure you’ve done that.
**Pace Morby**: Yeah. I’ve got a guy named Mario in San Angelo, Texas. Three years ago, he was listed with a broker for a 43-unit multifamily — a good little base hit for most people. I know you’re going for much larger assets.
**Rod Khleif**: 43 is great.
**Pace Morby**: 43 is a good one. It’s good when you can now afford an on-site manager, which is nice. So we saw it listed for 3 million bucks and it was on the market for six months. The broker couldn’t get the number. So on month five, I called the broker and said, “Hey, looks like it’s been on the market for a while.” I might not be your best offer, but I want to let you know that I’m going to offer seller finance. Ninety percent of the time, the broker doesn’t even show the seller the seller finance offer because they don’t understand it — or they’re too embarrassed to say they don’t. So that deal would expire. We then called the seller directly — Mario — and that 43-unit deal was structured with zero down, 4% interest, with no balloon payment.
**Rod Khleif**: But why?
**Pace Morby**: Why would Mario do that? Now we’re in the process of buying his stock a second time with him because we’ve now owned it for two years. He’s seen payments come in for two years. We built the relationship, right? Not only is he selling us a second asset, but he’s also become our private money lender on other projects.
**Rod Khleif**: Well, because…
**Pace Morby**: He understands. The bond that you’re talking about.
### ────────────────────────────── Expanding to Multifamily & Managing Assets
**Rod Khleif**: So how do you do 50 years?
**Pace Morby**: It’s a great little story. So Mario is…
**Rod Khleif**: He’s a retiree, right? He’s in his 70. No.
**Pace Morby**: He was… How old would you say, Mario was? I think he was around 45.
**Rod Khleif**: 50. So young. Okay.
**Pace Morby**: Yeah, a younger guy. Here’s the story: My team calls him directly. “Hey, Mario, would you take seller finance?” He says, “Yes, I would, but I want to meet the person in person face-to-face if we’re going to work out a deal.” So I fly to Dallas, drive to San Angelo where the asset is, and we meet in the parking lot. He did not want to go toward the property because he had his kid inside the escalator. I was like, “It’s kind of weird. Why doesn’t your kid just go hang out on the playground and find out?” I couldn’t get anywhere with him. He wanted 20% down, which I never do on seller financed deals. He wanted 8% interest in a five-year blend. I’m like, “Mario, there’s nothing for me here. I could get a better deal at the bank and, more importantly, I could choose the asset if I went to the bank.” And he says, “Well, what?” Anyway, we couldn’t get anywhere. Then I noticed his kid still on the escalator even 45 minutes into the conversation. I said, “Tell your kid to go hang out on the playground.” He said, “I would, but my kid hates this property.” And then I saw a window of opportunity.
────────────────────────────── Sponsor Message Break
**Rod Khleif**: So we interrupt this episode with a quick word from our sponsor, CREE Capital. Now, if you’re an accredited investor, you definitely want to listen up. We’ve got a beautiful asset in San Antonio where we’re assuming 4.2% interest debt. That’s right, 4.2% interest debt, and it’s got seven years left on it. Now, this property was previously under contract for 26 million. That contract fell through, and we’re getting it for 20 million. We’re paying 100,000 a unit, and the property right next door to this one sold for 137,000 a unit—that’s almost a 40% discount. What’s super exciting is it’s approximately a mile away from another 296-unit complex we already own. We love this area. The units here are larger, all have fireplaces and washer-dryer hookups, and the property sits on a large beautiful lake. In fact, 38 of the units in this complex are lakefront. San Antonio is one of the best markets in the country to invest in right now. The conservative returns we’re projecting look fantastic. So if you’re accredited, either get on a call with our team or register on our portal and check out the webinar we did. You can visit capitaliconcrecapital.com or text the word PARTNER to 72345. Check it out—it is really something.
### ────────────────────────────── Additional Creative Financing & Investment Strategies
**Pace Morby**: Seven months ago, the reason I decided to put the property on the market with the broker was because it was my son’s birthday. My wife asked him, “What do you want for your 12th birthday?” His answer was, “I want my dad to love me as much as he loves his tenants.” So I worked out a deal with Mario and said, “What if I could tell you that when your son is 62, this asset that he hates today will result in you receiving a check for $11,000—the final payment on his 62nd birthday—as a symbol of your love? Every single month you’ll get a check for $11,000.”
**Rod Khleif**: That’s good.
**Pace Morby**: Bro, so good. And Eric came with me. For anyone who can’t see, my videographer Eric travels with me all over the country. This was roughly three years ago. We interviewed Mario, who ended up in tears because the solution was so powerful for him. He said, “I want to retire. I want to retire, but I can’t unless I do a 1031 exchange. And if I turn 31, I now have a bigger asset and a bigger problem.” And you know, most of these sellers are not big institutions with massive teams—they’re mom and pop guys replacing their own toilets and lightbulbs. And so for Mario, who was missing all his son’s games and was forced to drive up two or three times a week to his property, the deal was structured so he would make 4% on his money and continue to receive payments even past his death. He was so amazed that he even gave his son the promissory note for his birthday.
**Rod Khleif**: Brilliant, brother.
**Pace Morby**: Freaking cool.
**Rod Khleif**: As real estate investors, we are problem solvers. When you look at something creatively in our space—regardless of asset class—and put on your creative hat to come up with solutions, success is inevitable. That’s a brilliant solution.
### ────────────────────────────── Single Family Versus Multifamily Investing
**Pace Morby**: Seeing here in single family — which, you know, I have 3000 in my portfolio — I’ve probably done two or three thousand creative finance deals in single family. Now we’re focusing a lot more on RV parks and some fun asset classes at this point. In single family, you’re typically dealing with a subject-to seller; you’re taking over their existing payments.
**Rod Khleif**: Hold on one sec. So subject-to is when somebody got a mortgage and you step in and take over their mortgage. That’s basically it. You’re not assuming it—you’re buying it subject-to that debt. And a lot of people worry about a due-on-sale clause. I’ve never seen a mortgage company exercise a due-on-sale clause.
**Pace Morby**: I’ve had five — actually, I’ve seen ten total including my five — but I’ve never seen it cause real issues. The way you overcome the due-on-sale clause is really simple: you can use a land trust or even do a deed-back arrangement with a lease option.
**Rod Khleif**: Exactly. Usually I use a land trust. I had hundreds of them. Land trusts are great because they give you anonymity. And you know, we’re going a little deep on this, but subject-to is a great way to take over a property that might not have as much equity as you need.
**Pace Morby**: Right. I look at it and I think, “There are people that bought in 2007 before the market crashed. They had all this equity. The market was going up, then crashed. Those people, if they had just kept their assets, would have seen their tenants pay down the mortgage for 15 years.” Those guys with fixed rates look back and say, “Why did I do that?” Their existing mortgage, locked in at a low rate, would have allowed them to raise rents multiple times over the years. The real value in a subject-to deal is never really about the equity—it’s about acquiring a really low rate locked in and getting good cash flow. So if you want a single family home today, there are plenty of resources like LandWatch.com, where there are thousands of creative finance listings right now. That’s for single family, RV parks, gas stations—everything. And then there are expired listings. I go to an agent and ask, “Do you know how many expired listings happen every day?” In Maricopa County, where I’m at—Scottsdale area—it’s 40 a day. Forty real estate agents get fired every day because a house is on the market for six months. So we call the seller directly and say, “Hey, did anybody pitch you to just take over your payments?” And that’s how we get a lot of our duplexes and four-plexes. In fact, my camera guy Eric just sold me a four-plex, a duplex and another single family home. He found them on expired listings, assigned them to me, and I just bought them.
**Rod Khleif**: Foreclosures, too? I used to knock on doors of people in foreclosure every night for about 8 to 10 years—about 500 houses. That’s probably why I locked up a lot of subject-to deals back then.
**Pace Morby**: Yep. Anybody can do this. So expired listings are really good. The challenge is, you often have to go through an agent to get quality ones. So if you’re an agent or know an agent, get your expired listing lists. And then there are foreclosures — one of the greatest opportunities. Why did these sellers even try to sell on the market? Because they didn’t have any equity. You just take over their payments and save them from foreclosure.
### ────────────────────────────── Managing and Expanding Real Estate Assets
**Rod Khleif**: So in your single family portfolio, how do you manage long-distance?
**Pace Morby**: I have two traveling asset managers, and underneath those asset managers, we have a nationwide property management company. There’s a company called Mind Property Management, based in New York, and they’re one of the only three that operate in all 50 states. So we work with them along with our traveling asset managers. For example, one of my asset managers, Heidi Silva, is full time with me. What she does is, if we have a midterm rental or an Airbnb, she’ll set the property up, disconnect, and then move on to the next one. Right now, she’s living in Montana at my RV park that we just bought for $5 million seller-financed. She sets up, gets a manager in place, and then moves on. In my single family portfolio, about 80% is long-term rent — boring old stuff, which is the right way to go. I used to do 75 Airbnbs in Atlanta, Georgia, and now I have zero there. I converted them to midterm rentals because that gives you more stable cash flow without the constant turnover of furniture, dealing with “Karens” and other short-term rental headaches.
**Rod Khleif**: Right. My long-term tenants, especially in multifamily, just want to be left alone. With Airbnb you deal with constant issues.
────────────────────────────── The Single Family vs. Multifamily Debate
**Rod Khleif**: So back to creative financing for a minute. In the multifamily space, aside from subject-to and seller financing, what else comes to mind under the creative financing umbrella?
**Pace Morby**: There’s land contracts, contracts-for-deed, bond-for-deed, lease options — we call those executory contracts. For example, if I want to buy a large multifamily deal, say a 500-unit in Houston that already has existing debt, I use an executory contract. I sign over the warranty deed to myself through a title company and get title insurance, but I don’t record the deed at the county recorder’s office. That way, I control the asset and get all the tax benefits, depreciation, and appreciation without triggering the bank’s due-on-sale clause.
**Rod Khleif**: Have you ever done creative financing where the seller stays in the deal?
**Pace Morby**: Yes, I have. Sellers sometimes come in and say, “We’ll sell you the asset, but we want 10% of the back end when you go and sell it.” They don’t want any involvement in the management or cash flow; they just want a piece of the equity. That’s more common with multifamily, where sellers might have trouble raising capital.
**Rod Khleif**: And with the current market conditions — bridge debt, refinancing challenges — it’s causing some deals to be structured creatively. If you’re an accredited investor, remember our San Antonio deal: a 200-unit property a mile away from a 296-unit complex we already own, where we’re getting it at phenomenal numbers.
### ────────────────────────────── Mindset, Lessons & Conclusion
**Rod Khleif**: I like to tell my students that we are problem solvers. When you can look at something creatively in our space, regardless of asset class, and put on your creative hat to come up with solutions — success is inevitable.
**Pace Morby**: Exactly. It’s fun, man. This game — whether it’s the 2,000 houses you had before or dealing with failed deals — everything you do now, everything you did before, is a journey of self-discovery. It’s about how creative you can be, how many deep relationships you can create, how many skill sets you pick up, and ultimately, growing your courage muscle.
**Rod Khleif**: I’m not afraid of failure. I’ve built 27 businesses, some worth tens of millions of dollars, and yes, we fail our way to success. I got to meet some amazing people who remind me that every failure is just a stepping stone.
**Pace Morby**: Absolutely. I believe that even a small first deal — like 20 to 50 single family homes — can build your skills, relationships, and courage. Even though I eventually pivoted to multifamily, I learned so much from single family. Now, I sometimes joke that I might eventually have not a single family home in my portfolio.
**Rod Khleif**: It’s true. Single family has its challenges. A vacancy in a single family can wipe out months of cash flow, whereas in multifamily, one vacancy is less impactful. I learned that the logistics of managing 800 houses versus a few apartment complexes are worlds apart.
**Pace Morby**: Exactly. When things go south in single family, you’re left scrambling for contractors and dealing with maintenance issues that can drain your cash flow.
**Rod Khleif**: And that’s the difference. It’s all about the numbers, the asset class, and understanding where your cash flow really comes from. I even wrote a book on creating lifetime cash flow through multifamily investing.
**Pace Morby**: Could someone have convinced you at 20 houses to pivot to multifamily?
**Rod Khleif**: You know, I bought 2000 houses with a small team and had our own management company. It was simple, but eventually, I got lazy — and if I still owned those 500 houses in Denver, I’d be netting a million dollars a month. But then I met the love of my life and built an amazing compound. Life is about trade-offs, and every decision shapes who we become.
**Pace Morby**: Absolutely. And remember, it all comes down to building your skills, developing those relationships, and growing your courage to take that first step.
**Rod Khleif**: So, for anyone just starting out, don’t be afraid. Whether it’s a house, a duplex, or a small multifamily building, the key is to get started, learn from each deal, and let that momentum carry you forward.
**Pace Morby**: If you want to learn more about creative finance, check out our YouTube channel. I break down every deal, have my attorney on to discuss settlement statements, and answer questions via Instagram DMs. Just send me a voice memo with your question and I’ll get back to you.
**Rod Khleif**: And remember, mindset is everything. I spend a lot of time on psychology because 80 to 90% of success in anything is mindset. So, Pace, what drives you? What makes you jump out of bed every morning?
**Pace Morby**: At our level, we don’t worry about our own families anymore — we’ve built security. For me, it’s the daily texts from my team. For example, Shelley on my team texted me two weeks ago. Before this job, she was on track to be a lunch lady because she had so little self-worth. Now, a year later, she’s a transaction coordinator on many of our deals, and she’s owning her own real estate. That kind of impact — changing someone’s life — is what drives me. Guys like you and me have a responsibility to use our skills and talents to provide opportunities for those who don’t have them.
**Rod Khleif**: What a great answer. It’s a gift to get that kind of love and success. I’m blessed to feel it every day.
**Pace Morby**: It’s the emotional income — the helper’s heroin. Once you help somebody get a deal, you can’t stop.
**Rod Khleif**: Absolutely. Well, brother, it’s been amazing to catch up. For everyone listening, check out Pace Morby when you’re ready to start in single family, and trust me — as you grow, you’ll naturally progress to multifamily.
**Pace Morby**: And please, Rod, come hang out with our team sometime. Bring your team out and experience it for yourself.
**Rod Khleif**: It was great to see you, brother. Thank you, everyone. Appreciate it.
### ────────────────────────────── End of Transcript
*Disclaimer: This summary and transcript was written with the help of AI and reviewed by Rod’s team.*
**Podcast Categories:** Podcasts
---
### [The Beginner's Blueprint to Landing a 148 Unit Deal](https://rodkhleif.com/podcasts/multifamily-capital-raising-with-erin-frigo/)
**Published:** July 10, 2026
**Author:** Bryan Hoover
**Excerpt:** The Beginner's Blueprint to Landing a 148 Unit Deal
**Content:**
## How Multifamily Capital Raising Opened the Door to Bigger Real Estate Deals
Many aspiring real estate investors believe they need years of experience before participating in large apartment acquisitions. In this episode, **Erin Frigo** explains why that isn’t true. After transitioning from a career in acting during Hollywood’s industry shutdown, she discovered that multifamily investing offered a faster path toward financial freedom than relying solely on earned income. By focusing on **multifamily capital raising**, networking, and joining experienced operators, she was able to become part of a 148-unit apartment acquisition in Texas despite being relatively new to the industry.
Her story demonstrates that real estate investing is less about having decades of experience and more about surrounding yourself with the right people, continuously learning, and taking action before you feel completely ready.
## Why Multifamily Capital Raising Is a Powerful Entry Point
One of the biggest lessons Erin shares is that investors don’t necessarily need to find their own apartment deals to become a general partner. Instead, she explains how multifamily capital raising allows new investors to contribute meaningful value by helping experienced operators secure equity while also participating in asset management, investor relations, and other ownership responsibilities.
Rather than waiting years to become an expert, Erin focused on building relationships, attending conferences, networking consistently, and staying visible with experienced sponsors. Those efforts eventually created an opportunity to join a deal team after proving her commitment and professionalism over several months.
Some of the key takeaways include:
- Building relationships before asking for opportunities
- Vetting experienced operators before partnering
- Learning every role involved in apartment syndications
- Using capital raising as a path into larger multifamily investments
## From Limited Partner to General Partner
Before joining the general partnership on a large apartment acquisition, Erin intentionally invested as a limited partner to better understand the investor experience. This gave her valuable insight into how syndications operate while helping her become more confident speaking with future investors.
She explains that understanding both sides of a transaction made it much easier to transition into a more active ownership role. Rather than rushing into leadership, she viewed each investment as another step in learning the business from the inside out.
## Inside the 148 Unit Value Add Apartment Deal
The featured acquisition is a **148-unit Class B+ apartment community in Cypress, Texas**, just outside Houston. The property had been owned by the same owner since 1993 and had been exceptionally maintained but received very few interior upgrades over three decades, creating a significant value add opportunity.
The business plan includes improving both curb appeal and resident experience while increasing rental income through thoughtful renovations. Planned improvements include updated interiors, renovated common areas, improved exterior lighting, a new pickleball court, clubhouse renovations, roofing improvements, and a complete property rebrand. These enhancements are designed to support projected rent increases while making the community more attractive to current and future residents.
## The Importance of Community and Mentorship
Throughout the conversation, Erin repeatedly emphasizes that joining an experienced investing community dramatically accelerated her progress. Instead of trying to figure everything out alone, she leveraged mentors, educational resources, networking events, and accountability from other active investors.
Rod Khleif reinforces that multifamily investing is a team sport where relationships often matter just as much as technical knowledge. Being surrounded by investors actively buying apartments creates opportunities that are difficult to find independently, especially for newer investors looking to gain experience.
## Guest Bio
**Erin Frigo** is the founder of **Cash Flow Wealth Builder** and a multifamily real estate investor focused on apartment syndications and capital raising. After beginning her career as a professional actress in Los Angeles, she transitioned into real estate investing during the Hollywood industry slowdown. Erin has participated as both a limited partner and general partner in multifamily investments while helping investors build long-term wealth through apartment syndications, education, and relationship-driven investing.
If you want to hear the full conversation and detailed insights, watch the podcast video or read the complete transcript below.
## **What Is Multifamily Capital Raising?**
Multifamily capital raising is the process of securing investment funds from passive investors to finance the acquisition of apartment communities and other multifamily real estate. Capital raisers work alongside experienced operators to help fund deals while providing investors with opportunities to participate in professionally managed real estate investments.
## **Why Is Multifamily Capital Raising Important?**
Multifamily capital raising is essential because most apartment syndications require equity from multiple investors to complete acquisitions. Raising capital allows sponsors to purchase larger properties, diversify risk, and create investment opportunities that would be difficult for a single buyer to achieve alone.
## **How Does Multifamily Capital Raising Work?**
Multifamily capital raising typically begins when a sponsor identifies an apartment investment opportunity and determines how much equity is needed. Capital raisers educate potential investors about the opportunity, answer questions, and help qualified investors participate in the offering while following applicable securities regulations.
## **Who Can Become a Multifamily Capital Raiser?**
Anyone willing to build relationships, learn apartment syndication, and understand investor communication can become a multifamily capital raiser. Many successful capital raisers come from backgrounds outside of real estate, including business, healthcare, technology, sales, and entrepreneurship.
## **Do You Need Experience to Start Multifamily Capital Raising?**
Previous real estate experience is helpful but not required. Many new investors begin by partnering with experienced syndicators, learning the investment process, and contributing through investor relations, networking, and capital raising before taking on larger responsibilities.
## **How Do You Find Investors for Multifamily Capital Raising?**
Successful capital raisers build long term relationships through networking events, educational content, referrals, social media, professional organizations, and real estate communities. Consistently providing value and educating potential investors helps establish trust over time.
## **What Skills Are Most Important for Multifamily Capital Raising?**
The most valuable skills include relationship building, communication, networking, financial education, credibility, consistency, and the ability to clearly explain investment opportunities. Trust and transparency are often more important than sales experience.
## **What Is the Difference Between a Capital Raiser and a General Partner?**
A capital raiser focuses primarily on bringing qualified investors into a multifamily investment, while a general partner is responsible for managing the acquisition, financing, operations, and overall execution of the business plan. In many syndications, capital raisers also serve as members of the general partnership and contribute to investor relations, asset management, or other operational responsibilities.
## **What Are the Benefits of Multifamily Capital Raising?**
Multifamily capital raising allows investors to participate in larger apartment acquisitions, build strategic partnerships, expand their professional network, gain hands on syndication experience, and create multiple income opportunities while helping others invest in commercial real estate.
## **How Can Someone Get Started with Multifamily Capital Raising?**
The best way to get started is by learning the fundamentals of apartment syndication, building relationships with experienced operators, attending real estate networking events, joining educational communities, understanding securities compliance, and consistently growing a network of potential investors through trust and education.
00;00;00;03 – 00;00;20;17
Rod
Welcome back to Multifamily Rockstars. So as you guys know, on these episodes, we dive deep into our guests deals and really give you more practical and actionable items to get started. Really to do your first deal, especially if you’re brand new. It’s these these episodes are really good for that. And I’ve got my co-host, Mark Nagy, with me on what’s Up Mark going on?
00;00;20;17 – 00;00;29;15
Mark
Rod. Yes. I believe now, by the way, I was just counting earlier. I think we’ve done over 200 of these with our students at this point, which is pretty good. No kidding. Where we started.
00;00;29;17 – 00;00;46;11
Rod
No kidding. Wow, wow. That’s that’s that is crazy. Well, listen, we’ve got a we’ve got a real ball of fire on today. Her name’s Erin Frigo. She’s a warrior. She’s the owner of the Cash Flow Wealth Builder company, which is an awesome name. And, welcome to the show, Erin.
00;00;46;13 – 00;00;48;06
Erin
Thank you. Thanks, rod. Thanks, man.
00;00;48;07 – 00;00;57;04
Rod
Of course, of course. So why don’t you tell us your story, Aaron? Tell us why. Real estate. Where’d you come from? Let’s let’s let’s get into it.
00;00;57;07 – 00;01;16;19
Erin
Well, I live in Los Angeles now, but, I grew up in Wisconsin. I’m, from a small town in western town, several towns, a family of six kids, four brothers and a sister. And, grew up, with the Midwestern kind of thinking, and I think that kind of bleeds out into other states as well.
00;01;16;19 – 00;01;38;11
Erin
But, you know, you go to school, you get a job, you get married, you have kids. The picket fence, dog, 2.5 kids, whatever it is. And you work hard and then you, you know, eventually reap the benefits later on. I but somebody who didn’t really follow that. I’m the artist in the family. I have another brother who’s an artist, but, I’m an actress.
00;01;38;11 – 00;01;58;28
Erin
Actually, I, moved to Los Angeles to come out here to college to go to school for the arts and, I still am an actress. I work right here in my studio right now with the boring black background for self tapes. So, yeah, I came out here as an actress and, went through the same schooling that other kids, did my age.
00;01;59;00 – 00;02;28;00
Erin
When I was little, they left out, talking about finance, talking about, I guess investing. So I always looked at people, and knew that there was something better than just that, trajectory. And, I’m the one who flew the coop, came out here, followed my dreams. Last year, some of you may know there was a strike here in Hollywood.
00;02;28;02 – 00;02;48;12
Erin
And Hollywood here in Los Angeles is, like, the biggest, you know, the moneymaker for the city. There was a huge strike, after the pandemic, even, which was horrible for the, industry. And the writers were on strike, and we were on strike for, like, five months. And I saw a lot of people, starting to lose their, homes.
00;02;48;15 – 00;03;11;08
Erin
A lot of people in the industry, directors, set designers, actors, people having to dig into their children’s college education to pay rent. And during the pandemic, I also had a big sit down with myself, and I just look, I looked at my fourth rib eye. Eye. Every actor has to have a job that sustains them.
00;03;11;11 – 00;03;37;14
Erin
You could be, you could be somebody who is a temp worker. My friend’s a temp work. He could be a waitress. You could be whatever. I started I was going out with a guy at the time, and he’s like, hey, you should look into, becoming an educator. So I started subbing here in Los Angeles, and last I think it was maybe sometime during the pandemic, I looked at my 403B just to see what was in there.
00;03;37;17 – 00;03;56;14
Erin
And rod, Mark, when I tell you what I saw in there, it was, as my brother says, laughable. I’m like, wow. So if a person continues on this, this, this trajectory, you know, some, some 20, 30, 40 years down the line when you would need that, what are you going to do with that in Los Angeles? You know what I mean?
00;03;56;17 – 00;04;19;27
Erin
I mean, inflation is going to become more and the cost of living will be more the cost, as you say, you go shopping, rod, you were, you know, freaked out by the what groceries costs now think of what they’ll cost then. And I was like, what am I going to do with that? So I always wanted to get into, investing, although I didn’t know what because we weren’t taught that, we’re taught to be employees.
00;04;19;27 – 00;04;49;26
Erin
If you think about Robert Kiyosaki, he talks about the four quadrants. We’re taught to be employees, not employers. So I was I got employee down 1,000%. I’m the dutiful, employer employee, the hustler, the. I have more than one job kind of person. I know how to work for my money, but I was never taught how to have my money, have babies and work for me.
00;04;49;28 – 00;05;10;11
Erin
And, you know, like, more, Buffett says, you know, you don’t find a way to make money while you sleep. You know, you’re going to work until you die. So I got enrolled during the pandemic. I saw this female financial course and I was taking it, I bought it, started going through the modules, and then around that time, I thought I’d like to get into real estate.
00;05;10;13 – 00;05;31;00
Erin
You know, I looked up, I looked I follow a lot of millionaires online, right? Including you. And I look at what they do, I’m like, what are these? Real estate. I mean, these, millionaires doing these millionaire people. What? What do they have that I don’t have? Because if I keep going the same way, there’s a real there’s a real distinction between the haves and the have nots.
00;05;31;02 – 00;05;50;01
Erin
I said, what are they doing? And I studied some people in history, and I’m like, either they have real estate in their portfolio or all of it is you know, real estate in their portfolio. So I found this guy online and he was teaching about residential, real estate, on a smaller level. And I was thinking, cool.
00;05;50;04 – 00;06;08;26
Erin
So I started getting into that course and I was thinking, oh, you know, maybe I’ll find, you know, a duplex. And I’m like, no, why don’t you get a fourplex live in one and get checks on the other three? And I thought that was great. Well, in the meantime, I’m telling you, like, Instagram knows what you’re looking for.
00;06;08;29 – 00;06;37;16
Erin
The person that I met during my female course, the women’s course on finances, one of the people who came to our community call, which we had once a month, these two, these, two ladies, they came on and they ten months down the road became my, first mentors, the following year. And I got in a mentorship with them because I decided I’m going to go head on in, and it was exactly the same week last year in the middle of July when the strike started.
00;06;37;16 – 00;07;16;19
Erin
And Los Angeles, I didn’t do it because of the strike. It was just kind of coincidental. And, my mind was blown open. You know, rod and Mark, they say you don’t know what you don’t know and it’s not your fault. But once you do know, you can do better. So once I learned about, oh my gosh, real estate and these my, my mentor was, they mentioned you, they mentioned Tony Robbins, they mentioned so many people, that I really started to follow and, and, and look into and I was blown away because they talked about multifamily on a large scale.
00;07;16;22 – 00;07;40;23
Erin
So one of the things that I had to do first when I was getting into real estate is to multifamily. Real estate is change. My mindset. These people were doing $77 million deals. They’re doing huge deals. And they they teach you not to let the numbers freak you out. You know nothing wrong with doing small deals, but I learned from jump ten acts is easier than two acts.
00;07;40;29 – 00;07;50;00
Erin
And that’s a great book that they mentioned to me, which is, Dan Sullivan, which I’m listening to now. I’m reading that book. Ten x is easier than two x if you’re going to.
00;07;50;02 – 00;07;51;21
Rod
That’s that’s the name of a book.
00;07;51;24 – 00;07;52;28
Erin
Yes. Ten x.
00;07;52;28 – 00;08;00;13
Rod
Oh that’s interesting. I know Grant’s got a ten. The ten. Oh he’s ten. Exciting but okay. So I didn’t know Sullivan did one as well. Interesting. Okay.
00;08;00;13 – 00;08;03;18
Erin
He’s got three books. Yes. Who know?
00;08;03;20 – 00;08;09;11
Rod
Which is great. Yeah, I know his books are fantastic. I didn’t I wasn’t aware of that. That particular title though, but awesome.
00;08;09;13 – 00;08;26;29
Erin
Oh, yeah. Yes. It’s it’s excellent. So I learned just to, you know, go big or go home and don’t be afraid of the numbers. Because if you’re going to underwrite a deal for a small one, why not make it for a large one and, you know, bigger benefits and therefore quickening your time to what your goal is in real estate.
00;08;27;01 – 00;08;36;05
Rod
So talk about why you joined the warrior program, because that that, you know, you’re you’re you’re playing around with it already. What what. And you already in a program. Talk about that if you would.
00;08;36;07 – 00;08;58;25
Erin
Well yeah, sure. I was in the program. It was just a year long program. And, there was only me and one other girl, who, we partnered on a deal together, which I’ll share with you in a little bit. We we didn’t have community, and I took your April virtual Academy because I saw it on social media, and, it was great.
00;08;58;27 – 00;09;19;07
Erin
And I said to my partner, I said, you know, I said to her, I said, you know, at the end of our, our, our mentorship here, I’d really I’m really highly considering rods because, rod, you have not only the knowledge and I’m forever a learner. But also you had community and the other one did not have community.
00;09;19;09 – 00;09;40;16
Erin
And, one of the things that I learned in the other, mentorship is they they taught us, go out there. Do you know, real estate meetups, go to conference CES. I started going to conferences. I went to meet ups and one over here in Glendale, California, a couple of people that we would, network with afterwards kept saying, oh, they’re a warrior.
00;09;40;19 – 00;09;55;17
Erin
They’re a warrior. And I’m telling you, when I came into real estate, like you say, it’s like drinking through a water, through a fire hose. I was like, oh my gosh, look at these real estate meetups. I was around all these people who, unlike me, come from a real estate background. So a lot of things came in and went out.
00;09;55;19 – 00;10;13;05
Erin
Then I come next month to another real estate meetup and they’d say, oh, rod, you know, rod, Cliff and the Warriors. And I’m like, who is this dude? Like, who is this guy? So I went and I checked you out and I’m like, oh, it’s a program. It’s he’s he’s it’s a whole community. So that’s how I found out about you.
00;10;13;05 – 00;10;16;05
Erin
Then I started following you, listening to your podcast.
00;10;16;05 – 00;10;17;24
Rod
And it’s all downhill from there.
00;10;17;25 – 00;10;21;03
Erin
I got yeah, okay. Yeah. Ever. And so I.
00;10;21;03 – 00;10;34;22
Rod
Want to, I want, I want to flex I want to flag something for you. Just, just, just so I don’t forget, you know, you said something that I hope you guys are all hearing and that is that you’re a forever learner. Because honestly, if you’re not learning and growing, you’re dying. And I don’t care if it’s real estate.
00;10;34;22 – 00;10;49;28
Rod
I don’t care what it is. But you should be growing in every aspect of your life and then, you know, you talked about community as well. And it’s critical, especially in this multifamily space. It’s more who you know than what you know, in many cases. And so would you agree with me, Aaron?
00;10;50;00 – 00;11;11;02
Erin
Absolutely. I agree, and I love the fact that you say it’s a team sport because I’m somebody who’s so used to doing everything myself, right? Like, oh, kind of an overachiever, kind of a perfectionist at times, although I’ve gotten better. So I love the fact I’m now part of your community and teaming up with people that are all like minded and your group.
00;11;11;02 – 00;11;29;11
Erin
Right. I have to tell you, I went to Sarasota and I got to meet you and give you a big old hug, and I got to meet you. I got to come to, right before I went to Tony Robbins last month. I came to you three day, and everybody at your in your community is so kind, and they’re so they’re really giving.
00;11;29;14 – 00;11;35;16
Erin
We’re all on the same thing, going in the same direction and everybody helps everybody. I love that.
00;11;35;22 – 00;11;48;14
Rod
It’s kind of extraordinary. Isn’t it? I mean, it really is. Has gotten a life of its own. I mean, I don’t know how many, how many deals, how many doors my warriors have now it’s got to be pushing. I don’t even want to guess. Honestly, it’s.
00;11;48;14 – 00;11;50;04
Mark
Probably around a quarter million, I think.
00;11;50;04 – 00;12;04;21
Rod
Yeah, I think I think it’s I think it’s close to a quarter million. Yeah. It’s insane. It’s it’s as you know, but, Well, let’s let’s thank you for all those kind words. I didn’t I didn’t expect to hear all that. I didn’t realize that you had the suffer through meeting other warriors and in meet ups and everything else.
00;12;04;21 – 00;12;31;03
Rod
I. That makes me feel good. You know, it’s I don’t know how many warriors we’re at now, but it’s it’s, you know, they’re we’re all over the country. It’s it’s awesome. But let’s talk about that last deal you did. Okay, let’s let’s get into the specifics of that last deal you did. So describe where it is, and the role you played, because, I mean, I know what it is, but I want my listeners to hear, you know, because there’s, as you know, this is a team sport, like we said, and there’s lots of different hats you can wear.
00;12;31;07 – 00;12;35;17
Rod
So talk about the deal and then talk about the hat that you wore, if you would, please.
00;12;35;19 – 00;12;56;23
Erin
Sure, sure. I came into that deal from, being at a conference in February and was introduced to some great people. You know, they say deals are down in the hallway. So I was in the hallway and met these gentlemen, and I got a feeling for them. And I said to, the other girl in my class, I said, you know, I’d like to do a deal with them someday and maybe partner with them on something.
00;12;56;26 – 00;13;20;21
Erin
But then, of course, it wasn’t just a vibe, it wasn’t just a feel. I vetted them, check them out, checked out their track record. Fast forward from February 24th to, gosh, what was it, June of this year? They had a deal on the table and, our mentors, we were encouraged to go ahead and, you know, maybe reach out to them and see if we could, you know, keep or guys on the team.
00;13;20;23 – 00;13;45;26
Erin
And, they said, yes. And so we came on and we came on as, capital raisers and, yeah, it was, it’s just amazing. It’s a deal. It’s 100 and, 48 units in Cypress, Texas, just outside of Houston. It’s a class B plus. Our goal is to bring it up to an A.
00;13;45;28 – 00;13;46;15
Rod
00;13;46;17 – 00;14;18;25
Erin
Guys, it is one like I’ve never seen. It’s a 1993 first and only owner, so it’s a 100% value add, I guess. The guy. Yeah. Like, I still can’t believe it. The guy really kept it nice. He would keep it up, but he never did any rental, so there’s no renovation. So we’re just into it a few months, and, it’s going well, I think people I think it was at like 94% when we came on.
00;14;18;25 – 00;14;40;03
Erin
Now we’re up at 97% occupancy. So, I mean, he kept it occupied, but he just never he never he never poured, you know, tons of money into it. But it’s in great shape. Great population of people. Yeah. Really excited to be on board and all the things we’re doing to it. So yeah.
00;14;40;09 – 00;14;56;18
Mark
So I want to ask you about something specific there. You mentioned that, you know, you just reached out to them, ask them to coach GP and and took that opportunity. So many people that come to us that are listening to the podcast, they’re they’re brand new into real estate, have never done anything just like how you started. You kind of glossed over it there.
00;14;56;18 – 00;15;09;15
Mark
But what what kind of gave you the confidence to do that? How did you go from zero real estate to just co GP not 150 units. What what gave you the confidence to just step into that deal and take on that role. How did you do that?
00;15;09;17 – 00;15;33;26
Erin
That’s a great question. You know, a back up a second, one of my goals, I know rod always talks about, you know, when you’re starting in real estate, kind of learn the rungs of the ladder. So one of the things I wanted to learn was what’s it like to be a LP? So last year, a week a year ago on Sunday, I inked on a deal which was my first, LP, which is another deal.
00;15;33;26 – 00;15;36;22
Erin
And Melissa, Texas, we could talk about. Let me stop.
00;15;36;22 – 00;15;53;12
Rod
You for one second. So, so LP is a limited partner, and that means she invested in someone else’s deal, someone other operators deal. And, you know, obviously in this, the deal she was just talking about, she was the operator and she was bringing in investors, bringing in LP. So just if you’re brand new, I just want to clear that up.
00;15;53;12 – 00;15;54;16
Rod
Okay. Keep going.
00;15;54;19 – 00;16;04;07
Erin
Yes. Thank you. I wanted to know what it was like to be a limited partner. So I did that last year in December and, and that’s a BTR that we did. We could talk about that if you want.
00;16;04;13 – 00;16;05;25
Rod
So go to rent.
00;16;05;27 – 00;16;29;16
Erin
Build to rent. And my next goal was to either GP and something or GP. So an answer to your question mark. I wanted to kind of have a plan for myself. And how did I get the confidence? Well, you know, rod says break it to you. Make it. I like to say face to face, it to you make it.
00;16;29;18 – 00;16;31;11
Rod
Oh, I like that, I like it.
00;16;31;14 – 00;16;53;13
Erin
I had faith and, thought long and hard and prayed about it and, talked about it and got, you know, people. I leveraged people’s experience and my mentorship about it. And I had been following them online, kind of courting them, Mark and ride, courting them by following them on Instagram, asking, hey, do you have a meetup?
00;16;53;13 – 00;17;12;10
Erin
I’m willing to fly in to, Texas, to come to it. We both well, just to show them, like, hey, we’re here, we want to play ball. Commenting, reaching out to them. And then I kind of checked out their track record. How many deals have they done? How many have gone full circle? How many are they?
00;17;12;10 – 00;17;41;09
Erin
And now, what what’s their business plan? Business structure? What what kind of a, what what do they, bring to their deals? I guess community first dealt with that. I talked about it with the mentor I had at the time, and, they encouraged us. You know, you should, go ahead in, and maybe just see if you’re if they’re willing to, you know, bring you on as, like a GP or a GP, you could offer capital raising, bring in capital.
00;17;41;12 – 00;17;58;01
Rod
So we and by the way, let me interject. Let me interject one thing there real quick. So guys, this is very, very common when, when people are taken down a large deal that’s got, you know, like like for example, we raised $12 million on an asset in San Antonio a few months ago. And we brought and we had some Co GP’s.
00;17;58;01 – 00;18;10;16
Rod
They were all warriors, that that brought in anywhere from 500,000 to $2 million in capital. To that deal. And they get a slice of the deal. They’re called cogs. Please continue.
00;18;10;19 – 00;18;28;07
Erin
Yes. So, we reached out to them and of course, they remembered us, and they knew who I was because I’m pretty. I like to, be active on social. And, they agreed, and we came on as, capital raisers and, Yeah.
00;18;28;08 – 00;18;38;01
Rod
So, as you know, Aaron, and because you’re a warrior, you know very well that you can’t just raise capital for a deal. Tell us what else you’re doing on this particular, deal.
00;18;38;03 – 00;18;58;26
Erin
We are involved in the asset management call several times a month. Bring ideas to our team leads and, sometimes those get added into the mix of what we’re going to be doing with the property. Also to, working with investors and investor relations and anything else that they come up with. We are game because we’re there to learn.
00;18;58;29 – 00;19;10;03
Erin
Like I said, this is our this is my, second deal. And we came on not only to help raise capital, but also to learn so I can go into the the next deal.
00;19;10;05 – 00;19;28;20
Rod
Yeah, well, that’s how it works. That’s how it works. And and so talk about what you’re doing at this asset. I know I noticed from my notes here that you’re looking at $200 rent bumps per unit. Talk about the value add that you’re doing there. Describe what it is. If it hadn’t had anything done in 30 years, there’s plenty to do, I’m sure, because things are dated.
00;19;28;23 – 00;19;30;25
Rod
Yeah, yeah.
00;19;30;27 – 00;19;35;27
Erin
I’m really excited. It’s a complete rebrand. The owner.
00;19;35;28 – 00;19;39;11
Rod
So rebrand means they’re changing the name. Okay, continue.
00;19;39;11 – 00;19;57;10
Erin
Okay, a complete rebrand. We added lights. I told them it’s perfect timing because, you know, people are going to be Christmas shopping, so exterior lights around. The, the property itself, we’re doing, we’re adding a pickleball, a pickleball court. A lot of people, I guess everybody.
00;19;57;10 – 00;19;59;12
Mark
Still have pickleball.
00;19;59;14 – 00;20;17;02
Erin
I don’t I don’t think I’ve ever played it. I know I’ve never played it. Right now, what we’re doing during the low, leasing times, we are working on the clubhouse. We’re redoing the clubhouse, renovating that for sure. I believe we just finished on the roofs.
00;20;17;05 – 00;20;39;06
Rod
Okay. Let me stop you for one second. You know, guys, one of the first things that we do whenever we buy an asset is we look at it from the safety standpoint, which is why lighting is so critical now. And our case, very often we’ll do perimeter security fencing. Gate gate it if it’s not gated, certainly a camera system, but I just want to address that, you know, people want to feel safe wherever they’re living.
00;20;39;07 – 00;20;49;07
Rod
And, you know, if it’s a B class, it’s probably a pretty safe area as well. But just as an aside, question interior finishes. Are you doing anything there?
00;20;49;09 – 00;21;09;04
Erin
Yes, we are, definitely painting or, redoing. Cabinets, I believe, or redoing countertops, some flooring, all of that. Because, you know, as I mentioned, it hasn’t been it hasn’t been touched. I think it’s just been maintained, you know, for 30 years is actually one person in there that’s been there from day one.
00;21;09;07 – 00;21;29;21
Rod
Oh, yeah. You get that, you get that, you know, by the way, on countertops, you don’t always have to replace them. You can resurface them. That’s very, very common. And they look really nice when that’s done. But, you know, paint and flooring are very, very common fixtures, lighting fixtures, plumbing fixtures are very common. Back splashes in the kitchen are common.
00;21;29;23 – 00;21;46;28
Rod
You know, maybe new vanities in the bathrooms, things of that nature, new new mirrors. These are all, you know, the kinds of things you’re going to see very typically done on interiors. By the way, guys, obviously this is the sort of stuff that we teach in the warrior program at our boot camps and in our coaching and everything else.
00;21;46;28 – 00;22;01;27
Rod
And if you have an interest in applying to our warrior program, text the word crush to seven, two, three, 4 or 5. And and, you know, we look you over, you look us over. And if it’s a fit, fantastic. Even if it’s not, you’ll leave that call better than when you got on it. That I can promise you.
00;22;01;27 – 00;22;06;08
Rod
But, again, text the word crush to inquire into our warrior program.
00;22;06;11 – 00;22;18;28
Mark
Two final things here. Number one, Aaron, I see on here you have a few different places where people can reach you. What? What would be the best social media channel for someone to reach out to you if they want to talk and get your expertise or work with you?
00;22;19;01 – 00;22;37;29
Erin
Sure, sure. You can reach me at, my website is Cash Flow Wealth builder.com. My YouTube is cash flow Wealth Builders with an S, and my Instagram is the same. Also YouTube. YouTube, Instagram, Facebook. I’m on all three of them. Four of them, I’m sure.
00;22;38;02 – 00;22;39;23
Mark
Fact is, if.
00;22;39;26 – 00;22;41;14
Erin
I follow Wealth Builder.
00;22;41;16 – 00;22;46;29
Rod
That’s such a great name, man. I can’t believe you got that. That’s fantastic. Customer. Cash flow, wealth builder, ecommerce.
00;22;47;06 – 00;23;03;01
Mark
Lastly, obviously you jumped right into big deals right out of the gate. Now, for new people that are listening to it again that are brand new, what would you recommend? Would you recommend people overcome their fear? Jump right into big deals? If you could go back and do it again, would you start smaller? Is it depended on the person?
00;23;03;01 – 00;23;06;02
Mark
What? What would be your last piece of advice for people that are brand new?
00;23;06;02 – 00;23;09;09
Rod
I actually have one more, but I do. I want that question. Answer first.
00;23;09;09 – 00;23;35;05
Erin
Okay. Yes. Thank you Mark, that’s such a great question and I’m so glad you asked that. I would have to say to people that are new and starting, in real estate or getting into multifamily, I’m new to real estate and multifamily. What I have to say is don’t wait. You know, I think Will Rogers was saying don’t wait to get into real estate, but get into real estate and wait.
00;23;35;07 – 00;23;56;23
Erin
That LP that I did last year, I inked on it a year ago today, and I am one year into that, you know what I mean? You know, they say like the time is going to pass anyway. So what are you going to do with that time? There’s a lot of people that sit on the outside. If you don’t jump in, if you don’t jump in and do something that will change your life.
00;23;56;26 – 00;24;19;23
Erin
I can honestly say in the last 18 months, the smartest thing that I have done is get involved in real estate. And it’s I’m so glad that it was multifamily. A mentor like ride can really increase or speed up your progress, and instead of going, a lot of people are just like, I’m going to read books for about five years and I’m just going to go to, you know, meet ups and just this will be your plane.
00;24;19;27 – 00;24;39;14
Erin
But going to somebody like Rod Cleef and I’m not just saying this, but getting a mentor can make your can make you lift up, you know like how helicopters lift off like this. They go up. It can take you from 0 to 100. And that’s what I did with bigger properties. My mentors and people like rod have taught me to go just think big.
00;24;39;16 – 00;24;56;28
Erin
I could have started small and I could have let my mindset. I don’t know about real estate. And honestly, Mark and rod, when I went to, meet up rod, I noticed a lot of people are like engineers or lenders or they’ve had their real estate license for all these years. And I’m like, am I in the right place?
00;24;56;28 – 00;25;16;05
Erin
And I’m like, you, Sharon, hell, are were you not to be here? And people, I really want to encourage people. I want to be of service to people in this industry and in this group, especially people who are new to real estate and think like, who am I? I don’t know anything. I don’t have anything to offer. Yes, you do.
00;25;16;08 – 00;25;30;20
Rod
And I could see how you could think that as an actor, you know, you’re a man. I’m an actor and I’m around real estate professionals that are doing this. You could have, you know, you have imposter syndrome. And, you know, I get it. And it’s so common. And I’m so glad that that you brought that up. And there’s a reason.
00;25;30;20 – 00;25;47;09
Rod
There’s a reason the Warriors are so freaking successful in its mindset. The bottom line is it’s not IQ, it’s not money. It’s not education. It’s nothing. But they just go freakin do it. And and it’s and it’s the mindset that causes them to do it. Aaron I really appreciate you coming on the show. You’ve added such tremendous value.
00;25;47;09 – 00;26;03;28
Rod
It’s great to see you again. And you know, I didn’t know you were an actor. I have to confess, I, I’d forgotten if you told me. Forgive me, but but you know, you you, just, such a great communicator. And I can see now why and, you know, I’m just. I’m dying. I’m dying to see where you’re at.
00;26;03;28 – 00;26;06;23
Rod
A year or two from now, it’s going to be exponential. I know.
00;26;06;26 – 00;26;28;07
Erin
Thank you. You know, and. Right. You know, I listen to Earl Nightingale a lot. He’s great. I’m real big. Earl Nightingale and Albert Einstein says, if you want change and you keep going about things the same way, but expect a different result, that’s complete insanity. So I, I kind of made a pivot last year during the strike, and I came into real estate.
00;26;28;09 – 00;26;49;13
Rod
Well, it took a lot of courage. I got to tell you, it took a lot of courage to go from acting to real estate and, but, and, you know, I can tell you, very impressive. And, just we’re blessed to have you in the, in the warrior program. So, you know, keep doing what you’re doing, Aaron, and make sure you’re back on in the next year or so, so you can tell us what you’ve done between now and then.
00;26;49;15 – 00;26;51;07
Rod
You take care. All right.
00;26;51;10 – 00;26;52;13
Mark
Guys, thanks.
**Podcast Categories:** Multifamily Rock Stars, Podcasts
---
### [What Is The Warrior Group?](https://rodkhleif.com/podcasts/rod-being-interviewed-about-the-warrior-program/)
**Published:** June 30, 2023
**Author:** Bryan Hoover
**Excerpt:** What Is The Warrior Group?
**Content:**
The Warrior Program is Rod Khleif’s elite multifamily mentorship community. It is built for investors who are serious about doing deals. It is not just for learning about them. Warriors are paired with an active operator-coach. They get group and high-performance coaching calls. They also get live events and a private network of 1,800+ investors. Together, they own 300,000+ units across the country.
This isn’t a course. It’s a deal-doing community where most of the deals Warriors close are done *with other Warriors*.
### –>>Want to learn more about the Warrior Program??? [CLICK HERE](https://rodkhleif.com/rod-khleif-warrior-program/)
## What’s Included in the Warrior Program
**Unlimited 1:1 Coaching** All coaches are highly successful warriors with tons of real experience. Unlimited coaching means you’ve always got access to help.
**Bi-Weekly Group Q&A Calls + Networking Breakouts** Live calls with Rod and the team, plus structured breakout sessions so you can speed-meet other Warriors, find partners, and build relationships that turn into deals.
**Monthly High-Performance Coaching** Rod spent 20 years studying under Tony Robbins and is a certified high-performance coach. These calls go beyond real estate. They cover mindset, productivity, relationships, and the psychology behind success. For most people, 80–90% of success comes from what’s between your ears.
**The Warrior Community (1,000+ Members)** A private, vetted network of investors across every city in the country. Warriors post deals, ask questions, and get responses within minutes. When someone closes their first deal, the whole community shows up. This is the most cited reason Warriors say the program changed their lives.
**Warrior-Only Live Events** Exclusive multi-day events held throughout the year where Warriors connect in person, share deals, and build the partnerships that move the needle fastest.
**All Tools, Underwriting Spreadsheets & Templates** Everything you need to analyze deals from day one, including the same underwriting platform Rod’s personal acquisition team uses.
**The Warrior Sword! First Deal Milestone** Close your first deal and you become a Warrior of the Sword. A real sword shows up at your door. It’s a tradition, and it matters, because the data shows that once a Warrior closes their first deal, the next ones follow fast.
---
## WHO IS THE WARRIOR PROGRAM FOR
The Warrior Program is not for everyone. Rod personally protects the culture of the group; ego and narcissism are deal-breakers for admission. The Warriors who thrive are:
- **Busy professionals** doing this on the side alongside a W-2 job and a family
- **Aspiring syndicators** who want to raise capital and do their first apartment deal
- **Experienced investors** ready to scale faster with a proven network behind them
- **People who want to build wealth with purpose** many Warriors give back often. It shows in our community culture
You don’t need multifamily experience to join. You need the right mindset and the willingness to take action.
---
## [**Apply to the Warrior Program →**](https://rodkhleif.com/rod-khleif-warrior-program/)
OR
Text **CRUSH** to **72345** to start the conversation.
---
## ROD KHLEIF’S WARRIOR PROGRAM FAQ SECTION
**What is the Rod Khleif Warrior Program?** The Warrior Program is Rod Khleif’s multifamily mentorship community. Members are paired with an active operator-coach. They get group coaching calls and high-performance coaching. They can join live events. They also get access to a private investor network of 1,800+ Warriors. Together, they own 3900,000+ units.
**Who is the Warrior Program designed for?** The program is for people serious about building a multifamily real estate business, whether they are new. It also fits busy professionals doing this on the side. It is also for experienced investors who want to scale. Prior multifamily experience is not required.
**How do I apply to the Warrior Program?** Text the word **CRUSH** to **72345** . You’ll be connected with Rod’s team to see if the program is the right fit. There’s no pressure, if it’s not the right time, they’ll point you in the right direction regardless.
**What kind of results have Warriors achieved?** Warriors collectively own over 300,000 units across the country. The community includes single moms who built portfolios of over 1,000 units. It also includes professionals who replaced their W-2 income. It includes first-time investors who closed their first deal within months of joining.
**What makes the Warrior Program different from other real estate coaching programs?** Three things: The coaches are active operators, not professional coaches. Most Warrior deals are with other Warriors, not outside the network. The program also includes mindset coaching with real estate training. Rod believes 80–90% of success is psychology, not just tactics.
The Warrior program offers mentorship.It also provides a supportive community.It is for people who want to build a strong multifamily real estate business. Whether you want financial freedom or want to learn more about multifamily investing, Rod’s Warrior Program can help. It offers the inspiration and guidance you need to reach your goals. It also helps you build lasting wealth for you and your family.
## Here’s some of the topics we covered in this Episode:
- Rod’s Reason For Starting The Warrior Program
- Why Most Of The Deals Warriors Do Are With Other Warriors
- How To Get A Team With No Experience
- Rod’s Communication With Warriors
- The Warrior Community and How They Help Lift Each Other Up
- The Barometer For Success In The Warrior Program
- The Kind Of People That Get Accepted Into The Warrior Program
To Apply for The Warrior Program: Text CRUSH to 72345 and we’ll help you crush it in this business.
**Full Transcript Below**
Intro
Hi, my name is Rod Khleif, and I’m the host of “The Lifetime Cashflow Through Real Estate Investing” podcast. And every week, I interview Multifamily Rock Stars and we talk about how they build 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.
Mark
Hey, guys. Welcome back to Multifamily Rock Stars. This is a little bit of an unusual interview and the fact that Rod isn’t doing the interview here. I am. I’m obviously Mark. I run the Massive Action Team for Rod here. And Rod is the one being interviewed today. The reason we’re doing this is a question I get so often. People listen to the podcast, they love it, and they hear people having success in the Warrior program. And I get asked all the time, Rod, what is the Warrior Program? What’s it about? How can it help me? And this is kind of what this podcast is today. It’s really for the people that have been thinking about joining a community you know, so they don’t have to build the business on their own or maybe getting a mentor and skipping the trial and error part. Or maybe they just like you. They like you, they like your story and they just need a little bit more info on maybe how you can help them before they reach out to my team. And so that’s the point of the podcast here today.
Rod
All right, well, let’s have some fun.
Mark
Yeah. Well, you know, we always start with the story. You’re asking them. I want to start same with you, Rod. Why did you create the Warrior program? Why do you mentor people? You’re obviously financially well off. Why do you still do this today?
Rod
Well, it’s funny. You know, you want to make God laugh, you tell him your plans, right? So I started my podcast because many of you know my story. I lost $50 million in 2008 and ’09. And I just wanted to share my story really about the fact that you know, it was my single-family that caused me to crash and burn. My multifamily did just fine through the crash. If I hadn’t cross-collateralized my multifamily with packages of houses, I’d still own those apartment complexes. So I wanted to get that message out there that if you’re going to buy and hold real estate, for God’s sakes, do multifamily, don’t do single-family. You know, look at me as a poster child for that. And, you know, early on in the podcast– you know, that was the main reason. But then the secondary reason is I knew I was going to get back into real estate and I hate asking for money. And I thought, you know what, it’ll be a great vehicle for me to talk about deals if I find one and raise equity for deals. And so early on the podcast, I used to say, if you listen to early episodes, I say I’ll never sell you anything. I just want to add value. And that was the truth at the time. I’d really never planned to. And then you know, I hit a million downloads. I’m like, all right, buddy, you probably got to do something with this. So I wrote my number one best-selling book, “How to Create Lifetime Cashflow Through Multifamily Properties”. Because, you know, what I was doing was I was taking free phone calls from my listeners, and they were always asking me, do you have a course? Do you have a book? Do you have something that I can move forward? Because I would do these free 30-minute phone calls, and I had hundreds of them. I’m not exaggerating. I said, just call me. I mean, let’s have a call. I’ll help you in any way that I can. It doesn’t matter what the topic is. And I really enjoyed them. And they kept asking me for stuff. And so I’m like, finally, you know, I wrote this book and I gave away 20,000 copies of this book. I still give this book away for free. You can go to “RodsLinks.com” and get it for free. Just pay for the shipping. It’s like six, seven bucks or something. But finally, it got to the point where I really needed to do something. And now I lie. I’m a liar because I sell everything. You know, I’ve got courses, coaching, and everything else, but I never planned to. That’s the thing. I really just wanted to add value. And that’s still how we operate our company. We try to add absolutely as much value as we possibly can. And so I started taking– I created a course, and I can humbly say it’s the best multifamily course out there, bar none. If anybody wants to argue with me, I’d love to have that debate, but it’s fantastic. It’s extraordinary. And at first, I didn’t do coaching, but then I decided to go ahead and start doing some coaching. And it was just me. And then, you know, I brought in super successful operators to do the coaching. And now, you know, pretty much most of our coaches are Warriors, and our coaches are not professional coaches. They are people that own hundreds or thousands of units. And, you know, many of them can only take one, two, three students. And we facilitate that. And, you know, it’s just turned into this incredible ecosystem. I think right now, our students own upwards of 300,000 units that we know of. We’re doing a count and we’re over 300,000. I really think we’ll exceed 170. You know, it’s very, very exciting. And, you know, people, when they talk about the program, the biggest thing they talk about is the community.
Mark
It’s funny, you mentioned the free calls you used to do. Every once in a while, I’ll get somebody on the phone who says, oh, yeah, I did one of those free calls with Rod, six years ago, and I never did anything with it.
Rod
No kidding. That’s funny.
Mark
Every once in a while. Yeah, it’s pretty rare.
Rod
That’s awesome.
Mark
Now you’re obviously just under six years later, that many doors. Most of them that I see in the group, obviously, are done between Warriors. I think there’s just a trust level there. But why do you think so many Warriors do work together on deals instead of going outside the network?
Rod
Sure. No, good question. Actually, you know, you’ve heard me say it– if you listen to this podcast at all, you’ve heard me say this is a team sport. It’s absolutely a team sport. Yeah, it’s not something you do on your own. You don’t buy 1, 2, 3, 10, 20, 30, 40 million dollars properties on your own for the most part. It’s done with other people, with partners. And, you know, that community breeds that interaction. We, in fact– you know, it’s interesting. We discovered, I don’t know, three and a half, four years ago, that our most successful Warriors, by far, are the ones that are the most connected in the Warrior community. So we started doing things to help facilitate those connections. You know, when you join, you’ll get a list of all the Warriors in the state that you live in, and then you can connect with them in our closed Facebook group and have lunch and dinner and people post all the time when they meet each other online. It’s just an incredibly supportive environment in that regard. And then, you know, we also have breakouts after our Q&A calls every other week where you can speed date and randomly meet Warriors. And then, you know, we have our Warrior-only events. And this is all stuff we did over the years that we added as we started seeing that this was really helping, you know because these connections inside the community are just absolutely freaking critical. And so we have our Warrior-only events. We’ve got one coming up in November in Phoenix. Up to this point, I was doing them all in Sarasota because I’m like, I buy you fly. But I’ve decided to do some for the West Coast peeps. So we’re doing one in Phoenix in November.
Mark
Thank you.
Rod
You’re welcome.
Mark
Yes.
Rod
And of course, you know, our coaching students are able to come to our events for free. The boot camps, we’ve got our big boot camp coming up in September. It should be about 1,000 people there. And there’ll be several hundred Warriors there as well. And so, you know, again, we do everything to facilitate those connections because we’ve discovered that it really is about what you– sorry, it really is about who you know, not what you know in this business. You know, yes, the course is important, the training is important, the boot camp is important. But what’s more important is who you know, the connections you make. Because, you know, most people get into this business by aligning with someone that’s already done it and, you know, called a sponsor. That’s the technical term for it. Somebody that’s got some doors, that maybe has some experience, that possibly has the net worth and liquidity requirements that a person needs to buy a property. And of course, we’ve got dozens and dozens and dozens of those in our Warrior community. So it makes it so much easier for somebody to get started, you know, to connect with a group.
Mark
So this is a perfect segue because another maybe top five questions I get all the time because most Warriors– maybe one or– outside of one or 2%, almost all the Warriors that joined have not done any multifamily experience. The question I get is, okay, I’m coming into this group potentially, all these people have all this experience, etc. How do I add value to team up with these people and do my first deal, why would these people want to work with me? What do you see?
Rod
Yeah. No, that’s actually a great question, and we get it a lot like you said. And really, I would say the top two ways to get enamored by a team is to either bring a deal or to raise money and bring money. Those are the top two for sure. But there are other things you can do as well. If you are super analytical and you’re great at underwriting, that is a huge plus for a team. And of course, our students all get our incredible underwriting platform, our spreadsheet that we use to underwrite deals. It’s just extraordinary. One of my team members on my personal acquisition team built it, Craig, and he’s phenomenal. You know, so if you underwrite deals, that’s a value add as well. And I’ve got super introverted Warriors that are very successful that you know, were very, very tentative and introverted, but great at underwriting. They now have literally thousands of units because they connected with other people and added value and boom, they’re off to the races. And then, you know, there’s also the asset management piece. It’s the project management, maybe construction experience, project management experience, management experience in general, because you buy these assets and you don’t throw your hands up and say, my work here is done. You’re going to manage that thing. You’re going to manage the property management companies for several years. And that’s a big piece. And so if you’ve got some experience there, you can bring that to a team. So there are lots of different hats that a person can wear. Of course, the number one is bringing money and bringing deals, but, you know, we teach you how to do all of that.
Mark
Now, that’s the technical side. Obviously, there is a personality and mindset side to this, which is super, super important. My two cents, I think that’s a big part of why people work with each other in the group as well because they’re very like-minded.
Rod
Sure.
Mark
How would you describe the culture of the group, the community? You know, what’s the mindset? And how do you protect that at this point?
Rod
Well, if you ever go to my website and go to the Warrior Win page, you will see tons of testimonials and interviews that we’ve had here on Rockstar’s episodes, and everybody raves about the community. And honestly, part of my job now is not just to, you know, bring more Warriors in, surely, but it’s really to protect what we’ve got. And, you know, we don’t allow any big egos in there because it’s become such a supportive environment. I mean, it’s extraordinary, candidly. You know, when somebody posts a deal that they’ve closed on, which is almost daily now, everybody jumps in and they get tons of congratulations. If somebody needs help with something, they post a question and within minutes there are people responding. I mean, it’s like that analogy, a rising tide lifts all ships. Okay? And that’s really what it is. Everybody is elevated inside the group because it’s so supportive and helpful. And I’ll tell you, the culture is very giving. Literally about a week ago, which I’m about to post in the Warrior group myself because he would never do it. But we’ve got a gentleman in the group that’s very successful and he has been building schools in India. And he sent me pictures of what he’s built and I’m going to post it and put him on the spot. So I remember at our Denver boot camp, we did what’s called a Hall of Fame for our Warriors. And we just picked ten exemplary Warriors. And it wasn’t based on how many doors they had. It was just based on a lot of things like, you know, do they help other people in the group? Certainly some success with how many units they have. And we picked ten. And, you know, we did a PowerPoint for each one of them. We asked them some questions and we discovered that every single one of them does something charitable. You know, like building schools in India, like, you know, sexual trafficking, raising funds for that, veterans’ homelessness, veteran suicide, just some really important causes. And every one of them did something. And it was just extraordinary to see that. I remember pointing that out to the 900 or 1,000 people there. I’m like, hey, that’s what we call a clue, guys. And that’s really the environment we’ve created is people helping each other succeed. You know, it’s so important that you are in a group of people that aren’t going to negate your dreams and or make fun of you or try to hold you back out of their own fear or their own limiting beliefs. So you need to be in a group– if you’re not going to join the Warriors, that’s fine. But you need to be in a group of people that will support you, praise you, validate you, push you, hold you accountable. And that’s what this group is, because you know, there are so many naysayers out there that will, out of their fear, like I said, they’ll destroy your dreams if you allow them. Your environment is so freaking important. You know, a lot of people default to a group of people that they went to school with for their peers, the people they, you know, work with. And sometimes those aren’t the best people. And sometimes it’s family as well. So you got to be really careful who you allow to influence you. And that’s what makes a group like this so extraordinary. Now, this one is off the chain extraordinary. But, you know, again, you could absolutely do this on your own as well. But you’ve got to get in a group like that where everybody’s rowing in the same direction. They want the same thing. They’re going to be encouraged by your success rather than feel rejected or humiliated or embarrassed or, you know, just negate it because of their own crap going on in their heads.
Mark
And by the way, that’s a part of the group. You know, I’ve been a part of coaching programs, and there are other real estate coaching programs out there. They’re all going to teach you multifamily. You say this all the time, right?
Rod
Right.
Mark
There is no magical secret sauce to it. But part of what we do is that high-performance coaching.
Rod
Well, you guys all know I’m into mindset and psychology. My God, I spent 20 years following Tony Robbins around the planet, worked with him for a while. And that’s my whole shtick because 80 to 90% of your success is mindset and psychology. So I became a certified high-performance coach several years ago because I wanted to add that component to my coaching program because, to me, it’s more important than the technical knowledge, frankly. Okay? And in that high-performance part, we go through things like your courage to take action because obviously there are more zeros on these deals. Your ability to influence people because this business is a team sport, you got to influence. And even things like your productivity, your ability to systemize this and actually turn it into a business so you’re not killing yourself. But even soft skills like your relationships with your children, with your spouse, you know, your mission and purpose in life, stuff that’s bigger than the real estate, but also foundational to the real estate because it affects everything. And so we have these high performances– you know, I’ve got a certified high-performance coach that’s a freaking rock star that helps me with this. But we have our high-performance coaching calls and they’re awesome. People rave about them. And so every month there’s those, in addition to, of course, all the other real estate– you know, the multitude of real estate coaching calls that we have. But that’s a big piece of, I believe, why our students are so freaking successful is because we push that content that’s so absolutely critical to success, that looking in the mirror, focusing on becoming, in my case, say, a better father, a better husband, a better entrepreneur, a better business person, but really, frankly, a better human being. And so that’s the stuff we do there. And I think it’s just incredibly powerful. One other thing I want to mention is every single one of my Warriors has my cell number. I talk to Warriors every single day. I’m very accessible. I take this very, very seriously. I take my Warrior’s success very seriously. And I only have one phone. Okay? It’s got two numbers on it because I had to get a second number with Hurricane Ian because I didn’t have any signal here. But I only have one phone and every Warrior has my number. So, you know, it’s not like some guru thing where I’m up on some white you know, throne somewhere. I take this very seriously and I take the success and honestly, the protection of my Warriors very, very seriously.
Mark
Now, to get into the details a little bit more. There are some people I know–I’ve been this person before that I know you always talk about text “crush”, “72345”. You’re interested in applying for the Warrior program. Maybe that’s in the back of someone’s mind, but they’re a little nervous, they’re a little scared, they’re not quite ready to take that step. You know, they’re a little bit more information gatherers. What are some of the other, I guess, pieces of the Warrior group that you can kind of give away, just some little golden nuggets here \[inaudible\]
Rod
Sure. Well, I’ll tell you, there’s, of course– it’s a lot. But let me simplify it. We partner you with a coach, and we don’t have professional coaches like everybody else does. Our coaches are operators. They’re people that have done, in most cases, more than 1,000 units. In some cases, 600, or 700 units. But they’re all freaking rock stars. And they can all only take maybe one to four students a piece because they’re just doing this because they want to give back. Okay? And that’s really the bottom line. And they’re extraordinary. We have about 30 coaches or so. And so, you know, you’re paired with a coach, an awesome coach. Of course, there are a lot of other coaching calls as well, group calls and things like that. I won’t get into too much detail there, but there’s a ton, I mean, more than you can handle. Okay? And then, you know, you get put into our entire– and of course, the high-performance calls, like we just said, those coaching calls, and those are very intimate, those. And then, you know, you get put into our entire community. You get access to, you know, literally over 1,000 people around the country. We have people in literally every city in the country. And then you get all– of course– so that group is just incredible. We’ve talked about that. It’s just extraordinary, the group itself. But then you get all the tools and tons of tools and resources, everything you could possibly– more than you can imagine. Let me just put it that way. You get all of that. And of course, you get a complete action plan, so you know what to do. Step one, step two, step three. You know, it’s just extraordinary. The program itself is extraordinary, which is why the results are so extraordinary. And I’ll tell you, I’m so freaking proud of it. I have to tell you, besides my kids and my wife, I don’t think I’m more proud of anything, which is you know, what we’ve accomplished with this Warrior program and continue to accomplish.
Mark
And before this call, you mentioned a couple of things that have really, really changed people’s lives specifically. Obviously, there are lots of people retiring, quitting high-paying jobs, but you touched on a couple of things. Could you share a couple of success stories so people can connect the dots here of how real estate actually gets them to their goals?
Rod
Yeah. So I could certainly talk about the extraordinary students that have thousands and thousands of units retired from very high-paying jobs because their income has just eclipsed their W-2 income. But you know what I think I’d rather talk about is the ones that didn’t have a lot that succeeded, the ones that you know, didn’t have a lot of money, didn’t have you know, big connections, lived in small towns, single moms. Let’s talk about single moms, okay? My mom was effectively a single mom for a long time. So we’ve got single moms that have literally now you know, over 1,000 units there. They’ve retired from jobs– I mean, I can think of four or five off the top of my head. That is something I’m super proud of because you know, they have it much harder than somebody that’s got support, got other income coming in, don’t have kids to deal with. I’m thinking Mandy, I’m thinking Esther, I’m thinking Alice. I mean, I’m just thinking of all these women that are single moms that are just freaking killing it. That’s something I’m super proud of. And the fact that we’re able to create that– I mean, we’ve got a Women’s Warriors group. We’ve got all these little– that’s another thing that’s kind of cool. Inside the group, we’ve got all these little groups like a women’s group. We’ve got underwriting groups, accountability groups, masterminds.
Mark
Money-raising groups.
Rod
Money-raising groups. We got meetups all over the country. Warriors having meetups literally all over the country. Somebody just posted today in Baltimore. That part is, I think, the most exciting. It’s just the group dynamic and all of the kind ripple effects. You know, the ripple effect that’s happening inside the group is just extraordinary.
Mark
And I’d say that, too, working with so many students, talking with so many of them. That’s one of the most common things I hear is the students and the success stories, they’re just regular people with jobs, a lot of them with kids. It’s not multi, multi-millionaires. I mean, don’t get me wrong, there are some of those in the group as well but, yeah.
Rod
Almost every one of them did it on the side, literally, almost every single one of them. Hype– very involved, W-2 jobs, consuming W-2 jobs, spouses, kids, and they still just achieved extraordinary success on the side, doing this on the side. So, you know, if you’re thinking you can’t do it, that’s an excuse. I love you, but that’s an excuse.
Mark
Yeah. Last thing for you here, Rod, how do you measure that success when you’re working with a Warrior? What are some of the key indicators you look at?
Rod
That’s a great question, actually. And because every Warrior is different, I’ll tell you, I think the greatest barometer of success for me is when somebody gets their first deal, because, you know, there’s that law of the first deal. It’s the scariest, it’s the most stressful, it takes the longest. And then, you know, what I see is once they get one, it’s like the next thing I know, they have two, three, four. It’s like, what the heck just happened here? And I love it because you know when they get their first deal, they become what we call a Warrior of the Sword. They get this cool, real sword in the mail that says Warrior on it. It’s really very, very cool. And I think that’s my biggest measure of success because we’ve got so many– I mean, we’ve sent out so many of those dang swords that you can’t even imagine. And so, you know, I’m going to measure it that way because, I mean, yes, certainly the count globally and all the units that Warriors have bought is extraordinary. I mean, just mind-blowing, frankly. But I think on an individual basis, to get that first deal, I know they’re off to the races because then they realize that you know, it’s really not as scary as they thought it was, that it’s absolutely doable, that the mist goes away, the intimidation goes away. It’s really, to me, that’s a big measure because that’s the biggest hurdle is to get them into their first deal because, after that, I know they’re off to the races.
Mark
Couldn’t agree more. Right? They end up stacking up so many more. Well, I want to end this just real quick. Obviously, you mentioned this so often, you know, people that genuinely connect with all these things that you’re saying, you can text the word “crush” to “72345”. And one thing I do want to say that you don’t mention ever, I think, is that you know, there are a lot of real estate coaching programs out there that say, “Hey, if you’re a fit and we’re a fit” and they kind of use that as a sales tactic. The way that we have it set up, I am the only one that can enroll Warriors into the program. My team, the three guys that work below me that are all real estate investors, by the way, they cannot enroll anybody in the Warrior program. And so genuinely, if you reach out to us and, you know, the coaching, mentoring, it’s really not the right thing. My team will leave you in a better spot. They’ll help you get clear on some real estate items. They will send you off completely on your way to go do this on your own. And genuinely, you don’t even have to explore anything. You’re not going to be sold if it’s something you genuinely don’t want. And so it’s something we genuinely have the process set up to do so that nobody is pressured into doing anything unless we can really, really help them. And so if you have some fear of like, hey, this may be the right thing, but I don’t want to be sold, just know that it’s set up in the way that you won’t even speak to me about it if it’s something that is really not the right thing for you.
Rod
And I will say we have turned some people down. If I hear ego or narcissism, they’re out. But it’s not common. Okay? I’m just going to say that. So that’s the biggest thing that I’m doing is just protecting the group, you know. Yeah. So again, text “crush”, if you’re interested to “72345”, it’s extraordinary. It truly is extraordinary. People rave about it. And, you know, I hope you’ll check it out.
Mark
Yeah, I hope we’ve added some value in a little bit of a different way. Anything else you want to add, Rod?
Rod
No, I think that’s it, buddy. That was really informative.
Mark
All right. Well, I look forward to hearing from some of you listeners out there.
Rod
Take care, guys.
Outro
So one other quick thing. We encounter so many people that are frankly frustrated. They’re looking in the mirror and they’re frustrated that they haven’t been able to escape the rat race. They haven’t been able to build cash flow to the point where they’re able to have financial and time freedom with their families. And maybe they see other people buying real estate and creating incredible cash flow and they think well, it’s just scary. You know, buying apartments is intimidating. And I get it. See, that’s why we created our Warrior Mentorship Program. They’re our coaching students, and they’ve had extraordinary results. My students, I’ve been teaching about five years and they own upwards of 300,000 units now that we know of. Right? And we feel like it’s just getting going. Now, we’re looking to grow this group and really take it to the next level. And honestly believe that the greatest transfer of wealth could be upon us right now with this current economic environment. Everything’s going on sale. So we’re looking for people who want to follow a proven framework, really like a blueprint or a map, literally, step by step and then they’re able to leverage our systems and our incredible network to raise money and equity. To find deals and close those deals and build partnerships, really nationwide. So if you’re interested in finding out more about how you can become more in our incredible network and take advantage of the unbelievable opportunities that are upon us, you can apply to my warrior mentorship program by texting the word “CRUSH” to “72345” or you can go to “MentorWithRod.com”. And what we’ll do is we’ll set up a call so you can check us out and we can check you out and see if it’s a fit. Now, again, you can go to “MentorWithRod.com” or text the word “CRUSH” to “72345” to apply and we will speak soon.
**Podcast Categories:** Multifamily Rock Stars, Podcasts
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### [The Craziest Luxury Condos Ever Built](https://rodkhleif.com/podcasts/luxury-condominium-development-with-gil-dezer/)
**Published:** July 13, 2026
**Author:** Bryan Hoover
**Excerpt:** The Craziest Luxury Condos Ever Built
**Content:**
## How Gil Dezer Reinvented Luxury Condominium Development
Luxury condominium development is far more than constructing high end buildings. It is about creating an experience that buyers cannot find anywhere else. In this episode of **Lifetime Cash Flow Through Real Estate Investing**, **Gil Dezer** explains how innovation, branding, market timing, and disciplined execution have helped him transform South Florida’s skyline with iconic branded residential towers. From Porsche and Bentley branded developments to revolutionary car elevators and private sky garages, Dezer reveals what separates world class projects from ordinary luxury real estate.
Rather than competing on price alone, Gil focuses on creating features that redefine luxury living. By continuously introducing amenities and design concepts that competitors later imitate, he has built a reputation for delivering properties that command premium attention while attracting affluent buyers from around the world.
## Turning Real Estate Innovation Into Competitive Advantage
One of the biggest lessons from the conversation is that successful luxury condominium development requires constant innovation. Gil discusses how the famous Porsche Design Tower was born from a simple question: how could luxury car enthusiasts enjoy their vehicles without valet parking or traditional garages? That thinking led to patented car elevators that transport both the owner and their vehicle directly into private sky garages attached to each residence.
He also explains how every new project becomes an opportunity to improve on previous developments. Features like private plunge pools, heated bathroom floors, golf simulators, racing simulators, pet grooming stations, wellness amenities, and thoughtfully designed outdoor living spaces all contribute to creating a product that stands apart in an increasingly competitive luxury market.
## Lessons Learned From Surviving the 2008 Real Estate Crash
Gil shares firsthand experiences from navigating the financial crisis while managing more than a billion dollars in projects under construction. Instead of focusing solely on market conditions, he emphasizes that buyer sentiment ultimately drives real estate values. During one of the most difficult periods in modern real estate history, his company survived by maintaining conservative land positions, negotiating with lenders, preserving liquidity, and remaining disciplined throughout the downturn.
His experience offers valuable lessons for investors and developers facing uncertain markets today. Careful capital structure, long term relationships with lenders, and maintaining flexibility can make the difference between surviving a downturn and losing everything.
### Key Takeaways
- Differentiate your projects instead of competing solely on price.
- Branding can create publicity and credibility that traditional advertising cannot.
- Innovation should solve real buyer problems rather than simply add expensive features.
- Conservative financing and disciplined execution help protect projects during market downturns.
- Successful development depends on both visionary ideas and exceptional operational execution.
## Building Billion Dollar Projects With Lean Leadership
One surprising insight is how small Gil’s executive leadership team remains despite overseeing billions of dollars in development. He explains that keeping decision making centralized allows projects to move efficiently while maintaining quality control across every stage of development.
From selecting land and working with architects to lender relationships, pricing strategy, permitting, construction, and sales, every major decision follows a disciplined process. Gil emphasizes that vision creates opportunities, but execution ultimately determines success.
## The Power of Branding in Luxury Real Estate
Gil discusses how partnering with globally recognized brands such as Trump, Porsche, Armani, and Bentley creates instant credibility and worldwide media exposure. Strong branding attracts affluent buyers while generating publicity that would be nearly impossible to purchase through conventional marketing.
For luxury developers, branding is not simply placing a logo on a building. Every partnership must align with the lifestyle, design philosophy, and expectations of the target buyer to create an authentic premium experience.
## About Gil Dezer
**Gil Dezer** is President of Dezer Development and one of the most recognized luxury condominium developers in South Florida. He has developed numerous internationally known branded residential towers, including Trump, Porsche, Armani, and Bentley properties. Known for introducing groundbreaking concepts such as patented automobile elevators and private sky garages, Dezer continues to push the boundaries of luxury condominium development through innovation, design, and world class execution.
If you want to hear the full conversation and detailed insights, watch the podcast video or read the complete transcript below.
**What Is Luxury Condominium Development?**
Luxury condominium development is the process of designing, financing, constructing, and marketing high end residential condominium communities that offer premium architecture, upscale amenities, advanced technology, and exceptional living experiences. These developments often target affluent buyers seeking convenience, exclusivity, and long term value.
**Why Is Luxury Condominium Development a Strong Real Estate Investment?**
Luxury condominium development can generate substantial returns through premium pricing, strong demand in desirable markets, brand recognition, and appreciation over time. Successful projects create value by offering unique features that distinguish them from competing properties.
**How Do Developers Differentiate Luxury Condominium Projects?**
Developers differentiate luxury condominium projects by incorporating innovative amenities, exceptional architectural design, premium finishes, branded partnerships, wellness features, smart home technology, and personalized resident services. Creating a unique buyer experience is often more valuable than competing on price alone.
**What Makes a Luxury Condominium Development Successful?**
A successful luxury condominium development combines an exceptional location, thoughtful design, strong market demand, financial discipline, experienced leadership, effective branding, and flawless execution throughout the development process. Every stage, from planning to construction and sales, plays a critical role in maximizing value.
**How Important Is Branding in Luxury Condominium Development?**
Branding is a significant factor in luxury condominium development because it builds buyer confidence, creates global recognition, and attracts media attention. Partnerships with respected luxury brands can increase visibility, enhance perceived value, and help projects command premium pricing.
**What Are the Biggest Risks in Luxury Condominium Development?**
The biggest risks include construction delays, rising material costs, financing challenges, changing market conditions, permitting issues, labor shortages, and shifts in buyer demand. Experienced developers reduce these risks through careful planning, conservative financing, and strong project management.
**How Is Luxury Condominium Development Financed?**
Luxury condominium developments are typically financed through a combination of developer equity, land ownership, construction loans, and buyer deposits collected during pre sales. Many lenders require significant pre sales before providing construction financing to reduce overall project risk.
**What Amenities Are Most Popular in Luxury Condominium Developments?**
Today’s luxury condominium buyers often seek resort style amenities such as private pools, wellness centers, fitness facilities, spa services, concierge programs, smart home technology, private garages, golf simulators, pet facilities, rooftop lounges, and premium security features.
**Who Buys Luxury Condominiums?**
Luxury condominiums are commonly purchased by high net worth individuals, business owners, entrepreneurs, executives, international investors, retirees, and second home buyers seeking premium locations, convenience, security, and low maintenance ownership.
**How Can Investors Benefit From Luxury Condominium Development?**
Real estate investors can benefit from luxury condominium development through appreciation, strong resale demand, premium rental income in select markets, and opportunities to participate in high value development projects. Investors who understand market trends and developer quality are often better positioned for long term success.
00;01;00;10 – 00;01;34;04
Rod Khleif
Welcome back to lifetime cash flow through real estate investing. I’m Rod Khleif and I’m thrilled you’re here. And I’m really thrilled with this interview today. This is our first traveling roadshow interview, and I had to come out here and interview Gil Desert. I’ve been watching Gil for a long time. Gil is like the face of luxury condominium development in South Florida and done all sorts of amazing things Trump branded towers, Porsche branded towers, Armani and now Bentley.
00;01;34;04 – 00;01;56;15
Rod Khleif
And wait till you see the footage of this, this complex that they’re building here in Sunny Isles. It’s extraordinary. Welcome to show brother. Thank you. Oh, yeah. So you you have been at this a long time with your father. I know, I just saw your father walk by, like I said. And you’ve you’ve done. What is it? Six Trump branded towers.
00;01;56;18 – 00;01;59;15
Rod Khleif
Talk a little bit about your background and your words, if you don’t mind.
00;01;59;17 – 00;02;21;20
Gil Dezer
Well, the Trump building kind of started in 2001. Right. And that’s where that’s where kind of it all kicked it off. My father I graduated University of Miami in 97, and it was around 96, 97 that my father was coming down here more often and spotted sunny Isles saw it as an opportunity. And so he started buying up motels here, and I stayed.
00;02;21;20 – 00;02;37;26
Gil Dezer
I stayed here in Miami. I got a job selling real estate for other companies. And then when we were ready in 2001 is when actually joined the company. And that’s when we started building the first building. Wow. Yeah. And that was the Trumpeter National Hotel. We did Trump Palace, Trump Royale after that, then three Trump Towers we did.
00;02;37;26 – 00;02;43;26
Gil Dezer
And then we said we did a little too much Trump on the beach here. It was in that 2008 height of the crisis. You know.
00;02;43;28 – 00;02;46;06
Rod Khleif
We’ll talk about that in a minute. Yeah.
00;02;46;09 – 00;03;07;04
Gil Dezer
And so, you know, other brands were rolling around and that we heard of and and we got together with Porsche. And you know, Borea was like, what does Porsche have to do with real estate. So we had several think tank sessions to see. How do you really incorporate what’s going on? We signed a deal with them in 2007 when everything was flying high, and then when, of course, the market changed.
00;03;07;04 – 00;03;26;29
Gil Dezer
Well, that’s when we said, well, here’s here’s our opportunity to really do something different and special because we were looking at thousands and thousands of apartments of the same 1500 to 3000ft² available all over the market. Right. And with depressed prices because of the real estate prices. What was going on? So he said, if you don’t change the game, you can’t change the.
00;03;26;29 – 00;03;28;15
Rod Khleif
Price to differentiate yourself.
00;03;28;17 – 00;03;41;10
Gil Dezer
And costs at that point were also, you know, in a weird spot getting getting a little bit different and out of control. So we said, let’s look for people who oh, and there are no mortgages. Don’t forget no, no mortgage crisis.
00;03;41;10 – 00;03;43;23
Rod Khleif
I lost $50 million in that crisis.
00;03;43;25 – 00;03;44;26
Gil Dezer
Yeah. The only.
00;03;44;26 – 00;03;48;03
Rod Khleif
One you did well, no. You survived. I know you had.
00;03;48;05 – 00;04;07;11
Gil Dezer
We we lost hundreds of millions of potential profit. You know, that’s the good part. But, you know, you know, I remember talking to Donald Trump Jr one day and we were both going through it. He had his own issues there. And we said we’re working harder to lose less money. That’s what it was. You know, that’s that’s all it was less money.
00;04;07;11 – 00;04;32;13
Gil Dezer
That’s it. Wow. Yeah. So yeah. And so from from there, it was always said, well, what does Porsche have to do with the real estate? And he had the time now to kick the can around, because there was nothing going on between 2009 and 2011. Right. And so that’s where he came up with this car elevator concept. You know, we said, make the car for the car lover, make the building for the car lover, and also create, you know, an elegant, escalated lifestyle within a building that I haven’t seen before in Miami.
00;04;32;14 – 00;04;35;09
Gil Dezer
So we put swimming pools on the balconies. Yeah.
00;04;35;11 – 00;04;36;18
Rod Khleif
Well, that you’re doing that here too.
00;04;36;20 – 00;04;52;21
Gil Dezer
Yeah, yeah. And that was the first one. That was the test, if you will. And everybody loves it. And and here, you know of course this is the 2.0. Right. So here we made it better. Here we put the sunken sunken over there. They’re sitting on top of the balcony and kind of blocking a little bit of your here.
00;04;52;21 – 00;05;07;13
Gil Dezer
We pushed them to the side sunk them in. So when you walk out of your fire it’s the money shot. You see the full of the ocean behind it. Yeah. We had this is a higher level of well 2.0 you know. So whenever you do anything 2.0 it’s always a lot better.
00;05;07;14 – 00;05;19;13
Rod Khleif
Oh yeah. I mean push button and the freaking kitchen opens up and the and the. Yeah the views are incredible. The pool the you know having to walk in in your cars right there. Do you write up in your car or do you.
00;05;19;15 – 00;05;35;25
Gil Dezer
Of course. That’s where my patent lies. Oh no kidding I took what was automated parking before and I added a passenger in the car. We have passenger safety things within the elevator that allows you to sit in your car and go right into the automated. Parking was always done to save space. They put cars next to each other.
00;05;35;26 – 00;05;45;08
Gil Dezer
Right. All right. We weren’t looking to save space. We’re just looking to move guys in the car. Wow. See where to get home. No valet moves. Receipt changes your stereo or air conditioning. Right.
00;05;45;11 – 00;06;01;16
Rod Khleif
Right, right. Oh, yeah. Exactly. You have to worry about pilfering in your car and all that. Right. Well, back to 2008 for a minute. I told you, I got my ass handed to me, but you survived. You were, like, almost a half $1 billion, and you pulled through it. How did you pull through?
00;06;01;18 – 00;06;02;02
Gil Dezer
You know.
00;06;02;05 – 00;06;02;20
Rod Khleif
Sorry to bring.
00;06;02;20 – 00;06;21;17
Gil Dezer
Back the. It was it was. It was a tough time. You know, you woke up every morning and I had I had to touch the real estate and I said this, this is not going anywhere. Right. And I learned a lot about real estate values. Real estate values are based on buyer sentiment. The real estate is the real estate, right?
00;06;21;19 – 00;06;46;11
Gil Dezer
It’s about what the buyer feels about it. You know, and that’s why. Oh, people didn’t want to touch it. It was dying. It was going. We had we had $1.6 billion under construction at that time. Yeah. In sales we owed, we had equity and we owed and we owed half $1 billion on. Right. And we were able to at 1.6 turn into 600.
00;06;46;12 – 00;06;47;26
Gil Dezer
Right. Right. Because everything felt.
00;06;48;01 – 00;06;49;24
Rod Khleif
All the deposits flew away.
00;06;49;26 – 00;07;10;11
Gil Dezer
And then lawsuits get my deposit back. It was not it was not a fun time. But at the same time, we were our cost structure in the building because we own the land properly and didn’t charge ourselves for the land. And we usually leave the land in the deal is the equity. Yeah. So therefore the only real cost is the hard cost construction and the marketing dollars you spent.
00;07;10;11 – 00;07;12;26
Gil Dezer
And so we were able to hold on.
00;07;12;26 – 00;07;14;06
Rod Khleif
To the negotiate with the bank.
00;07;14;07 – 00;07;15;11
Gil Dezer
Yeah, we got extended.
00;07;15;11 – 00;07;17;06
Rod Khleif
Deferrals and all this other business.
00;07;17;07 – 00;07;20;28
Gil Dezer
We got an extension where we were paying only 2% interest annually.
00;07;21;00 – 00;07;21;15
Rod Khleif
Nice.
00;07;21;22 – 00;07;30;26
Gil Dezer
And if we were able to pay them back in in 24 months, they would credit us back. All that was real. Wow. So. And we did it. We paid it back in 19 months.
00;07;30;27 – 00;07;39;26
Rod Khleif
That’s that’s you know Trump talks about that as well. When he was actually upside down. It was a similar scenario prior to eight I think is when that happened to him. Let me ask you, this.
00;07;39;27 – 00;07;46;19
Gil Dezer
Was just bringing that up, you know, because we had paid off all of our loans and we were the only ones in all of land. I mean, we had guys.
00;07;46;22 – 00;07;49;08
Rod Khleif
People were converting them to rentals. There was all sorts of.
00;07;49;14 – 00;08;06;11
Gil Dezer
Problems everywhere. All you guys are literally paid off. Like good boys didn’t get the discount other than the interest, right? And so we had a big mortgage burning ceremony mortgage because that’s the truth in this book. He burned the mortgage when he paid off. And so he brought Trump down here. Oh. Did you? Oh, yeah. It’s all over the internet.
00;08;06;11 – 00;08;12;09
Gil Dezer
You can look up Trump mortgage in Trump Royal and and we had a whole thing with fire and it was a beautiful part.
00;08;12;12 – 00;08;30;09
Rod Khleif
I love it. I love it. Well, you know when when you owe the banks that much money, they’re going to work with you. Or they can if they if they trust you and you, you guys obviously have incredible integrity. Now, let me ask you this. Did you get any did you learn anything about branding and things like that working with Trump.
00;08;30;09 – 00;08;33;06
Rod Khleif
Because I mean, he’s he’s got that whole brand thing going on.
00;08;33;06 – 00;08;50;21
Gil Dezer
He was the only brand that he started. Yeah. There was no other real estate brand. I mean, he put his name on Fifth Avenue and 57th Street. That’s his spot. Right? So and that’s where he created what is. So what is the brand then? Is a is a great location a great, great specification on construction and and a Trump branded building.
00;08;50;21 – 00;09;02;11
Gil Dezer
So that’s and it got a lot of attention. He got his worldwide attention. They got us press that we couldn’t buy it right. That’s where the real branding thing comes in. If you can do it properly, you get an amount of press that you just can’t buy as far.
00;09;02;11 – 00;09;02;20
Rod Khleif
As that.
00;09;02;22 – 00;09;13;27
Gil Dezer
That’s a very good. And that’s and that’s what sells the apartments. People. People don’t trust ads anymore as much as if they’ve read an article about something or see it or see it on the podcast or something like that. Right. That becomes more trustworthy.
00;09;13;29 – 00;09;33;02
Rod Khleif
Right, right, right. So other, you know, besides the branding, are there any other secrets to selling to super high net worth, you know, luxury buyers? Can you speak to that a little bit? What are you what are the sorts of things that you try to. I mean, I saw your showroom here. It’s magnificent. You’ve got a cafe that’s better than any barista.
00;09;33;03 – 00;09;35;07
Rod Khleif
Any any Starbucks, whatever. That’s right.
00;09;35;08 – 00;09;51;24
Gil Dezer
But you basically have to think of what they want. You know, I kind of know what they want. I live in my own buildings, you know, and. And I’m a potential buyer myself. I see myself if I can’t live in there, I can’t sell it, you know? So we do things that, you know, that you feel you need.
00;09;51;27 – 00;10;09;01
Gil Dezer
In my past buildings, I only recently got a dog. So in my past buildings, we didn’t have a dog grooming station. But now this one, we are okay. Because I see the need. Instead of having that guy with a mobile truck, you have a spot. He can do it in your building. You know, the the hair salon at the Porsche Design Tower was like is the biggest hit going.
00;10;09;07 – 00;10;25;05
Gil Dezer
So we’ve made it larger here in this building. Things like that. Things that Bentley requested that we’re doing here, weird things like for example, there’s there’s a there’s a telephone room. Telephone room. It used to be back in the 80s. There’s a telephone booth. Right? Right. Well, here’s just a national telephone booth without the telephone.
00;10;25;08 – 00;10;25;28
Rod Khleif
You just go in there.
00;10;25;28 – 00;10;45;08
Gil Dezer
With a quiet call. You know, if you’re in the middle of a lobby space. Whatever. I mean, I loved it when they said that. I’m like, that’s a great idea. That’s cool. You know? So you’re unique. It’s unique. So and then, of course, we’re doing what what we were the pioneers on as far as the amenities go. We were the first guys to put the racing simulators in there because we’re doing a Porsche building right now.
00;10;45;08 – 00;11;00;28
Gil Dezer
I see every rental building has a racing similar inside. Really? Yeah. So we get copied on these things. We have a golf simulator and all that fun stuff and and but but it’s these buildings are really built as five star hotels without trains. Yes. Yeah. So yeah.
00;11;00;29 – 00;11;06;15
Rod Khleif
So do you think it was the elevator that drove the Porsche building to the success that it did?
00;11;06;16 – 00;11;19;18
Gil Dezer
It was definitely what got us the attention, and it got us the right kind of clientele, you know, because the building there is full of all like minded buyers, you know, people who love their cars. And and then he gave us an unintentional benefit that we didn’t think about.
00;11;19;19 – 00;11;19;29
Rod Khleif
Which.
00;11;19;29 – 00;11;38;28
Gil Dezer
Is Miami has a lot of South Americans. The South Americans come here to enjoy their success, their wealth. Right. They can’t enjoy it back home. Right? These people are kind of trained and not trained, but you know, it’s grenade kind of be afraid of their own shadow. And somebody might be following me.
00;11;39;00 – 00;11;41;19
Rod Khleif
From a protective. Protective standpoint. Interesting.
00;11;41;21 – 00;11;46;12
Gil Dezer
They love this idea because of the fact that they pull in. They can have a Mercedes.
00;11;46;13 – 00;11;48;13
Rod Khleif
They can have an armored black ladies for that one.
00;11;48;16 – 00;12;05;18
Gil Dezer
But black windows, nobody knows who they are. They can pull right in. They go in the elevator. Go. There’s there’s no valet. Nobody tracking you. Yeah. So it’s a safety and security thing that we as Americans, I don’t think about. I thought about how cool is it to have your car and then the South America. Wow. So I can just come.
00;12;05;21 – 00;12;11;24
Gil Dezer
You saw light bulbs go off on their head, and so we we didn’t start marketing it that way. But we see the tremendous value.
00;12;12;01 – 00;12;14;06
Rod Khleif
Where all your buildings in Sunny Isles.
00;12;14;08 – 00;12;17;29
Gil Dezer
Well, I’ve done a few buildings downtown and down. Yeah. Okay.
00;12;18;01 – 00;12;27;13
Rod Khleif
Yeah. And I know Sunny Isles. I’ve got a Russian friend, great friend that lives here, and it was a big Russian presence here. But you bring in South Americans all from everywhere.
00;12;27;14 – 00;12;36;26
Gil Dezer
The Russians. There was a period of time when the Russians bought here, but that period happened and stopped. Oh it did. Yeah. They were good buyers. Oh, interesting. That period, I think, stopped in 2008. Okay.
00;12;36;26 – 00;12;59;16
Rod Khleif
Yeah. Oh, interesting. So, well, let me ask you this. You know, you’re seeing these big IPOs happening in California and you’re reading these articles about how they want to get the hell out of California. And a lot of them are coming here. And they got the wealth tax. They got the billionaire tax. And there’s a lot of people that with these IPOs are literally getting tens of millions of dollars in instant cash.
00;12;59;18 – 00;13;02;03
Rod Khleif
Do you see that as a real opportunity for you guys.
00;13;02;04 – 00;13;04;03
Gil Dezer
Well it’s not just the cash instant wealth.
00;13;04;04 – 00;13;06;23
Rod Khleif
Well well they have to cash out. They have to cash out.
00;13;06;26 – 00;13;26;17
Gil Dezer
But yeah. Yeah, I’m assuming that if they get smart and move over here, right? I mean, California is going to be a shit show by a million cuts when I get in there. It’s crazy. You know, they’re really cutting everybody crazy. But it’s also in the US is not that easy. You know, you can’t just pick up and leave and but yeah, we, we see the bigger companies coming down here.
00;13;26;19 – 00;13;28;08
Rod Khleif
Oh yeah. That’s happening right now too.
00;13;28;09 – 00;13;38;27
Gil Dezer
And what we did see, you know, Carl Icahn opened up his office down the street here. And since he came in we witnessed a bunch of large sales of houses. But again that’s a ready product. We’re still two years.
00;13;39;03 – 00;13;39;24
Rod Khleif
Yeah. Yeah. You’re still.
00;13;39;24 – 00;13;45;05
Gil Dezer
Yeah. Yeah. That’s. But I’m sure that they’re going to start making plans for the future when they see what’s going on. Right, right.
00;13;45;10 – 00;14;03;24
Rod Khleif
So, you know, you’re a visionary. That’s obvious. How much of development is vision versus execution? Because, I mean, just the myriad of of detail. You know, I’ve built a house. I mean, this is like, crazy to me. So talk about your execution for a minute if you would.
00;14;03;25 – 00;14;05;04
Gil Dezer
So the vision part is the fun.
00;14;05;08 – 00;14;06;00
Rod Khleif
Right, right.
00;14;06;01 – 00;14;07;11
Gil Dezer
Right, right. You sit there and wish.
00;14;07;12 – 00;14;08;16
Rod Khleif
Them the goals and the dreams.
00;14;08;17 – 00;14;26;22
Gil Dezer
Let’s put this and let’s do that. Let’s do this and let’s do that. And then we start pricing things out okay. Maybe we don’t need that you know. So one of the things I really wanted to do in this building that I just couldn’t accomplish was the balcony doors. They opened by touch. Oh, I have it on my boat.
00;14;26;23 – 00;14;42;14
Gil Dezer
Cool. I have a yacht, 140ft. Right, right, right. You press a button, doors open. Right. All you have to. Right. You know, that’s really the only guys who put in lift and slide. Lift this slide. I don’t know if that is when you. It’s a handle that falls down. Okay. Wheels lift up. And you can actually open the door with your partner.
00;14;42;15 – 00;14;44;07
Gil Dezer
Oh. Very good. It’s very.
00;14;44;09 – 00;14;47;12
Rod Khleif
My building like, takes everything. I have to get that freaking.
00;14;47;15 – 00;15;00;10
Gil Dezer
Yeah. That’s that. I don’t like to do that. I consider that cheap construction. Right, right, right. So the lift, the slide is already a high school. But I said, why can’t it be like a boat? Right? And we tried and tried and tried and we couldn’t we couldn’t.
00;15;00;10 – 00;15;00;25
Rod Khleif
Get it done. Yeah.
00;15;00;26 – 00;15;06;02
Gil Dezer
Okay. We could get it done for $40,000 a unit. That was. That was crazy.
00;15;06;07 – 00;15;19;19
Rod Khleif
But but on the execution front, I mean, the the the architects, the engineers, the finance, the capital markets, all these things you have to pull together. What’s your team look like? Let me ask it that way.
00;15;19;21 – 00;15;25;21
Gil Dezer
Very, very short team. Very small team I have we’re four guys. Five guys. Wow. Yeah.
00;15;25;23 – 00;15;29;25
Rod Khleif
You’re building billions of dollars worth of product for guys.
00;15;29;27 – 00;15;30;19
Gil Dezer
The.
00;15;30;22 – 00;15;32;17
Rod Khleif
Well, I mean, the sea level that.
00;15;32;17 – 00;15;47;24
Gil Dezer
My main office has 42 people inside of it. Okay, but we’re four guys. Okay. Yeah. You met Sebastian. He handles sales for everything. Okay. All the projects were doing right now. Okay. And then I have, I have, I have no other titles. Everybody’s a clue. Okay, well.
00;15;47;24 – 00;15;48;25
Rod Khleif
They all have ops. Okay.
00;15;48;26 – 00;15;50;01
Gil Dezer
So they’re all.
00;15;50;03 – 00;16;08;26
Rod Khleif
Over there. So for my own edification, just because, you know, I’m a wannabe when it comes to what you’re doing here. So, you know, you find a piece of land, you throw the land into the deal. You, you you you come up with your vision for what you’re going to put there. Then what? You bring in the architect, you bring in the engineers.
00;16;08;27 – 00;16;23;29
Gil Dezer
The architect helps shape the vision. Okay. Because we start with the product type. This is this is the issues. This is what we want. We want the pool. Don’t put it above. Gotcha. How are you going to sink it if you know that? Ruining the floor below. Right. So we have fun sessions on doing all that.
00;16;24;01 – 00;16;24;10
Rod Khleif
That’s right.
00;16;24;10 – 00;16;25;16
Gil Dezer
Because you got the floor.
00;16;25;19 – 00;16;27;03
Rod Khleif
So you got to build higher. Probably,
00;16;27;05 – 00;16;44;21
Gil Dezer
Well, yeah. No, we came up with a great solution. Okay. You know, but again, we have time to think about it. So we’re kicking around ideas. This is the 16th iteration of a building. Meaning the guy drew 16 other 15 other buildings until we designed. This is what it is. And and that’s it. So when we start playing, we want this.
00;16;44;22 – 00;16;49;23
Gil Dezer
We want that. I’m putting saunas in every single bathroom. Yes, I’m heating floors. I have heated.
00;16;49;25 – 00;16;50;04
Rod Khleif
Oh yeah.
00;16;50;06 – 00;16;52;23
Gil Dezer
Heated floors. Floors in the bathroom. Very cool. Nobody does that.
00;16;52;25 – 00;16;53;18
Rod Khleif
No, that’s nice.
00;16;53;19 – 00;16;58;22
Gil Dezer
But you don’t realize it unless you live here, right? The floors are freezing cold. Oh, yeah, I have.
00;16;58;23 – 00;17;05;01
Rod Khleif
I have these little padded slippers that I’ve never worn before, but I’ve got here from my place in Miami because.
00;17;05;04 – 00;17;21;13
Gil Dezer
Yeah. So? So you need the floors in the bathroom. So we have a shower. We get out to a heated floor. What a great idea. Okay, so. And these things, when you’re building the building, the heated floor is costing you 3800 bucks a unit. Wow. It’s fine. You know, that’s not it’s not not going to break the bank, but yet it makes it for a better product.
00;17;21;15 – 00;17;26;01
Gil Dezer
So those kind of things we do. So those were, those were the the ideas that we throw out.
00;17;26;03 – 00;17;27;26
Rod Khleif
And the architect puts that together.
00;17;27;27 – 00;17;28;20
Gil Dezer
It puts it together.
00;17;28;21 – 00;17;33;15
Rod Khleif
What’s the next stage in the in the process. Well, it’s not sequential. There are probably things happening all the time.
00;17;33;15 – 00;17;48;18
Gil Dezer
But yeah. Next stage is. Yeah. Exactly. All the time. So as he’s putting together, we’re getting ready for a site plan review of the city. Gotcha. We’re getting into a general contractor to start pricing. Right. You know, we’re getting all the ducks in a row. Okay. We’re creating the business model. How much can we sell this for? Need to work.
00;17;48;19 – 00;18;11;22
Gil Dezer
Right? Usually of course does. Because. Right. And and then and then starting to discuss with lenders. You know, just just to identify who would be interested in this kind of thing. We did discuss with lenders for about a year before we actually got into the nitty gritty of signing a deal. So just to let him know, hey, we’re in the market where, you know, let them know so, so and and that’s it.
00;18;11;23 – 00;18;20;06
Gil Dezer
You know the lenders like to watch your progress. Also. They like to say, oh I spoke to him when he first started. Oh here you go. He got the 50% in this time. And that was go.
00;18;20;08 – 00;18;23;21
Rod Khleif
You do drawers and all that business. I’m sure like like you wouldn’t a normal construction.
00;18;23;23 – 00;18;29;09
Gil Dezer
Once you get the loan. Once you close a lot. Right up until then, it’s all equity out. Yes. Okay. So the sales office.
00;18;29;10 – 00;18;33;09
Rod Khleif
So you’re doing you’re doing deposits and everything else to get that done. Yeah. Okay.
00;18;33;10 – 00;18;38;09
Gil Dezer
Yeah. We’re taking a 50% deposit on the project. 30 now and then. Ten and ten. Wow.
00;18;38;11 – 00;18;41;22
Rod Khleif
And I heard the price points in, like, 5.8 to start.
00;18;41;22 – 00;18;47;05
Gil Dezer
Or 5.8. Yeah, but the average units are six and a half for the, for the west side and for the oceanfront or eight and a half to.
00;18;47;05 – 00;18;48;13
Rod Khleif
Nine, eight and a half to nine.
00;18;48;15 – 00;19;02;14
Gil Dezer
Wow. Which is actually cheap. Is it. Yes. Because if you think about it, I bet you it’s cheaper than what you paid for your apartment right now. Because for 9.5 million on the oceanfront. Yeah. For starter for 6.5 million on the on on.
00;19;02;15 – 00;19;02;17
Rod Khleif
The.
00;19;02;17 – 00;19;06;03
Gil Dezer
Backside, on the base, you get 5500ft². Wow.
00;19;06;04 – 00;19;07;29
Rod Khleif
So they’re that big?
00;19;08;01 – 00;19;12;08
Gil Dezer
Yeah. Wow. 5500ft². The unit itself is 2500.
00;19;12;08 – 00;19;13;14
Rod Khleif
Square feet. Well, it’s a balcony.
00;19;13;21 – 00;19;21;23
Gil Dezer
And you have the balconies and you have the garage. Oh, yeah. Because you have a garage. Okay. But for 5500ft², at 6.5 million, it’s $1,200 a.
00;19;21;23 – 00;19;24;17
Rod Khleif
Square foot. That’s a good price. That’s. Yeah, that’s a good price. Okay.
00;19;24;18 – 00;19;36;21
Gil Dezer
That’s a good price. Okay. Oceanfront nine. $9 million for 6000ft². Wow. $1,500 a foot. Yeah. So people who see the value in the balcony, you see the value in the garage, they realize, wow, this is actually kind of cheap.
00;19;36;22 – 00;19;40;10
Rod Khleif
Where are your buyers coming from right now as you’re getting deposits?
00;19;40;12 – 00;19;54;06
Gil Dezer
Oh, yeah. We had we had we had four sales already this month. We had two Americans, one Colombian, one Mexican interest. And we heard we have a few other. Mexico was a big market for Mexico. Yeah. Okay. Yeah. There’s a lot of wealthy Mexican.
00;19;54;08 – 00;20;11;29
Rod Khleif
No kidding. I didn’t know that. Oh, yeah. So? So, you know, your father started this thing. What sorts of things did you pick up from him? Because he’s obviously a visionary as well. You know what? What? Let me ask you this. What have you learned about leadership? Because, you know, you’re running the show now. What? What have you learned?
00;20;12;00 – 00;20;20;10
Rod Khleif
I think I saw a quote where what was it? You hang on, hang on. I’ve got it here. Where?
00;20;20;13 – 00;20;24;25
Rod Khleif
Oh, darn it, now I can’t find it like. Like I wanted to.
00;20;24;27 – 00;20;25;29
Gil Dezer
About the navigator.
00;20;26;01 – 00;20;48;08
Rod Khleif
No, it was really more about your personal mindset around relaxing into it, I think is kind of what I’m remembering. I’ve got it here somewhere. But you know what? What what have you learned? I mean, this is a massive operation you’ve got going here, even with only four people at the top of life. But, you know, what have you learned about leadership?
00;20;48;11 – 00;21;12;07
Gil Dezer
Yeah. Keep that 4 or 5 people at the top. Yeah. Otherwise it gets loose. Okay. We we don’t I don’t do things loosey goosey. Right? Everything is buttoned up tight. Super tight. That’s that’s the main difference between me. My father. Okay. My father really is a true visionary, right? His execution style is extremely okay. So that has got you, you know, and and so but that’s that’s where we come from with each other.
00;21;12;08 – 00;21;12;16
Gil Dezer
You know.
00;21;12;17 – 00;21;19;27
Rod Khleif
So what what is your background like? Schooling and everything. So are you more analytical or are you more, you know, regimented?
00;21;20;03 – 00;21;23;04
Gil Dezer
I’d say I’m more I was a studied finance. Okay.
00;21;23;06 – 00;21;24;01
Rod Khleif
There you go.
00;21;24;03 – 00;21;36;04
Gil Dezer
Okay. I’m definitely a math guy. Okay. I can multiply numbers in my head. Okay. Yeah. So. But and, you know, so. And this is a big math game. You know, the whole development primarily in its.
00;21;36;05 – 00;21;46;10
Rod Khleif
Primarily empirical. It’s primarily in numbers. Same thing in commercial real estate. Yeah. Oh, that’s what it was. You said your management style changed from frustrated to calm. Yeah. That was a quote.
00;21;46;11 – 00;21;50;14
Gil Dezer
Yeah. Well, when I was younger, I, you know, it was the New Yorker and and, you know.
00;21;50;16 – 00;21;51;14
Rod Khleif
Oh, is that where you’re from?
00;21;51;17 – 00;22;01;01
Gil Dezer
Yeah. Yeah. You know, and everybody here was like, you know, slow and frustrating. And so you get into it and you start realizing how you can still get things done, but it just takes a little longer.
00;22;01;02 – 00;22;01;11
Rod Khleif
Right.
00;22;01;13 – 00;22;02;02
Gil Dezer
Right, right.
00;22;02;03 – 00;22;07;29
Rod Khleif
Right. You know, how do you protect the downside risk for something this massive?
00;22;08;02 – 00;22;15;19
Gil Dezer
It’s part of the business plan. Yeah. You know, there’s a huge downside. The biggest downside risk is if something goes wrong in the construction. Oh.
00;22;15;26 – 00;22;17;08
Rod Khleif
Oh, interesting.
00;22;17;11 – 00;22;18;25
Gil Dezer
That’s the real risk. Okay.
00;22;18;26 – 00;22;19;25
Rod Khleif
Have you had that happen?
00;22;19;26 – 00;22;22;27
Gil Dezer
No. Fortunately. My God. What? Of course, there’s always issues.
00;22;22;29 – 00;22;28;20
Rod Khleif
Well, the little things, but what could go wrong? Like, for an example.
00;22;28;22 – 00;22;32;19
Rod Khleif
I guess that’s impossible to answer. That’s a possible to answer.
00;22;32;21 – 00;22;48;23
Gil Dezer
You got a hurricane. Middle construction. You know that that can delay you months, you know. Okay. You have a major subcontractor. Takes a shit on you halfway through the job. Yeah. You know, you your bank stops funding. We saw that in 2008. Oh, sure. Right. It was.
00;22;48;23 – 00;22;50;24
Rod Khleif
Like a light switch when you couldn’t borrow.
00;22;50;24 – 00;23;12;15
Gil Dezer
A dollar. You’re halfway under construction. The lender stop giving you money. Right. I mean, those that’s the where the risk comes in. You know, but as far as the risk of building the building, if you can actually build and execute the building and the building actually stands there, you’ve created value, right? Just financially, there’s no risk. Meaning? Meaning if you can’t pay off the lender, you still have so many units you can refinance to pay off the land.
00;23;12;16 – 00;23;15;16
Gil Dezer
Gotcha. You know. Gotcha. And you’ll take time to sell those.
00;23;15;23 – 00;23;18;01
Rod Khleif
You could separate them. Gotcha. Okay. That makes sense.
00;23;18;03 – 00;23;25;29
Gil Dezer
Okay. Yeah. I mean, buildings that are that don’t sell out. For instance, if they have 20 or 30% inventory and they still own, they still owe it to the banks.
00;23;26;00 – 00;23;26;26
Rod Khleif
Yeah. Okay.
00;23;26;28 – 00;23;36;06
Gil Dezer
They’ll take that 30%. Take a finance on it. Pay the bank off and everybody’s fine. Right. So but the key is execution. The risk is an execution, right?
00;23;36;09 – 00;23;37;03
Rod Khleif
Oh, yeah. In any.
00;23;37;03 – 00;23;38;00
Gil Dezer
Business, you gotta finish.
00;23;38;00 – 00;23;40;21
Rod Khleif
The building. Right. Right. Right. Okay. So.
00;23;40;24 – 00;23;42;15
You know, I know you’ve got a couple of kids.
00;23;42;16 – 00;23;42;29
Rod Khleif
Right.
00;23;43;01 – 00;23;43;14
Okay.
00;23;43;15 – 00;23;52;15
Rod Khleif
And you’ve said your buildings are like your babies. But you’ve said that, father. These are quotes I looked up on you that fatherhood is your greatest gift. I have to agree with you on that. How old are they?
00;23;52;16 – 00;23;54;16
Gil Dezer
They’re now 16 and 13.
00;23;54;17 – 00;24;01;00
Rod Khleif
Oh, wow. Wow, wow. Yeah. So had they changed your definition of success in any way?
00;24;01;02 – 00;24;24;28
Gil Dezer
I mean, just changed my daily responsibilities. You can tell you that. Sure, sure. You know, it’s nice though, to I instilled in them. How is important and how, you know, not being like, just a regular schmo. A daughter of a rich guy. Right. You know, and and have people look at you differently when, when, when you, when you speak properly to them and and understand.
00;24;24;29 – 00;24;43;26
Gil Dezer
And that took a wild effect on them. My, my my oldest is an honor student taking AP classes. I mean it worked on I, I hope they don’t see this. I was not the best student, you know. And I saw it, you know, those better students, they they do. It does help them, you know. But. So I wanted to at least study well and do well in school.
00;24;43;26 – 00;24;44;09
Gil Dezer
And then they’re.
00;24;44;09 – 00;24;46;10
Rod Khleif
Doing it. Do they have an interest in what you’re doing at all?
00;24;46;12 – 00;24;54;21
Gil Dezer
Probably my youngest does. Oh, yeah. Yeah. My oldest also she she likes it. She thinks it’s cool. But my youngest, she wants to. Work my work for daddy.
00;24;54;22 – 00;25;18;01
Rod Khleif
I host the I have the largest coaching program on the planet for multifamily. My students own, I think, about 350,000 units. Oh, wow. And my daughter finally bought a freaking triplex. She’s 35. Finally, finally getting into it was like, good, thank you, good lord. But, you know, are there any things your father taught you that you really couldn’t learn in school?
00;25;18;03 – 00;25;23;04
Gil Dezer
Yeah, yeah, I think I think my main mantra is if you’re going to do it, do it. 100%.
00;25;23;05 – 00;25;23;09
Rod Khleif
Yeah.
00;25;23;09 – 00;25;24;02
Gil Dezer
Because the.
00;25;24;09 – 00;25;43;15
Rod Khleif
The the the the grandiose, you know, magnitude of what you do is like it’s a little, you know, you know, we’re I think we’re locked in by what we believe we can accomplish. How did you get how did you get past any of those blockages? Like, this is so massive.
00;25;43;17 – 00;25;45;24
Gil Dezer
In the beginning, I was like, how do people build these buildings?
00;25;46;01 – 00;25;46;12
Rod Khleif
Yeah.
00;25;46;13 – 00;25;47;19
Gil Dezer
Right. And when you’re in.
00;25;47;19 – 00;25;48;18
Rod Khleif
It, that’s it.
00;25;48;19 – 00;26;06;11
Gil Dezer
You’re like, shit. We’ve been building things since the pyramids, right? Yeah. How much has changed? Okay. You know. Okay. I mean, and that’s what caused my innovation. Car elevators, swimming pools and the documents that people don’t do, right. I’m always trying to innovate because I see, like, again, those sliding doors. If I would have gotten that, we would have been the only building in Miami with a push button sliding door.
00;26;06;11 – 00;26;11;21
Gil Dezer
But it was, you know, it’s cost prohibitive. You know, I was hoping maybe I could sell upgrades, but then I don’t I don’t.
00;26;11;21 – 00;26;12;00
Rod Khleif
Want to.
00;26;12;01 – 00;26;17;26
Gil Dezer
Yeah, that’s I don’t want to sell somebody a $90,000 and then go ask them for $50,000 more. Right. I don’t want to do that. So.
00;26;17;27 – 00;26;19;07
Rod Khleif
So you love this?
00;26;19;09 – 00;26;23;03
Gil Dezer
Yeah. You love this. I love the one. It’s fun. Yeah. Okay. It was not fun.
00;26;23;04 – 00;26;33;22
Rod Khleif
Well, when you love what you do, work is play, and you’re able to innovate. I think you know. But, you know, I didn’t drive my Bentley here today, and. And I’m disappointed that I didn’t actually know.
00;26;33;23 – 00;26;34;17
Gil Dezer
Now at home.
00;26;34;18 – 00;26;44;29
Rod Khleif
I know right. But but, you know, just a sidebar for a minute. And I know your father’s got an incredible collection, as do you in cars. You love cars. You do a rally as well. Right.
00;26;45;00 – 00;26;52;29
Gil Dezer
You do? Yeah. I grew up with cars. I grew up with him taking me to auctions every weekend. And he has his cars. He has a collection of 2200 cars in Orlando.
00;26;53;06 – 00;26;54;11
Rod Khleif
200 cars.
00;26;54;12 – 00;26;57;01
Gil Dezer
It’s in a 600,000 square foot museum.
00;26;57;03 – 00;26;57;20
Rod Khleif
Where is it?
00;26;57;21 – 00;26;59;28
Gil Dezer
It’s on International Drive in Orlando.
00;27;00;02 – 00;27;00;22
Rod Khleif
Oh, it’s in Orlando.
00;27;00;23 – 00;27;05;22
Gil Dezer
Yeah. It’s called desert land. Desert land? Yeah. It’s open to the public. It’s a museum. It’s amazing.
00;27;05;23 – 00;27;06;21
Rod Khleif
2200 cars.
00;27;06;22 – 00;27;23;16
Gil Dezer
Yeah. You can spend days in there. No. Yeah. You can actually spend days in there. It’s pretty amazing. And it’s also in that same building. He has a whole game room set up with, with go kart racing and. Very cool. Yeah. It’s a beautiful place. It’s. And it does very well. It’s in Orlando. It’s it’s like an alternative to going to the park.
00;27;23;18 – 00;27;24;02
Rod Khleif
Gotcha.
00;27;24;03 – 00;27;24;08
Gil Dezer
Yeah.
00;27;24;08 – 00;27;29;25
Rod Khleif
Well, I’m going to check it out. I didn’t even know it was there. Now, you were into cars too. I know you got a big. And you’ve got some really cool shit.
00;27;29;26 – 00;27;31;15
Gil Dezer
I’m into cars that I can drive every day.
00;27;31;16 – 00;27;32;18
Rod Khleif
Yeah. Oh. Are you okay?
00;27;32;18 – 00;27;40;11
Gil Dezer
Okay. In the collectible stuff. So. Okay. Yeah, I have, I have, I have. So my apartment was the inspiration for Porch Design Center.
00;27;40;12 – 00;27;40;26
Rod Khleif
Oh, really?
00;27;40;27 – 00;27;56;14
Gil Dezer
Yeah. It was. I have I built a unit at the Trump Palace, but I took the first three floors of the building, and I connected it to the main garage of the building. Okay. So. And I took a little bit of that garage. So I have a 29 car garage that I parked into, and I walk right into my apartment.
00;27;56;15 – 00;27;56;19
Rod Khleif
Oh.
00;27;56;20 – 00;28;07;10
Gil Dezer
I love it. And I don’t have to go through valet. I don’t have to go through the lobby. I don’t have to go through anything. And everybody who ever walked in and be like, this is amazing. You don’t have L.A., you don’t have a lobby. And that’s where I said, well, hey, why don’t we do that with the elevator?
00;28;07;14 – 00;28;08;16
Rod Khleif
And that’s how I got the inspiration.
00;28;08;17 – 00;28;26;19
Gil Dezer
That’s where the inspiration came from. Connecting the garage. And oh, and I have a swimming pool on my on my. I have a balcony. Wow. The swimming pool. So I said, hey, people really want these components in an apartment. Right? People are tired of having a house. Dealing with the landscape or the painter? The. You know, everybody likes the idea of turning a key and walking away, but yet having all those same components you have in the house.
00;28;26;20 – 00;28;27;09
Rod Khleif
Well.
00;28;27;11 – 00;28;27;29
Gil Dezer
That’s what it does.
00;28;28;00 – 00;28;38;05
Rod Khleif
I mean, you’ve, you’ve you’ve done it here, my friend. I want to tell you. But before I cut loose, you’ve done this. Gumball 3000 rally. Can you tell me what that is? Because I don’t even know what that is.
00;28;38;07 – 00;28;46;05
Gil Dezer
Gumball is my weekly vacation. My annual vacation. Annual vacation. Vacations. One time I shut off my phone. You can’t. You can’t get Ahold of me. Okay.
00;28;46;08 – 00;28;46;20
Rod Khleif
And what.
00;28;46;20 – 00;29;04;08
Gil Dezer
Is it? Every year they changed. The route is a bunch of guys. I bought 120 of us degenerates that we. We get into fancy sports cars and we drive recklessly all over the all over the place. No kidding. This year was was was Miami to Mexico City. Wow. And we drove from Miami. I drove a Bugatti from Miami to.
00;29;04;09 – 00;29;11;11
Gil Dezer
We stopped at my car museum in Orlando was the first stop. My father’s car museum. And and then from there, I switched cars.
**Podcast Categories:** Podcasts
---
### [The Real Estate Asset Everyone Is Overlooking](https://rodkhleif.com/podcasts/industrial-real-estate-chase-mcleod/)
**Published:** July 6, 2026
**Author:** Bryan Hoover
**Excerpt:** The Real Estate Asset Everyone Is Overlooking
**Content:**
# Industrial Real Estate Investing With Chase McLeod
Industrial real estate has become one of the most compelling asset classes for investors looking beyond multifamily properties. In this episode of Lifetime Cash Flow Through Real Estate Investing, Chase McLeod explains why warehouses, flex properties, and small bay industrial assets are attracting institutional capital and creating new opportunities for investors seeking diversification.
## Who Is Chase McLeod?
Chase McLeod is the founder and principal of McLeod & Company, a commercial real estate firm specializing in industrial properties. Over the past five years, his company has completed nearly $900 million in transactions, primarily in Southern California and Texas. With nearly two decades of experience in industrial leasing, tenant representation, and investment sales, Chase has developed deep expertise in one of the fastest-growing sectors of commercial real estate.
## Why Industrial Real Estate Is Gaining Attention
According to Chase McLeod, industrial real estate is benefiting from several long-term demand drivers. The growth of e-commerce, expansion of logistics networks, and increasing demand from data center infrastructure are creating substantial needs for warehouse and distribution facilities.
He explains that major markets such as Dallas-Fort Worth, Houston, Savannah, and Southern California continue to attract companies looking for strategic locations to store and distribute goods. At the same time, new development has become more difficult due to rising land costs, entitlement challenges, and increased regulations, creating a potential supply shortage in certain markets.
## The Different Types of Industrial Properties
Chase breaks industrial real estate into several categories, each serving different types of tenants and investors.
- Super bulk warehouses exceeding 700,000 square feet
- Bulk and medium distribution facilities ranging from 200,000 to 700,000 square feet
- Small bay and flex industrial properties designed for smaller businesses and service providers
He notes that small bay industrial properties have become particularly attractive because they serve a broad tenant base, including contractors, distributors, service businesses, and local companies that need a combination of office and warehouse space.
## Why Small Bay Industrial May Be an Opportunity
One of the biggest themes discussed during the episode is the growing interest in flex and small bay industrial properties. Chase believes these assets offer several advantages:
- Strong tenant demand from local businesses
- Multiple exit strategies for investors
- Potential interest from institutional buyers seeking scale
- Opportunities to increase rents on under-managed properties
Unlike large distribution centers that may rely on a single tenant, small bay industrial properties often have multiple tenants and can provide diversified income streams. Chase believes investors who can acquire these assets at attractive prices and improve operations may benefit from significant long-term value creation.
## How Data Centers Are Impacting Industrial Demand
Another major trend discussed is the explosion of data center development. While many investors focus on the data centers themselves, Chase points out that an entire ecosystem of companies supports this industry. Businesses that manufacture, store, and distribute equipment for data centers require warehouse space, creating additional demand for industrial properties in markets like Texas.
This secondary demand has contributed to increased leasing activity and is helping reshape the industrial landscape across the country.
## Finding Value in Industrial Real Estate
For investors interested in entering the industrial sector, Chase recommends focusing on properties that share characteristics familiar to multifamily investors. He suggests looking for:
- Long-term private ownership
- Under-managed assets with below-market rents
- Strong locations with favorable demand drivers
- Opportunities to improve operations and increase value
He emphasizes that many of the same value-add principles used in apartment investing can also apply to industrial real estate when investors understand the asset class and its unique dynamics.
Industrial real estate continues to evolve as supply chains, logistics, and technology reshape the economy. Chase McLeod provides a detailed look at why warehouses and flex properties are attracting increased investor attention and where opportunities may exist in the years ahead.
If you want to hear the full conversation and detailed insights, watch the podcast video or read the complete transcript below.
## Frequently Asked Questions About Industrial Real Estate
**What Is Industrial Real Estate?**
Industrial real estate refers to commercial properties used for manufacturing, warehousing, storage, distribution, logistics, and business operations. These properties include distribution centers, flex spaces, small bay industrial buildings, and large warehouse facilities.
**Why Is Industrial Real Estate a Good Investment?**
Industrial real estate has become an attractive investment because of strong demand from e-commerce, logistics companies, manufacturing, and data center infrastructure. Investors are drawn to the sector for its potential for long-term leases, steady cash flow, and opportunities for appreciation.
**What Are the Different Types of Industrial Real Estate?**
The primary types of industrial real estate include warehouses, distribution centers, manufacturing facilities, flex industrial properties, and small bay industrial buildings. Each serves different tenant needs and offers unique investment opportunities.
**What Is Small Bay Industrial Real Estate?**
Small bay industrial real estate consists of smaller warehouse and flex units that are often occupied by local businesses, contractors, service providers, and distributors. These properties typically have multiple tenants and are becoming increasingly popular with investors because of their diversified income potential.
**What Is Flex Industrial Space?**
Flex industrial space combines office space with warehouse or storage areas. These properties are designed to accommodate a variety of businesses, including construction companies, e-commerce operators, and service-based businesses that need both administrative and operational space.
**How Does E-Commerce Impact Industrial Real Estate?**
E-commerce has significantly increased demand for industrial real estate because companies need more warehouses and distribution centers to store inventory and fulfill customer orders quickly. This trend has fueled growth in industrial markets across the United States.
**Why Are Data Centers Increasing Demand for Industrial Real Estate?**
The rapid growth of artificial intelligence and cloud computing has created demand for data centers and the companies that supply them. Businesses that manufacture, distribute, and store equipment for data centers often require large industrial facilities, driving additional demand for warehouse space.
**What Should Investors Look for in an Industrial Real Estate Deal?**
Investors should look for properties in strong markets with favorable demand drivers, long-term ownership histories, below-market rents, and opportunities to improve operations. Location, tenant quality, and potential for rent growth are also critical factors.
**Which Markets Are Strong for Industrial Real Estate Investing?**
Markets with strong population growth, major transportation hubs, ports, and expanding logistics networks tend to perform well for industrial real estate investing. Cities such as Dallas-Fort Worth, Houston, Savannah, and Southern California continue to attract significant industrial demand.
**Can Industrial Real Estate Be Syndicated Like Multifamily Properties?**
Yes. Industrial real estate can be acquired through syndications and private investment groups, similar to multifamily properties. As investor interest grows, more opportunities are emerging for passive investors to participate in industrial real estate deals.
00;00;37;23 – 00;00;58;02
Rod Khleif
Welcome back to lifetime cash flow through real estate investing. I’m Rod Cleef, and I’m thrilled you’re here. As always. I’ve got a very interesting gentleman in here today all the way from California. Chase McLeod. Now, Chase is the founder and principal of McLeod and company. And their focus is industrial commercial real estate. Now, you know, we’ve been bringing in lots of different asset classes here.
00;00;58;02 – 00;01;16;04
Rod Khleif
And I was just telling Chase we had our warrior event last weekend, and we had one of my students who’s done a lot of industrial flicks, smaller industrial, do a presentation. Teaching it because we’re teaching it now is to was teaching senior housing there. We’re teaching all these different asset classes. So this is a real treat. Chase welcome brother.
00;01;16;04 – 00;01;18;07
Chase Mcleod
Thank you so much for having me. I really appreciate it.
00;01;18;08 – 00;01;34;19
Rod Khleif
Of course. Well, why don’t you give us a little background on you and and why real estate. And you’ve been at it, you know, 20 plus years, mostly larger tenants and institutional tenants. I think you called them. Yeah. Give us, give us, give us the backstory.
00;01;34;21 – 00;02;04;03
Chase Mcleod
I would love to. Actually, born and bred in Dallas, Texas. Went to SMU. And towards the end of my senior year in college, I actually got into a commercial real estate by accident. I had a core class and needed some extra credit in. Got invited to an economics club meeting. At that meeting, I met the senior vice President of Operations for a boutique commercial real estate tenant representation only firm in Dallas, and had a great conversation.
00;02;04;04 – 00;02;07;12
Rod Khleif
Explain what that means. Tenant representation I know, but my listeners may.
00;02;07;12 – 00;02;42;25
Chase Mcleod
Not sure. I think in any facet of commercial real estate, whether it’s office, industrial, etc., there’s different specialties that brokers tend to gravitate towards. One is tenant representation. You tend to say that you are not conflicted. You’re only representing tenants. You don’t represent landlords. Usually. The other term is corporate services. You’re a brokerage or a team that specifically pursues or chases or wants to represent large companies with a lot of leased facilities, office, industrial, etc. you want to be their broker, whether it’s Tallahassee, Florida or Dallas, Texas.
00;02;42;25 – 00;03;05;04
Chase Mcleod
You want to be their person. Got it. So the first company ever worked for that was their specialty back in the 90s. They actually started representing Federal Express and then Fedex in the early 90s. They made a pitch presentation to them that they should only have one broker, regardless of location. And the reason for that was, is they were going to learn the nuances of the company and the client better than anybody else.
00;03;05;07 – 00;03;07;23
Chase Mcleod
And the location was just, you know, that’s.
00;03;07;25 – 00;03;09;21
Rod Khleif
Viable, viable, viable.
00;03;09;23 – 00;03;15;00
Chase Mcleod
Yeah, yeah, yeah. So I accidentally stumbled into commercial real estate. I really thought.
00;03;15;01 – 00;03;16;00
Rod Khleif
You went to work for this guy or.
00;03;16;00 – 00;03;30;07
Chase Mcleod
What I did, well, the story was I followed up for two months. No response. Then I got a phone call this the second, second semester, my senior year, and he said, we’ve got a young team that needs an intern. When can you be here for an interview? And I said, when do you want me here? So I had one suit.
00;03;30;07 – 00;03;46;18
Chase Mcleod
I had to skip all my classes the rest of the day, went sat in the lobby for two hours, interviewed, got to interview for them or excuse me, work for them almost my entire second semester senior year. By the time I was a week away from graduation, they said, could you help me with some projects over the weekend?
00;03;46;18 – 00;04;04;04
Chase Mcleod
I said, yes, so this is my moment. So I waited about an hour and then I asked the boss. I said, I know that I can be an asset to this firm, to your team. I’d like to work full time, he said. How much? I said, how much money do I want to make? Said how much? I paused, had no idea what I was doing, and I said $30,000.
00;04;04;05 – 00;04;05;14
Rod Khleif
This was when.
00;04;05;16 – 00;04;28;08
Chase Mcleod
2006\. Wow. So accidentally got into commercial real estate, but felt like I loved it during my time in college and the team that I originally worked for, they had four national accounts they were doing all around the country tenant representation. So one facet of commercial real estate is specifically representing the interest of tenants. And then a work for that company for a few years in Dallas changed firms.
00;04;28;08 – 00;04;50;06
Chase Mcleod
And then what felt like almost overnight after I graduated college. Lehman Brothers and Bear Stearns announced recession in 2008. I went from basically working for a team that was nonstop to nothing. So the first team I worked for, I learned a tremendous amount about how to do a deal, how to do a commercial lease for a large corporation.
00;04;50;09 – 00;04;56;24
Chase Mcleod
The next individual that I worked for, my next firm, I got an MBA in what I would call sales.
00;04;56;25 – 00;04;58;12
Rod Khleif
Sales, sales and negotiation.
00;04;58;13 – 00;05;06;28
Chase Mcleod
He taught me how to cold call. But most importantly, and I carry this to this day. He taught me how to ask questions on the phone.
00;05;07;01 – 00;05;09;07
Rod Khleif
The best the best sales is asking questions.
00;05;09;07 – 00;05;16;10
Chase Mcleod
He went 100% taught me how to ask questions. That led to a conclusion that I was trying to get to have the other person.
00;05;16;11 – 00;05;18;16
Rod Khleif
You lead the conversation with questions. That is correct. That’s the best.
00;05;18;19 – 00;05;38;03
Chase Mcleod
So my first through of 4 or 5 years, even through the first part of the recession, I was doing corporate services, tenant rep. And then I met my now wife at SMU, and she decided to go back to California after she graduated for graduate school. And then when she graduated grad school, I proposed. And then I begged her to come back to Dallas.
00;05;38;09 – 00;05;55;12
Chase Mcleod
We worked in Dallas for a couple of years, and then in 2011, also a terrible time to be in the business. I was still doing corporate services tenant rep, but I decided she has a very large family in California, Southern California. And I said, if we’re going to build a family, I wanted to do it near your family because I’m a small one.
00;05;55;18 – 00;06;02;07
Chase Mcleod
2011 we moved to California with one car, two dogs, and no money. Is what I say.
00;06;02;08 – 00;06;11;28
Rod Khleif
Nice, nice. So you moved to California? Yeah, with a couple of dogs and no money. What did you do? I mean, just, you know, give us give us some highlights. So I was still.
00;06;11;28 – 00;06;36;25
Chase Mcleod
Doing corporate services and tenant representation. I was still representing a couple companies, fortune 1000, that I had procured myself around the country. And I came home one night and I just. I said to my wife, I said, I feel like I don’t know anyone. I feel like I don’t have any connectivity or relationships here because I was living in Orange County, but I was doing deals everywhere but California, all around the country.
00;06;36;25 – 00;07;05;21
Chase Mcleod
So I made a decision that I wanted to do business in Southern California. I wanted to do bigger business than I had ever done before. I changed firms again to a local firm called Voight Real Estate Services that had an outstanding reputation for industrial local representation. And that was agency leasing, which is when you represent a commercial landlord tenant representation and a ton of reputation and track record of by a rep and seller rep, all on industrial.
00;07;05;24 – 00;07;24;20
Rod Khleif
Now. I mean, just with my own being naive, I would think that LA would be a great place just because it’s a port and you probably got a lot of need for for industrial space. There is that is that is that a driver or what are the drivers in Southern Cal for industrial?
00;07;24;21 – 00;07;50;00
Chase Mcleod
Yeah, the port of LA and the Port of Long Beach have always been drivers for industrial real estate. Okay. And the biggest driver is pricing. So it starts at the port of LA in Long Beach. Over the last 35, 40 years it’s just been migrating east, mainly a function of land prices, right? The developers wanted cheaper land pricing to build cheaper buildings, willingness to lease them for a lower rate.
00;07;50;00 – 00;08;10;24
Chase Mcleod
But it’s all about basis for most of these developers, right? Right. So that’s been the story for 40, 50 plus years in Southern California. What’s been fascinating kind of fast forwarding to now is there are certain markets in Southern California where rent and land prices tend to be higher, a little bit further east than a little bit further west.
00;08;10;25 – 00;08;12;24
Rod Khleif
Well, that doesn’t make any sense. But okay.
00;08;12;25 – 00;08;27;23
Chase Mcleod
Well, there’s more opportunity in larger lots to build larger buildings slightly further east. And there also tend to be different demand drivers. So they’re clear height. Like what. Clear height. The actual height of a warehouse.
00;08;27;25 – 00;08;30;27
Rod Khleif
Oh. So oh the actual height inside the warehouse. Okay.
00;08;30;28 – 00;08;36;28
Chase Mcleod
So if there’s an opportunity to build a taller building further east and a tenant.
00;08;37;00 – 00;08;39;13
Rod Khleif
Because the eggs aren’t as strict or what?
00;08;39;16 – 00;08;57;06
Chase Mcleod
There’s an opportunity to buy a larger parcel or acreage assemblage. Right? And then usually there’s a there’s a tipping point on industrial warehouse square footage is where you really don’t build a certain height unless you’re building a certain size.
00;08;57;07 – 00;08;57;25
Rod Khleif
Yeah. That makes.
00;08;57;26 – 00;09;01;09
Chase Mcleod
So, for instance, you know, everyone knows that Amazon has Monster Warehouse.
00;09;01;09 – 00;09;02;18
Rod Khleif
Yeah. I was just going to bring that up. Yeah.
00;09;02;20 – 00;09;29;25
Chase Mcleod
So Amazon typically when they have developers build warehouses or frankly speaking, if developers are building warehouses with Amazon and Walmart and Target in their mind, right, it’s taller the better. Okay. There’s two real drivers for development, which is kind of on the same topic or kind of a little bit different. But the two biggest drivers of development right now, if you can find something big enough to build in Southern California, and if yes, that is true, which I’ll bring up Texas because I was just there a couple of weeks ago.
00;09;29;26 – 00;09;40;18
Chase Mcleod
Okay. It is becoming painfully difficult to not only find good, buildable sites in Southern California, but to actually get approval to build them.
00;09;40;20 – 00;09;48;11
Rod Khleif
Oh, yeah. Geez, don’t get me started on that. So these poor people who lost their houses through fires can’t, can’t rebuild their freaking homes because of this bullshit.
00;09;48;12 – 00;09;56;06
Chase Mcleod
Yeah. Then there seems to be some backdoor politics happening. Were somehow half of what got burned down is now right? Is as low cost.
00;09;56;06 – 00;10;08;24
Rod Khleif
Or got to be affordable housing. Yeah. Don’t get me started. We won’t go down that political rabbit hole. But but. Yeah. No. So. So you started your own company. Yes. Yes, sir. Okay. And you’ve had it. How long?
00;10;08;25 – 00;10;10;26
Chase Mcleod
Five years. Five years this year.
00;10;11;00 – 00;10;16;19
Rod Khleif
And you’ve done, like a billion, almost $1 billion in transactions. Correct. Yeah.
00;10;16;20 – 00;10;23;15
Chase Mcleod
So as of as of this month, we’re almost at 900 million nice and close transactions. We’ve been very.
00;10;23;19 – 00;10;24;05
Rod Khleif
Your company.
00;10;24;06 – 00;10;24;23
Chase Mcleod
For my company.
00;10;24;27 – 00;10;25;15
Rod Khleif
Congratulations.
00;10;25;16 – 00;10;33;13
Chase Mcleod
So we founded a little over five years ago. Vast majority of that is Southern California, but about 250 million of that. Those transactions were actually in.
00;10;33;13 – 00;10;44;08
Rod Khleif
Texas, in Texas as well. Yeah, I love Texas. I’ve got assets in Texas. I love visiting California. But yeah. So the most went there again. Almost went there again.
00;10;44;11 – 00;11;15;26
Chase Mcleod
The most interesting thing. And this is industrial real estate. This is Southern California, right. The the location of where the ports are, the amount of population that California has. And frankly speaking, I don’t know I don’t know statistics on me, but I guarantee you I went to SMU. We go to SMU alumni and recruiting events annually. The dean of the business school still comes to Southern California.
00;11;15;28 – 00;11;33;27
Chase Mcleod
Actually, he’s brand new, but the pitch used to be at SMU. Give me your kids for six years because I’ll give them a four year education, and then I’ll give him a job for two years. Then I’ll send them back to California. The new pitch of SMU, which, by the way, do you know what the number two incoming freshman population every year is for SMU, Southern California, really?
00;11;33;28 – 00;11;35;25
Chase Mcleod
Not even the state of California, Southern California.
00;11;35;27 – 00;11;36;12
Rod Khleif
Interesting.
00;11;36;12 – 00;11;48;17
Chase Mcleod
So the only reason why I bring that up is even schools like SMU and TCU know that California kids want to go to Texas. The flip side is a ton of them. Even if they’re given opportunities to get jobs in Texas and.
00;11;48;17 – 00;11;48;26
Rod Khleif
Stay.
00;11;48;27 – 00;11;55;27
Chase Mcleod
They want to come back. So as many I don’t know if this to the statistics, but for as many people that are trying to get out of California, there’s still.
00;11;55;27 – 00;11;57;06
Rod Khleif
A lot trying to get out.
00;11;57;12 – 00;11;58;02
Chase Mcleod
There’s a lot trying.
00;11;58;02 – 00;12;15;20
Rod Khleif
To get out. I mean, I see articles every day because my AI sends me articles to to do green screens on and talk about, you know, and a common topic is just the exodus from the blue states. I mean, you got that billionaire. I mean, we’re digressing a little bit here, but you have that billionaire tax, they’ve got these high income taxes.
00;12;15;21 – 00;12;37;00
Rod Khleif
And I was just listening to Joe Rogan interview Andreessen, you know the venture capitalist. Yeah. Mark Anderson and talking about how they’re worried that it could be a national thing at some point where there’s a, a tax based on your net worth. And, and so yeah, just anyway, we won’t digress. Let’s stick with you here. But but.
00;12;37;08 – 00;12;38;18
Chase Mcleod
I don’t know if that’s ever going to happen.
00;12;38;19 – 00;12;51;18
Rod Khleif
Yeah. Well let’s hope not. I mean, there’s some things right now. I mean, it’s it’s going to be there’s an election, it’s in the election. This this billionaire taxes. It’s there and it’s 5050 that it’ll pass.
00;12;51;20 – 00;13;04;05
Chase Mcleod
So I it would absolutely shock me if it did absolutely not shock me if somehow we, you know, wiggles through. They have the mansion tax in LA right. That that was meant to raise taxes or to raise more tax income. It didn’t.
00;13;04;06 – 00;13;11;25
Rod Khleif
Know of course people they leave and then then the rest of the people have to they lose money from their tax base. The rest of people have to make that loss up.
00;13;12;01 – 00;13;32;23
Chase Mcleod
There’s there’s a new bill that got past about a year and a half ago called AB 98 in Southern California. Basically, you can’t build a new industrial facility over 100,000ft² if you’re within 1000ft of residential. I can’t tell you where the good sites left to build are that aren’t within 1000ft of residential. And so that’s an interesting tipping point for our market in general.
00;13;32;28 – 00;13;48;22
Chase Mcleod
I watched one of your shows and they were talking about you had a wonderful gentleman on there. They had 900 employees all across the US. Your tagline was they’re going to buy at 1.5 billion in apartments this year with the gentleman’s name was oh, I don’t I watched it was.
00;13;48;22 – 00;13;49;29
Rod Khleif
A 1300 interviews.
00;13;50;05 – 00;14;07;21
Chase Mcleod
It was it was a great interview. You guys were talking about development. And when the tipping point was when people were going to build again and where values were going to go, because no one is building through 26, maybe early 27. Right. That’s the most fascinating thing about Southern California industrial real estate. Okay. So you’ve got two things that are conflicting.
00;14;07;21 – 00;14;25;13
Chase Mcleod
One, no one knows where the leasing market is. Sometimes the leasing markets great in one pocket. Sometimes it’s devastating even on the market for three years. In other pockets, you have a massive barrier of entry to be able to develop new product. Because of things like AB 98, we don’t have a good leasing market. So how do you underwrite a new build?
00;14;25;18 – 00;14;34;24
Chase Mcleod
It takes three and a half years to get it entitled. Why would you want to build. Right. So it hasn’t fully happened yet, but it will where existing building values will skyrocket.
00;14;35;01 – 00;14;35;26
Rod Khleif
Yeah, for sure.
00;14;35;27 – 00;14;57;24
Chase Mcleod
If we get a few more extra lease comps, right, if we get a little bit of a adjustment and interest rates, and if the namesakes, the lengths, the Blackstone’s, the JP morgan’s, the Clarens, etc. if those guys have a mandate where they jump in, then everyone will want to catch up before it jumps another 100 bucks a building.
00;14;57;25 – 00;15;06;10
Rod Khleif
Let’s talk about other types of industrial, because again, I told you my students are doing the industrial flex. So what are the different types of industrial that people can do?
00;15;06;15 – 00;15;07;17
Chase Mcleod
00;15;07;20 – 00;15;10;11
Rod Khleif
Of course there’s a big box stuff that you do, which is.
00;15;10;14 – 00;15;16;22
Chase Mcleod
Give a few categories. I’ll I’ll call it super bulk. Super bulk is going to be at least 500,000.
00;15;16;22 – 00;15;18;00
Rod Khleif
Square feet. An Amazon warehouse.
00;15;18;08 – 00;15;25;00
Chase Mcleod
That’s at least super bulk is probably 700,000ft² or more. If you’re speaking that developers are more afraid, they’re.
00;15;25;00 – 00;15;38;22
Rod Khleif
Building, expect 700,000 square foot warehouses. By the way, spec means you build it and you don’t have an end, and you know you don’t have a tenant for it or you don’t have it resold. Yes. That’s a that’s a that’s a big kahuna spec in the seven.
00;15;38;25 – 00;15;49;01
Chase Mcleod
My, my home and my specialty is Southern California. But I’m born and bred in Dallas, right. I was in Dallas Fort Worth, Houston three times last month.
00;15;49;03 – 00;16;03;08
Chase Mcleod
In Dallas Fort Worth. This this is a corroborated story from some of the best brokers, the best investors in the market in the Dallas-Fort worth market. Right now, there’s at least ten leasing requirements for at least 1,000,000ft² of warehouses.
00;16;03;09 – 00;16;06;02
Rod Khleif
Meaning there’s a demand for minimum. Wow.
00;16;06;03 – 00;16;08;08
Chase Mcleod
There’s at least ten requirements. Usually an industrial.
00;16;08;12 – 00;16;10;03
Rod Khleif
Requirement means there’s somebody that wants it.
00;16;10;04 – 00;16;15;22
Chase Mcleod
There is a rumor or there are tours or is legitimate or is a legitimate requirement in the market. Wow.
00;16;15;25 – 00;16;16;17
Rod Khleif
For a million square.
00;16;16;17 – 00;16;37;16
Chase Mcleod
Feet in industrial, the term is Tim. Tenants and market and and the biggest investors want that list. They want to know who’s in the market because a lot of them have either vacant buildings or they’re building buildings. Right. So the the actual rumor is there’s at least ten requirements. Wow. Looking for 1,000,000ft² or more. There are only three existing buildings built in the metroplex in that size range.
00;16;37;23 – 00;16;40;27
Chase Mcleod
So it went from kind of last 20.
00;16;41;00 – 00;16;53;03
Rod Khleif
Talk about the different. Sorry, sorry to interrupt, but but so what are the uses that you think comprise those ten? Just out of curiosity, what are the highest uses because you hear about data centers. I’m hearing about that a lot. Yes. Is that one?
00;16;53;04 – 00;17;10;00
Chase Mcleod
The most interesting part is everyone’s talking about data centers, right? The actual data centers themselves. What’s driving part of the industrial leasing market right now in markets like Texas? Right. Companies that store, distribute and sell equipment and components for.
00;17;10;02 – 00;17;10;27
Rod Khleif
The data centers.
00;17;10;29 – 00;17;12;03
Chase Mcleod
Need the warehouses.
00;17;12;04 – 00;17;12;27
Rod Khleif
Wow.
00;17;13;00 – 00;17;26;02
Chase Mcleod
And you have markets like Houston, Baytown, etc. there’s a limited requirements to entitle and approve and permit construction in a place like Texas. Entitling is the.
00;17;26;05 – 00;17;38;21
Rod Khleif
It’s not a pain in the ass. No it’s not. Houston doesn’t even have a zoning. I’m actually buying six assisted living facilities right now in Houston, Dallas and San Antonio. Yes, I love Texas. Yes. You know, I love Texas as much as I love Florida.
00;17;38;22 – 00;17;57;28
Chase Mcleod
So. So one question I asked on my tours in Houston and Dallas two weeks ago is I said, your developers that have fully entitled land for warehouses, that have been sitting on them waiting to go spec build without a tenant, right. Are they now debating reinstating it to a data center? The answer is yes.
00;17;58;00 – 00;17;58;22
Rod Khleif
The answer is yes.
00;17;58;25 – 00;18;07;29
Chase Mcleod
Yes. But the flip side is if they spec it with what it was already planned to be, which is a warehouse, will they still get at least because of what I’ll call the the data center trickle effect?
00;18;08;00 – 00;18;30;14
Rod Khleif
Well, yeah. The manufacturers and distributors that are that are supporting the data centers. Yes. Yeah. Wow. That’s crazy. That’s it. You know, you read some of these articles about the the economic needs that these data centers have. It’s like trillions. I mean, it’s it’s crazy. They’re talking about putting them in space for the cooling and the ocean for the for the energy.
00;18;30;15 – 00;18;31;15
Rod Khleif
I mean, just some crazy.
00;18;31;16 – 00;18;36;15
Chase Mcleod
Well, it’s a power consumption thing, but what most people don’t realize is, and I’m only on the surface of understanding the details.
00;18;36;15 – 00;18;37;03
Rod Khleif
Of this.
00;18;37;05 – 00;18;42;12
Chase Mcleod
There’s a water consumption component of it on certain data centers as well. It’s cool from a cooling standpoint.
00;18;42;18 – 00;18;43;10
Rod Khleif
Interesting.
00;18;43;11 – 00;19;14;00
Chase Mcleod
Wow. So the so if we’re talking about vampires, the Southern California market that we specialize the most in the Inland Empire is a hub for most third party logistics companies. Basically others that are getting paid to either bring in product from overseas and store it or bring it in, store it, and ship it. The the interesting thing is, at least 50% of our third party logistics clients we represent in Southern California are all asking us about Dallas, Fort Worth and Houston.
00;19;14;01 – 00;19;14;23
Rod Khleif
Really. So they want.
00;19;14;29 – 00;19;15;26
Chase Mcleod
Their next facilities.
00;19;16;00 – 00;19;16;19
Rod Khleif
They want to move there.
00;19;16;20 – 00;19;21;25
Chase Mcleod
They’re debating Houston for that port versus Dallas Fort Worth for location population.
00;19;21;27 – 00;19;26;14
Rod Khleif
Yeah, yeah, that makes complete sense. So back to my question about the different types of industrial.
00;19;26;15 – 00;19;41;12
Chase Mcleod
Yeah. So I’m sorry. So I’ll say super bulk which really is categorized I would say at least 700 to 750,000ft². When you’re speaking those buildings. Most developers are afraid of buildings that big becoming obsolete. Yeah. So the two things they’re looking.
00;19;41;12 – 00;19;44;04
Rod Khleif
At, that’s a that’s a life changing event that happens.
00;19;44;04 – 00;20;03;11
Chase Mcleod
How tall can we build it structurally? Usually it’s 40 to 42ft minimum. Clear. That means the building is probably another ten feet taller than that 5 to 10ft. Interesting. When when someone quotes a minimum clear height, it’s the minimum area under the right. Yeah. That you could you could store, I would say in between medium and 500,000ft² is still.
00;20;03;12 – 00;20;03;18
Rod Khleif
It’s.
00;20;03;18 – 00;20;32;20
Chase Mcleod
Not it’s still bulk. Right. But I would say bulk not super bulk is maybe somewhere around 400,000ft² up to that 700,000 square foot range. And then anything below 400 to about 200 is like medium. Okay. That, that that square footage size range could be fortune 1000 credit. It could be an overseas three pl third party logistics company you have never heard of before.
00;20;32;23 – 00;20;46;25
Chase Mcleod
That has one facility. One guy owns it. He’s bringing a bunch of product from overseas, mainly China, mainly Asia, and then under 200,000ft² down to about 50. Small to medium.
00;20;46;26 – 00;20;47;22
Rod Khleif
That’s small to medium.
00;20;47;24 – 00;20;48;01
Chase Mcleod
Small to.
00;20;48;01 – 00;20;49;02
Rod Khleif
Medium industrial. Yeah.
00;20;49;03 – 00;21;02;01
Chase Mcleod
So everything that I just named on square footage wise is what I would, what we would call a distribution warehouse. It’s meant to have a ton of doctors or an 18 Wheeler can back up. It’s meant to store high.
00;21;02;04 – 00;21;09;02
Rod Khleif
It’s meant to have you see, you see them where the doctors are level with the back of a trailer so they can literally roll them. Right? That’s correct. Right.
00;21;09;09 – 00;21;36;10
Chase Mcleod
And, and there’s a bunch of newer technology that’s been created and put in these buildings to make it as easy as possible for the truck to come in, sit flush of the forklifts, go in and out, in and out. Relatively speaking. The only thing I’ll add onto those medium bulk and super bulk facilities is they usually the distribution companies break their business down into kind of two models fulfillment and trans load fulfillment e-commerce.
00;21;36;17 – 00;21;50;00
Chase Mcleod
They’re bringing as much as you can, stack as much as you can inside of it and eventually ship it out, ship it out, ship it out. Trans load is really not meant to be stacked. It’s really meant to be sat on the floor because it’s moving so quickly in and out.
00;21;50;01 – 00;21;50;12
Rod Khleif
Gotcha.
00;21;50;19 – 00;21;54;02
Chase Mcleod
Those companies need as many doc doors as they can because they have a ton.
00;21;54;02 – 00;21;55;20
Rod Khleif
Of trucks. Need the ceiling height.
00;21;55;21 – 00;21;56;16
Chase Mcleod
They don’t use it.
00;21;56;18 – 00;21;57;22
Rod Khleif
Yeah, right. At least they don’t.
00;21;57;24 – 00;21;59;25
Chase Mcleod
So the two things they need is a lot of doctors.
00;21;59;26 – 00;22;00;07
Rod Khleif
Right.
00;22;00;08 – 00;22;06;11
Chase Mcleod
And the truck court has to be huge because they’re actually storing 18 wheelers overnight. Got it in between their trucks.
00;22;06;18 – 00;22;07;10
Rod Khleif
It’s called.
00;22;07;12 – 00;22;09;28
Chase Mcleod
Your flex question. I break that down.
00;22;09;28 – 00;22;19;04
Rod Khleif
And so we’re talking we’re going to talk about flex now guys which is what a lot of my students are doing. So okay so talk about that. Flex and their small bay as well right.
00;22;19;07 – 00;22;22;00
Chase Mcleod
Well there’s intertwining terms.
00;22;22;01 – 00;22;22;19
Rod Khleif
Okay. All right.
00;22;22;20 – 00;22;24;24
Chase Mcleod
All right I think flex and small bear the same.
00;22;24;25 – 00;22;25;15
Rod Khleif
Same thing. Got it.
00;22;25;16 – 00;22;29;07
Chase Mcleod
I think small Bay is a sexier institutional term.
00;22;29;09 – 00;22;31;01
Rod Khleif
Flex. Okay. Okay. Got it.
00;22;31;02 – 00;22;48;23
Chase Mcleod
Okay. Because everyone knows distribution warehouse. Everyone knows bulk. Right. Small bay. I’m not going to say that it was invented by institutions and investors, but it sounds more institutional than flex. Got it. Flex to me. Sounds private investor. Right. Small bay. Sounds like I’m building a portfolio of 30 properties that are small bay. Here’s my perspective.
00;22;48;25 – 00;22;52;11
Rod Khleif
Gotcha. Okay. All right. So? So describe describe it for my listeners.
00;22;52;12 – 00;23;02;04
Chase Mcleod
Yeah, I think there’s there’s two ways that we see the product. One is grade level only doors. They’re not meant for large.
00;23;02;05 – 00;23;03;05
Rod Khleif
Not meant for a semi.
00;23;03;06 – 00;23;12;28
Chase Mcleod
They’re not meant for a semi. And then that’s where small Bay comes into play. Small bay industrial can be dock high served. It can. More often than not, it is dock high served.
00;23;12;29 – 00;23;13;06
Rod Khleif
Oh, it.
00;23;13;06 – 00;23;22;29
Chase Mcleod
Is flex. I’ll just. I’ll give the category based on the businesses that go in there. Okay. Flex I would say t shirt silk screening business. Yeah. Next to the crossover.
00;23;22;29 – 00;23;25;25
Rod Khleif
Or carpet company that needs to the carpet storage next.
00;23;25;25 – 00;23;26;16
Chase Mcleod
To the CrossFit jump.
00;23;26;18 – 00;23;28;10
Rod Khleif
Right next to the CrossFit gym inside there.
00;23;28;12 – 00;23;53;23
Chase Mcleod
Okay. Really good flex in certain great locations. Looks like retail from the front. No kidding. Ton of glass. Great auto parking. And then 1 or 2 doors per unit in the back. Interesting what certain developers have. Excuse me. What certain investors have been fighting to buy around the country, and certain developers and certain pockets of the country, like one of my best friends in Fort Worth has started a development company specifically to develop.
00;23;53;26 – 00;23;54;14
Rod Khleif
Small bag.
00;23;54;17 – 00;23;54;23
Chase Mcleod
Yeah.
00;23;54;24 – 00;23;56;05
Rod Khleif
Small bag. It’s very lucrative.
00;23;56;06 – 00;23;56;16
Chase Mcleod
Because.
00;23;56;16 – 00;23;57;08
Rod Khleif
He knows.
00;23;57;10 – 00;24;15;06
Chase Mcleod
You can’t really buy good institutional grade product in that category. And if you build it the right way, if you can find a really good site that gives you two things permission to build tall so they can store if they want to install doctors. But also what are you missing on these.
00;24;15;07 – 00;24;15;26
Rod Khleif
Location?
00;24;15;27 – 00;24;17;00
Chase Mcleod
Its location.
00;24;17;00 – 00;24;18;03
Rod Khleif
But it’s also the freeway.
00;24;18;04 – 00;24;18;12
Chase Mcleod
Truck.
00;24;18;12 – 00;24;19;14
Rod Khleif
Parking truck park.
00;24;19;16 – 00;24;19;23
Chase Mcleod
Can you.
00;24;19;23 – 00;24;20;29
Rod Khleif
Do both? Interesting, interesting.
00;24;21;00 – 00;24;35;02
Chase Mcleod
Can you do truck parking on a small bay? If you have both, it’s it’s almost impossible to be a tenant who needs 20,000ft². Two doctors and room for two trailers. You can’t find that. So if you can find that.
00;24;35;03 – 00;24;35;21
Rod Khleif
Or create.
00;24;35;21 – 00;24;55;07
Chase Mcleod
It or create it, the thesis that one of my friends who’s the developer is coming to is. Institutional capital will always overpay for someone who solved the problem that was difficult to solve. And if they can get capital out the door at volume. So it’s not process is if I can build this at institutional level.
00;24;55;11 – 00;25;15;24
Rod Khleif
Or, or build enough of them so that it attracts institutional money. Like I’ve got students doing roll ups right now, which is the same kind of dynamic, just a different business. So your buddy, your best friend is building is building these things. I’m assuming to get some scale to ultimately sell to a to an institutional player, or just for cash flow.
00;25;15;26 – 00;25;37;01
Chase Mcleod
Or have enough of a portfolio that he can put into production for construction. And then if, if what he has prepared to build is big enough, the partner that his his partner that builds excuse me, got his equity partner for the construction would then take him out. Right. At stabilization.
00;25;37;02 – 00;25;37;14
Rod Khleif
Interesting.
00;25;37;14 – 00;25;39;05
Chase Mcleod
Doesn’t have to sell it right there.
00;25;39;05 – 00;25;48;14
Rod Khleif
Just just exit right inside his own team. Correct. Well that’s cool. That’s very cool. So describe why it’s called flex space.
00;25;48;16 – 00;26;09;03
Chase Mcleod
Typically flex or flex industrial. It’s all about ratios of square footage is. So if you look at a 50,000 square foot warehouse that’s meant to be a distribution warehouse. Usually developers don’t build. And frankly speaking, tenants don’t want more than 10% office in a building of that size. We’re really not looking for more than 5000ft² or a 50,000 square foot.
00;26;09;04 – 00;26;11;18
Rod Khleif
You need a bath, couple of bathrooms and some offices.
00;26;11;19 – 00;26;23;11
Chase Mcleod
Correct. Flex is closer to 50% on average. Oh it is. It’s meant to be a higher finish of office in the front. Meant to be a higher finish of maybe drop ceiling showroom and then almost warehouse as a secondary.
00;26;23;14 – 00;26;44;00
Rod Khleif
Interesting. Okay, interesting. But the flex piece relates to the office warehouse flex or the size of the units. Like if you’ve got a 100,000 square foot building, does flex relate to your ability to make one of the units larger than the others, or is it is it more relating to office versus warehouse?
00;26;44;01 – 00;26;51;13
Chase Mcleod
Yeah. I mean, when I think of flex, I think of multiple small units that could be expanded upon or combined.
00;26;51;14 – 00;26;56;11
Rod Khleif
Or combined. Okay. Got it. Okay. All right. So you’re not moving walls. You’re just maybe combining them.
00;26;56;13 – 00;27;16;05
Chase Mcleod
Yeah. Either if you’re expanding to it based on our experience, if you’re expanding to an adjacent or next door unit, you should, in theory if you need it. Either use both the glass fronts as your entrance, or you can tear a couple of walls down, either in the warehouse or in the office, or both. Okay. But flex is meant to be small units.
00;27;16;07 – 00;27;19;01
Chase Mcleod
And they’re also painfully expensive to build.
00;27;19;02 – 00;27;19;23
Rod Khleif
Oh, they are.
00;27;19;27 – 00;27;23;28
Chase Mcleod
Well, warehouses when you’re talking about 100,000ft² with four concrete walls in.
00;27;23;28 – 00;27;24;14
Rod Khleif
A roof.
00;27;24;21 – 00;27;37;18
Chase Mcleod
Right? You have less office finish. Right now, the land might be more expensive. That’s the counterintuitive part of it. Sometime back in 21 and 22, in the Land Empire, we were selling land for development at 80, 90, $100.
00;27;37;18 – 00;27;40;19
Rod Khleif
A year. Describe what the Inland Empire is for those that don’t know what you’re talking about.
00;27;40;19 – 00;27;49;13
Chase Mcleod
So the Inland Empire is what I would call a landing zone for product that needs to be stored. That comes in from the port of LA in Long Beach.
00;27;49;14 – 00;27;52;27
Rod Khleif
And it’s, it’s it’s east of of. Correct. Okay.
00;27;52;28 – 00;27;58;09
Chase Mcleod
It’s about it’s about depending on traffic. It’s about 60 to 120 minutes east of the port of L.A..
00;27;58;10 – 00;28;00;19
Rod Khleif
An hour to two hours east of. Right. Okay.
00;28;00;21 – 00;28;29;11
Chase Mcleod
And it’s Riverside County in San Bernardino County. If I’m saying this correctly, which I hope I am, I believe San Bernardino County is at or around the same size as Rhode Island, but the bulk of where the Inland Empire is in San Bernardino County is the westernmost part. So Riverside and San Bernardino counties for industrial, real estate, industrial warehouses, it is, I mean, what I would call the landing zone of product that comes in from the port.
00;28;29;13 – 00;28;42;27
Chase Mcleod
Now, certain businesses still use Orange County, LA, etc., but developers and investors originally expanded the Inland Empire for cheaper land to build.
00;28;42;28 – 00;28;49;29
Rod Khleif
Okay. Talk about the impact of Chinese capital in your business.
00;28;50;01 – 00;28;51;08
Chase Mcleod
It’s absolutely huge.
00;28;51;11 – 00;28;53;17
Rod Khleif
So what’s happening?
00;28;53;19 – 00;29;13;00
Chase Mcleod
I’ll tell you two stories. One, one of, if not the largest public rights in the world for industrial real estate. I had a meeting with them a few months ago. We were talking about the market. We were talking about clients that we were representing, that were looking for 3 to 4 to 500,000ft² of warehouses in the Inland Empire.
00;29;13;04 – 00;29;27;18
Chase Mcleod
Three months ago, they said if it was not for Chinese and Asian businesses leasing warehouses, that the leasing market would be close to crickets.
00;29;27;19 – 00;29;29;04
Rod Khleif
No kidding right now. Well.
00;29;29;10 – 00;29;59;07
Chase Mcleod
The same is almost occurring in places like Texas. Another story I’ll say is about a year ago, we were working on a deal representing a tenant to help them lease a warehouse 380,000ft². Everything was done. Everything was negotiated on the lease. Terms were agreed to. The final lease was issued. This was someone. It’s very, very typical. So the owner of the company typically lives overseas.
00;29;59;10 – 00;30;27;28
Chase Mcleod
The business needs one, two, maybe three warehouses in Southern California. Sometimes they’re in Texas, North Carolina, Savannah, etc. and on Thursday night, I get a phone call from the head of operations. You know, locally in California, we’re good to go send the lease for DocuSign. Well, why are the deposit okay? Did everything Thursday night. Didn’t hear anything. And I’m in a meeting and I get three back to back phone calls from the local operations guy.
00;30;28;04 – 00;30;49;03
Chase Mcleod
I had to leave the meeting like this is. This is not good. Called him back. He said, I’m so sorry. I said, don’t don’t say that. What happened? He goes, we were all ready to go. We went to go initiate our wire for $6 million to cover the deposit, first month’s rent and some buffer money for the brand new deal, ten year lease.
00;30;49;03 – 00;31;07;11
Chase Mcleod
And the government restricted us to only wire out 3 million. We have no idea where we’re going to be able to get the other 3 million. That was last April, right at the beginning of tariffs and the ripple effect from that. Now fast forward to now. So that deal died.
00;31;07;12 – 00;31;08;29
Rod Khleif
That deal. That deal done that.
00;31;09;00 – 00;31;39;05
Chase Mcleod
Wow. That was a 20 plus million. The value of that lease that we get paid on as a commission. The value of that lease was over $20 million. The evaporated overnight. Now you fast forward to now. And you look at the first five months of leasing for warehouses over 250,000ft² in the land empire, I would venture a guess that at least 35 to 45% of those leases have been done by Asian or overseas.
00;31;39;06 – 00;31;43;19
Rod Khleif
Three pieces. So did did you figure out why they wouldn’t allow the full six.
00;31;43;24 – 00;31;45;10
Chase Mcleod
Government was restricting.
00;31;45;11 – 00;31;46;14
Rod Khleif
Taking these government?
00;31;46;15 – 00;31;50;17
Chase Mcleod
The Chinese government was restricting taking money out. And this was.
00;31;50;19 – 00;31;51;00
Rod Khleif
About that.
00;31;51;01 – 00;31;51;21
Chase Mcleod
And this was right at the.
00;31;51;21 – 00;31;54;09
Rod Khleif
Beginning of the United States. It was China. Oh. Got it.
00;31;54;10 – 00;32;08;14
Chase Mcleod
No, it was the Chinese government restricting it. Wow. So we sold a warehouse last December for a client of ours that 51% of the parent company was owned by the Chinese government. Wow. Took us two and a half years to.
00;32;08;14 – 00;32;10;07
Rod Khleif
Sell it. Wow. Wow wow wow.
00;32;10;08 – 00;32;35;14
Chase Mcleod
So in answer to your question, it’s a it’s a it’s almost a counterintuitive story. The last 14 months, the leasing market went crickets because of the lack of Chinese and Asian businesses that were allowed to lease warehouses. Now, fast forward to today, 35, 45, 50% of all leasing that’s happening in a pocket like Inland Empire are those same Chinese businesses.
00;32;35;20 – 00;32;52;24
Chase Mcleod
But then one step forward is we were talking about the government. We were talking about bills and things like that. There’s now a new bill in Texas that it really was created to protect land acquisitions by foreign entities around.
00;32;52;24 – 00;32;55;26
Rod Khleif
Air force bases. You hear about them buying land around military bases.
00;32;55;27 – 00;32;56;24
Chase Mcleod
Called SB 17.
00;32;56;25 – 00;32;57;05
Rod Khleif
Okay.
00;32;57;06 – 00;33;22;27
Chase Mcleod
So I think the real reason or the I’m not an attorney, right. But the real reason for that bill was to protect things like that. What the byproduct has happened is if. A person owns more than 10%, this is what was explained to me. I’m not an attorney. If someone domiciles in China and they own more than 10% of a company or entity looking to lease a commercial facility.
00;33;23;00 – 00;33;24;27
Rod Khleif
In Texas, build.
00;33;25;00 – 00;33;26;05
Chase Mcleod
Lease, maybe.
00;33;26;05 – 00;33;27;18
Rod Khleif
Purchase. Okay.
00;33;27;20 – 00;33;40;07
Chase Mcleod
It’s restricted on the east side. They only allow 364 days of a lease. You can’t go longer than that. You have to have an entity that is not owned or controlled by a foreign domiciled individual.
00;33;40;08 – 00;33;44;24
Rod Khleif
I don’t understand why the leasing would be a big deal. I can understand buying land around a military base.
00;33;45;02 – 00;33;47;05
Chase Mcleod
I think it got somehow like incorporated.
00;33;47;05 – 00;33;59;18
Rod Khleif
Convoluted into it. Okay, so one of your interview topics you put on your bio was the industrial market just gave tenants the best hand they’ve had in a decade? Yes. What are you talking about with that?
00;33;59;19 – 00;34;03;07
Chase Mcleod
The market is unbelievably inconsistent right now. Okay. And frankly.
00;34;03;09 – 00;34;07;18
Rod Khleif
Because so. Oh got it. So it’s a it’s a leasing. It’s a it’s like a buyer’s market.
00;34;07;20 – 00;34;09;23
Chase Mcleod
It is 100% attendance market.
00;34;09;24 – 00;34;10;10
Rod Khleif
Gotcha.
00;34;10;16 – 00;34;37;07
Chase Mcleod
Mainly because if we’re talking about the large bulk warehouses let’s call Southern California text is a little bit different right now. But in Southern California, anything over 100 and 200,000ft², most of that is institutionally owned. The links, the JPMorgan’s, the clearance, etc.. Right. And a lot of it has been sitting vacant for a long time. Wow. Six months, one year, two years, etc..
00;34;37;08 – 00;35;07;07
Chase Mcleod
Now if you layer on the vacancy component with that term, we talked about tenants and market. There aren’t a ton of tenants in market looking to lease those spaces. So when it was 2022 for a 100,000 square foot warehouse in the Land Empire Fontana, we were seeing deals done at $2 per square foot per month. Triple net, which means property taxes, insurance cams are on.
00;35;07;07 – 00;35;08;15
Rod Khleif
Top of the tenant pays everything.
00;35;08;15 – 00;35;20;22
Chase Mcleod
So if it’s a gross number that was $2.30 per square foot per month for 100,000 square foot unit. Okay. Excuse me. Building. I want to say unit today. It’s almost half.
00;35;20;24 – 00;35;23;04
Rod Khleif
Really? Wow. Wow.
00;35;23;10 – 00;35;47;20
Chase Mcleod
So the most difficult thing about our market right now is this is on the buyer and seller side. This is on the tenant and landlord side for for the Inland Empire. We still don’t really know what these buildings are worth anymore because of inconsistency. Right. A building over here in this part of the market and what’s called San Gabriel Valley, City of Industry, it’s a very, very heavy Asian business market.
00;35;47;22 – 00;36;05;18
Chase Mcleod
We sold a building for $328 a square foot last month. If you go 15 to 20 miles east, which is not that far, there are buildings selling for 190 per square foot. Now on the leasing side.
00;36;05;20 – 00;36;28;24
Chase Mcleod
Landlords have an unbelievably difficult job right now because sometimes there’s good comps and an institutional landlord like you would if you own a 200 unit apartment complex in a great market, Miami, you’re going to cling to the best comp, right? That’s your benchmark. We have a couple of benchmarks. We have a lot of vacancy. So do you want to take the next tenant and give the most concessions and get the deal done.
00;36;28;24 – 00;36;33;10
Chase Mcleod
Or do you think it’s going to turn on a dime? Yeah. That’s the hardest thing about industrial estate in Southern California.
00;36;33;10 – 00;36;56;02
Rod Khleif
Right now. Yeah, we’re having a challenge with a couple of appraisals on this six pack of assisted living facilities. Facilities were mind because the cops are just just aren’t there and they’re screaming deals but the cops aren’t there. Well, before we started recording, you mentioned that industrials becoming very sexy. And you think that they may bring in retail investors, which is what we do.
00;36;56;03 – 00;37;10;09
Rod Khleif
You know, we’ll bring in somebody for 100,000 a pop. And that’s like I’m raising 7.2 million for this six pack at about 100,000 a pop. Those are retail investors, right. Talk about elaborate on that.
00;37;10;12 – 00;37;30;22
Chase Mcleod
To me. You go to a cocktail party and you talk to people about diversification and real estate, right? Nine times out of ten apartments are going to come up, right? Apartments are easily digestible by someone who’s never been an investor before. Because you know what an apartment looks like. You know what it smells like and tastes like, etc. most people can’t say that about industrial.
00;37;30;28 – 00;37;55;04
Chase Mcleod
Most people can’t say that. Now. The flip side is from an investment standpoint, it’s unbelievably difficult to find a good deal, right? And the risk profile is different, right? If you buy a 20 unit complex in a outskirt market in Dallas, you’re pretty safe. Large one bedrooms, baristas, bartenders, etc. you’ve got rental cash flow. You’ve got comps that support it.
00;37;55;04 – 00;38;18;21
Chase Mcleod
You lose three units. Just call my property manager and figure it out. You put 250 grand into a syndication, or a fund that buys a 50,000 square foot building for a great price, right? The basis is awesome. The location is awesome. Those leases get done every 3 to 5 years. We are in an environment right now where there’s probably 1750 on the market for lease right now that are vacant.
00;38;18;25 – 00;38;25;02
Rod Khleif
No kidding. 1750s oh 17 50 square foot facility is what you’re saying.
00;38;25;04 – 00;38;26;08
Chase Mcleod
A 50,000 square foot.
00;38;26;08 – 00;38;27;21
Rod Khleif
Warehouse, 50,000 square foot warehouse.
00;38;27;26 – 00;38;44;24
Chase Mcleod
So a 50,000 square foot warehouse in the industrial real estate world is really small. Gotcha. Relatively speaking. Now, if you were to buy a 50,000 square foot warehouse in a market like the Inland Empire, I would probably say you’d be lucky to buy it for $13 million.
00;38;44;25 – 00;38;47;08
Rod Khleif
Wow. Holy shit. So that’s crazy.
00;38;47;08 – 00;38;59;09
Chase Mcleod
But what’s interesting to me is if you can get over the risk profile, I think the tenant pool, relatively speaking, is just as big as something like apartments.
00;38;59;12 – 00;39;26;09
Rod Khleif
Listen in. Especially if even smaller than that. Even smaller than 50,000 square foot. You know, like a flex. These flex things, you’ve got office warehouse. Every trades company in the world wants one HVAC, electrical, plumbing, drywall, I mean the painters, a carpet, flooring installation. They need some warehouse and they need an office. And so there’s, you know, and then like, I know my some of my students have assets in Savannah Port.
00;39;26;09 – 00;39;27;04
Chase Mcleod
They’re great.
00;39;27;06 – 00;39;47;13
Rod Khleif
Great market. Yeah. Reporting Houston. Yeah yeah yeah yeah. So you know, I think there’s a I think there’s an opportunity in that asset class in some of these smaller industrial flex basis. As long as the demand drivers are there. And that was the big focus of the, you know, the presentation we did last weekend.
00;39;47;15 – 00;39;52;09
Chase Mcleod
So a ton of your background originally was single family investing. Correct.
00;39;52;10 – 00;39;53;24
Rod Khleif
And then multifamily in a big way.
00;39;53;25 – 00;40;13;02
Chase Mcleod
So I got to watch a ton of your shows leading up to our time together. And I this is the best analogy I can give. Would you agree? Single family home to single family home. An owner user that wants to buy it, move in and raise his family is going to pay more than an investor that wants to buy it and lease in cash.
00;40;13;02 – 00;40;13;14
Rod Khleif
Flow it.
00;40;13;16 – 00;40;27;05
Chase Mcleod
For sure. Okay, so that’s the dynamic of what’s different about industrial is I think you have different exit strategies. So if you buy it right, you could at least and hold it. You could sit on it for two years and flip it.
00;40;27;06 – 00;40;28;29
Rod Khleif
Couldn’t you condo condo it.
00;40;29;00 – 00;40;29;19
Chase Mcleod
And you.
00;40;29;19 – 00;40;31;15
Rod Khleif
Can insert each one individually.
00;40;31;19 – 00;40;38;25
Chase Mcleod
It depends on the the makeup of the facility. Condo mapping is possible. Kind of depends on.
00;40;38;25 – 00;40;39;16
Rod Khleif
I’ve seen it done.
00;40;39;21 – 00;41;06;16
Chase Mcleod
Yeah. Yeah, it depends on the makeup. Usually condo wing happens back to your term out flex. Condo map happens when you buy a 50,000 square foot flex building that already has 15 units. But it’s one parcel, right? So you put the map on. So that was very popular in Southern California. The difference is I still think there’s going to be a way of eventually of retail investing in assets like industrial, real estate.
00;41;06;17 – 00;41;07;13
Rod Khleif
Larger industrial.
00;41;07;14 – 00;41;23;03
Chase Mcleod
Larger industrial. Interesting. Now someone’s going to go out and syndicate it, or they’re going to raise it or whatever and be the operator. And that’s that’s difficult because most industrial real estate investors prefer to have one partner. They want to go to one institutional partner to have.
00;41;23;04 – 00;41;30;02
Rod Khleif
Yeah. I think this is your model of the world just because you’ve been at it. But yeah, you can you can teach around that. Oh, you can.
00;41;30;04 – 00;41;31;15
Chase Mcleod
See that’s why I think it’s the future.
00;41;31;16 – 00;41;31;21
Rod Khleif
Yeah.
00;41;31;22 – 00;41;51;14
Chase Mcleod
Okay. Because those institutions are unbelievably difficult to deal with sometimes on small deals. Gotcha. Now, the flip side is if if both of us have access to a 50,000 square foot warehouse in Ontario, California, and we can prove we’re getting it for 20% below market, we don’t think there’s that much we have to invest in to fix it.
00;41;51;15 – 00;42;05;03
Chase Mcleod
We think it’s going to take us eight months or less to lease it. Now, the flip side is the exit strategy on a 50,000 square foot warehouse in Southern California is in five years. An owner user might drastically overpay us to put his business in there.
00;42;05;03 – 00;42;09;25
Rod Khleif
Yeah, yeah. So very viable. I think that’s not just in California. I think that’s it’s all over the country.
00;42;09;26 – 00;42;20;21
Chase Mcleod
All over the country. Yeah, Miami. We actually just did our first industrial lease by the Miami airport. Oh, yeah. For one of our clients. And you’re right. Miami. New Jersey. Savannah.
00;42;20;26 – 00;42;39;06
Rod Khleif
Chicago can’t keep people out of Florida. You can’t keep him out of out of Savannah, Georgia, parts of Georgia, the Carolinas, Texas. I mean, it’s crazy. Well, listen, brother, I really appreciate you coming on to the show. Thank you so much. A ton of value. I my head’s swimming a little bit from all the stuff we were talking about.
00;42;39;06 – 00;42;44;29
Rod Khleif
And, you know, it’s a real pleasure to meet you. And, you know, you’ve done some big things. And I’m sure that’s going to continue.
00;42;45;05 – 00;43;14;18
Chase Mcleod
Would you mind if I ask you a question? Sure. So impressed and blown away by the seminars and the educational platform that you’ve built. Thank you for for your audience. Thank you. What I think is missing, frankly speaking, in my business, is there’s not a very good platform, if any, that’s willing to share insight on how to broker these deals.
00;43;14;19 – 00;43;35;03
Chase Mcleod
That’s number one. And number two, there’s no one that’s really sharing an educational platform on how to invest in it. Yeah, because when you look at apartments, like you and I were talking about, no one, no one who has ever invested in partment needs to be educated on what apartments are, right, what they what they can be. It’s the complete opposite for industrial.
00;43;35;04 – 00;43;37;16
Chase Mcleod
Yeah. And I think there’s a fear.
00;43;37;19 – 00;43;55;12
Rod Khleif
Well, it’s just an ignorance. They just don’t know it. They don’t. They don’t understand it. Well, I’m going to brag for a minute. This. We just discovered this on Wednesday. I now have the largest real estate coaching program. Really? On the planet. Really? Yeah. My students on 300, we’re counting, and we’re at 305,000 units that they own under my tutelage.
00;43;55;12 – 00;44;15;03
Rod Khleif
And we know it’s a lot more than that because nobody, not everybody responds. And yeah, which is more than everybody else that teaches this combined. So on the multifamily side and then we’ve got every asset class represented, including the smaller industrial, like I said, senior housing, self-storage, student housing, mobile home parks, all of it. And it’s really exciting.
00;44;15;03 – 00;44;43;05
Chase Mcleod
But I will give some insight to your students on this because you talked about your students are expanding into flux, right? Small bay in flux. One of them. Yeah. So the number one profile that most investors are seeking when they buy any type of industrial is you’re looking for something that has been legacy owned under managed with lack or inconsistency of pushing rents.
00;44;43;13 – 00;45;04;03
Chase Mcleod
That’s a story as old as time for opponents, right? Sure. I think I told you this. So we have a new apartment listing for sale in Riverside, California. That’s that profile, 1970s build. The the brother and sister that are our clients that were selling it for their father. Bought the land built at 156 units. That’s the profile. Yeah.
00;45;04;07 – 00;45;29;18
Chase Mcleod
Even if your students have never invested in industrial, never been in industrial, etc., if they were going to start through your program and you guys were going to go look for the next round, the number one thing that I would seek out in any market, private ownership, own for at least 20 years. And then I would try to do some level of due diligence, if you can, on the tenants, which you can find on CoStar and stuff like that.
00;45;29;18 – 00;45;36;01
Chase Mcleod
But that demographic doesn’t want to be a landlord anymore, right?
00;45;36;02 – 00;45;36;23
Rod Khleif
No. They’re tired.
00;45;36;24 – 00;45;37;07
Chase Mcleod
Doesn’t want.
00;45;37;07 – 00;45;42;07
Rod Khleif
To be. There’s 10,000 people a day turning 65 in this country. They own some of this property and they.
00;45;42;07 – 00;45;50;15
Chase Mcleod
Want out. And I bet if you actually peel the onion, here’s the next thing. You definitely want them to have inherited it from.
00;45;50;15 – 00;46;08;12
Rod Khleif
Their kids. Don’t. Yeah, the kids don’t listen. Mom and dad did that. I just want the money. Totally. Right. You know. Yeah, that’s happening to in a big way. There’s lots of opportunity right now, guys. You can buy businesses. Like, he was just describing that a lot of opportunities in real estate where that’s happened, where properties have been inherited.
00;46;08;12 – 00;46;16;14
Rod Khleif
And you know, I finally got my kids interested. Good God, after freaking, you know, 48 years doing this. But yeah.
00;46;16;15 – 00;46;45;08
Chase Mcleod
But the profile is the same on on on flex or smoke. Now, now single tenant industrial is a little bit different. But the the let’s just call it what it is. It’s multi-tenant industrial I would really say three four plus the the same strategy that you teach your students on multifamily, whether it’s Sarasota or San Diego. To me, the the opportunities to go out and by flex industrial right now is one.
00;46;45;12 – 00;46;48;10
Chase Mcleod
Institutions don’t want to buy small deals, right. They want to buy portfolio.
00;46;48;12 – 00;46;48;28
Rod Khleif
Same with the.
00;46;49;01 – 00;47;04;28
Chase Mcleod
Complex number one. Number two more often than not they’re under managed. Number three, to create a transaction. Right. There has to be some level of urgency. Right on the other end, on the on the side where it feels like the buyer.
00;47;04;29 – 00;47;13;24
Rod Khleif
And I get people he doesn’t want to sell. What can I do? I’m like, you’re pushing a rope. There’s got to be motivation, right? Right. Totally love it. Well thanks, brothers, very much. A pleasure.
00;47;13;24 – 00;47;18;01
Chase Mcleod
To meet you. Unbelievable. Grateful that you reached out. I’m glad I was already all the way.
00;47;18;02 – 00;47;19;06
Rod Khleif
Yeah. You were here anyway.
00;47;19;07 – 00;47;19;14
Chase Mcleod
On the.
00;47;19;14 – 00;47;25;27
Rod Khleif
Side of the country. Thank God you have to fly from California. I’ve had that happen many times, but no, that’s much easier. Well, it’s a pleasure, brother.
00;47;25;28 – 00;47;26;25
Chase Mcleod
Thank you so much again.
00;47;26;26 – 00;47;27;11
Rod Khleif
You bet.
**Podcast Categories:** Podcasts
---
### [How a Single Mom Built a 540 Unit Real Estate Portfolio](https://rodkhleif.com/podcasts/multifamily-asset-management-with-ify-asoh/)
**Published:** July 3, 2026
**Author:** Bryan Hoover
**Excerpt:** How a Single Mom Built a 540 Unit Real Estate Portfolio
**Content:**
## How Multifamily Asset Management Drives Apartment Investing Success
Multifamily asset management is often the difference between an average investment and an exceptional one. In this episode of Multifamily Rockstars, multifamily operator and private equity sponsor Ify Asoh shares how effective asset management, team building, and operational oversight have helped her grow to more than 540 apartment units across Texas and Pennsylvania with over $54 million in assets under management.
Her journey is particularly inspiring because she started with no commercial real estate experience. A critical care pharmacist and single mother of three, Ify entered real estate in 2022, immersed herself in education, and quickly realized that multifamily investing is a team sport. By leveraging mentorship, networking, and strategic partnerships, she closed her first two apartment deals within a week of each other and has continued to expand her portfolio.
## Why Building the Right Team Matters
One of the biggest lessons from this conversation is that commercial real estate investing cannot be done alone. New investors often assume they need to master every aspect of the business themselves, but Ify emphasizes that success comes from surrounding yourself with experienced operators, sponsors, and partners.
She discusses how joining a community of multifamily professionals accelerated her growth and allowed her to find partners who could assist with:
- Loan sponsorship and lending qualifications
- Capital raising and investor relations
- Asset management and operational execution
- Deal analysis and strategic decision making
By assembling the right team, investors can overcome experience gaps and participate in larger apartment acquisitions much sooner than they might expect.
## What Multifamily Asset Management Really Looks Like
Many investors underestimate the importance of multifamily asset management. While acquisitions and raising capital often receive the most attention, the real work begins after the deal closes.
Ify explains that asset management involves continuously monitoring the health of the investment and identifying potential issues before they become major problems. Her team focuses heavily on operational metrics and maintains constant communication with property management teams.
Some of the key performance indicators they monitor include:
- Occupancy and vacancy rates
- Lead generation and leasing conversions
- Delinquencies and collections
- Lease renewals and resident retention
- Online reviews and resident satisfaction
She compares asset management to spotting an iceberg before it threatens the ship. Successful operators stay ahead of problems rather than reacting after performance begins to decline.
## The Importance of Lead Conversion and Leasing Performance
One of the most valuable insights from this episode comes from a real-world example involving one of Ify’s Pennsylvania assets. The property had historically served as student housing but was transitioning into a traditional apartment community.
Although the property was generating plenty of leads, conversions remained low. Through careful asset management and detailed reporting, the team discovered that the property manager excelled in student housing but struggled with traditional apartment leasing.
This experience reinforced an important lesson for investors: numbers alone do not tell the whole story. Asset managers must understand the operational drivers behind the metrics and work closely with onsite teams to improve performance.
## Active Versus Passive Real Estate Investing
Ify also encourages aspiring investors to determine whether they want to be active or passive participants in real estate. Both approaches can create wealth, but active investing requires significant time, education, and operational involvement.
For investors who choose the active route, multifamily asset management offers one of the most impactful roles on any apartment investment team. It provides a deep understanding of operations and can create tremendous value over the life of an investment.
## About Ify Asoh
Ify Asoh is a multifamily operator, private equity sponsor, and founder of Goshen Capital Investments. She is also a critical care pharmacist and single mother who successfully transitioned into commercial real estate investing. Since beginning her multifamily journey in 2022, she has grown her portfolio to more than 540 apartment units across Texas and Pennsylvania and oversees approximately $54 million in assets under management.
Throughout her investing career, she has become particularly passionate about multifamily asset management, investor relations, and building high-performing teams that create long-term value for investors.
If you want to hear the full conversation and detailed insights, watch the podcast video or read the complete transcript below.
## Frequently Asked Questions About Multifamily Asset Management
**What Is Multifamily Asset Management?**
Multifamily asset management is the process of overseeing an apartment property’s financial performance, operations, and business plan after acquisition. Asset managers work closely with property management teams to maximize income, control expenses, increase property value, and deliver returns to investors.
**Why Is Multifamily Asset Management Important?**
Multifamily asset management is important because it directly impacts the profitability and long term success of an apartment investment. Strong asset management helps identify problems early, improve operational efficiency, increase occupancy, and ensure the property achieves its investment goals.
**What Does a Multifamily Asset Manager Do?**
A multifamily asset manager monitors property performance, reviews key metrics, manages business plans, oversees renovations, communicates with investors, and works with property management companies to improve operations and maximize returns.
**What Key Performance Indicators Are Used in Multifamily Asset Management?**
Some of the most important key performance indicators in multifamily asset management include occupancy rates, vacancy rates, lease renewals, rent collections, delinquency rates, lead conversions, net operating income, and resident retention.
**How Does Multifamily Asset Management Increase Property Value?**
Multifamily asset management increases property value by improving net operating income through higher occupancy, strategic rent increases, expense reductions, and operational efficiencies. Since apartment values are largely based on income, better performance often leads to higher property valuations.
**What Is the Difference Between Property Management and Asset Management?**
Property management focuses on the day to day operations of an apartment community, including leasing, maintenance, and resident relations. Asset management focuses on the bigger picture by creating and executing strategies that improve financial performance and maximize investor returns.
**How Often Should Multifamily Asset Managers Review Property Performance?**
Most multifamily asset managers review property performance weekly or monthly. Regular reviews of financial reports, occupancy trends, leasing activity, and resident feedback help identify issues quickly and keep the property on track to meet its goals.
**Why Are Lease Renewals Important in Multifamily Asset Management?**
Lease renewals are important because retaining existing residents is often less expensive than acquiring new tenants. High renewal rates help stabilize occupancy, reduce turnover costs, and improve the overall financial performance of an apartment community.
**Can Passive Investors Benefit From Understanding Multifamily Asset Management?**
Yes. Even passive investors benefit from understanding multifamily asset management because it allows them to evaluate investment opportunities, assess operator performance, and better understand the factors that drive returns in apartment syndications.
**What Skills Make Someone Successful in Multifamily Asset Management?**
Successful multifamily asset managers typically possess strong analytical skills, communication abilities, financial knowledge, leadership qualities, and problem solving capabilities. They must be able to identify opportunities, manage teams, and make strategic decisions that improve property performance over time.
00:00:39:08 – 00:01:03:06
Rod Khleif
Welcome back to multifamily Rock star. So as you guys know, this is where we deep dive into our guest deals and really give you practical and actionable tip, actionable tips to do your own first deal. And today I’ve got doctor ifI asco on and she’s with Gaussian capital investments multifamily operator. She’s a private equity sponsor. She’s also a critical care pharmacist.
00:01:03:06 – 00:01:27:19
Rod Khleif
She’s also more importantly a single mom with multiple children who is just a wonderful human being. She’s a Nigerian immigrant. And so she spent 15 years taking care of critically ill patients. And but she’s in 540 apartment units now in Texas and Pennsylvania. She’s she’s got she’s in a total of about $54 million in assets under management. And she’s just a beautiful human being.
00:01:27:20 – 00:01:29:04
Rod Khleif
Welcome to the show. You.
00:01:29:05 – 00:01:32:06
Ify Asoh
Thank you. Ron, thank you so much for having me again.
00:01:32:07 – 00:01:37:24
Rod Khleif
Of course, of course. So you were on the show a couple of years ago. How long have you been a warrior? Now.
00:01:38:00 – 00:01:42:05
Ify Asoh
I started, I think it was February 2023.
00:01:42:07 – 00:01:43:11
Rod Khleif
February 23rd.
00:01:43:13 – 00:02:04:20
Ify Asoh
Okay. February 2023. So I called you and I said, hey, you got room for me? Yeah, yeah. I started my journey in real estate in the summer of 2022. Had no clue how to navigate the waters. I didn’t know what escrow meant. Had absolutely no clue. I knew I wanted to buy and hold. But by and hold. No.
00:02:04:22 – 00:02:27:20
Ify Asoh
And so I joined a real estate group. And I think their focus was more in residential assets. And while I was in there, I learned about commercial. I learned that commercial was possible. It was possible and feasible for the average person like me, except they didn’t have they didn’t have any offerings, no education, etc. so I went outside of the group and I started self-learning.
00:02:27:20 – 00:02:58:12
Ify Asoh
And so for anyone that’s listening and wondering how do I start? You start by investing in yourself. So I started by investing in myself via education, and that took me from late summer into early 20 of 2022 to early 2023, and I had thought that I could acquire commercial multifamily by myself. I thought I could, you know, call a broker and I would get a deal and I’ll just take it to a sponsor.
00:02:58:12 – 00:03:11:01
Ify Asoh
It was going to be as easy as that. And I found out that I was saying the right things, talking to the right people, stepping out of my shell. But you need a team. You need a team when you need a team, when you’re starting out, your.
00:03:11:05 – 00:03:18:24
Rod Khleif
Business is a team sport, you know? And I shout that from the rooftops at my boot camps and everything. So what was what did you do next?
00:03:19:00 – 00:03:38:16
Ify Asoh
So I knew I needed a team. And you had come on one of the online community webinars or zooms that we had. I’d never heard of you before then, and you had offered a, you know, you were about to run one of your virtual bootcamps. So I had listen, I listened in, I was like, I think I’m spot on, I can do this by myself.
00:03:38:16 – 00:04:12:05
Ify Asoh
And then realized I couldn’t. And so I reached out to you and I said, I need, I need help. And so, you know, as I was joining the Warriors, I also met up with an owner operator outside of the warrior program, and that’s how I got started. I had invested passively before all of this. I visited passively early that year in Mississippi and no clue how things were going to go, but I was very, very confident in the operator and it’s been going amazingly well.
00:04:12:06 – 00:04:36:10
Ify Asoh
So during the Warriors in February, you had the warrior event, I think it was in March or April of that year, like shortly after I joined and I went, and I’m so glad that I went because I was able to make meaningful connections that helped helped us close our first two deals, because they closed within a week of each other in August of that year.
00:04:36:11 – 00:04:37:08
Ify Asoh
Wow. Yeah.
00:04:37:09 – 00:04:55:09
Rod Khleif
Well, let me let me introduce something. So if you if you haven’t heard, you know, my warriors and my coaching students, and if you don’t even know this, we’re counting how many doors people have. And we are now at three, 305,000 under my tutelage. And we know it’s more than that. It’s a lot more than that because not everybody responds.
00:04:55:10 – 00:05:16:21
Rod Khleif
But it just that’s by the way, that is more than everybody else combined. That teaches this by a long shot. But but anyway, so so so we have warrior events guys. Those are you listening just to get our warriors together. Because 95% of those deals are done between warriors in some fashion, be it, be it, do the deal together, raise money together, do whatever it is.
00:05:16:22 – 00:05:23:12
Rod Khleif
And and so yeah. So we do these events to get people together. Anyway please continue. Yeah.
00:05:23:13 – 00:05:41:08
Ify Asoh
Yeah. No there’s so many elements because by the time I came into the warrior program, I had two deals that I was working on that I came in with. But we needed a sponsor for one of them. Right. We need a sponsor. We needed other private equity owners that could help with raising capital, helping out with asset management.
00:05:41:08 – 00:05:55:00
Ify Asoh
So it was so helpful to come into what I now know is a very well rounded group, a group of very well rounded CRE professionals that don’t only focus on one thing versus the other.
00:05:55:02 – 00:06:12:10
Rod Khleif
Right. Let me interject something else. Let me interject something else. Sorry to interrupt, but you said something they meant they may not know what it is. So what she’s talking about with a sponsor, guys, is, you know, when you’re going out there and you’re getting significant financing, the lender wants to see a few things, okay? One is they want to see some experience okay.
00:06:12:11 – 00:06:35:15
Rod Khleif
Secondarily, they want to see a net worth very often equal to the loan amount. They also want to see post closing liquidity very often equal to 10% of the loan amount. But it can be it can be your team or it can be a sponsor that steps in. That’s got those qualifications. Which is why the program like the Warriors is so successful, is because there’s dozens and dozens of these groups that can be sponsors in a deal.
00:06:35:15 – 00:06:42:05
Rod Khleif
And so so you recognize that you met some people and and boom, you’re off to the races okay.
00:06:42:07 – 00:06:53:09
Ify Asoh
Of to the races and to those. Deal one and deal two. But deal number three which happened the following year in 2024, we brought in Charlie Peters, but in another sponsor some other warriors. Yeah. Yeah.
00:06:53:10 – 00:06:54:19
Rod Khleif
Another warrior. Yeah.
00:06:54:21 – 00:06:57:22
Ify Asoh
Yeah. And then deal number four. Same thing. We brought it.
00:06:57:24 – 00:07:14:19
Rod Khleif
Right, right. Well that’s that’s that’s how the business is done. So you know, you need you need to lean on other people, you know, and and it’s what’s so exciting about the business. And are you doing for. Forgive me because I should know this, but are you doing any other asset classes besides multifamily?
00:07:14:20 – 00:07:35:01
Ify Asoh
So I’m glad you asked right now. So when I got when I got into this. Right. So let me go a couple of steps back then. If anyone who’s listening that’s new, I. One of the things you may experience is, you know, drinking from the fire hose, chasing shiny object depending on how your journey goes. Right? When I was stepping into CRA, I had already been through all of that.
00:07:35:02 – 00:07:36:13
Rod Khleif
By the way, that’s commercial real estate.
00:07:36:14 – 00:07:54:21
Ify Asoh
Fischer okay. Yeah, so I didn’t want to. I didn’t want to chase any other shiny objects. So my focus, I was laser focused on multifamily only, and my intent was, I need to learn this business model well enough. And then when I get to that point that I feel comfortable, I can then expand because there are other asset classes.
00:07:54:21 – 00:08:04:01
Ify Asoh
So I didn’t come in wanting to be jack of all trades or do everything because I just didn’t have the capacity. I’m still working my full time jobs and.
00:08:04:07 – 00:08:08:23
Rod Khleif
Nobody should do everything anyway. This again, this business is a team sport, right? Okay.
00:08:08:24 – 00:08:23:15
Ify Asoh
Yeah. So I mean, I’ve been focused so far and only involved in commercial multifamily, but I know that I’m at the point where I’m willing to expand to other asset classes. So. Okay. Like like like you like you’ve, you know.
00:08:23:16 – 00:08:48:14
Rod Khleif
Well, yeah. No, I’m doing senior housing right now just because it’s, it’s there’s some extraordinary deals. 10,000 people a day turning 80. And so and that’s the thing, you know, is and we taught senior housing at this last warrior event we just had I taught it for a couple of hours. And you know, industrial flex space as another asset class that, you know, oh, I’m having a brain fart now Sidoti don’t help with.
00:08:48:15 – 00:09:09:02
Rod Khleif
Yeah. John Sidoti wonderful guy helped with. And so we’re doing other asset classes, which is very exciting. Mobile home parks, you know, some retail hotel conversions, ground up developments happening. You know, so there’s all sorts of things happening besides those 305,000 units in the multifamily space. So it’s yeah, it’s it’s it’s really cool.
00:09:09:04 – 00:09:26:01
Ify Asoh
But but that’s but that’s the thing, rod, I knew that after joining the Warriors. Right? I knew that whenever I was ready to launch into any other asset class, there were already operators in that field. I didn’t need to worry about having to go look for them. They were already there. So yeah, yeah.
00:09:26:01 – 00:09:32:06
Rod Khleif
That’s great. So what’s next? What are you what are you up to now? What are you looking at?
00:09:32:07 – 00:09:44:21
Ify Asoh
I’m thinking of senior living as well. Yeah, that’s. Yeah, that’s that’s the that’s the direction I’m thinking of incorporating. You know, it’s even that even that of parks and.
00:09:44:23 – 00:09:46:03
Rod Khleif
R-V parks. Okay.
00:09:46:04 – 00:09:46:20
Ify Asoh
Okay.
00:09:46:22 – 00:10:08:16
Rod Khleif
Yeah. Those are exciting to. Yeah those are exciting two there. You know I say you know RV parks have more more moving parts than like a mobile home park because you’ve got transient people in and out. So it’s more, you know, it’s more more operations than, than a mobile home park where they’re static. But no. That’s interesting. RV parks okay.
00:10:08:17 – 00:10:14:12
Ify Asoh
Yeah. Again, just, you know, just thinking about it. One action, you know. Yeah.
00:10:14:14 – 00:10:37:15
Rod Khleif
There’s 80 million people, baby boomers getting older. They love their RVs, okay? They love to come to Florida and south southern states and come here from the in the winter and go back up. You see caravans of them on I-95 here in 75 in Florida here. And so yeah, that’s an interesting idea because you know yeah I love it.
00:10:37:17 – 00:10:45:00
Rod Khleif
So, so so if you what where do you feel like you add the most value to your teams that you’ve been involved with.
00:10:45:00 – 00:11:11:01
Ify Asoh
So when I, when I was working through my first two deals raising equity, I actually found I know it sounds weird, but I found that I enjoyed building teams more than I did raising equity. And so not to, you know, toot my own horn, but a couple of the deals that we’ve done recently, I’ve brought in most of the team members.
00:11:11:01 – 00:11:33:17
Ify Asoh
So I did something that I absolutely love doing, which is odd and ironic. As an introvert, you would think I would be very much keep to myself. I’ve enjoyed asset management. I still do it. It’s something I never knew I would fall in love with, but it’s actually the most enjoyable part of the business for me. So as a management.
00:11:33:18 – 00:11:35:08
Ify Asoh
Yeah, nice.
00:11:35:08 – 00:11:42:11
Rod Khleif
Nice. Now, now, I mean, you’re you’re analytical as well. So did you play a role in the underwriting at all or.
00:11:42:13 – 00:12:05:19
Ify Asoh
I did not. And I’ll tell you why on my journey leading up. Well before I even go into that, for anyone that’s listening, everyone should know how to underwrite. And not everyone needs to be the underwriter. But everyone needs to learn how to underwrite and know how to explain those numbers and piece them apart to your investors, etc. so I just want to lay that as a foundation.
00:12:05:19 – 00:12:23:08
Ify Asoh
When I was starting off, I thought, you know, I initially thought to be this is way before the Warriors. I initially thought that I was going to be the person, the main person in acquisitions. That didn’t happen. And then I switched to underwriting, and I realized that, you know, in order to be seasoned and worth your grade, insulted.
00:12:23:08 – 00:12:41:14
Ify Asoh
And if it’s a grain of pink MLA and salt, you need to have underwritten hundreds of properties. Because I was starting this journey. Not in my 20s, not in my 30s, I felt, when am I going to write a hundreds and hundreds of properties? So that made me. Yeah, yeah.
00:12:41:15 – 00:12:54:10
Rod Khleif
Repetition, build skill. And you do need to look at a lot of deals. So you do the asset management. Can you describe what that looks like on your calls with your property management companies. Just for the people that don’t know what that means?
00:12:54:13 – 00:13:16:13
Ify Asoh
Yes. So it actually starts before the deal is closed. But but what we do on our team, in addition to weekly calls, are going to the weekly calls, in addition to weekly calls. Our lead asset manager also meets with the property management company behind the scenes, you know, via call, via text. She makes a very random unannounced visits to the property.
00:13:16:14 – 00:13:42:12
Ify Asoh
Most of my assets are in Texas. I do have one in Pennsylvania. For context, I live in Massachusetts, so it’s nice that we have boots on ground where our assets are exactly on the calls that we have with our property management company. If you think of an asset management team. So if you think of the the this may not be a great analogy, but I’ll use it if you think of the story of the Titanic.
00:13:42:13 – 00:14:02:03
Ify Asoh
Right. So the asset management team is that team that is trying to look way, way ahead to see the iceberg. We just need to see the tip. We just want to make sure that this business model that we’re running here is not going to, you know, run on the ground. And so on a weekly basis, we’re reviewing certain key performance indicators.
00:14:02:08 – 00:14:20:09
Ify Asoh
We all are divided into different groups so that we can everyone needs to be aware of everything that’s happening, but some of us are more focused on concentrated in specific areas. I run the investor relations for all the deals I’m on, so I need to understand everything that’s going on because I’m going to explain that to the investors.
00:14:20:09 – 00:14:21:03
Ify Asoh
So we’re looking.
00:14:21:03 – 00:14:24:10
Rod Khleif
At, put it in your email to your investors as well. Yes. Yeah.
00:14:24:11 – 00:14:25:02
Ify Asoh
Correct.
00:14:25:04 – 00:14:30:15
Rod Khleif
Could you talk about some of those KPIs just to give listeners an idea if they’ve not heard this before?
00:14:30:20 – 00:14:50:00
Ify Asoh
Exactly. So you get you know, you get on a call. What are you looking at. How what’s your occupancy numbers like? What are your vacancy like where your leads coming from. Where are they not coming from? Where are they supposed to be coming from that they’re not coming from? Have you had any skips? You know? Did someone just wake up and leave?
00:14:50:02 – 00:15:11:15
Ify Asoh
We’re also looking at delinquencies. Who’s not paying because you you’re you’re looking at it from a perspective of what kind of tenants do we have? You’re also looking at it because asset management you’re managing the property managers. But how good are they collecting. Were they good befriended. So you’re looking at that on a continuous basis. I look at Google reviews.
00:15:11:15 – 00:15:22:07
Ify Asoh
I look at what our website looks like. Well, you know what. What are the tenants saying on their other things? We look at renewals. Renewals renewals. Yeah. Renewals.
00:15:22:08 – 00:15:23:14
Rod Khleif
We’ll talk about that.
00:15:23:16 – 00:15:39:08
Ify Asoh
You’re trying you’re trying to get a feel for resident retention, right. Who wants to stay here. Because it’s it’s great if you can bring people in through drive bys or Zillow etc.. But you also want to shut the shut the back door.
00:15:39:12 – 00:15:41:05
Rod Khleif
The back door. Yeah. Keep them from.
00:15:41:07 – 00:15:45:13
Ify Asoh
Yeah. Keep them from leaving. Why are they leaving?
00:15:45:15 – 00:16:06:16
Rod Khleif
And so what you do is you is you is you as you look at those renewals, leases that are expiring like 3 or 4 months in advance, have the team better be calling them and getting them to renew, maybe motivating them with some a little special or something. Another thing I want, another thing I want to outline is, you know, when you’re looking at where the leads are coming from, you also want to look at the conversions.
00:16:06:17 – 00:16:16:00
Rod Khleif
How many of the leads came in, how many converted to a tour, how many tours converted to an app, and how many apps converted to a lease? So you want to look at each one of those pieces, right?
00:16:16:01 – 00:16:38:16
Ify Asoh
I have a story about that. I was about that. So our our Pennsylvania asset was traditionally or rather historically, student housing. It was pure student housing. And our business plan was to shift to this hybrid model. And we quickly found out that it would have a bit, you know, it would be better to just completely shift to a pure traditional tenant housing.
00:16:38:18 – 00:17:05:00
Ify Asoh
And so over time, we found out that our community manager, who has been amazing, she was amazing community manager. She knows all the residents and the the families and everybody by name. She was great as a student housing manager, but as we shifted to more traditional tenants, it’s been a struggle for her and we were able to detect this through conversion.
00:17:05:02 – 00:17:24:07
Ify Asoh
We would see the leads coming in, but nothing was happening with the lead. On one of our calls, our lead asset manager actually role played with her twice, saying, okay, you know, I’m a potential client, you know, what are you going to tell me? And that’s when we realized she, you know, it’s a sales skill, right? And it was.
00:17:24:08 – 00:17:28:06
Rod Khleif
No it’s sales. Yeah. It’s bottom line. It’s sales period.
00:17:28:07 – 00:17:30:08
Ify Asoh
So it just interesting.
00:17:30:10 – 00:17:30:17
Rod Khleif
I would.
00:17:30:18 – 00:17:32:03
Ify Asoh
Have thought the students.
00:17:32:05 – 00:17:37:12
Rod Khleif
I would have thought the student housing would have been harder. It’s very interesting that that.
00:17:37:14 – 00:17:44:09
Ify Asoh
Rod it’s right across it’s literally a stone’s throw from the school. So you probably probably had just.
00:17:44:14 – 00:18:02:14
Rod Khleif
So she didn’t have to sell. She didn’t have to sell. They just they just showed up. Got it. Okay. Interesting. Wow. That’s very interesting. Yeah. So so these are the things that you’re managing as an asset manager and an ongoing basis. And you know when you’re splitting up a general partnership guys the asset management should probably be the largest piece.
00:18:02:14 – 00:18:22:14
Rod Khleif
If you’re splitting up a GP interest in a deal. You know, when you when you put one of these deals together, you’re going to get a typically do a split for whoever brought the deal. You’ll do a split. Whoever’s using their resume to qualify for the debt, you’ll do a split for the money that gets raised. But the asset management typically is the largest piece because it can go on for five years or more.
00:18:22:15 – 00:18:23:03
Rod Khleif
Right.
00:18:23:04 – 00:18:44:02
Ify Asoh
Yes, yes, it’s very active. So, for for folks who are thinking of, you know, you know, commercial or even real estate in general, is this is this for me? Get yourself educated enough to know whether you want to be passive or active. You should hit that, you know, fork in the road. And I did, and I thought about it and I said, I want to be active.
00:18:44:02 – 00:18:52:03
Ify Asoh
And active means active. It’s worked. It work. But the beauty is there’s a team so it does not fall on one person.
00:18:52:04 – 00:19:11:00
Rod Khleif
And even if you’re going to be passive, get your butt to my freaking bootcamps. You don’t squander your money so you can look at a deal and know what you’re looking at. By the way, you know the boot camp now is $25. It’s virtual. I don’t sell anything and listen to what I give with it. The document library deal evaluator software.
00:19:11:00 – 00:19:21:13
Rod Khleif
I give my 15 module multifamily wholesaling course, my finding deals course, my courage incompetence course, and my best selling book. All that 25 bucks.
00:19:21:15 – 00:19:35:23
Ify Asoh
You know, when you said your when I was the boot camp to 2023, when you were advertising it and you said each day was either 12 or 13 hours inside of me, I went, you’re right guys.
00:19:35:24 – 00:19:44:07
Rod Khleif
Oh, you mean oh, you mean the virtual ones? No, it may feel like that long. It’s not that long. No, no, no it was. You’re exaggerating a little bit. No.
00:19:44:09 – 00:19:50:22
Ify Asoh
I was at work. I you started when I was going to work, and I came back and it was still going, and I.
00:19:50:22 – 00:20:07:13
Rod Khleif
Was like, okay, well, I don’t go that long anymore. I have a life. But but but there are two full days. I mean, they’re two days, two days, and I don’t sell anything, so there’s no excuses. I mean, you guys, if you’re listening, go to boot camp or text the word boot camp to seven, two, three, four, five.
00:20:07:14 – 00:20:30:16
Rod Khleif
If you’re interested in applying to the warrior program, text the word crush 72345. That’s how you apply crush to 72345. You know, here’s a single mom with three kids killing it. Tell me your excuse. Okay. You know, with a full time job and everything else and soccer and everything else you got to contend with. Yes, yes. No excuses.
00:20:30:17 – 00:20:42:05
Rod Khleif
If you. Thank you so much for coming on. I’m so grateful to see you. And and, you know, adding some value. All right, well, listen, it’s great to see you. And I hope I see you again very soon.
00:20:42:07 – 00:20:43:10
Ify Asoh
Thank you, thank you.
00:20:43:11 – 00:20:47:07
Rod Khleif
Oh, by the way, by the way, can people reach out to you if they want to reach out? How can they reach out?
00:20:47:08 – 00:20:49:13
Ify Asoh
Yes, I’m on LinkedIn. I’m the only one.
00:20:49:13 – 00:20:54:04
Rod Khleif
If I have, I have a spell. Your name please.
00:20:54:05 – 00:20:57:12
Ify Asoh
I am. My last name is associate.
00:20:57:14 – 00:21:04:10
Rod Khleif
There you go. There you go. Yep. Not too many of those. Okay. Yeah. Okay. Thanks. All right. Thank you.
00:21:04:12 – 00:21:05:10
Ify Asoh
Thank you. Ron.
**Podcast Categories:** Multifamily Rock Stars, Podcasts
---
### [A $40 Lawn Mowing Job Led to Multi Million Dollar Exits](https://rodkhleif.com/podcasts/business-exit-strategy-with-justin-goodbread/)
**Published:** June 29, 2026
**Author:** Bryan Hoover
**Excerpt:** A $40 Lawn Mowing Job Led to Multi Million Dollar Exits
**Content:**
## How a Business Exit Strategy Creates Long Term Wealth
Most entrepreneurs spend years building companies without ever considering how they’ll eventually leave them. In this episode of Lifetime Cash Flow Through Real Estate Investing, serial entrepreneur and business strategist Justin Goodbread explains why every business owner should start with the end in mind. After founding and exiting seven companies, including businesses that reached eight and nine figure valuations, Justin has developed a framework that helps entrepreneurs build companies that create both wealth and freedom.
For real estate investors and business owners alike, a strong Business Exit Strategy isn’t just about selling a company. It’s about creating an asset that can operate independently, generate value, and ultimately provide financial and personal freedom.
## Meet Justin Goodbread
Justin Goodbread is a Wall Street Journal bestselling author, entrepreneur, and business coach who has successfully built and exited seven companies. He is the host of The Deca Millionaire Way podcast and specializes in helping business owners increase company value, prepare for exits, and create lives centered around purpose and freedom.
His experience spans consulting, insurance, financial services, business valuation, and marketing, giving him a unique perspective on what makes businesses scalable and attractive to buyers.
## The Five Step Framework for Building an Exit Ready Business
Justin’s approach centers around what he calls The Millionaire Way, a five-step framework designed to help entrepreneurs build valuable companies.
- Relentless Foundation
- Relentless Examination
- Relentless Execution
- Relentless Exit
- Relentless Freedom
He emphasizes that most entrepreneurs become trapped inside the businesses they create because they fail to revisit their vision, mission, and values. Taking time to clarify personal goals and define what success truly means can dramatically change how a company is built and managed.
## Why Business Owners Become the Bottleneck
One of the most valuable insights from the conversation is that business owners often become the greatest obstacle to growth. Buyers pay a premium for companies that can function without the founder’s daily involvement. If the owner is responsible for every major decision, the business becomes difficult to sell and significantly less valuable.
Justin recommends several steps to remove yourself as the bottleneck:
- Hire people with strengths opposite your own.
- Build systems and processes that allow the business to operate independently.
- Replace yourself in key operational and sales roles.
- Separate your personal identity from the company.
This mindset shift can dramatically increase business valuation while also creating more freedom in everyday life.
## Execution Is What Separates Successful Entrepreneurs
Ideas are abundant, but execution is rare. Justin explains that successful entrepreneurs break large goals into smaller, actionable steps. Instead of chasing countless opportunities, business owners should focus on a few key objectives every 90 days and create specific action items that move those objectives forward.
The conversation reinforces an important lesson for investors and entrepreneurs: systems, accountability, and consistent execution create long term success.
## Buying a Business May Be Better Than Starting One
Given today’s environment, Justin argues that acquiring an existing company can often be a smarter move than starting from scratch. With thousands of business owners reaching retirement age every day, tremendous opportunities exist for entrepreneurs willing to purchase and improve established businesses.
The same principles still apply:
- Expect setbacks and failures.
- Invest in coaching and mentorship.
- Focus on building systems and leadership.
- Think long term rather than chasing immediate rewards.
Whether buying a business or building one from the ground up, success comes from persistence and disciplined execution.
## The Value of Coaching and Mentorship
Both Justin and Rod emphasize that coaching dramatically shortens the path to success. Time is far more valuable than money, and experienced mentors can help entrepreneurs avoid costly mistakes and accelerate growth.
Successful investors and business owners understand that they do not have to reinvent the wheel. Learning from those who have already achieved the desired outcome can compress years of trial and error into a much shorter timeline.
If you want to hear the full conversation and detailed insights, watch the podcast video or read the complete transcript below.
## Frequently Asked Questions About Business Exit Strategy
**What Is a Business Exit Strategy?**
A business exit strategy is a long term plan that outlines how a business owner will eventually leave or sell their company while maximizing its value. A well designed exit strategy helps entrepreneurs prepare their business for acquisition, succession, or other transition opportunities.
**Why Is a Business Exit Strategy Important?**
A business exit strategy is important because it helps owners build a company that can operate independently of them. It also increases business value, creates financial security, and provides greater flexibility and freedom when it is time to transition out of the company.
**When Should You Start Planning a Business Exit Strategy?**
Business owners should begin planning their exit strategy as early as possible, ideally five or more years before they intend to sell or step away from the company. Early planning provides more time to improve operations, increase profitability, and make the business more attractive to buyers.
**How Does a Business Exit Strategy Increase Company Value?**
A business exit strategy increases company value by reducing the owner’s involvement in daily operations, creating scalable systems, building strong leadership teams, and improving financial performance. Buyers typically pay more for businesses that can thrive without the founder.
**What Makes a Business Attractive to Potential Buyers?**
Potential buyers look for businesses with predictable cash flow, strong systems and processes, recurring revenue, documented operations, and experienced management teams. Businesses that depend heavily on the owner often receive lower valuations.
**Can Small Businesses Benefit From a Business Exit Strategy?**
Yes. Small businesses often benefit the most from having a business exit strategy because many owners rely heavily on their company for income and retirement planning. Preparing for an eventual sale can significantly increase the owner’s financial outcome.
**What Are the Most Common Business Exit Strategies?**
The most common business exit strategies include selling to a third party, selling to employees, transferring ownership to family members, merging with another company, or creating a succession plan that allows the owner to gradually step away.
**How Long Does It Take to Prepare a Business for Sale?**
Preparing a business for sale can take several years depending on the company’s current condition. Most experts recommend beginning the process at least three to five years before a planned exit to maximize valuation and address operational weaknesses.
**How Can Business Owners Remove Themselves as the Bottleneck?**
Business owners can remove themselves as the bottleneck by hiring strong leaders, implementing systems and processes, delegating responsibilities, and building a management team capable of running the company independently.
**Should Real Estate Investors Have a Business Exit Strategy?**
Absolutely. Real estate investors who own investment companies, property management businesses, or syndication firms should have a business exit strategy to ensure their operations can continue generating value without their direct involvement and to create future liquidity opportunities.
00;00;47;07 – 00;01;06;15
Rod Khleif
Welcome back to lifetime cash flow through real estate investing. I’m Rod Khleif, and as always, I am thrilled that you’re here. You’re going to get tremendous value from the very interesting gentleman I’m interviewing today. His name is Justin Good Bread, and Justin is a Wall Street Journal bestselling author. I’m a Amazon bestselling author, which is not nearly to the level of a Wall Street Journal best selling author.
00;01;06;15 – 00;01;29;28
Rod Khleif
So that’s cool. He’s done seven business exits. He’s an expert in teaching people about building businesses and exiting businesses. He has a podcast called the Deca Millionaire Way, which I just got invited to speak on. And yeah, international bestseller, a book called The Ultimate Sale. Yeah, I guess I’ll stop there because I’m sure we could keep going. Welcome, brother.
00;01;29;28 – 00;01;42;17
Rod Khleif
Thanks for having me, buddy. Yeah. Of course. So, Tennessee. Tennessee? Yeah. Well, give us a little background on who you are. I got a little bit of a taste, but, you know, give us give us your background, you know, so people know who you are.
00;01;42;18 – 00;02;00;22
Justin Goodbread
Absolutely. So I’d always say I’m just a country boy. I’m born and raised on a dirt road in South Georgia. I grew up running barefoot, chasing alligators. That’s who I am. You know, if if we forget where we come from, its oftentimes we get we lose our way, right? So that’s who I am. Born and raised there and then started my first business on 15 and my dad left.
00;02;00;26 – 00;02;01;13
Rod Khleif
Is that what you said?
00;02;01;14 – 00;02;16;12
Justin Goodbread
15 years old? Yeah. You’ll love this. My dad, he came home from work and he said, hey, son, if you don’t have a job by this Friday, don’t come home. Yeah. Pretty tough, but we were homeschooled. It’s a little different back then. Right now, there’s homeschoolers everywhere, but back in the day, there were only about 10,000 of us total United States.
00;02;16;13 – 00;02;28;26
Justin Goodbread
And so like the Waltons type of family, you know, sit around the dinner table at night and have fun and dad’s like, hey, you don’t have a job of this, right? Don’t come home. But here’s a couple rules for you. You can’t work fast food, you can’t work for a grocery store, and you can’t work for anybody. I know.
00;02;29;00 – 00;02;45;06
Justin Goodbread
All right, so I got my last name is Good Bread. Have you ever met another good bread before? No. Yeah. You know, forever remember that name. So I was, like, knocking on doors, going different places. Hey, do you know my dad, Alan? Like. Yeah, he’s a good man, dude. After about four days, everybody knew about that, so I finally I was like, what am I going to do?
00;02;45;08 – 00;02;59;27
Justin Goodbread
Friday afternoon or Thursday afternoon if I don’t have a job by Friday? Dennis said, don’t come home. I’m going to be like out in the streets, dude. So grabbed a lawnmower rod, went down the street, cut, cut some grass, made 40 bucks, took me two hours. Came home that day, put the mower up, took a shower with smelling good.
00;02;59;28 – 00;03;15;03
Justin Goodbread
Dad come home from working the blue collar job like most of our warriors out there. Didn’t smell too good. It had a rough day and he said. He said, hey son, looks like he got a job. I said, well, dad, don’t know if it counts as a job. I made 40 bucks in two hours. He said, cool. He said, let me teach you something here.
00;03;15;03 – 00;03;33;28
Justin Goodbread
So I said, what’s that? He goes, if you will forever remember this. If you’ll learn how to work for yourself and never beholden to the man you’ll never go without. Now let’s start a business for yourself. That was a launch many, many, many years ago. From that point to today, it’s been seven companies that we’ve started and exited scaled them for 7 or 8 and nine figure valuations.
00;03;34;01 – 00;03;35;14
Justin Goodbread
It’s been a journey. It’s been fun.
00;03;35;15 – 00;03;37;24
Rod Khleif
What are some of the businesses you’ve done? Well, the.
00;03;37;24 – 00;03;53;17
Justin Goodbread
First one was a landscape company that agree with that one and sold that one and exit it. Just after Emily and I got married and then started consulting business to help dentists by practices and scale their companies and exit and do the same thing, like do a roll up of kind of sorted. They’d be a roll up or exit or some of that nature.
00;03;53;19 – 00;04;19;16
Justin Goodbread
And then I had an insurance business. Everybody had to be an insurance at some point. Right. So I had an insurance business and sold that through a partnership divorce. It’s called lawsuit. And then my last three kind of packaged together, I started in the most ridiculous industry of all times, which is the financial services industry. Started a registered investment advisory firm December 17th, 2017, 49 months later, had an eight figure valuation, took that company a value.
00;04;19;18 – 00;04;44;17
Justin Goodbread
A business valuation acceleration company and a marketing firm sold all three of those together back in 2021. The company who acquired it, they said, hey, good Brad, come and use these skill sets and take our company from where it’s at to the next level. So that company went from low eight figure valuation to a nine figure valuation, had the largest transaction in 2023, took 18 months to triple its value using what we coach around our clients these days.
00;04;44;20 – 00;05;10;22
Rod Khleif
Okay, okay. And so you you you have you have the podcast and you tell me you’re building a studio in your place, which is cool. And you live right down the road from my cousin, my country cousin who can’t pronounce our last name properly. But yeah, we won’t get into that. But yeah, and we were just talking. You guys had had a fireworks display, unsolicited, unplanned fireworks display on the side of a highway yesterday.
00;05;10;28 – 00;05;15;10
Justin Goodbread
Yeah. Saw that. It looked like some truck cut on fire carrying fireworks. Fireworks going everywhere.
00;05;15;11 – 00;05;35;27
Rod Khleif
Yeah. It was it was hilarious. But luckily nobody got hurt. But. So, you know, I love business. I’ve built 30 businesses, and when they fail, I call them seminars. Right? Several of my business has been worth tens of millions of dollars. Most were spectacular flaming seminars. Right. But we fail our way to success, right? Have you had any failures.
00;05;36;00 – 00;05;50;22
Justin Goodbread
In business? No. In terms of being able to lose money, in terms of losing money. But I think failures can be defined throughout the experiences of the education seminars we have in life. Right? In the sense of lawsuits, several of the lawsuits in business, just to me are seminars. Those are things.
00;05;50;22 – 00;05;51;29
Rod Khleif
That I’m in one right now.
00;05;52;00 – 00;05;58;18
Justin Goodbread
Yeah, they’re not fun. But you learn so much those, right? I’ve lost some friends. Yeah, I’ve lost some friends in business.
00;05;58;21 – 00;06;00;15
Rod Khleif
That’s hard. They call that that’s a failure.
00;06;00;17 – 00;06;16;11
Justin Goodbread
That’s a failure for sure. Yeah. I’ve lost some friends in business. I’ve had some family members disengage because of business. You know, it seems to me, rather as you elevate through whatever the glass ceiling is you’re facing. Maybe it’s an economic glass ceiling. Maybe it’s a personality glass ceiling. Maybe it’s their own court system, belief system or whatever.
00;06;16;12 – 00;06;26;22
Justin Goodbread
It seems like every time you level up, you look around and people or friends or acquaintances or even habits, they end up looking like not as shiny as they used to, the way.
00;06;26;24 – 00;06;32;00
Rod Khleif
They fall away. Sometimes they just fall away when your level of consciousness elevates, you lose people.
00;06;32;01 – 00;06;33;06
Justin Goodbread
That’s right. Well said.
00;06;33;13 – 00;06;43;01
Rod Khleif
And so you help businesses prepare themselves for.
00;06;43;03 – 00;06;44;21
Rod Khleif
A sale, basically.
00;06;44;27 – 00;07;10;09
Justin Goodbread
Yeah. So every business owner at this particular let me back up a bit. In the United States right now, there’s roughly 33 million small business owners, according to the SBA, Small Business Association. So small business has under 500 employees. Just from a technical standpoint, a lot of businesses out there, of those 33 million business owners, roughly about 28 million in the service business, you’re in the service business, I’m in the service business, as opposed to retail, like brick and mortar or manufacturing.
00;07;10;13 – 00;07;34;01
Justin Goodbread
So in the service based business community, the vast majority of us never will eclipse 10 million in EBITDA, right? Most of us are in the micro small business. So for those of us in that area, we don’t realize the amount of economic impact that we have on our own lives, much less those outside of us. So for for the if we were going to run the mean right now, the average income that most business owners in the United States try to achieve its roughly 20,000 a month.
00;07;34;05 – 00;07;50;09
Justin Goodbread
So let’s say $250,000 a year is what we try to take home. But then by the time we pay our children, our spouse, the car payment, the cell phones, the trips and everything else that our CPAs teach us to put into the company before you know it, rod, we’re making 400, $500,000 all in out of business. Now. The world sees it.
00;07;50;09 – 00;08;12;29
Justin Goodbread
They see this shiny lifestyle and we get used to living that lifestyle. But most of us, as business owners, don’t realize the amount of capital or assets that we’re going to need outside that business for us to maintain that lifestyle. So we have this business which is oftentimes our largest asset. Most of small business owners don’t do what your expertise is in scaling, using real estate or building portfolios or things of that nature.
00;08;12;29 – 00;08;40;29
Justin Goodbread
Instead, they’re hand to mouth. So part of the millionaire way is to wave the battle, wave the banner, so to speak, and say, hey, mister business owner out there. Yes, we do want you to buy some real estate. Yes, we do want you to have stop portfolios. Yes, we do want you to. But unless you have this business in a position that it can be disposed of, that somebody is willing to walk in and give you some bank, you’re going to reach a point in your life to where you’re going to have to take a significant lifestyle reduction, or you’re going to work longer than you desire.
00;08;41;01 – 00;08;45;17
Justin Goodbread
So the way is to bust all that out, get the bat on the show you. Here’s how you do that.
00;08;45;18 – 00;09;05;22
Rod Khleif
Okay. I mean, there’s 10,000 people a day turning 65 in this country and a lot of businesses. Yes, sir. And they want out. Yes, they want to retire. I’m 66. I’d love to slow down, but I’m not going to. But. So. So what are some of the strategies that you implement? You bring in, you find a small business owner.
00;09;05;24 – 00;09;22;07
Rod Khleif
I mean obviously every business is sales, marketing, operations, culture, people, every business is nothing candidly, but systems and people as well. And Peter Gruber says every business is innovation and marketing. So what pieces do you get involved in? All of it. What what are you get involved in?
00;09;22;08 – 00;09;42;03
Justin Goodbread
Yeah. So we have a five step framework that we use with all of our classes. What our newest I’d love to hear it about. So the five steps are is called the Millionaire way is relentless foundation okay. Relentless examination. You’ll notice I use the word relentless relentless execution, relentless exit and relentless freedom. Five steps and bury within those five steps.
00;09;42;03 – 00;10;02;12
Justin Goodbread
Every business, especially the service based business, can be judged on 286 different metrics. You just mentioned seven of the elements. So you have planning. Where are you going? Where are you going there leadership. How are you going to work with those around you? Sales and marketing, sister, cousins, your team, operations, finance and legal. Eight areas of business is comprised in those 256 metrics.
00;10;02;19 – 00;10;24;28
Justin Goodbread
And so when we’re talking about the deck millionaire way, what we’re looking at is how can we take these 256 elements and maximize it, not for necessarily the owner’s benefit alone, but also for that of the team, because you’ve had employees, you want to take care of them, your customers, your vendors, your charities, all the things that we maximum how do we maximize those and get them into alignment for harmony and for synergy in our lives?
00;10;25;00 – 00;10;47;03
Rod Khleif
Interesting, interesting. Yeah, I love the I love the fact that you have relentless freedom at the end because, you know, so many people, you know, you hear about people retiring from business and and they die with a few years. It’s like, you know, you work your ass off like that. Not you don’t. You don’t do it to to to give up.
00;10;47;06 – 00;10;55;28
Rod Khleif
But no, I love this. The examination is critical. You you don’t know what you’re. If you can’t, we’ll start. So what’s the foundation tear apart.
00;10;56;05 – 00;11;15;13
Justin Goodbread
So let’s. You know, you and I have been in business for old Salty Dogs business for 30 plus years. Each of us. How many times have we heard vision, mission of values forever and ever. Right. But what I’ve discovered is I’ve talked with literally tens of thousands of business owners when I’m doing a keynote like yourself or doing a podcast or, you know, even on our show, whenever I’m talking to business owners, we often lose sight of where we’re going.
00;11;15;14 – 00;11;32;22
Justin Goodbread
And while we’re going there, we get caught up in the trap that we build. So relentless foundation stepping us take a step back and really do an introspective work. The hard work of who is rod, who is Justin and why are we? How did God uniquely equip you and me so that we can go out and impact those we have the privilege and honor serve, right?
00;11;32;23 – 00;11;48;01
Justin Goodbread
Most business owners, like I said, we start off that way. But then we get tired. We get we get into that hamster wheel of just life. So Religious Foundation is all about taking a step back and quantifying where you want to go. Vision. Mission values. Relentless examination.
00;11;48;01 – 00;12;05;10
Rod Khleif
Hold on, hold on, hold on. I just want to salute you, brother. That is so profound. The fact that you start there. Yes, sir. I mean, coming from someone who’s built 30 businesses is in a place right now where I need to be doing that foundational work literally right now in my life. So that really resonated with me.
00;12;05;10 – 00;12;08;23
Rod Khleif
I just got I got to give you a shout out for that because that is cool as hell.
00;12;08;27 – 00;12;27;14
Justin Goodbread
Well, you know, it’s interesting, as I was just talking with a business owner that has a business, we just brought him into our coaching business. He has a $34 million prize business, a solid business. He can sell it tomorrow. Cash offer. We got on the table and we went through the assessment of his values. And he’s like, Justin, it’s been such a long time since I did the introspective work.
00;12;27;17 – 00;12;41;11
Justin Goodbread
One of the things I teach, yeah, we see these things like integrity and honesty and all these, you know, cliche words that no one really mean remembers. I give a value as an example. I have 11 values that come out of my one of my future books, but I have 11 values, right? And one of them came from a life event.
00;12;41;11 – 00;12;56;15
Justin Goodbread
My dad, I call it Turn the Turtle. Now you’re going to resonate with his value because we’re sitting here together today. But one day my dad and I were walking through the woods and we see this little box turtle upside down is struggling, you know, legs flailing. And he reaches down rod and he picks it up and turns it over and puts it on his way.
00;12;56;16 – 00;13;14;18
Justin Goodbread
Right now I’m about 16, right? You know, the age, like my kids downstairs play around now. And I said, hey, pops, I call my dad. Pops, why did you do that? He’s like, what do you mean? I said, why’d you do that, dad? He said, because I can now. I’m trying to be clever, right? I said, no, dad, you missed it.
00;13;14;19 – 00;13;30;01
Justin Goodbread
Why? What made you do that? He said, because I can’t. So I looked at it and said, no, you’re not hearing me. And just like a dad, he put his hands on my shoulder. I never forget like it was yesterday. Put his hands on my shoulder. He said, son, you’re not hearing me. Anytime we have the power and the ability to help somebody else, it doesn’t cost us a lot of time, energy, whatever.
00;13;30;01 – 00;13;44;00
Justin Goodbread
And if it does and we can do it, we do it because we’re good brands. We’re children of God. That’s what we’re supposed to do. So out of that was birth the value turn the turtle. Now, what’s interesting is that whenever I go on stage and I talk people forever, members turn the turtle and all of us have that value.
00;13;44;01 – 00;13;58;25
Justin Goodbread
When most of us have that value, we’re going to help others when we can do it. So if we could, we can steal down these experiences, these positives and negatives, these introspective were we were talking about our faith a little bit before we got on camera. We can boil these down to who we are. And how did God uniquely equip us?
00;13;58;25 – 00;14;08;22
Justin Goodbread
Out of the 8.3 billion the people in the world to go out and impact and resonate with those that we have the honor and privilege to serve on a daily basis? Brother, we don’t have to retire.
00;14;08;27 – 00;14;28;28
Rod Khleif
Yeah, well, I will. No, that’s not your dead right. We don’t have I don’t I don’t think I’ll ever retire, quote unquote, totally retire. But you know, it’s sad though. You know, you say that most people have that innate desire. But you see these videos of people in trouble and who shooting the damn video rather than helping, you know, and people walking by these people in trouble.
00;14;29;02 – 00;14;39;09
Rod Khleif
And and don’t get me started on that. But you know, so so I think that message does need to get out there more. But anyway foundation so and then examination.
00;14;39;10 – 00;14;44;06
Justin Goodbread
Examinations I love pancakes. You love pancakes I like pancakes okay okay. Pancakes is one of a favorite.
00;14;44;11 – 00;14;47;11
Rod Khleif
I love them but I can’t eat them anymore.
00;14;47;14 – 00;14;52;11
Justin Goodbread
I like we had some whole grain pancakes. I just love put a little bit of bananas on top. Caramel. I mean, it’s.
00;14;52;17 – 00;14;53;23
Rod Khleif
That sound good? Okay.
00;14;53;24 – 00;15;02;15
Justin Goodbread
Pancakes have two sides. It’s amazing. Most of us, as business owners, were so pointed to one side of our life. We focus all of our attention on our business.
00;15;02;17 – 00;15;03;05
Rod Khleif
Right?
00;15;03;07 – 00;15;18;21
Justin Goodbread
This is not original for Justin. In fact, we have shirts out there. To me, you have two sides of our lives as owners of even those of us who are heavy and real estate like you and I are. We have our faith, our family, our friends, our fitness and our finances. We were talking about your your gym downstairs and how you you dive into fitness.
00;15;18;22 – 00;15;34;21
Justin Goodbread
You know what good is making all the money in the world if you can’t enjoy it physically? What good is make it is earning income if your family’s gone or destitute. I know many people who work billions of dollars have close friends who are billions of dollars that they would trade it all in a heartbeat to have their wife back, or have their son back, or have their children alive.
00;15;34;21 – 00;15;50;26
Justin Goodbread
So to me, for those of us who want to grow, whether that be a business or a real estate or whatever it may be, it helps us to do the the alignment to make sure there’s, I don’t think, a balanced lifestyle, but a blended lifestyle where those five elements are in harmony with our business and they integrate together.
00;15;50;26 – 00;16;09;02
Justin Goodbread
So we talk about examination. We’re going to look at a business, we’re going to look at whatever it is and align that faith, family, friends, fitness, finances into that business so that it doesn’t become the prison that most business owners out there are dealing with. Even those who own big real estate portfolios, they end up being imprisoned by that portfolio they’re trying.
00;16;09;02 – 00;16;13;19
Rod Khleif
To manage. Love that to man. Totally love that. To then execute him.
00;16;13;20 – 00;16;18;14
Justin Goodbread
Execution is where everything falls apart, isn’t it? Yeah. I mean, how many of us have shiny shiny object syndrome.
00;16;18;15 – 00;16;28;22
Rod Khleif
Or ideas I hear? I have people tell me I got this great idealism, this idea. Okay, well, how are you going to execute on that freaking idea? Seriously? Have you done a business plan? You know, where do you have any money? What? You know, anyway? Yeah.
00;16;28;23 – 00;16;48;06
Justin Goodbread
Relentless execution is all about breaking it down into action steps. So what we teach is that every action, every business, should break things down. Every real estate company should break things down into 27 action items per 90 days. So here’s how this works. Most of us have a thousand things to do. What are the three things that we need to accomplish over the next 90 days?
00;16;48;06 – 00;17;11;01
Justin Goodbread
And of those three things, what specifically are we going to accomplish then, for each of those one items, what are three action steps? What are three things that somebody else in the company can accomplish as you work through a framework, then ultimately you’re going to have 27 specific action items that not you, the owner, not me, the owner, but our team’s subcontractors can go out and execute at a granular level so that we can stay visionaries.
00;17;11;06 – 00;17;27;18
Rod Khleif
So you go micro with it. That’s why there’s 27 and there’s only three at the top. That’s correct. Yeah. I you know, in my companies we use iOS, you know, from traction. And it’s the 90 day thing as well. You know you set these 90 day goals. They’re rocks. They call them. But and then you have an accountability chart where only one person’s accountable.
00;17;27;20 – 00;17;44;27
Rod Khleif
Otherwise nobody’s accountable if there’s more than one. So you’ve got some similarities there which I love, the micro where you go really deep on three things. And that’s let’s remember that. Matt okay. I like I like the sound of that. So that’s on execution. And then you, you position for an exit.
00;17;44;29 – 00;17;47;18
Justin Goodbread
Yeah. We always begin with the end of mind don’t we. Right. I mean whenever you.
00;17;47;18 – 00;17;50;10
Rod Khleif
Buy you should I’m not saying you always do, but. Yes.
00;17;50;13 – 00;18;03;28
Justin Goodbread
Well said. But whenever we buy a piece of real estate, we know that we make our money on the front side. You and I both know that after years in business and years in real estate. Same is true in business. Wherever you’re at today, you have to figure out what is your out of this business. Most of us is business owners.
00;18;03;28 – 00;18;09;15
Justin Goodbread
Never think about the out. We actually build ourselves as the epicenter of the business. So the way I describe.
00;18;09;15 – 00;18;12;14
Rod Khleif
It, and in every business, the CEO is always the bottleneck as well.
00;18;12;18 – 00;18;25;11
Justin Goodbread
Well sad. Well said. So I don’t know if you had these, you know where you grew up. But in South Georgia we had these things that I call the spinning wheel of Death. They were merry go round. They were metal merry go round. If you ever get on merry go round, you’re holding on for dear life. Because bubbles are.
00;18;25;12 – 00;18;42;07
Justin Goodbread
They’re pushing round around. Right. Eventually, if you could work your way to the center of the merry go round, it is not as turbulent. It’s not as volatile. Volatile. You can sit there, you can laugh at your buddies falling off of it. What happens in many of our companies around the country is the business owner has worked their way to the center of that merry go round, and they are the complacent.
00;18;42;07 – 00;18;46;22
Justin Goodbread
They’re kind of a little bit comfortable, if you will, and if they’re because they’re.
00;18;46;22 – 00;18;50;05
Rod Khleif
Comfortable causing me to look in the mirror right now, brother, I’m just telling you. But yeah, yeah, but.
00;18;50;05 – 00;19;08;29
Justin Goodbread
Whenever they’re comfortable, the problem is, is that now when we go to exit, the outside buyer sees that comfort, the outside biases, that comfort. And they recognize that the value of that company is not what it could be. And so they’re going to come in pennies on the dollar and acquire that company. And the owner. Statistically speaking, only 4% of owners that do exit are happy.
00;19;09;00 – 00;19;30;27
Justin Goodbread
So that owners now sitting there because they were comfortable trying to enjoy life. All that hard work. For those decades, you and I have been toiling away. It’s exhausting. And it’s like, man, we finally got here. Why don’t want to go back into the fray and ride that merry go round? The goal with the exit. The relentless exit is at least five longer preferred five years from the time that you desire to exit, you’ve got to get off the merry go round.
00;19;30;27 – 00;19;35;26
Justin Goodbread
You got to have this thing operating where you’re. It’s an autonomous golden goose, the autonomous creature, if you will.
00;19;35;28 – 00;19;50;28
Rod Khleif
Without you necessarily being directly involved to the level that you probably have been in the past. I’m assuming you pull the CEO back from the business a little bit, try to try to leverage that skill set or or how do you work that?
00;19;50;29 – 00;20;09;28
Justin Goodbread
Absolutely. So those eight areas that I mentioned beforehand, the planning, leadership, sales, marketing, people, operations, finance and legal picture those as placeholders on a merry go round like a perfectly slice of pizza, if you will. Merry go round. Well, the owner has to do is oftentimes they have to relinquish they. It’s easy for us to relinquish to the opposite personality that we are.
00;20;10;03 – 00;20;30;07
Justin Goodbread
It’s difficult for us to relinquish to our mini mes. For most of us as owners, the hardest thing for us to relinquish is sales and marketing. Because we know our product, we know our service, we know the avatar, we know how we can impact their lives. And so as soon as we can start relinquishing even those things that we’re strong in, it allows us to literally sit on the proverbial bench over there and watch that company spin around and round around.
00;20;30;08 – 00;20;46;27
Justin Goodbread
The bottleneck, as you mentioned earlier, is whenever, because God equipped us very uniquely, because we’re tenacious, because we’ve been beat up, we know how to jump back in on the ground, solve the problem really quick, and we don’t want to see our team spend weeks upon weeks upon weeks fighting for the same thing we learned 25 years ago.
00;20;46;28 – 00;20;55;27
Justin Goodbread
The challenge for us, much like we do when we’re when we’re parenting our children, is to set the systems and the processes up so the owner can get off the merry go round and enjoy the wheel spinning around.
00;20;55;29 – 00;21;03;06
Rod Khleif
Yeah. No, that makes sense. What? You know, just for my own edification, what do you do on the relentless freedom? Fun?
00;21;03;12 – 00;21;18;05
Justin Goodbread
Freedom is interesting, isn’t it? It’s a word that we often toss around, but we often most of us is. Owners never quantify. You know, some of us may say freedom of assets or freedom of money, right? That’s easy. I think. Money is so cheap, I really do, right? The older I get, the more money just seems so fickle to me.
00;21;18;07 – 00;21;33;12
Justin Goodbread
Freedom of time is pretty powerful to me right now. I love, you know, after several of these eggs that’s being able to, like, come down for this weekend and spend some time with you and, and spend some time here on the beach. I’ve enjoyed that. That’s freedom of time, freedom, freedom of talent, freedom of impact. You know, we have charities in our lives.
00;21;33;12 – 00;21;52;25
Justin Goodbread
So what we have to look at goes back to that, that relentless foundation. And why are we doing this? Whatever this is, why do we have this portfolio of real estate? Why do we have this business portfolio? Why do we have these things? What’s the ultimate purpose for Emily? And our life was how do we take all the things that God’s equipped us with, and how do we pour back into his kingdom?
00;21;52;25 – 00;22;08;22
Justin Goodbread
How do we pour it back so we can impact others? So we have charities that we support, that we set up ourselves, that we we help girls come out of the sex trades in the, in the, in the islands, in the Caribbean we have some things that are freedom giving for us. What? Whenever we look at the millionaire way though, don’t.
00;22;08;26 – 00;22;30;27
Justin Goodbread
I don’t want the audience to be confused. Freedom doesn’t have to wait until you exit your company. It’s a linear progression because we logically can think in terms of line, but freedom can occur today. Freedom can occur. For many of us as business owners, just dropping those remedial things and saying, hey, I’m not going to return my email, hey, I’m not going to go do this bit, hey, I’m not going to do that sale and instead replace whatever that time frame was.
00;22;30;27 – 00;22;38;13
Justin Goodbread
If we’re talking about freedom of time was something that is life giving to you, to your purpose that God’s designed you for.
00;22;38;16 – 00;22;58;27
Rod Khleif
You say God a lot. And I know that you’re you’re very faith driven guy. And I was telling you that I was agnostic six months ago, maybe eight months ago. And I went on Ryan Pineda show. And let me tell you why. One of the reasons I was as I’m in, you know, I had an exporter embezzle millions of dollars from 23 of our apartment complexes.
00;22;58;27 – 00;23;22;16
Rod Khleif
And and he was religious, quote unquote. In fact, I talked to one of the parishioners in his church, widow that invested $900,000 as a as a mortgage against their home. And she’s she’s losing it, you know, and one of many, many investors that this guy, this nefarious guy screwed around. And so I was kind of, you know, if somebody talks religion, I put my hand over my wallet.
00;23;22;18 – 00;23;41;12
Rod Khleif
Right. But I went to Ryan Panetta’s show. I want to give him a shout out. And I told him that, and he had me get a book called The Case for Christ. You’ve heard of that book? Yeah. Yeah, great. Great speaker as well. Just if you don’t know, guys, it’s an investigative reporter that didn’t believe in Jesus and investigated an investigative reporter.
00;23;41;12 – 00;24;03;00
Rod Khleif
They dig deep and became very religious after doing the investigation and speaks and wrote that book. And so I’ve now started embracing God and Jesus. And it’s very, very unique for me. Got a Bible and the whole thing. And we actually preyed on Ryan’s show, which was really awkward at the time for me, because I’d really never prayed before.
00;24;03;00 – 00;24;16;17
Rod Khleif
But, you know, I was I was, I’ll tell you, I’d just tell you a quick story. I was writing, I have this elliptical bicycle that I write. It’s the gayest thing you’ve ever seen. It’s I lose my masculinity a minute, I get on it, but I ride it around the neighborhood here, to the amusement of my neighbors. And I was.
00;24;16;18 – 00;24;34;14
Rod Khleif
I did a prayer because someone told me to do this. Ask God to show himself to you. And so I was writing that bike and I did that prayer. I didn’t even tell you this mat. I did that prayer. And I go around the cul de sac and there’s a woman and her son painting a figurine of Jesus on the on the on the lawn right there.
00;24;34;15 – 00;24;51;18
Rod Khleif
I mean, like seconds after I did that. Is that crazy? But yeah. No, I’m actually going to a faith based men’s group tonight. You know, just, you know, I’m embracing this and I want to put that out there because I’ve never really talked about it, that if at all on the show and, you know, I encourage you to explore it as well.
00;24;51;18 – 00;25;00;07
Rod Khleif
If, you know, if it’s not in your, you know, in your bailiwick. But anything to add to what I just said. I mean, I’m.
00;25;00;07 – 00;25;17;07
Justin Goodbread
Never surprised. Excuse me, I’m never surprised, but always amazed what God will do. Yeah. I hear, you know, in East Tennessee, that’s the Bible belt of the US. And I was born and raised in church. But over the last, you know, almost 50 years of my life, I’ve seen God do some pretty amazing things that you can’t explain away.
00;25;17;09 – 00;25;27;28
Justin Goodbread
I’ve read the book that you’re talking about her, the speaker. But what it also comes down to is that personal relationship, that conversation that you had, that God revealed himself to us. And I would just challenge you as as.
00;25;27;29 – 00;25;41;03
Rod Khleif
I’m still struggling a little bit with it. I’m just going to be honest with you. I’m still I’m still a little like, you know, it’s it’s it’s hard because I’m so pragmatic. I’m so, hey, show me. I’m such a show me person that I’m still struggling a little bit. Just.
00;25;41;06 – 00;26;01;13
Justin Goodbread
You know, it’s amazing to me. Rod is. Yesterday morning we went fishing out here in the bay with a guide, and the sun was coming up. And it happens every day, the same exact way. And the dolphins were bouncing behind the boat and I took a breath of air. Not my air, but I took a breath there. My lungs work that day, and when I started looking at this world that we live in, and you look at the beauty man makes a pretty good things.
00;26;01;13 – 00;26;09;22
Justin Goodbread
But I’ve never been able to create things from nothing. When you look at this world, this entire environment around us, you can’t help but know that I believe that there’s something bigger than all.
00;26;09;22 – 00;26;10;11
Rod Khleif
Of us. I have.
00;26;10;11 – 00;26;11;25
Justin Goodbread
To agree. I believe that, but.
00;26;11;25 – 00;26;15;18
Rod Khleif
It couldn’t have all fallen together perfectly like that without some divine intervention.
00;26;15;22 – 00;26;40;23
Justin Goodbread
So if we believe that I don’t want to get super theological today, but if we believe that, then ultimately where do we fit in that system? And so what I look at is, is that Justin, Good Bread or Rochefort, everybody else who’s listening to us, God has uniquely positioned us with own DNA, with her own life, with her own turmoils, the hardships we face, the challenges we face, the gifts he’s given us, everything has put put in us for something.
00;26;40;24 – 00;26;56;04
Justin Goodbread
What is that something? That something for each of us has to be discovered. And what’s cool about it is you don’t find it in a weekend. You don’t find it right on the bike. Unfortunately. I wish we could. We find as we have that conversation over and over and over, and as we walk through this thing of faith, right, we look into faith.
00;26;56;04 – 00;27;15;09
Justin Goodbread
It’s like, wow, there is a part for just in this life and that this phase of my life now 30 years in business, a lot of successes, some hard times and failures. When I look back, it’s like, you know what? Why would I not take everything that God is equipped with me in my life, the way he’s put me together uniquely and share it, if for nothing else, to give somebody else and say.
00;27;15;09 – 00;27;18;01
Told me that dumb mistake. I’ve been there. You don’t want to step.
00;27;18;01 – 00;27;27;21
Justin Goodbread
On that, right? So that to me is the faith journey we’re on, especially someone who has recently shifted from agnostic to maybe saying, hey, I see you. Let me know a little bit more about you.
00;27;27;22 – 00;27;51;00
Rod Khleif
Yeah, yeah. No. Same. And I feel the same way about what you just said as well. I mean, you know, coaching is, is is one of the ways to do that. And I, we just discovered a few days ago that my students now own more real estate than everybody else that does this combined like 305,000 units just in multifamily, which just blows my mind and we know we’re missing a bunch.
00;27;51;01 – 00;28;08;23
Rod Khleif
It’s probably 400,000, honestly. But you know, it’s just astounding. So it’s effectively the best coaching real estate coaching program really in the world. Just like I said, it just blows my mind. And you know, I’ve got a wall in the other house here with hundreds and hundreds of thank you cards from from students. And it’s just such a blessing.
00;28;08;24 – 00;28;29;27
Rod Khleif
You know, people ask why I’m still doing this. It’s because of that. I get I get love every single day. Cards, gifts, you know, emails, DMs, every single day. It’s a blessing. And I’ve got a charity as well. But but talk a little bit more about some of the things you see when you get in deep with some of these business owners.
00;28;29;28 – 00;28;42;23
Rod Khleif
You know, you’ve talked about some of the stuff, but talk about some of the, you know, any other shortcomings that you come across that might add value to the listeners that have a business or starting a business? Want to start a business?
00;28;42;25 – 00;29;03;13
Justin Goodbread
Yeah, let’s go to top three that I hear and see holds the value down. Right. So there’s 286 different metrics. I mentioned that earlier KPIs, KPIs, different metrics that that evaluation firm is going to look at, whether that be a bank, whether that be an advisory firm, something of that nature or private equity, you name it. When we get down to it, the number one you mentioned earlier, the bottleneck.
00;29;03;13 – 00;29;20;24
Justin Goodbread
And what I say is the owner is the epicenter of the business, right? That is the number one, hands down. You mentioned iOS. You know, we’ve been here and I’ve been on the stage together talking to business owners. Phenomenal example there of somebody who’s taken that, that, that, if you will, the bully wake and drive it for and say, hey owners, get out of the business.
00;29;20;24 – 00;29;35;27
Justin Goodbread
But most of our owners don’t know how to do it, right. Most of our owners can’t see their way. They’re like, hey, I’m in the company. How do I get out? Show me the way. So we have a simple process that we show an owner how to exit the company. Okay. So that’s usually the number one. So how do you get how do you how does an owner.
00;29;35;29 – 00;29;38;03
Rod Khleif
Okay no, no you can’t say that and let it slide.
00;29;38;03 – 00;29;40;05
Yeah we’re gonna do it. Let’s go through that. Give me give me a little.
00;29;40;06 – 00;29;41;02
Rod Khleif
A little a little deeper.
00;29;41;02 – 00;29;41;25
Than just okay.
00;29;41;26 – 00;29;52;23
Justin Goodbread
So how does an owner get out of the business, right. Number one, you hire your offset, you hire the person opposite you. Right? My wife’s right over here. She’s directly opposite me in personality. She will not get on this microphone.
00;29;52;24 – 00;29;53;12
So you’re talking.
00;29;53;13 – 00;29;55;08
Rod Khleif
You’re talking in and yang person.
00;29;55;10 – 00;29;55;19
Correct.
00;29;55;19 – 00;30;02;15
Rod Khleif
So you’re talking about hiring somebody. That’s not like if I’m an extrovert type A personality, I’m not going to hire that personality.
00;30;02;16 – 00;30;19;14
Justin Goodbread
Nope. Not off the bat. Okay. Well, because you and I, you know, let’s say we’re extrovert on which type of a personality profile you want to use this Myers-Briggs or Colby or disc or whatever it is. We know who we are, right? It’s interesting that many of us who’ve been married for a very long time, we also realize our mates are opposite of us.
00;30;19;14 – 00;30;37;09
Justin Goodbread
God puts us together. And Yang, you mentioned, right? So in order for for me to hire somebody just like me is going to take that proverbial merry go round that I mentioned earlier and wait it too heavy to one side. But so for for me, I am really good. I’m a high D, high C personality. You probably as well as a high D personality.
00;30;37;15 – 00;30;53;09
Justin Goodbread
So for those of us who are hides, oftentimes we’re not really good at systems, right? We know we need systems, but for somebody for us to get in and say all the little micro points and five bullet points down and wireframe things out, we’re just probably not comfortable doing it. Can we do it? Yes, we can do it.
00;30;53;09 – 00;31;09;10
Justin Goodbread
But is it our skill set? No. But I heard somebody years ago say, do you realize that out of the 8.3 billion people in the world, the things that you hate doing, God has position somebody out there who knows exactly how to do that and they want to do that. So for those of us in business, if want to get out of the business, we have to look goes, what is it that’s draining us?
00;31;09;10 – 00;31;12;22
Justin Goodbread
What is it that’s weaken that company, that’s hire somebody for that position?
00;31;12;22 – 00;31;12;27
Right.
00;31;13;02 – 00;31;14;19
Rod Khleif
It makes complete sense.
00;31;14;21 – 00;31;38;24
Justin Goodbread
Now here’s where it even gets more funny. You take that take that, that merry go round. As an example, we had a friend named Bubba. Bubba was the type of guy you want center playing football. He was the guy you wanted running in front of you. Not like my build. So Bubba’s about twice my size. For us as business owners, our weight is so much heavier than the rest of our team that we have to wait, offset the balance of our company with lots of operations.
00;31;38;24 – 00;31;55;00
Justin Goodbread
If we’re a high dominant personality, we have to have lots of S’s. If we’re a D, we have to have lots of alternative or opposite personalities to weight us down. What we like to do is we like to. The old saying says birds of a feather flock together. We like to hire people who are just like us, who are killers, right?
00;31;55;03 – 00;31;55;09
Justin Goodbread
Right.
00;31;55;14 – 00;31;56;08
It makes us feel.
00;31;56;08 – 00;32;02;11
Justin Goodbread
Good because we’re the alpha dog inside there. But it doesn’t scale the company. We can’t get out of it. So step number one is hire the opposite.
00;32;02;12 – 00;32;02;22
Gotcha.
00;32;02;23 – 00;32;21;15
Justin Goodbread
Then work your way around to yourself so your higher higher higher higher higher. All the different positions to where ultimately most business owners are going to be left as the top salesperson. Most of us maybe a marketing person if you’re in the content world, but most of us going to be the top sales. Step number two, after you hire the opposites around you, is going to be replace yourself as a salesperson.
00;32;21;21 – 00;32;43;04
Justin Goodbread
That takes some time. We’ve been coaching Deca millionaires for some time now, and for those of us who’ve been weathered, if you will, by the storms of life and by business, it takes time to train that person, hand them the baton. It takes time, not necessarily to get them up to speed, right, but to get us ready to us, to get our mind ready to say, okay, I’m entrusting this person or persons.
00;32;43;04 – 00;32;43;14
There’s a lot.
00;32;43;14 – 00;32;44;04
Rod Khleif
Of fear around that.
00;32;44;05 – 00;32;44;08
Justin Goodbread
Well.
00;32;44;08 – 00;32;45;06
That’s our baby. Yeah.
00;32;45;07 – 00;33;01;15
Justin Goodbread
It’s our baby. It’s our it’s our reputation. It’s our livelihood. It’s who we are. It’s our identity for many of us. So in order for us, number one, to become get out of the bottleneck and drive our value as high as possible, we have to remove ourself. Number three, and that is, as I just alluded to, is we’re dropping your identity.
00;33;01;21 – 00;33;18;26
Justin Goodbread
Once we look external back to that vision, mission values, back to the self-reflective things. Once we realize that Justin Gilbert is more than just a business coach, an award winning author, an international speaker, once I get outside of that and say, you know what? I’m a dad. I’m a husband, I’m a pianist. I like to hunt and fish, man.
00;33;18;29 – 00;33;19;19
Justin Goodbread
Once I realized.
00;33;19;19 – 00;33;20;11
All these things.
00;33;20;11 – 00;33;34;15
Justin Goodbread
That I am outside of my business, it helps me look back and say, hey, this one business, it was fun. It can now run by itself. But what if I would ever here did this? What if I went over it, started coaching business? What if I wrote that book that I’ve been thinking about for years? What if I went and spoke to somebody on a podcast?
00;33;34;15 – 00;33;44;04
Justin Goodbread
What if I did those things? What if I went and helped to an orphanage in the Philippines? So for us, as the number one issue that we as business owners have is the bottleneck of the business.
00;33;44;06 – 00;33;47;22
Rod Khleif
Okay, okay, okay. And the third or did you was.
00;33;47;22 – 00;33;52;14
Justin Goodbread
That so the first three is how are your opposites. That’s how your sales person then move your identity outside.
00;33;52;14 – 00;34;08;06
Rod Khleif
The move the identity. You know on identity. It’s also very dangerous to have your business be your identity because if the business it fails, you’re a failure. People kill themselves over that. The business should always be the vehicle, not the identity. Well said. Yeah.
00;34;08;08 – 00;34;09;04
Justin Goodbread
I agree 100%.
00;34;09;04 – 00;34;21;07
Rod Khleif
Right? Yeah. So any advice for someone that wants to start a business? They’ve got their excited about the possibility of a particular business. Talk to somebody that hasn’t started one yet and just give them some tips.
00;34;21;10 – 00;34;27;17
Justin Goodbread
Yeah. First thing I would say is ideas are cheap right? That is are cheap. How many times have you and I’ve been approached by people. You mentioned it earlier. People.
00;34;27;20 – 00;34;28;23
Rod Khleif
Two days ago I got approach.
00;34;28;23 – 00;34;44;11
Justin Goodbread
With something. Yeah it is are cheap. It ultimately it ultimately in order to start a business there’s just one one word action action action. You’ve got to take a step. You got to take a step and realize that no matter what you do in the first year or 2 or 3 years, it’s going to be wrong. You’re going to fall on your face, you’re going to fail forward.
00;34;44;11 – 00;35;09;10
Justin Goodbread
You’re going to fail often. Every time you do stand up and continue to falling forward. And the road to success for that of a business owners is through a lot of failures, through a lot of blood, through a lot of sweat, through a lot of tears. That’s the only way that we can get the running business. If we if we understand the mindset, the mindset of burn the ships, like many of us heard, like so many of the people before us have spoken into the ethos like Zig Ziglar and Les Brown and Charlie Johnson and so many out there that I used to listen to.
00;35;09;12 – 00;35;25;23
Justin Goodbread
Once we understand the mindset of, hey, we’re going to charge hell with the water pistol, but I say, we’re going to charge hell with a water pistol. Once we get to that point, then we can ultimately answer the question, which I think that most of us who’ve been in business for a long time can resonate with is it’s not.
00;35;25;23 – 00;35;46;16
Justin Goodbread
If I fail, it’s what if I didn’t take the risk? I don’t want to meet myself. Right. And this is where someone says, I want to start a business. You’ve got to get to the point to where you say, I don’t want to face myself and my deathbed saying, I wish I would have. I want to say, if I’m going to start a business, that, okay, it’s going to be hard, it’s going to suck, it’s going to be laborious.
00;35;46;16 – 00;35;54;03
Justin Goodbread
But I would rather fall, fail and be a laughingstock of everybody out there as opposed to looking at myself in the mirror many years from now.
00;35;54;04 – 00;36;11;14
Rod Khleif
You heard about the book Bronte where wrote it’s. She was a hospice nurse in Australia and she asked people that were dying a question. And the question was, do you have any regrets? And she wrote a book about it, bestseller, something like The Five Regrets of Dying. And the number one regret was not living the life I could have lived.
00;36;11;14 – 00;36;16;11
Rod Khleif
Living someone else’s life. Yeah, I fear that. Don’t fear failure. Yeah, yeah, yeah.
00;36;16;12 – 00;36;30;02
Justin Goodbread
So I think once we understand that, hey, we’re going to fail. We are going to fail. Just go ahead and accept it. Yeah. People are going to laugh at you. That’s okay. Look at yourself in the years from now. Then once you do that, what you can then lean into if you’re going to start a business is get some wisdom.
00;36;30;07 – 00;36;34;01
Justin Goodbread
I’m a firm believer in hiring a coach, I really am. I have five coaches in my life right now.
00;36;34;02 – 00;36;35;04
Rod Khleif
I got two right now myself.
00;36;35;05 – 00;36;53;28
Justin Goodbread
I believe that a coach can shortcut our mindset, but they also can give us frameworks that help us reach capacity, whatever that may be, in a quicker time frame. As you hire the coach. Here’s a piece of words of wisdom. Took me decades to figure this one out is that time is infinitely more valuable than money is. Money is so easy to make.
00;36;53;28 – 00;36;54;27
Justin Goodbread
Money is so easy to get.
00;36;54;27 – 00;36;56;10
Rod Khleif
It shortens time.
00;36;56;10 – 00;37;16;17
Justin Goodbread
It does. He shortens the times. But I have to come to the I had to come to the position in my own life, right where I was willing to let go of my hard earned dollars in order to get gain back what I conceived as my short amount of time. Now, as 30 something years in business, it’s like, dude, I trade my dollars for time every day of the week.
00;37;16;20 – 00;37;36;03
Justin Goodbread
And if I were going to coach somebody who says, hey, I got this idea, great, you’re going to fail. Go ahead and acknowledge that. Look at yourself in the future. Let’s take a step back and be willing to depart from your hard earned dollars to hire somebody who can shortcut that time frame for you. And then whenever you hire coach, this is a sidebar for those of you who consider hiring rod as a coach in your own for real estate, let me give you some advice.
00;37;36;07 – 00;37;51;02
Justin Goodbread
There’s a program. I hadn’t even seen your program. I know you have a program and a success metric that if you follow these things, it will work. Obviously, case and point, but you’re not going to get the depth of your wisdom rod in a year’s time. You’re going to get the foundational things. You’re gonna get things that are going to make you successful.
00;37;51;02 – 00;38;11;21
Justin Goodbread
But we hadn’t even begin to crack open the experience that you’ve had for decades from now. So oftentimes when we hire a coach in this microwave environment that we live in, we want instant results. We jump in, we get a framework, and we don’t realize, yes, the framework is there, but it’s the application, the wisdom and the mentor and and the coaching and the blowing the whistle at you to help you become successful through that framework.
00;38;11;21 – 00;38;12;17
Justin Goodbread
So if I.
00;38;12;19 – 00;38;32;11
Rod Khleif
In the repetition, repetition and all of that. Yeah. All of that. Yeah. No, I agree completely. And yeah, I’ve had coaches my entire life and, and you know, and even in my business, yes, you could do it on your own seven years with, with with us. You do it in two years, you know, that’s it. If you’re willing to do it now, you got to do it.
00;38;32;12 – 00;38;41;05
Rod Khleif
I do the work. You got to do the work. But we’ll give you the map, the maps there. The roads have been, you know, the wheels been built. You don’t have to build the wheel. You just have to do it and execute on it. Yeah.
00;38;41;06 – 00;38;52;27
Justin Goodbread
And in today’s world, I’m not so sure. And this is going to sound contradictory to everything we’ve said thus far. Your question directly was, what would I say to somebody who wanted to start a business in today’s world? I’m not so sure. I’d start a business by one by one.
00;38;53;00 – 00;39;06;19
Rod Khleif
Right now, especially ten babies, 10,000 people a day turning 60. Yeah, I’m buying senior housing because there’s also 10,000 people a day turning 80. And they need senior housing. Yeah. So I mean, you know, instead of getting crushed by the wave, ride that wave, right.
00;39;06;19 – 00;39;09;05
Justin Goodbread
The banks are there to lend you the money. That’s right. So no.
00;39;09;07 – 00;39;17;13
Rod Khleif
I agree completely. Agree completely. I’m so glad you said that. For God sakes, don’t start one by one. I mean so many opportunities right now. Yeah. Love it.
00;39;17;14 – 00;39;20;11
Justin Goodbread
But the same rules apply. Even if you buy a business, realize.
00;39;20;11 – 00;39;21;15
Rod Khleif
That you’re going to fail. Yeah.
00;39;21;20 – 00;39;34;11
Justin Goodbread
You’re still going to need a coach. You’re still going to have to have that mindset that that killer mindset. You’re going to have to have that. You’re going to have to not want it. You’re not going to you’re not going to take it. You’re not going to have the nice house and the cars and the fantasy vacations for probably a decade.
00;39;34;13 – 00;39;48;22
Justin Goodbread
Yeah, I know that scares some people, but you’re going to have to put everything back into the company and like gambling. And I’m probably like you and your family, you lived on beans and rice for a long period of time in order to get that company where it’s sustainable. So, you know, there’s a lot of what I call young ones today, young ones in terms of.
00;39;48;24 – 00;40;00;21
Rod Khleif
They want to take a pill and have it because it were no, you got you got to actually got to actually do the work. You know, I don’t know if I agree with the ten years, I think you can do it less than that. But I but that said, you got to do the work. You gotta do the bottom line.
00;40;00;24 – 00;40;03;04
Rod Khleif
So how do people reach out to you, bud?
00;40;03;06 – 00;40;09;26
Justin Goodbread
Yeah. The best way is either connect with us on Instagram. It’s a fun story. I know some good bread or we have our own podcast. Deck a millionaire.
00;40;09;29 – 00;40;10;17
Rod Khleif
Yeah yeah yeah.
00;40;10;20 – 00;40;15;26
Justin Goodbread
The code is the podcast. It’s on all the major challenges. You can hear us talk about how to rapidly scale companies.
00;40;15;27 – 00;40;22;28
Rod Khleif
Love it, love it. Well, I appreciate it, but it’s a pleasure to meet you, man. It’s been a lot of fun. And your family as well, of course. Absolutely. Thanks for having us.
**Podcast Categories:** Podcasts
---
### [The 10X Systems That Replaced His Day Job](https://rodkhleif.com/podcasts/cost-segregation-in-multifamily-real-estate-baran-menguloglu/)
**Published:** June 26, 2026
**Author:** Bryan Hoover
**Excerpt:** The 10X Systems That Replaced His Day Job
**Content:**
## How Cost Segregation in Multifamily Real Estate Creates Wealth Faster
For many investors, multifamily real estate is about cash flow and appreciation. But one of the most powerful wealth-building tools often goes overlooked: cost segregation in multifamily real estate. In this episode of Multifamily Rockstars, investor and entrepreneur Baran Menguloglu explains how accelerated depreciation and strategic acquisitions can significantly improve returns while helping investors scale their portfolios.
Baran also shares the story behind acquiring a 12-unit apartment property in Knoxville, Tennessee, detailing how he identified the opportunity, structured the financing, and navigated unexpected challenges during closing. His experience provides practical lessons for investors looking to transition from smaller properties into larger multifamily deals.
## From Engineer to Multifamily Investor
Baran Menguloglu is originally from Turkey and has lived in the United States for more than two decades. After spending years in automotive engineering, he transitioned into entrepreneurship by launching multiple retail businesses across several states. Eventually, his search for commercial space led him into real estate investing.
What began with a mixed-use property purchase evolved into a growing multifamily portfolio. Over the last five years, Baran has focused on building systems, acquiring apartment properties, and leveraging tax strategies that increase long-term wealth creation.
## Finding and Closing a 12-Unit Deal
The featured deal was a 12-unit apartment community located just minutes from downtown Knoxville and the University of Tennessee. The property’s location and strong upside potential made it an attractive acquisition.
Baran’s approach to sourcing deals is simple:
- Analyze opportunities immediately.
- Submit offers quickly.
- Avoid unnecessary delays with lengthy negotiations.
That speed allowed him to secure the property before other buyers could act. He also obtained attractive financing through a credit union, closing the deal with 80% loan-to-value financing and a competitive interest rate.
## The Power of Cost Segregation in Multifamily Real Estate
One of the biggest reasons Baran invests in multifamily properties is the tax advantage created by cost segregation in multifamily real estate. Instead of depreciating a property over a traditional schedule, investors can accelerate depreciation by breaking down individual components of the building and assigning them shorter useful lives.
The benefits include:
- Larger depreciation deductions in the early years of ownership.
- Potential reduction of taxable income.
- Increased cash flow that can be reinvested into additional acquisitions.
- Enhanced returns for investors and partners.
Baran emphasizes that these tax strategies are an essential component of his investment criteria and play a major role in how he evaluates new opportunities.
## Creating Value Through Strategic Renovations
The Knoxville property offered significant upside through operational improvements and light renovations. Existing rents were substantially below market rates, creating an opportunity to increase income through modest upgrades.
The business plan includes:
- Interior painting and flooring improvements.
- Enhanced curb appeal.
- Upgrading the tenant experience.
- Gradual repositioning of the resident base.
With a relatively modest capital expenditure budget, the projected rent increases could significantly improve the property’s overall value.
## Building Systems to Scale
A major takeaway from this conversation is Baran’s commitment to creating systems and processes. Drawing from his entrepreneurial background, he has implemented structured operating systems throughout his businesses and is applying the same philosophy to multifamily investing.
Rather than creating another full-time job for himself, Baran focuses on:
- Delegation and team building.
- Asset management systems.
- Leveraging partnerships.
- Creating operational efficiencies that allow him to scale.
His long-term vision is to build a business that can grow without relying on his involvement in every daily activity.
## Advice for New Real Estate Investors
For aspiring investors, Baran stresses the importance of education and mindset. He believes that investing in mentorship and training can dramatically shorten the learning curve and help investors avoid costly mistakes.
His recommendations include:
1. Start investing as early as possible.
2. Consider house hacking as an entry point into real estate.
3. Invest heavily in education and mentorship.
4. Develop the mindset required to make large investment decisions.
5. Build relationships and partnerships with experienced investors.
According to Baran, the combination of knowledge, systems, and a strong mindset creates the foundation for long-term success in multifamily real estate.
If you want to hear the full conversation and detailed insights, watch the podcast video or read the complete transcript below.
## Frequently Asked Questions About Cost Segregation in Multifamily Real Estate
**What Is Cost Segregation in Multifamily Real Estate?**
Cost segregation in multifamily real estate is a tax strategy that allows investors to accelerate depreciation deductions by identifying building components that can be depreciated over shorter time periods instead of the standard 27.5-year schedule. This approach can significantly increase early-year tax savings and improve investment returns.
**How Does Cost Segregation Work for Apartment Buildings?**
A cost segregation study breaks down an apartment property’s assets into categories such as flooring, appliances, landscaping, parking lots, and fixtures. These components may qualify for depreciation schedules of 5, 7, or 15 years rather than the standard depreciation timeline, allowing investors to realize larger deductions sooner.
**Why Is Cost Segregation Important for Multifamily Investors?**
Cost segregation is important because it can create substantial tax savings, improve cash flow, and free up capital that investors can reinvest into additional properties or renovations. Many multifamily investors use this strategy to accelerate portfolio growth and increase overall returns.
**Can Cost Segregation Increase Cash Flow?**
Yes. By generating larger depreciation deductions in the early years of ownership, cost segregation can reduce taxable income and potentially lower an investor’s tax liability. The resulting tax savings can improve cash flow and provide additional capital for future investments.
**Who Should Consider a Cost Segregation Study?**
Investors who own apartment buildings, multifamily properties, or commercial real estate may benefit from a cost segregation study. The strategy is particularly attractive for investors seeking to maximize tax efficiency and improve after-tax returns.
**When Should a Cost Segregation Study Be Performed?**
Many investors complete a cost segregation study shortly after acquiring a property so they can maximize depreciation benefits from the beginning of ownership. However, owners of existing properties may also be able to perform a study retroactively and capture missed depreciation benefits.
**What Types of Multifamily Properties Qualify for Cost Segregation?**
Most multifamily properties can qualify for cost segregation, including small apartment buildings, large apartment communities, student housing, and mixed-use properties that contain residential units.
**How Much Can Investors Save With Cost Segregation?**
Tax savings vary depending on the property’s purchase price, asset composition, and the investor’s tax situation. In many cases, investors can accelerate hundreds of thousands of dollars in depreciation deductions, creating meaningful tax benefits and improved cash flow.
**Does Cost Segregation Work With Bonus Depreciation?**
Yes. Cost segregation and bonus depreciation often work together to provide even greater tax benefits. Certain assets identified during a cost segregation study may qualify for bonus depreciation, allowing investors to deduct a significant portion of those assets immediately.
**Is Cost Segregation Worth It for Smaller Multifamily Properties?**
It can be. While cost segregation is commonly associated with larger apartment communities, many investors with smaller multifamily properties also benefit from the strategy. The decision typically depends on the property’s value, expected tax savings, and long-term investment goals.
**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.
**Podcast Categories:** Multifamily Rock Stars, Podcasts
---
### [He Looked at 100 Industries and Chose This One](https://rodkhleif.com/podcasts/lp-investing-in-real-estate-with-sam-silverman/)
**Published:** June 22, 2026
**Author:** Bryan Hoover
**Excerpt:** He Looked at 100 Industries and Chose This One
**Content:**
## LP Investing in Real Estate: Lessons from Sam Silverman
For many real estate investors, building wealth through passive investing can be just as powerful as actively managing properties. In this episode of Lifetime Cash Flow Through Real Estate Investing, Sam Silverman shares his journey from sales professional and single-family investor to investing in more than 90 deals as a limited partner. Along the way, he developed a disciplined framework for evaluating operators, raising capital, and identifying opportunities across multiple asset classes.
This conversation provides valuable insight into LP Investing in Real Estate, including how investors can reduce risk, evaluate sponsors, and position themselves for long-term success. Sam also discusses why he has expanded beyond traditional real estate into private credit and business acquisitions while still applying the same investment principles.
## Why Sam Silverman Transitioned from Single Family Homes to LP Investing
Like many investors, Sam began by purchasing single-family rental properties. While the portfolio generated cash flow, he realized the operational effort required to manage multiple homes was not aligned with his long-term goals. The amount of time, attention, and management needed for each property outweighed the returns he was earning compared to his professional career.
That realization led him to explore LP Investing in Real Estate. By investing passively in multifamily properties, mobile home parks, self-storage facilities, debt funds, and other asset classes, he was able to gain exposure to different investment strategies while learning from experienced operators. This approach allowed him to diversify risk and discover which investment models best matched his interests and strengths.
## How to Vet Real Estate Operators as a Limited Partner
One of the most valuable parts of the discussion centers on operator due diligence. After investing in more than 90 deals, Sam has developed a process for evaluating sponsors beyond simply reviewing financial projections.
Key factors he considers include:
- Track record and experience in similar projects
- Long-term vision and investment philosophy
- Professional reputation and references
- Ability to navigate challenges during market downturns
- Quality of communication and investor transparency
Sam emphasizes that investors should not rely solely on references provided by operators. Instead, he recommends leveraging platforms like LinkedIn to identify mutual connections and conduct independent background checks. This type of backchannel research often provides a more accurate picture of an operator’s character, competence, and reliability.
## Building Trust and Raising Capital
The conversation also explores capital raising strategies and how professionals can leverage their existing credibility. Sam believes many investors overlook the value of their current network and professional reputation.
Whether someone is a surgeon, technology executive, business owner, or sales professional, they already possess trust and authority within a specific community. By partnering with experienced operators and maintaining strong relationships, investors can create opportunities to raise capital while providing value to their network.
LinkedIn has become a particularly powerful platform for Sam’s business development efforts. He discusses how targeted outreach, relationship building, and consistent networking can create meaningful opportunities for both investors and operators.
## Expanding Beyond Real Estate Through Business Acquisitions
While LP Investing in Real Estate remains a core part of Sam’s background, he has increasingly focused on acquiring and scaling businesses. One of his primary ventures involves acquiring paving companies through a roll-up strategy.
The opportunity stems from several market dynamics:
- Highly fragmented industry structure
- Aging business owners approaching retirement
- Limited succession planning
- Attractive acquisition valuations
- Potential for operational efficiencies through consolidation
Rather than making drastic changes after acquiring companies, Sam focuses on improving back-office operations, reducing administrative burdens, and supporting employees through the transition process. This people-first approach helps preserve company culture while creating opportunities for growth.
## Private Credit and Alternative Investment Opportunities
Another area of focus for Sam is private credit. Through his lending platform, he provides capital to small businesses that may not qualify for traditional financing.
Unlike conventional loans, these investments are structured around purchasing future revenue streams at a discount. This model allows investors to generate attractive returns while maintaining relatively short repayment cycles. Sam explains how underwriting, collections, and risk management play critical roles in creating a sustainable private credit operation.
For investors seeking diversification, private credit represents an alternative source of yield that is not directly tied to real estate market performance.
## About Sam Silverman
Sam Silverman is the founder of Silverman Capital and an experienced investor with exposure to more than 90 passive investment opportunities across multiple asset classes. His background includes sales leadership, capital raising, private credit, business acquisitions, and real estate investing. Today, he focuses on acquiring and scaling paving companies while continuing to evaluate opportunities in private credit and alternative investments.
If you want to hear the full conversation and detailed insights, watch the podcast video or read the complete transcript below.
## FAQ About LP Investing in Real Estate
**What Is LP Investing in Real Estate?**
LP Investing in Real Estate refers to investing as a limited partner in a real estate syndication, fund, or partnership. Limited partners provide capital to a deal while the general partner manages acquisitions, operations, financing, and execution. This structure allows investors to earn passive income and potential appreciation without managing properties themselves.
**How Does LP Investing in Real Estate Work?**
LP Investing in Real Estate works by pooling investor capital to acquire real estate assets such as multifamily apartments, self-storage facilities, mobile home parks, industrial properties, or other commercial real estate. Limited partners receive a share of the profits based on their investment while the general partner handles day-to-day operations and business decisions.
**What Are the Benefits of LP Investing in Real Estate?**
LP Investing in Real Estate offers passive income potential, portfolio diversification, professional management, and access to larger institutional-quality properties. Investors can participate in real estate opportunities that may be difficult to acquire individually while avoiding the responsibilities of property management.
**What Types of Properties Can Limited Partners Invest In?**
Limited partners can invest in a wide variety of real estate asset classes, including multifamily apartments, mobile home parks, self-storage facilities, industrial properties, office buildings, retail centers, senior housing, and mixed-use developments. Many investors diversify across multiple asset types to reduce risk.
**How Do You Vet a Real Estate Operator Before Investing?**
Investors should evaluate an operator’s track record, experience, communication style, market expertise, and past performance. It is also important to review references, speak with current investors, analyze previous deals, and understand how the operator manages challenges during market downturns.
**What Questions Should You Ask Before Becoming a Limited Partner?**
Investors should ask about the sponsor’s experience, business plan, projected returns, fee structure, financing strategy, risk factors, market conditions, and communication process. Understanding how the operator plans to execute the investment strategy can help investors make informed decisions.
**What Risks Are Associated With LP Investing in Real Estate?**
Like any investment, LP Investing in Real Estate carries risks including market fluctuations, economic downturns, interest rate changes, occupancy challenges, operational issues, and sponsor execution risk. Investors should carefully review offering documents and understand the risks before investing.
**How Much Money Do You Need to Start LP Investing in Real Estate?**
Minimum investment amounts vary by sponsor and deal. Many real estate syndications require investments ranging from $25,000 to $100,000, although some funds and platforms may offer lower minimums. Investors should evaluate opportunities based on their financial goals and risk tolerance.
**Can LP Investing in Real Estate Generate Passive Income?**
Yes, many real estate syndications distribute cash flow to limited partners throughout the holding period. While distributions are not guaranteed, successful investments can provide passive income along with potential profits when the property is sold or refinanced.
**Is LP Investing in Real Estate Better Than Owning Rental Properties?**
The answer depends on an investor’s goals. LP Investing in Real Estate offers a passive approach with professional management, while direct ownership provides greater control but requires more time and operational involvement. Many investors use both strategies as part of a diversified real estate portfolio.
**How Can Investors Diversify Through LP Investing in Real Estate?**
Investors can diversify by allocating capital across different markets, operators, property types, and investment strategies. A diversified portfolio may include multifamily, self-storage, mobile home parks, industrial assets, and private credit investments to reduce concentration risk.
**What Should Investors Look for in a Real Estate Syndication?**
A strong real estate syndication typically includes an experienced sponsor, a well-defined business plan, conservative underwriting assumptions, attractive market fundamentals, clear investor communication, and alignment of interests between the general partner and limited partners.
00;00;38;22 – 00;00;56;14
Rod Khleif
Welcome back to lifetime cash Flow through real estate investing. I’m Rod Khleif and I am thrilled you’re here. And I know you’re going to get tremendous value from the very interesting gentleman I’m interviewing today, because we’re going to cover all sorts of things. Investing as a limited partner, vetting the operators as a limited partner, which is a big deal right now.
00;00;56;14 – 00;01;17;23
Rod Khleif
Raising money. He’s doing roll ups, doing private private credit for small businesses. And he’s been involved in multiple asset classes. So we’re really going to have a lot of fun today. His name Sam Silverman and he’s Silverman Capital. Oh welcome to show brother. Yeah. Thanks for having me on. Absolutely. And tell us how you evolved into all of these different types of business models.
00;01;17;23 – 00;01;27;04
Rod Khleif
And I’d love to hear if you have a team doing this, if you have different team members doing these different aspects of what you do, but give us give us your background. Yeah. So I.
00;01;27;07 – 00;01;48;05
Sam Silverman
Started out of college in sales, so I ran a you know, I started out cold calling. I think of the entry level sales, super small startup type place where you are boiler room type atmosphere. And it was like a real big, you know, real very, very techie type company. So, you know, like most people graduated college and had no clue what I wanted to do.
00;01;48;06 – 00;01;53;00
Sam Silverman
So my thought was, let me go learn some actual tangible skills and figure out a way to make some cash.
00;01;53;01 – 00;02;04;05
Rod Khleif
So let me stop you for one second, guys. If there was any skill that you could learn to be a success in business and in life, it is sales experience. So please continue.
00;02;04;05 – 00;02;06;10
Sam Silverman
100%. Whatever it is that you go do.
00;02;06;11 – 00;02;07;09
Rod Khleif
You got to sell?
00;02;07;12 – 00;02;24;24
Sam Silverman
Knowing sales is the lifeblood of any organization, right? If you have a great idea, a great operations, you have to be able to go sell. Otherwise there’s no revenue coming in. So was in sales for a while. And in sales is a great path because it’s meritocracy. So what that means is that if I perform well, I can make more money really quickly.
00;02;24;25 – 00;02;51;29
Sam Silverman
Spending come doubled every year for for a handful of years. In turn, I got into real estate, right, in terms of buying single family homes. And I was going one by one. And what I realized quickly, at least for me, was that the operational lift to go do each single family home to go make 2 or $300 a month per home, was a big trade off relative to what I can earn my day job, so that head space mindshare operational lift wasn’t worth it.
00;02;51;29 – 00;03;07;26
Sam Silverman
I sold the entire portfolio itself. All think I had probably ten homes at the time that Zillow, and they were so buying homes and got into investing as an LP, so went on the whole podcast circuit, listened to every different operator I found, and it was only my own money. So I was just throwing, you know, different places, right?
00;03;07;27 – 00;03;15;21
Sam Silverman
Multifamily, mobile, home park, storage, debt, write everything you can think of from real estate to go get a feel for what it was that I liked.
00;03;15;23 – 00;03;18;09
Rod Khleif
And what did you like?
00;03;18;11 – 00;03;37;25
Sam Silverman
I liked the deal side of it. I like the operational side less so in terms of what the role itself could be. So what I realized, too, was that there are different buckets you play in terms of the roles and function on the deals. So from there pivoted to going out and partnering in groups. I worked with right to go bring in capital to their projects, right?
00;03;37;26 – 00;03;56;22
Sam Silverman
Whether through a co-sponsor agreement, whether through a fund to fund. Right. And it’s sort of working with them on their deals from there. Got very, very involved in the compelling 95 to 100 years as an LP at this point in the last 7 or 8 years. And, you know, in turn, you learn a lot, right, in terms of what’s good, what’s bad, and what you like doing.
00;03;56;22 – 00;04;07;22
Sam Silverman
And I’ve since pivoted from, you know, we used to focus really heavily in real estate. It’s actually much more so now in private credit and actually a roll up in the asphalt paving space. So big pivot right?
00;04;07;23 – 00;04;27;19
Rod Khleif
Right, right. Yeah. We were just talking before we started recording. One of my warriors, Tyson I know was raising money for your paving roll up because I recognized you said paving and and I know he was doing he was part of a roll up. He’s also doing medical as well. But so so so right now you’ve got all these different.
00;04;27;22 – 00;04;31;06
Rod Khleif
Are you still investing as an LP as well or are you backing away from that now?
00;04;31;06 – 00;04;48;03
Sam Silverman
So I definitely keep a lot more cash on hand. Right. When you run operating companies, you need a lot more cash in terms of what is your working on you to come in the build face, right where in the build phase, I’m sure you may have experienced this to you. Go through a lift in which you’re making far less money than you will longer term on what it is you’re working on.
00;04;48;09 – 00;05;03;08
Sam Silverman
So we keep a lot more cash on hand in paving. You have things that come up like bonding, or you can move $4 million in your balance sheet of a company recently so we can go secure government contracts so we keep way more cash in hand. So along with an answer of saying yes, but more so in my own deals right now.
00;05;03;11 – 00;05;25;17
Rod Khleif
Gotcha, gotcha. So you invested in over 90 deals as an LP. Talk about a little bit about your vetting process. And, you know, I’m sure you have. And I know you had ups and downs. You may have lost capital, a lot of operators in the multifamily space or in in struggling right now. And there’s incredible opportunity as a result of that.
00;05;25;17 – 00;05;29;21
Rod Khleif
But talk a little bit about how you vetted operators.
00;05;29;22 – 00;05;48;06
Sam Silverman
Yeah. So at first it was much more. So just gut feel when it was your own capital there. Right. So you kind of look at the process that you go through, at least that I did first, park my own cash with them, see the experience. Right. In terms of communication, in terms of how they’re performing versus their targets from there, right, there are some opportunities to go help be a bigger part of the team.
00;05;48;12 – 00;06;02;10
Sam Silverman
Right. So I’d say kind of looking back on it, I think now there’s a lot of things you look for, right? Number one is always the people they are working with. Sure. I think in any deal writing the deal is great. Over a five year period, there’ll be a lot of times that deal in which things don’t go exactly as planned.
00;06;02;12 – 00;06;02;20
Sam Silverman
Right.
00;06;02;22 – 00;06;07;20
Rod Khleif
So so when you’re talking about looking at the people, what sorts of things do you look at? Let’s be a little more granular.
00;06;07;21 – 00;06;30;21
Sam Silverman
Yeah. So one obviously is track record, right. In terms of what is that. They have done a similar type experience, what their background is. I’d see also what they gave up to go do something right. For example, if someone left a, you know, really high end corporate role making a half million, million dollars a year, I likely know that they’re a barrier for success of what they want to deliver on is very, you know, a much higher bar.
00;06;30;23 – 00;06;45;07
Sam Silverman
I see all the timeline in which they look at. So for example, right. Some people look at things in a six month to two year window. So we look at things in 30 or 40 years in terms of how does they want to operate. So I think in terms of understanding someone’s time horizon for their company itself matters a lot.
00;06;45;08 – 00;07;05;14
Sam Silverman
And what I mean by that is that I’m 31 and we look this in everything that we do is met with a 30 year lens. So for us, it may hurt us financially in the short term. Well, long term in the next 30 years, right? We think we think we’ll do pretty well. So in turn, I think you kind of operate differently if you have a long term lens on how it is that you want to go, you know, be in business what you want.
00;07;05;16 – 00;07;08;11
Sam Silverman
You want to be known for all those things.
00;07;08;13 – 00;07;12;23
Rod Khleif
Interesting. Well, you’re an anomaly. You’re obviously very analytical as well. Yes.
00;07;12;25 – 00;07;13;25
Sam Silverman
Yeah, definitely.
00;07;13;27 – 00;07;26;04
Rod Khleif
A lot of salespeople aren’t, you know, they’re not great communicators. You’re a great communicator, but you’re also analytical. So you’re a bit of a of a unicorn in that regard. Usually it’s one or the other, you know. Would you call yourself an introvert or an extrovert?
00;07;26;04 – 00;07;27;26
Sam Silverman
I think an extrovert introvert.
00;07;27;27 – 00;07;33;08
Rod Khleif
Yeah. Yeah, yeah. Okay. I’ve heard that too. Yeah. You get energy from being alone or being around people.
00;07;33;10 – 00;07;38;15
Sam Silverman
From the right people. Yes. Otherwise I’m totally comfortable being nice. Yeah.
00;07;38;20 – 00;07;58;15
Rod Khleif
Yeah, yeah, you’re definitely unique in that regard. You know, some of the best partnerships I’ve seen or, you know, somebody an extrovert, a mouthpiece like myself here with, you know, a CPA, which is, you know, previous relationship I had and now I’m with a, you know, finance expert. But yeah, those are those are some of the matches I see in my warrior program that work very, very well.
00;07;58;18 – 00;08;21;13
Rod Khleif
So so you’re doing you’re doing multiple things. So as far as the vetting goes, by the way guys in my Linktree Rod’s links, I’ve got a book on the questions you should ask before you invest with a GP. It’s free. You know at the very least utilize that. And like Sam said, you know, trust your gut to you kind of alluded to to, you know, meeting them personally and getting a feel for them.
00;08;21;13 – 00;08;31;06
Rod Khleif
And I place a lot of weight on, on, you know, the gut feel because your brain is so powerful to pick up on things that you’re not even consciously aware of. And so.
00;08;31;09 – 00;08;48;24
Sam Silverman
There’s also the right now, if you look at social media to it’s so you hop on LinkedIn like I’m a big, big believer in LinkedIn and I go pull up your page. For example. I’m sure you have hundred people who are mutual connections there. It’s very easy to go ping a few people and go back to know someone now as well in terms of their experience, right?
00;08;48;25 – 00;08;55;04
Sam Silverman
So you can do things like that, that take a few minutes to go do and get meaningful references yourself. The reference to someone.
00;08;55;04 – 00;08;55;18
Rod Khleif
Gives a great.
00;08;55;18 – 00;09;01;02
Sam Silverman
Idea, right? The reference is that if I ask you, rod, I’m like, hey, I’m looking at this deal with you. Give me some of your references.
00;09;01;03 – 00;09;07;05
Rod Khleif
Yeah, well, they’re going to be the people that hate me, obviously. Right, exactly. I’m being sarcastic. Yeah. So, no, that’s a really good idea.
00;09;07;08 – 00;09;17;27
Sam Silverman
Backchannel. Someone else I think is really powerful, too. And it also helps you have talking points that you can go address that person as well, that you don’t know, that they don’t know you’re going to go ask. You can kind of go have better points to go talk through that person.
00;09;17;28 – 00;09;38;07
Rod Khleif
No, that’s good advice. That’s very good advice. So, you’re obviously raising money. You’ve raised a lot of money. Talk about that a little bit. Talk about some of the things you’ve done to be congruent. Incredible. When you’re going out there and raising money and talk about some of the some of the strategies utilized to build reach in that regard.
00;09;38;13 – 00;10;01;12
Sam Silverman
Yeah. So again, like we are huge on LinkedIn okay. My background in tech, if you look at my function, what my team used to do, they were all prospectors and have a big team of inside sales folks. Their sole job was go find look like companies to our customers. Go find that role in persona of who it is that we target to go sell to and go book conversations with them, use LinkedIn, use cold call, use email, use all those things.
00;10;01;12 – 00;10;11;11
Sam Silverman
So in our end, LinkedIn is fantastic. I think if you’re starting out figuring out who it is. Do you have access to so say for example, one of your students is a surgeon, and for them they.
00;10;11;11 – 00;10;13;24
Rod Khleif
Have a great example because that’s Tyson. Yeah.
00;10;13;24 – 00;10;33;04
Sam Silverman
Yeah yeah. Like like Tyson is on an awesome job. Right. So think of Tyson right where he has massive credibility by being a successful orthopedic surgeon. Right. And in turn, his people in his space know his background. Right. They trust him there. So in turn, Tyson goes and partners with groups who he feels confident in. He leverages their track record and their history.
00;10;33;05 – 00;10;52;27
Sam Silverman
He also leverages his background, right, that if Joe, who worked in the air next to me, knows me as a credible orthopedic surgeon who does his job, who is respectful, who does all these things to incredible their that trust that in turn will carry over to this potentially to what I was saying. Hey, you know what? This is something you can relate to them very well, right?
00;10;52;28 – 00;10;55;25
Sam Silverman
Right. That for me it was all people in sales and tech.
00;10;55;26 – 00;11;11;04
Rod Khleif
Okay. Because that’s where you went. Okay. Yeah. Because not everybody’s a surgeon and not everybody’s in sales in Texas. You’ve got to kind of look at where you’re at. We get a lot of it people though I will say that in my warrior program, tons of IT people, but business owners as well. Maybe maybe you’re a business owner.
00;11;11;06 – 00;11;38;03
Rod Khleif
So yeah. So that’s that’s good now. And you like LinkedIn. We’re doing that as well actually right now very successfully we’re getting lookalike lists and and reaching out and getting appointments set from our LinkedIn outreach. That’s going very well too. Glad to hear that it’s working for you. So okay, so that’s on the raising money front. And then on these roll ups that you’re doing roll up rather that you’re doing because I know he’s involved in some other ones.
00;11;38;03 – 00;11;51;29
Rod Khleif
You’re doing paving companies. Talk about what that looks like to you. Why paving companies and, and, you know, explain the roll up and explain to and what you plan to do there, please.
00;11;52;00 – 00;12;12;23
Sam Silverman
Yeah. So my partner and I, Chris, looked at probably 50 to 100 industries before we landed on paving. And what we wanted to figure out was where you have fragmentation. And what that means is that companies that are disparate, like you think of E-Com, you think of Amazon, right? In paving. There aren’t those massive companies that own the entire market itself.
00;12;12;24 – 00;12;29;13
Rod Khleif
Similar to what what’s his face did with Waste Management? He’s a great roll up example. You know who I’m talking about, Ian? No, no, no. Oh, God. He did the same thing with blockbuster. Wayne. Okay, so he did. He did a roll up on video stores with blockbuster, and he also did a roll up on trash companies with waste.
00;12;29;15 – 00;12;36;08
Rod Khleif
Sorry. Interrupt, but no no no, no, no, I’m known for it. I have four and a half stars on iTunes because I interrupt too much. Shut up and let your guest talk. Anyway.
00;12;36;09 – 00;12;46;22
Sam Silverman
There’s just a big one to that sold guild garage. You really? Two years? They made 32. Give or take acquisitions. Well, sold it for 800 plus million dollars in two years.
00;12;46;22 – 00;12;49;01
Rod Khleif
No kidding. Yeah. These these were garage door companies.
00;12;49;03 – 00;12;49;27
Sam Silverman
Garage door companies?
00;12;49;28 – 00;13;00;22
Rod Khleif
Yeah. Interesting. So. So when you say disparate, this is what we’re talking about. There’s all sorts of different companies. Like there are an HVAC. Totally. And yeah okay.
00;13;00;23 – 00;13;24;20
Sam Silverman
Like we saw it I mean, for example, working a list for now in Texas of their 700 plus companies, just in Texas, they do over $10 million of revenue, just impeaching each just in paving, just in Texas. So and that’s part of the list as well. So fragmented in terms of these are non-institutional operated mom and pop typically usually first time owner whose own that company their entire life.
00;13;24;22 – 00;13;43;03
Sam Silverman
Right. And the average profile of the person who’s owning a paving company, they’re between 55 and 72 years old. And for them, they usually have between an eighth and 10th grade education, some more, some less. Right. But they are people who have like they are workers, they are great people. They build awesome businesses.
00;13;43;04 – 00;13;54;01
Rod Khleif
Salt of the earth, salt of the earth can fix anything. You know, I’ve got a guy. You probably saw my guy walking around here. He’s he can pave. He can do concrete. He can do electrical, plumbing. But they’re salt of the earth guys. Yeah.
00;13;54;03 – 00;14;10;29
Sam Silverman
Yeah, some of these folks do, like, they’ve made millions of dollars for decades. And like, these are awesome businesses. So the issue is that when that happens is that if dad’s 60 and the son is now 30, and the son grew up with the dad making a few million dollars a year, they likely have to work as hard as dad to go work in the paving field themselves to.
00;14;11;01 – 00;14;25;22
Sam Silverman
So they wanted to go to college. They wanted to go have a white collar job. So there that creates an opportunity where dad has now built a great company and he wants to go take a step back. And that can be a few different things to step back could be, you know, I love my crew. I want to keep working in the field.
00;14;25;22 – 00;14;38;11
Sam Silverman
I don’t want to go order equipment. I don’t want to go have to deal with insurance. I don’t want to go call the city for bonding. I don’t have to go to a county and payroll. So that creates an opportunity for us to go in and acquire companies that are really fair price, and for them help that transition.
00;14;38;11 – 00;14;48;28
Sam Silverman
More importantly, go take care of their crew. I think for us, what really differentiates us is that ours, the family owned business, you know, two of our four partners, the father and son team Heppell, don’t pay income in the last eight plus years.
00;14;48;29 – 00;14;49;16
Rod Khleif
They have.
00;14;49;17 – 00;14;50;01
Sam Silverman
They have.
00;14;50;02 – 00;14;52;29
Rod Khleif
Yeah. So they bring that experience. So you’ve got three partners. The four.
00;14;52;29 – 00;15;05;00
Sam Silverman
Of you. Three partners? Yeah. Myself, my partner Chris, who’s our CFO. We started it. We actually went through a merger and process now with Jeff and Jeffrey, they’ve built their own paving company the last eight years. Just been paying for 30 plus years.
00;15;05;00 – 00;15;21;02
Rod Khleif
So fantastic partners to have for this. Yeah. It’s always the best way to do it is to get people that really forgotten more about it than you’ll ever know. You know, that’s that’s awesome. And so talk about the mechanics of, of of why you’re rolling these up. Talk about talk about the exit.
00;15;21;04 – 00;15;39;24
Sam Silverman
Totally. So if you look at in this space right, like to sidebar for a second, you look at real estate, right. If you have 100 units or if you have 500 units or 1000 units, you likely don’t get a much better valuation per door per dollar of NOI. If you get massive scale, maybe a bit for for like a bigger institutional buyer.
00;15;39;25 – 00;15;44;27
Rod Khleif
But yeah, not exactly maybe to a read or something. But yeah, not not not not what you’re going to talk about here.
00;15;45;02 – 00;15;54;05
Sam Silverman
It’s nominal. Yeah. But we can go in and acquire these companies that are between, you know, right now three and $10 million of EBITDA. Right. And we can be between two and.
00;15;54;05 – 00;15;56;10
Rod Khleif
Ten EBITDA for for. Yeah.
00;15;56;13 – 00;16;06;06
Sam Silverman
So it’s earnings before interest. Taxes taxes depreciation and amortization. Yeah. So basically kind of your high level net earnings right. And that’s how they’re valued.
00;16;06;07 – 00;16;08;23
Rod Khleif
So you said that 3 to 10 times EBITDA.
00;16;08;24 – 00;16;10;18
Sam Silverman
3 to 3 is $10 million of EBITDA in terms.
00;16;10;18 – 00;16;15;28
Rod Khleif
Of $10 million of EBITDA. And then you’re buying them based on on what’s the multiple.
00;16;16;00 – 00;16;17;16
Sam Silverman
Anywhere between two and a half. And for.
00;16;17;18 – 00;16;35;00
Rod Khleif
Two and a half to four times the EBITDA guys. So so basically you look at that bottom line net number and you’re buying it for a multiple of that. And so he’s saying 2 to 4 times that bottom line number is what you’re paying okay. Yep. So you put these together talk about what you do once you get them together I mean I know but I want you to tell them.
00;16;35;01 – 00;16;48;27
Sam Silverman
Yeah I mean a lot of it things at first we don’t do a whole lot. Right. Because these are companies that have been around for 20 or 30 years and and they’re great company. Still, we try to make small tweaks. The first thing we always try and tackle is the back office, the thing the owner hates the absolute most.
00;16;48;29 – 00;17;09;00
Sam Silverman
If we’re saying, hey, you know what, we’ll take payroll, we’ll take accounting, we’ll take billing off your plate. They’re thrilled. Right? Very low resistance. Right. There are other changes that we like to make, but we played a little more. Time is also important thing to like. We had this recently. We have people in the crew who have been, you know, they’re not the most tech savvy folks sometimes or tech adopting folks.
00;17;09;00 – 00;17;11;14
Rod Khleif
So we tech resistant maybe.
00;17;11;16 – 00;17;23;06
Sam Silverman
Resistance to the point. Yeah. Like our Chris. We were joking about it. It’s like if we have to get the guys to go switch from Gmail to a Microsoft email, people will give me their phones and leave like people will.
00;17;23;07 – 00;17;31;08
Rod Khleif
People there that black and white, it’s silly shit like that. They’ll just walk. I know I’ve dealt with them many, many times with contractors and workers. Yeah, totally.
00;17;31;08 – 00;17;46;04
Sam Silverman
So it’s finding like wins. We can go take that show. Hey, we are committed to your success. We are bought in. We are kind of figuring out the lay of the land here as well. But small things at first, right? Showing them, hey, this actually helps you. This helps you. Or more money helps make your life easier, right?
00;17;46;05 – 00;17;49;28
Sam Silverman
We try and do small things over time that add up to be a much bigger thing.
00;17;49;29 – 00;18;10;15
Rod Khleif
You’ve really got to build the relationships to. Especially with guys like that, you really got to let them see that you care about them. You validate them, you, you make them feel valued. And that’s been effective for me with with like maintenance supervisors or maintenance men at apartment complexes when they when they know you value them and respect them.
00;18;10;15 – 00;18;28;13
Rod Khleif
Respect is the biggest thing. If you respect them, you won’t lose them, you know? And but you get their opinion on things as well. I know this sounds off topic guys, but this is a big deal when you’re dealing with this type of a demographic. These these guys that you know, they’re blue collar, they work hard and they don’t have much patience for us.
00;18;28;14 – 00;18;32;28
Rod Khleif
White collar, you know management types so totally.
00;18;33;00 – 00;18;39;22
Sam Silverman
Well it’s also the people if you look at buying a business, you’re buying basically a collective group of folks who are.
00;18;39;23 – 00;18;44;16
Rod Khleif
You’re buying a system and you’re buying people. That’s it. Every business is nothing but a system and human capital.
00;18;44;17 – 00;18;58;07
Sam Silverman
Totally. Yeah. It’s all people who have the same collective energy towards one common goal. And the people, especially in this space or the single most important thing, like if you look at your biggest issues, it ties to in paving, there’s a collective labor shortage. When looking at the.
00;18;58;07 – 00;19;02;03
Rod Khleif
Tough work man out there in that freaking heat. That is real work. Yeah, yeah.
00;19;02;04 – 00;19;12;08
Sam Silverman
Yeah, it’s tough work. But we also, I think a sidebar here too is we structure the compensation. So we have one division of our company that focuses much more so on private work. So we do the parking lots for.
00;19;12;14 – 00;19;13;18
Rod Khleif
You like an apartment complex.
00;19;13;23 – 00;19;32;21
Sam Silverman
Yes we do CVS. We do Walmart, we do Burger King CBRE. Right. These guys are actually compensated by the job. So we have guys who can go make $200,000 a year, potentially working as a paver because they are really efficient at their jobs and they want to go opt in for more work. Right? So they refer their friends, they’ll work Saturdays, right?
00;19;32;23 – 00;19;42;25
Sam Silverman
So they’re compensated based on productivity, similar as if you’re a salesperson, right. It’s your measure based on if you can go out there and get stuff done, you have a lot of upside to go take on more jobs.
00;19;42;27 – 00;19;53;16
Rod Khleif
Interesting, interesting. I wouldn’t have thought that. So are you implementing social media at all? You implementing AI at all? Talk about that a little bit.
00;19;53;17 – 00;19;54;27
Sam Silverman
Yeah, so I’d say AI.
00;19;54;28 – 00;20;15;13
Rod Khleif
And guys, the reason I’m drilling down on this is I think there’s an incredible opportunity to buy businesses. I know we talk about multifamily on this podcast, but we also talk about buying other asset classes. And we talk about basically, I want to do more towards being an opportunist. And there’s an incredible opportunity to buy businesses 10,000 people a day, turning 65.
00;20;15;13 – 00;20;39;13
Rod Khleif
Many of them, like your paving company owners, want to step back. They want to retire. They want to go go to an island and relax and all that stuff. And so there’s an incredible opportunity to buy businesses. Would you agree with me? Totally. Yeah, totally. And so that’s why I’m drilling down on this. So talk about how you’re, you know, if, if, if and how you might be implementing tech and social media and marketing strategies, AI, whatever.
00;20;39;16 – 00;20;56;10
Sam Silverman
Yeah. So on the AI side of the house, we use some. Right? I’d say Claude has been massive for us, but looking at due diligence on companies. So for those of you who have not gone through financials in the company, some of these things are a mess. Right, right. Like in real estate, if you’re buying bigger deals too.
00;20;56;12 – 00;20;58;24
Sam Silverman
Usually it’s a little bit cleaner. We have some stuff.
00;20;58;24 – 00;21;03;05
Rod Khleif
That I’ve seen shit shows from property management companies. Ridiculous job they do.
00;21;03;09 – 00;21;14;06
Sam Silverman
We have stuff on paper. There are cash jobs to reconcile sometimes, right? All these things that make it a complete nightmare to go through, right? Especially for taking out debt to right the banks and the quality of earnings folks like they need to have it.
00;21;14;06 – 00;21;15;25
Rod Khleif
Really. They want to see it clean. Yeah.
00;21;15;26 – 00;21;34;11
Sam Silverman
So we’ve used Claude a ton in terms of projects has been fantastic in terms of due diligence. Asking questions right helps prep legal save us some legal costs there as well to a ton in accounting. Right. In terms of you more automation around pulling our data and having actual insights there too. I say in the field.
00;21;34;12 – 00;21;36;06
Rod Khleif
But you’re not using it operationally yet.
00;21;36;08 – 00;21;36;28
Sam Silverman
Not a ton.
00;21;37;00 – 00;21;56;23
Rod Khleif
Gotcha. Not a ton. We’re just starting to implement it right now. We’ve done it on our marketing side and it’s killing it. I mean, we’re using open claws. Well, where standalone machine is doing all of this stuff. Yeah, but we’re just now implementing it in our operations. And all this stuff is brand new. We’re in the top one of 1% as it’s stats right now, just in our implementation.
00;21;56;23 – 00;21;59;26
Rod Khleif
But it sounds like, you know, you’re looking that direction as well,
00;21;59;29 – 00;22;14;22
Sam Silverman
Yeah, yeah. I mean, for us to like in the role of space, there’s different types of companies. I’d say for us we’re focused very heavily on acquisitions. So we see right now a limited window to go acquire paving companies that are really fair valuation paving signifies.
00;22;14;22 – 00;22;15;18
Rod Khleif
It limited.
00;22;15;19 – 00;22;17;22
Sam Silverman
Because take HVAC a handful of years.
00;22;17;23 – 00;22;22;17
Rod Khleif
Ago and that’s I hear every freaking venture capital in the world is getting into HVAC right now.
00;22;22;19 – 00;22;24;16
Sam Silverman
There you go. So if you look at pricing, you just have.
00;22;24;17 – 00;22;36;15
Rod Khleif
To find somebody at my warrior event came up to me, and he owns a big HVAC conglomerate, and he’s like, I’m coming into a lot of money because I’m getting bought. I mean, literally that just happened this weekend.
00;22;36;19 – 00;22;55;06
Sam Silverman
Oh, it’s it’s it’s huge. I mean, whenever a Grand Cordon puts out of program on something, valuations usually go up whether good or bad, right. And what you’re seeing now is like HVAC used to trade for 3 or 4 x, right. For 1 million to $5 million a year. Firm net. Right now that same firm trades for 6 to 8 x.
00;22;55;06 – 00;23;12;15
Sam Silverman
So A2X spike in valuation, the same dollar of EBITDA. The reason that there’s these bigger conglomerates like you’re saying that if they’re worth 15 top if they’re worth 15 they can go by at six all day long. So you’re seeing these bigger platforms being traded, which we think that paving is now getting a lot of traction right now to.
00;23;12;21 – 00;23;16;24
Sam Silverman
Because if you look at companies who are valued multiples based on how defensible they are to.
00;23;16;27 – 00;23;20;04
Rod Khleif
Right, right. You’re paying is there a moat around the business. Right.
00;23;20;05 – 00;23;37;14
Sam Silverman
So paving is very defensible when looking at that moat you build. And in turn we think that multiples will start shooting up. So when I say two years we think we have two years to go acquire at a very good valuations. So we’d be all in for forex across the board versus going slower, being all in at 6 or 7 x in a few years.
00;23;37;15 – 00;23;39;22
Rod Khleif
Gotcha. So talk about the exit.
00;23;40;00 – 00;23;48;29
Sam Silverman
Yes. You’ve already seen a handful of ones. So the biggest if you look at like the final boss of paving right. You’ve got Construction partners Inc.
00;23;49;02 – 00;23;49;25
Rod Khleif
I don’t I don’t.
00;23;49;27 – 00;23;50;25
Sam Silverman
They’re public.
00;23;50;27 – 00;23;52;02
Rod Khleif
Under their big one okay.
00;23;52;03 – 00;24;12;16
Sam Silverman
Yeah. So they’ve got $4 million a year of EBITDA okay. They trade publicly between 19 and 22 x their EBITDA. Wow. So that’s on the really big side. There are certain things they trade higher right. Public companies. You can go borrow against your stock. So you get extra few extra turns there for liquidity. You also have Dave’s materials plans and asphalt plans to help them go and get extra value.
00;24;12;16 – 00;24;22;28
Sam Silverman
But we also saw a lot of other exits in the, you know, 9 to 12 X range here as well for $50 million plus EBITDA. So on our end, 5050 plus. Yeah.
00;24;22;29 – 00;24;26;09
Rod Khleif
So many businesses. Is that five six, seven.
00;24;26;10 – 00;24;28;19
Sam Silverman
Depends on how big they were when you bought them. Yeah.
00;24;28;21 – 00;24;32;28
Rod Khleif
Yeah. But you so you’re buying it for and you think you can trade at nine to. What did you.
00;24;32;28 – 00;24;54;18
Sam Silverman
Say 9 to 12. Nine. We have a partner internally institution that is giving us some debt in the past before. And they think that paving will be 18 plus. Wow. We’re not banking on that right. You know in we think that we are going to be a really quality M&A type firm, right. In terms of we want to go, oh, we possibly can the next handful of years before pricing gets out of hand, stupid.
00;24;54;20 – 00;24;55;24
Sam Silverman
Yeah, yeah.
00;24;55;27 – 00;25;05;26
Rod Khleif
Well that’s a hell of a return anyway. I mean, nine from four to 9 to 12 is very respectable. So. So what else are you are you thinking about any other verticals or.
00;25;05;29 – 00;25;18;17
Sam Silverman
Just paving? So on our end, like we’ve got full blinders on the next few years in this buying window. I think in the future, if we ever have a change of ownership or change of operational role internally, we’d look at something else, right? And do it again.
00;25;18;20 – 00;25;41;23
Rod Khleif
You’ve got these two partners that are big in the business. So that’s that’s good. So, another thing you do is private credit. Can you elaborate on that and ask you raising money for that. So you’re arbitrage that. So yeah. So correct me if I’m wrong. You’ll you’ll find a business that needs some that needs some cash. You’ll loan them the money.
00;25;41;25 – 00;25;45;14
Rod Khleif
Well, you know, I, I think I’m stealing your thunder. Please, please.
00;25;45;15 – 00;26;04;20
Sam Silverman
I have three partners there as well. Okay. And actually three brothers myself. Okay. Two of them have owned a brokerage in the creative financing space for businesses the last 11 years. They brokered $1.2 billion of capital. Disappoints so far. Okay, right. The big about half of the last two and a half years. Okay. And for them right. They make brokerage fees.
00;26;04;20 – 00;26;09;23
Sam Silverman
So they’re they’re transaction based right. They get fees for helping broker deals to third party funders.
00;26;09;24 – 00;26;10;11
Rod Khleif
Gotcha.
00;26;10;12 – 00;26;25;22
Sam Silverman
On our end, we’ve seen now that there’s a huge opportunity to go keep the highest quality of those deals on your own paper. So in turn, we opened up a fund last year, year prior to use all our money, about a few million dollars to go test it out and work at the kinks of the operational piece of it.
00;26;25;27 – 00;26;32;13
Sam Silverman
And now we open up a fund last year to go take those higher quality deals that they broker in house instead now.
00;26;32;14 – 00;26;39;16
Rod Khleif
And you told me a really elaborate, unique repayment model. Can you elaborate on that?
00;26;39;17 – 00;26;44;22
Sam Silverman
Yeah. So if you look in the private credit space, there’s different types of private credit means, you know, private lending of some kind.
00;26;44;23 – 00;26;47;08
Rod Khleif
Yeah, yeah. Just borrowing money from someone other than a bank.
00;26;47;10 – 00;27;06;27
Sam Silverman
Yeah. So on are and how actually be structured is that we buy a future percentage of the revenue at a discount. So for example, say you own a roofing company. Right. And we find $100,000 to you. Okay. Maybe over the next ten months you pay us back 120 K, okay. But in that 40 weeks you’re not paying us 1% per month.
00;27;06;27 – 00;27;25;00
Sam Silverman
And then a big balloon payment, you’re paying us in that 40 weeks $3,000 per week. So the really appealing thing for us is that we get our cash flow cycle back very quickly for velocity of money, right? We also de-risk ourselves too, because if you default halfway through, we’ve collected a big piece of your capital back already. We can keep cycling it there for as well.
00;27;25;02 – 00;27;29;23
Rod Khleif
What is your, what is your.
00;27;29;26 – 00;27;38;00
Rod Khleif
Strategy if someone does default is there are there you know what I mean. You do a UCC agreements, things like that. But but how do you protect yourselves?
00;27;38;02 – 00;27;49;17
Sam Silverman
There are defaults in the space. So the rates the net rates are far higher. But in turn there’s buffer room for defaults. Right. So we model an arm between 4 and 6% of capital we put out will be lost.
00;27;49;18 – 00;27;50;04
Rod Khleif
4 to 6.
00;27;50;04 – 00;28;06;15
Sam Silverman
Percent, 4 to 6% in total capital. On and so on the default side of it. Right. We usually work in businesses first like we service all loans in house. So usually first thing is just a call. And right half time they just forgot the money was not in their account. Right. Right. So that’s usually the first place.
00;28;06;17 – 00;28;10;01
Sam Silverman
We’ve done restructures. We have done, you know things do.
00;28;10;01 – 00;28;13;21
Rod Khleif
How long have you been doing this? The fun. Yeah. This this private equity.
00;28;13;22 – 00;28;15;29
Sam Silverman
Is about two years. Two years. Yeah two years.
00;28;16;00 – 00;28;16;07
Rod Khleif
Okay.
00;28;16;08 – 00;28;17;20
Sam Silverman
So the fund itself about nine months.
00;28;17;22 – 00;28;22;23
Rod Khleif
Okay. So you’ve got you’ve got people in the operations side of this, you know, in the collection side and all that stuff.
00;28;22;24 – 00;28;26;29
Sam Silverman
Yeah. So full in-house underwriting team and a full in-house collections team as well.
00;28;27;00 – 00;28;32;16
Rod Khleif
Gotcha. Okay, Brian, cut this out. Where are we at on time, bud?
00;28;32;24 – 00;28;36;15
We are at.
00;28;36;17 – 00;28;38;17
35 minutes. Okay. All right, all right.
00;28;38;19 – 00;28;43;17
Rod Khleif
We can start closing it up.
00;28;43;20 – 00;28;46;04
Private credit, raising money. Operator. Vetting.
00;28;46;08 – 00;29;08;08
Rod Khleif
Any other topic that we might want to explore? It’s been a pretty wide ranging conversation. You’re a smart motherfucker. I’ve got to tell you. I’m impressed, buddy. So you are obviously extremely motivated. I mean, you’ve got all these different verticals happening. You’re obviously very intelligent as well. What’s the driver? What’s what gets you to jump out of bed every day to go go out there and kick ass.
00;29;08;08 – 00;29;15;09
Rod Khleif
You’ve got all these. You’ve done some really amazing stuff. Let’s talk about what’s what’s the why. What’s the push?
00;29;15;11 – 00;29;31;23
Sam Silverman
Yeah, I think some people are born with a safety net. Some people aren’t. Right. I was in the latter camp. Right. So I grew up in New York, and I went into a high school in which was probably the wealthiest high school in New York. And you had to graduate from my graduating class. I had to leave school there.
00;29;31;24 – 00;29;50;29
Sam Silverman
Baseball scholars leave school after 10th grade and moved so I can go to go to his own school and in turn, like you’re exposed to such wealth from those people that you may not have. So in turn, you really see what is actually possible. So I think for me, what was really nice to go see in different stages of life was that you can go see, right, the comfort and kind of, you know, fall back playing.
00;29;50;29 – 00;30;11;14
Sam Silverman
You get from being a position like that. You also see kind of each stage or corporate role that I had. That bar of what’s possible keeps jumping up. So I think for me, like the biggest thing is just the freedom piece of it, right? I was in corporate for for a handful of years, and the control and freedom piece matters a lot more to me in terms of the ability to go really control what it is that you do.
00;30;11;17 – 00;30;27;14
Sam Silverman
I was not a great employee, right, for. Yeah. Yeah. Especially once I realized, like, I was good and I once I realized I can work myself, you start getting very bitter and hostile and, But, yeah, I mean, I kind of think it’s now it’s. You want the control and freedom of what you want to do.
00;30;27;15 – 00;30;45;02
Rod Khleif
Yeah. No, I love it. And something you said that I want to tell my peeps here is, you know, when you can. When you can experience or be exposed to something better. It juices you like, you know, I go to the yacht shows sometimes in Miami, and I’ll go sit in the captain’s chair and I’ll go walk around like I own the thing I’ve laid on the bed, which you’re not supposed to do it.
00;30;45;02 – 00;31;01;05
Rod Khleif
Just visualize being there. But when you can do that and you know you’re able to manifest these things, when you can see that, like I remember, you know, I when I first moved down here, I rented a house on a canal and I thought, man, this is amazing. I can take a boat from my backyard out to the ocean.
00;31;01;05 – 00;31;21;09
Rod Khleif
And and that was really inspiring. And that motivated me to, you know, to, to to buy a place on the beach here and, and, you know, I think that experience piece. So you got it through school. But I think, you know, if you’re listening and you haven’t had the, the, the, the blessing that you had to be able to go to a school like that, you can go out there and manifest this stuff yourself.
00;31;21;10 – 00;31;34;08
Rod Khleif
Go, go test, drive the car, go, you know, go toward the houses, go, go do what you need to do to see these things that are possible. And you’ll get you’ll know that’ll be the impetus to go make it happen. Would you agree?
00;31;34;09 – 00;31;46;29
Sam Silverman
Yeah. I mean, I think if you compare yourself in snares to where you see what’s possible. Yeah, mine was great because I saw those things other people had. Right. In terms of the life they get to go live. And, and you want those things to and you want the control. Yeah. I think the biggest thing you have is peace of mind.
00;31;47;01 – 00;31;54;20
Sam Silverman
Right. The more you know, depending on how you look at money you’re at, the more you have, the more buffer and protection you have in certain like scenarios too, right?
00;31;54;21 – 00;32;08;16
Rod Khleif
No, I totally agree. Well, listen, brother, I appreciate you coming down. This has been a fascinating conversation, very unusual for this show, but I you’re doing a lot of great things, and I know you’ll continue to do great things. So thank you for coming down here.
00;32;08;17 – 00;32;09;05
Sam Silverman
Yeah. Thanks for having.
00;32;09;05 – 00;32;10;09
Rod Khleif
Me on. Absolutely.
**Podcast Categories:** Podcasts
---
### [The Real Estate Strategy That Changed His Life Forever](https://rodkhleif.com/podcasts/multifamily-distressed-assets-with-mike-mannino/)
**Published:** June 19, 2026
**Author:** Bryan Hoover
**Excerpt:** The Real Estate Strategy That Changed His Life Forever
**Content:**
# How Mike Mannino Builds Wealth Through Multifamily Distressed Assets
Finding and acquiring multifamily distressed assets has become one of the most powerful strategies for real estate investors looking to create significant wealth in today’s market. In this episode of Multifamily Rockstars, Mike Mannino shares how he transitioned from fixing and flipping over 100 homes to building a portfolio of multifamily properties and self-storage facilities by targeting deeply discounted opportunities.
Mike explains why multifamily investing became a critical part of his long-term wealth strategy after facing large tax bills from his successful house-flipping business. Rather than relying solely on active income, he sought assets that could provide cash flow, appreciation, and tax advantages while creating financial security for the future.
## Turning a 68 Unit Apartment Deal Into $3 Million in Equity
One of the most valuable lessons from this conversation is Mike’s detailed breakdown of a recent 68-unit apartment acquisition in Sumter, South Carolina. The property was purchased for $3.3 million, with approximately $500,000 invested into renovations and operational improvements.
Within less than a year, Mike and his team increased average rents from roughly $700 per month to over $1,000 per month while dramatically improving the property’s appearance and functionality. These improvements included:
- Parking lot resurfacing and striping
- Exterior cleanup and landscaping
- Sewer line replacements
- Adding dryer hookups to units
As a result, the property’s value increased by nearly $3 million in just 11 months, demonstrating the power of buying multifamily distressed assets with clear value-add opportunities.
## Why Distressed Multifamily Deals Are Creating Opportunity
A major topic discussed during the interview is the current state of the multifamily market. Rising interest rates, increasing operating expenses, and financing challenges have placed significant pressure on many apartment owners.
According to Mike, multifamily property values have declined substantially from their 2022 peak, creating a rare buying environment for investors who understand how to identify distressed opportunities. He believes investors who can successfully acquire and operate multifamily distressed assets during this cycle may be positioned for substantial gains over the next several years as markets recover.
The discussion highlights how disciplined underwriting, conservative assumptions, and patience are essential when evaluating today’s deals. Rather than chasing volume, Mike’s team reviews hundreds of opportunities every month and only acquires one or two properties each year.
## How Wholesaling Commercial Real Estate Generated Six Figure Paydays
Mike also shares another strategy that many investors overlook: commercial real estate wholesaling. By putting apartment and self-storage properties under contract and assigning those contracts to other investors, he generated several six-figure assignment fees.
His recent wholesale transactions included:
- $175,000 assignment fee on a self-storage facility
- $175,000 assignment fee on another commercial property
- $224,000 assignment fee through a partnership with a fellow Warrior Group member
These deals demonstrate that investors do not always need to own a property to create substantial income in commercial real estate.
## Lessons From Challenging Apartment Investments
Not every deal goes according to plan. Mike discusses a 19-unit apartment property where occupancy unexpectedly dropped after acquisition, creating significant financial strain during renovations.
The experience reinforced the importance of thorough due diligence, verifying seller information, and maintaining adequate reserves for unexpected challenges. Even experienced operators encounter setbacks, but successful investors learn from them and continue moving forward.
## Building a Team to Find Better Deals
Another key takeaway is the importance of building the right team. Mike credits much of his success to partnerships, networking, virtual assistants, and relationships developed through industry communities.
His acquisition process involves reviewing hundreds of deals every month through a structured system that filters opportunities based on key metrics before deeper analysis begins. This allows his team to focus only on properties that meet their strict investment criteria.
## About Mike Mannino
Mike Mannino is a real estate investor, entrepreneur, and operator who has fixed and flipped more than 100 homes throughout Metro Detroit. He later expanded into multifamily real estate and self-storage investing, building a portfolio that includes more than 220 apartment units and hundreds of self-storage units. Through his company, he focuses on acquiring multifamily distressed assets and value-add opportunities that generate significant equity growth and long-term cash flow.
If you want to hear the full conversation and detailed insights, watch the podcast video or read the complete transcript below.
## **Multifamily Distressed Assets FAQ**
## **What Are Multifamily Distressed Assets?**
Multifamily distressed assets are apartment properties experiencing financial, operational, or physical challenges that create opportunities for investors to purchase them below market value. Distress may result from poor management, deferred maintenance, vacancy issues, loan maturity problems, or economic pressures affecting the property’s performance.
## **Why Are Multifamily Distressed Assets Attractive to Investors?**
Multifamily distressed assets often allow investors to acquire properties at discounted prices and increase value through renovations, operational improvements, and better management. These opportunities can create significant equity growth, increased cash flow, and strong long-term returns when executed properly.
## **How Do Investors Find Multifamily Distressed Assets?**
Investors typically find multifamily distressed assets through broker relationships, direct owner outreach, foreclosure lists, loan maturity data, networking events, and off-market marketing campaigns. Building strong industry relationships often provides access to opportunities before they become widely available.
## **What Are Common Signs of a Distressed Apartment Property?**
Common signs include high vacancy rates, below-market rents, deferred maintenance, poor curb appeal, financial distress, delinquent loans, declining occupancy, and management inefficiencies. These issues often create opportunities for value-add investors to improve performance.
## **How Do Multifamily Distressed Assets Create Equity?**
Investors create equity by increasing net operating income through rent growth, expense reductions, property improvements, and operational efficiencies. As income rises, the property’s value typically increases, often creating substantial equity gains.
## **What Risks Should Investors Consider When Buying Multifamily Distressed Assets?**
Investors should evaluate renovation costs, financing challenges, tenant issues, unexpected repairs, market conditions, and operational risks. Thorough due diligence and conservative underwriting are essential to minimize potential losses.
## **Are Multifamily Distressed Assets Good During High Interest Rate Environments?**
Many investors believe distressed opportunities become more abundant during periods of higher interest rates because some property owners face refinancing challenges and increased operating expenses. This can create favorable buying opportunities for well-capitalized investors.
## **How Much Capital Is Needed to Invest in Multifamily Distressed Assets?**
The amount varies depending on property size, location, financing structure, and renovation requirements. Investors may use personal capital, partnerships, syndications, or commercial financing to acquire and improve multifamily distressed assets.
## **What Is the Difference Between a Value Add Property and a Distressed Asset?**
A value add property typically has opportunities for improvement but may still be operating effectively. A distressed asset generally faces more significant financial, physical, or operational challenges that require substantial intervention to stabilize and improve performance.
## **Can New Investors Successfully Invest in Multifamily Distressed Assets?**
Yes, new investors can succeed by educating themselves, partnering with experienced operators, building strong teams, and conducting thorough due diligence. Many successful investors begin by learning from mentors and participating in smaller deals before taking on larger acquisitions.
00:00:00:02 – 00:00:20:01
Rod Khleif
Welcome back to Multifamily Rockstars. So as you guys know, these are the episodes where we dive deep into our guest deals and really give you some practical and actionable items for getting started doing your first deal, even if you’re brand new to multifamily. And I’ve got a real kick ass guy on the show with me right now. He’s a warrior and his dad’s a warrior as well.
00:00:20:02 – 00:00:26:24
Rod Khleif
Mike Mannino the second. He’s done a lot of big stuff, and we’re going to have a lot of fun talking about it. Welcome, brother.
00:00:26:24 – 00:00:29:08
Mike Mannino
Thank you very much for having me. I’m very happy to be back.
00:00:29:09 – 00:00:36:04
Rod Khleif
That’s right. We did have you on a long time ago. How long have you. When did you join the program? When did you become a warrior? I don’t remember.
00:00:36:05 – 00:00:49:14
Mike Mannino
You know, I was thinking about it. I think it was during, like the Covid times. Like in 2020. Yeah. Okay. We were buying our first commercial deal, and I said, I don’t know what I don’t know. And I was listening to your podcast and it changed my life, so.
00:00:49:15 – 00:01:05:16
Rod Khleif
Oh, oh thanks, buddy. So so give a little background, you know, for people that don’t know who you are. Talk a little bit about why real estate and just kind of bring us current with all the different things you’ve done, because I’d like to drill down on a few of them, but let’s let’s go ahead and give us an overview.
00:01:05:17 – 00:01:22:06
Mike Mannino
Sure. Yeah. So I my background is fixing flipping. I’ve bought, fixed and flipped over 100 homes in metro Detroit, Michigan. I started flipping homes when I was 22, 23 years old. Now I’m 33. Getting old, but.
00:01:22:08 – 00:01:27:12
Rod Khleif
Very socks that I have, socks that have three decades on you, just so you know.
00:01:27:14 – 00:01:59:21
Mike Mannino
But very blessed. And I started working with my dad flipping homes and I retired him. He was a contractor, and I retired him from contracting for him to just drive his tussle around, check out the job site. And so I basically retired my father. And then we in 2022, I went really heavy into multifamily because in 21, I had a six figure tax bill from the IRS because we were successful fixing flippers and you get penalized for it, unfortunately.
00:01:59:23 – 00:02:23:14
Mike Mannino
So I said, I need to solve this. So we got into multifamily, started really buying apartments to offset our income tax problem, and then also have something that if I wanted to take a year or two off, I still get paid because in a fix and flip business, the second I stopped fixing and flipping, my income goes to zero, so I wanted some security with that.
00:02:23:14 – 00:02:27:17
Mike Mannino
I don’t have A41K, I don’t have a job. There’s no I don’t know.
00:02:27:17 – 00:02:29:15
Rod Khleif
For what you kill, basically.
00:02:29:16 – 00:02:31:01
Mike Mannino
Exactly, exactly.
00:02:31:03 – 00:02:46:06
Rod Khleif
Okay, now you’ve done you’ve fixed and flipped houses. You’ve got 220 plus multifamily units right now. You’ve got 250 self storage units. You know, you look for deep value add properties that you can buy to discount. Yes. Would that be accurate okay.
00:02:46:06 – 00:02:46:22
Mike Mannino
That’s very accurate.
00:02:46:23 – 00:02:56:18
Rod Khleif
Yep. All right. Well let’s let’s do this. Let’s talk about that first deal you did as a warrior. And.
00:02:56:20 – 00:03:01:07
Rod Khleif
On here I’ve got my notes in front of me here. So it was a 68 unit. Yeah. Where’s it located.
00:03:01:08 – 00:03:04:01
Mike Mannino
So that’s actually my most recent one is a 16.
00:03:04:01 – 00:03:07:05
Rod Khleif
Oh that’s the recent one. Oh okay. All right. Well that’s fine. Let’s go through that one. No big.
00:03:07:06 – 00:03:09:14
Mike Mannino
68 units. Way more fun than my first one.
00:03:09:16 – 00:03:10:08
Rod Khleif
Okay.
00:03:10:09 – 00:03:21:12
Mike Mannino
So this one we bought last year. So 2025 was our best year in business, which is very rare to say with, you know.
00:03:21:14 – 00:03:22:08
Rod Khleif
All the districts.
00:03:22:09 – 00:03:34:18
Mike Mannino
Going on. Yeah, all the distress going on. So I’m feel extremely blessed. But this one is a 68 unit in Sumter, South Carolina. I moved down to South Carolina for years now to be.
00:03:34:19 – 00:03:45:09
Rod Khleif
Well, that’s not a bad move if we’re talking Detroit to South Carolina. Just saying. So, you know, I’m sorry. Right. Sorry, but, yeah, you know, it’s true. Anyway.
00:03:45:11 – 00:04:07:11
Mike Mannino
Sorry. I know you’re fine. I can also use my boat nine months a year instead of two months a year. So no, it was such a better move. But this one, when we bought it, we paid 3.3 million for it. We’ve invested just under 500,000 so far. So into it for just under four. And when we’re done, it’s going to be worth $7 million.
00:04:07:17 – 00:04:30:02
Mike Mannino
So one deal. We’ve created $3 million in equity. We bought that July 28th, 2025. So in 11 months we’ve created almost $3 million of equity, bringing the average rental rate was $707 a month to today, it’s $1,007 a month. So we’ve increased rents by 50% in ten, 11 months.
00:04:30:04 – 00:04:38:12
Rod Khleif
Yeah, 300 bucks, 300 bucks a door. Yeah. That’s that’s a that’s a really fantastic deal. How’d you find that deal?
00:04:38:16 – 00:04:56:00
Mike Mannino
So they actually came from a broker. It’s funny. We were supposed to buy another deal with him maybe two years ago, two and a half years ago. And then the seller just ended up backing out of the deal. We. We agreed on a lie. Letter of intent. We were writing up the purchase agreement, and then he just said, I don’t want to sell anymore.
00:04:56:02 – 00:05:01:00
Mike Mannino
So the broker kind of kept us in his back pocket because he knew we were serious buyers.
00:05:01:01 – 00:05:03:21
Rod Khleif
Okay. And how did you find it?
00:05:04:02 – 00:05:16:00
Mike Mannino
This one we syndicated. So we had, you know, 70% bank debt, 30%. We syndicated with investors. So friends and family and and some of our money too.
00:05:16:02 – 00:05:27:13
Rod Khleif
Okay. Fantastic. How did you. So you put about 4 or 500 grand in in renovations into it at CapEx. Is that correct? What sorts of things did you fix? What did you do?
00:05:27:15 – 00:05:47:14
Mike Mannino
Yeah, so I love doing the exterior stuff first before you increase rents to show tenants that like, hey, we’re not just coming in here increasing rents to market just because, you know, we’re investing. We do care. So we go through, we power wash, trim the bushes, seal coat and striping. Parking lots is like the cheapest. That’s bang for your buck you can get.
00:05:47:15 – 00:06:08:08
Mike Mannino
It looks like a brand new parking lot. And sewer lines had sewer line issues. Were replacing those and the tenants are happy. And then a lot of these units actually all the units have washer hookups, but no dryers. No dryer hookups. Oh, so so people are washing, but then they’re using like clotheslines or hanging them in their unit.
00:06:08:09 – 00:06:21:02
Mike Mannino
Yeah. And it looks unsightly. So for, you know, $1,500 per unit we’re going through, we’re adding the 220 lines, installing the dryer events. And the tenants are absolutely loving.
00:06:21:04 – 00:06:23:13
Rod Khleif
What you’re built. What you’re built. Was that thing. Just curious.
00:06:23:14 – 00:06:26:01
Mike Mannino
1970s like 1978, 77.
00:06:26:01 – 00:06:46:24
Rod Khleif
That’s some stupid shit. Not putting dryer outlets in there. Good lord. Yeah. Well, good. Fantastic. Well, that’s that’s a no brainer, man. When you can add something like that, it makes a huge difference. I won’t buy an asset candidly anymore. If it’s just all laundry rooms. I want to have washers and dryers in the units. You know, people don’t want to have to carry their laundry around.
00:06:47:00 – 00:07:01:00
Rod Khleif
You know, it’s just, you know, we live in a day and age now where, where, you know, that’s kind of gone by the wayside. So are you. So is this a C-Class asset? Because I see I see section eight here. You’re doing some housing in there.
00:07:01:01 – 00:07:14:19
Mike Mannino
Yeah. So half of it is housing and everyone’s lived there for a very long time. The extremely low I mean we have a couple times have been there since it was built. I mean it’s crazy. Wow. So yeah, it’s a C-Class property. Yeah.
00:07:14:19 – 00:07:50:06
Rod Khleif
Okay. Okay. Okay. Well, great. You know, we’ve had a little challenge with C-Class assets just because, you know, they’re struggling with this freaking inflation. You no cost of groceries and gas. That’s just like, ridiculous. But if you’re making it work, that’s fantastic. So I want to shift. That sounds like a great deal. Awesome job on that, brother. Now I want to shift gears for a minute because, you know, I remember posting in the warrior group, and I don’t know if you saw this post, it may have been before you joined about how many had wholesale a multifamily deal and made over $100,000.
00:07:50:07 – 00:08:08:11
Rod Khleif
Do you recall that? Was that? Were you were you around when I did that post? You did okay. And 12 of them had and two actually made over a million, believe it or not. But you have had some kick ass wholesale deals. Talk about your wholesale deals. You wholesale the what’d you tell me self storage or what was it that you wholesale.
00:08:08:14 – 00:08:13:12
Mike Mannino
Yeah. So I’ve wholesale two self storage facilities an apartment complex okay.
00:08:13:13 – 00:08:25:23
Rod Khleif
And how much did you make in each one of these deals by the way if you don’t know what wholesaling is, guys, you basically put a place under contract and you basically just sell the contract to someone else. You don’t even close, they close on it and you get a fee for, you know, shifting the deal to them.
00:08:25:23 – 00:08:27:13
Rod Khleif
So how much did you know?
00:08:27:15 – 00:08:37:03
Mike Mannino
Each one was over six. So the first one was 175,000. The second one was 175,000, and the third one was $224,000.
00:08:37:08 – 00:09:03:21
Rod Khleif
Nice, nice, nice, nice. By the way, guys, if you sign up for my freaking boot camp now, I am making it so ridiculous. So not only can you get my virtual bouquet, you can come for 25 bucks, but you get my multifamily wholesaling course, 15 modules on how to wholesale multifamily with the ticket. Plus, you know, my finding deals course, my courage and confidence course, my deal evaluator software, my document library, my my best selling book.
00:09:03:22 – 00:09:21:19
Rod Khleif
Tell me your freaking excuse. Okay, 25 bucks. I don’t sell anything. Two days of training and you get all that stuff. So, yeah, I’m so glad that that I asked you about that before we started recording, because I knew you had done a wholesale deal for some, some decent change, because I remember you posting about it, three of them for over 100 grand a pop.
00:09:21:20 – 00:09:22:24
Rod Khleif
That’s an interesting man.
00:09:23:00 – 00:09:40:08
Mike Mannino
And like, I want to talk a little bit to like. So the first two I did on my own and then I talked about it in the, in the program, you know, and I shared my success. And because of doing that and then sharing your success and documenting it, another warrior reached out. He said, hey, I saw you did this with a self storage facility.
00:09:40:08 – 00:09:52:09
Mike Mannino
I’m actually looking at one. Maybe we could do this. And we worked together, and it was a $224,000 assignment, maybe $220,000, because I shared my success in the group and worked with someone else in the group.
00:09:52:10 – 00:10:10:07
Rod Khleif
Life changes. Beautiful. That’s beautiful man. Yeah. So so by the way, if you are interested in the warrior program, text the word crush to seven two, three, four, five. And that’s how you apply. We look you over, you look us over. If it’s a fit, you’re off to the freaking races. Has it been good for you?
00:10:10:10 – 00:10:24:00
Mike Mannino
It’s been life changing it. I, I think we’re talking a little bit before we recorded. It’s changed my life. It’s changed my father’s life. It’s changed my employees lives. It’s the best decision I’ve ever made my whole entire life.
00:10:24:02 – 00:10:44:17
Rod Khleif
Oh. That’s nice. Thank you for that. So you know what? You know, I get I have a lot of brand new people. What is, you know, maybe an action item that you could talk about, you know, maybe deep dive a little bit that would benefit a listener. That’s just getting started. What would you speak? Speak to someone that’s looking at doing this.
00:10:44:17 – 00:10:47:15
Rod Khleif
Hasn’t done it yet. Giving us some advice.
00:10:47:17 – 00:11:12:11
Mike Mannino
Yeah. If you’re looking at doing this, like what I did when I first got started in this, because I knew if like fix and flip and then multifamily similar but different. First, surround yourself with other people. Listen. I listen to every single one of Rod’s podcasts. I, I have been to maybe six of your virtual events I have from 2020 to 2024.
00:11:12:11 – 00:11:31:02
Mike Mannino
I never missed one of your events for four straight years. Wow. I went to all your warrior events. Every single event. Really not just understand that I could even articulate it too. So really, first is understand and surround yourself with people who understand the business that you want to do.
00:11:31:03 – 00:11:33:15
Rod Khleif
People who think what you think is hard is easy.
00:11:33:17 – 00:11:34:15
Mike Mannino
Yeah, yeah.
00:11:34:16 – 00:11:45:14
Rod Khleif
Right, right. Yeah. And we just had a warrior event just literally a couple of weeks ago at a few hundred people here. It was a kick in the ass. I know you’ve got a new baby, and I don’t remember seeing you there. Of course, my eyes crossed.
00:11:45:15 – 00:11:51:23
Mike Mannino
Yeah, I know we couldn’t make it this time, but I want to very soon. He’ll be the youngest for you there.
00:11:52:00 – 00:12:12:16
Rod Khleif
So love it. So? So get around people network getting a group of people that are doing this. You know, I don’t know if you know this. You don’t even know this mic. We just did a count on on the number of multifamily deals that our Warriors have last Wednesday. It’s up to 305,000 units that are owned by the Warriors.
00:12:12:17 – 00:12:33:15
Rod Khleif
Yeah. And and we know it’s more than that because there’s so many people don’t even respond. So probably 350,000, which is more than everybody else that does this. It teaches this combined. So it’s just you know, I keep bragging about that because it’s just freaking awesome. So I always like to talk about good decisions you’ve made. Obviously you love the warrior event, but also like to talk about seminars.
00:12:33:15 – 00:12:50:21
Rod Khleif
You know what I mean by that statement at the time, you got your ass kicked and I know you weren’t ready for this question, but you know, I when I do my boot camps now, I ask every panelist talk about a seminar because I think people learn more from, you know, when you get your ass kicked and, and, you know, there’s lessons in it, then, you know, everybody always talks about success.
00:12:50:21 – 00:13:06:02
Rod Khleif
But I like to, you know, be authentic and, you know, because you’ve got a whole menu to choose from. I know you do. It’s like we all do in the business. Can you think of one where you could add some value, talk about something that may have happened. Maybe it was an equity raise, maybe it was a lender issue, I don’t know, give you some thought.
00:13:06:05 – 00:13:37:19
Mike Mannino
Yeah. I’m a very blessed that I haven’t had too many like major seminars. Right. But like like I’m just thinking the fixing full of business. I’ve lost money. Like out of the hundred homes, ten of them weren’t. I’ve lost 20, 30 grand. Right. They’re not all home runs. And, you know, thankfully, we haven’t experienced that in the multifamily, but I have, like a seminar, even as much renovations as I’ve done, I have we have an apartment building where there was a 19 unit that we bought two years ago in North Carolina.
00:13:37:21 – 00:14:05:13
Mike Mannino
I think there was out of 19 units, 2 or 3 were vacant. And then after we closed, within three months of closing, we went down to one occupied. Wow. So we were expecting to at least break even while we’re doing the renovations to now, we are losing $10,000 a month and that went on for 18 months. We had contractor issues win over budget on the renovations with no money coming in.
00:14:05:15 – 00:14:09:01
Mike Mannino
So it happens to all that’s that’s.
00:14:09:03 – 00:14:16:03
Rod Khleif
That’s a good one. That’s a good one. Is there anything you could have done differently. Just is there a lesson. There is just one of those things I.
00:14:16:03 – 00:14:18:06
Mike Mannino
Think, you know, when you’re buying these types of assets.
00:14:18:07 – 00:14:32:24
Rod Khleif
By the way, sorry to interrupt. Sorry to interrupt, but that sounds kind of nefarious. Do you think there was some bullshit going on as far as the occupancy? Because that doesn’t sound right when you’ve got, what was it, 16 people or 15 people move out within a month or two? Something. Something fishy to me in that.
00:14:33:00 – 00:14:51:06
Mike Mannino
Well, I think so. When you that’s kind of when we buy these types of properties at such a significant discount, you know, the bookkeeping isn’t they don’t have rent rolls, they don’t have tea twelves, they don’t have. So could this seller been misleading me about his rent collections? Possibly. And that could have been what happened. So that’s where we had it started.
00:14:51:06 – 00:14:53:10
Mike Mannino
Victim people. Because nobody was paying except for one.
00:14:53:14 – 00:14:57:18
Rod Khleif
Got it. Okay. So you evicted a bunch of them. They didn’t just leave.
00:14:57:20 – 00:15:01:13
Mike Mannino
Like some left some, you know, in the middle of the night, you know, the whole stuff.
00:15:01:15 – 00:15:16:11
Rod Khleif
Got it. Okay, now I understand. Okay. So so, so. Well, that’s a good one. So what’s a hot topic? You know, in this business that everybody seems to be talking about? I’d love to get your opinion on what’s what’s hot right now.
00:15:16:13 – 00:15:21:07
Mike Mannino
Yeah. So I believe right now Charlie Peters posted this in the group.
00:15:21:09 – 00:15:22:21
Rod Khleif
That’s another warrior.
00:15:22:23 – 00:15:44:10
Mike Mannino
Yeah. He’s another warrior. He’s he’s when rod said like other people think your problems are nothing that he’s one of those guys. Like if I got him with my problems like that’s nothing. But he puts in the group that multifamily is, you know, from its peak in 2022, from the Fred website, they, you know, they which is the was it the financial website for the federal government?
00:15:44:12 – 00:15:58:14
Mike Mannino
They posted a chart that in 2022 to today, multifamily values have gone down 20%. Yeah. That’s because, you know, interest rates have risen which cap rates increase and expenses gone up. And and the whole thing.
00:15:58:15 – 00:16:00:06
Rod Khleif
So all of that, all of that. Yeah.
00:16:00:11 – 00:16:20:12
Mike Mannino
So that was four years ago. And you know talking to AI and I’m like, hey, when real estate drops, you know, maybe 20% from its peak, how long does it usually take to recover. And, you know, it says like within ten years. There’s no reason why we shouldn’t recover. So that means it’s been four years. In the next six years.
00:16:20:14 – 00:16:42:19
Mike Mannino
My mind, I believe that, you know, statistically, looking at the past, that real estate should go up at least 20% to back to what it was from four years ago and then real estate. Ever since it it’s been around, especially with, you know, printing the US dollar will just keep going up in value over time. So I believe right now is the best time to get aggressive with buying properties.
00:16:42:19 – 00:16:56:07
Mike Mannino
If you can make a deal, work at these high interest rates and find a distressed asset right now, which they’re they’re starting to come out. I believe those who do it today, in the next five, six, seven, ten years from now will be heavily rewarded.
00:16:56:09 – 00:17:15:16
Rod Khleif
Absolutely. Agree. Completely. Yeah. I think we’re in one of the greatest opportunities we’re going to see in our lifetime because there’s so many distressed assets right now. You know, Merrill, you know, Merrill SEC attorney that a lot of the Warriors work with, he got six foreclosure clients, separate apartment complex clients in one day in foreclosure. Yeah, in one day.
00:17:15:18 – 00:17:33:16
Rod Khleif
You know, we’re seeing deals being sold for less than the debt right and left, you know, and so, you know, that’s that’s a that’s a big piece. Now, now, Brian, cut this out. Is there a question you’d like me to ask you? I’ve got a bunch of them here that I don’t normally ask. I’ll cut you off guard.
00:17:33:17 – 00:17:34:08
Rod Khleif
No.
00:17:34:10 – 00:17:35:22
Mike Mannino
I’m not that.
00:17:35:22 – 00:17:36:04
Rod Khleif
Okay?
00:17:36:04 – 00:17:37:01
Mike Mannino
No. All right.
00:17:37:02 – 00:17:39:24
Rod Khleif
All right, let’s see.
00:17:40:01 – 00:17:41:12
Two. Two. Two, two.
00:17:41:14 – 00:17:55:14
Rod Khleif
Give me a second. Yeah. So talk about Mike. Talk about your team. What is your what’s what’s your team comprised of if you have one I mean you still doing the flipping or you just totally doing assets the cash flow at this.
00:17:55:14 – 00:18:19:13
Mike Mannino
Point you cannot and should not do this business by yourself, especially when getting started. So I have my partner Adam and then Bryce Bedwell, who actually I met through the warrior program again, sharing, you know, what I do in the warrior program. He was a young guy. I think it was 24 at the time, and he’s going to be a multi-millionaire very shortly.
00:18:19:18 – 00:18:39:24
Mike Mannino
And he helps us find deals and reach out to brokers. And then we have have a couple Vas who, organized deals for us. So our team, I believe why we’re extremely successful is we look at over $300 per month with over $3,600 per year. We offer on hundreds of them, and we only buy 1 to 2 per year.
00:18:40:01 – 00:18:47:12
Mike Mannino
So it’s a lot of output on our end to buy because we look for deals on 40 to 60% on the dollar. So.
00:18:47:16 – 00:19:10:15
Rod Khleif
Right right, right. Distressed deals. So what are you doing to blow through that? Many deals are using AI at all yet. Or is it you know, I mean you get to a point where you can smell if it deals decent to get the crap off your desk to focus on the ones that have merit. You know, we’ve got great software in the warrior program to do your detailed analysis, but how are you looking at so many?
00:19:10:16 – 00:19:14:04
Rod Khleif
Is is it a team sport where you’re each dividing and conquering, or how do you do it?
00:19:14:09 – 00:19:41:17
Mike Mannino
So we haven’t implemented using AI for our deals yet I do, I’m actually writing a post right now. I’m going to post Inside the Word program how we have saved $150,000 last year using AI. It’s really cool, but for looking at our deals, we use our Vas who our virtual assistants, they organize all the deals that they see, they put into a spreadsheet with address the price, price per door, a couple metrics and it turns red, yellow and green.
00:19:41:17 – 00:19:54:02
Mike Mannino
And we’re looking at the yellow and green. And that’s what Brice does. And then once that passes that sniff test then I’ll look at it. And then we will do the detailed, like you’re saying with the software’s of right. That’s where we going through all the expenses. And it comes.
00:19:54:03 – 00:20:11:10
Rod Khleif
Very nice, very nice. Well, listen, brother, I really appreciate you coming on. Make sure you smack your dad in the back of the head for me and tell him it’s from me. And you know I love him. And, do you have a are you okay with listeners reaching out to you? Yeah.
00:20:11:11 – 00:20:12:16
Mike Mannino
Yeah.
00:20:12:18 – 00:20:14:03
Rod Khleif
How would they do that?
00:20:14:04 – 00:20:31:04
Mike Mannino
Yeah. So you can reach out to me if you go to facebook.com, Nino II. Because that’s for the second you’ll find me. I have 13,000 followers. You can go to our, our company website, reciprocity capital group, which is reciprocity.
00:20:31:06 – 00:20:45:20
Rod Khleif
Well, listen, brother, I really appreciate it. It’s great to see you. And again, all kidding aside, I give you dad my love, and we’ll. We’ll see you soon, I hope. Yes. Take care of that little baby. All right. Take care, brother. See you later.
**Podcast Categories:** Multifamily Rock Stars, Podcasts
---
### [How She Put 4 Kids Through College With Real Estate](https://rodkhleif.com/podcasts/multifamily-asset-management-jennifer-barner/)
**Published:** June 12, 2026
**Author:** Bryan Hoover
**Excerpt:** How She Put 4 Kids Through College With Real Estate
**Content:**
# Multifamily Asset Management Lessons from Jennifer Barner
Multifamily asset management is often what separates average investments from exceptional ones. In this episode, Jennifer Barner shares how she transitioned from single-family investing into multifamily real estate, eventually growing her portfolio involvement to nearly 1,200 units across multiple states. Her journey demonstrates that persistence, market selection, operational discipline, and strong partnerships can create extraordinary results even when success takes longer than expected.
## How Jennifer Barner Broke Into Multifamily Investing
Jennifer Barner began her real estate journey after discovering that retirement funds could be invested in real estate through self-directed accounts. Motivated by a desire to build wealth and provide for her four children’s college education, she initially focused on single-family properties and house flipping.
After spending more than a year underwriting hundreds of multifamily deals without securing an acquisition, Jennifer continued building experience through single-family investments rather than quitting. That decision became a critical foundation for her future success. The construction knowledge, property management experience, and investor credibility she developed during that period later became valuable assets when she entered larger multifamily projects.
## Finding Opportunity in Northwest Arkansas
Jennifer’s breakthrough came during the uncertainty of 2020 when many investors were slowing down. Instead of remaining focused solely on her local market, she identified strong growth indicators in Northwest Arkansas.
Several factors made the market attractive:
- Major employers including Walmart, Tyson Foods, and J.B. Hunt
- Significant infrastructure investment and highway expansion
- Strong population and job growth trends
- High occupancy levels across competing apartment communities
By focusing on market fundamentals instead of short-term fear, Jennifer and her team acquired a property in Springdale, Arkansas that would become a highly successful investment.
## Multifamily Asset Management That Increased Property Value
One of the most valuable lessons from the conversation centers on multifamily asset management and operational improvements.
When Jennifer evaluated the property, she noticed several indicators of underperformance. The expense ratio appeared unusually high, vacancy was elevated compared to competing properties, and rents were significantly below market despite the asset being located in a desirable area.
The original business plan included modest upgrades such as:
- Updating paint colors
- Replacing outdated fixtures
- Improving hardware and faucets
- Modernizing unit appearance with minimal capital expenditures
However, effective multifamily asset management requires adapting to market realities. After testing renovations, Jennifer discovered that lightly renovated units were achieving nearly the same rents as renovated units. Rather than continuing to spend money unnecessarily, the team adjusted the strategy and focused primarily on cosmetic improvements.
That disciplined approach helped drive rents from approximately $450-$625 at acquisition to around $850 while maintaining exceptionally strong occupancy.
## Why Relationships Accelerated Growth
Another key theme from Jennifer Barner’s story is the power of partnerships.
After successfully executing her first multifamily acquisition, opportunities began to multiply. Her performance on that initial deal led to additional partnerships, loan guarantor opportunities, and larger roles within future acquisitions.
Jennifer emphasizes that working with people who share similar values, underwriting standards, and business philosophies creates a stronger foundation for long-term success. Building trust through execution ultimately opened doors that would have been difficult to access alone.
## Raising Capital Through Credibility
Many investors struggle with raising capital, but Jennifer’s experience demonstrates that credibility is built long before asking investors for money.
Before entering multifamily investing, she documented her progress through dozens of house flips and real estate projects. By consistently sharing her experience and results, she created confidence among potential investors. When multifamily opportunities emerged, many investors already trusted her ability to execute.
This highlights an important lesson for aspiring syndicators: capital raising often begins years before a deal is presented. Education, visibility, consistency, and demonstrated competence all contribute to investor confidence.
## Markets Jennifer Barner Likes Going Forward
Looking ahead, Jennifer remains focused on markets with strong growth fundamentals and favorable long-term demographics. While rising insurance costs have created challenges in some southeastern markets, she continues to see opportunity in areas where population growth, employment expansion, and infrastructure investment support future demand for housing.
Among the regions discussed were:
- Northwest Arkansas
- Dallas-Fort Worth suburbs
- Select Midwest markets
- Growth-oriented secondary and tertiary cities
Her investment philosophy remains centered on identifying markets where economic expansion supports long-term rent growth and occupancy stability.
## Guest Bio: Jennifer Barner
Jennifer Barner is the Founder of Lighthouse Ventures and an experienced multifamily real estate investor involved in nearly 1,200 apartment units across multiple states. She began her real estate career through single-family investing and house flipping before transitioning into multifamily syndications. Today, she focuses on asset management, capital raising, and helping investors build wealth through strategic real estate investments while continuing to educate and mentor others in the industry.
If you want to hear the full conversation and detailed insights, watch the podcast video or read the complete transcript below.
## **Multifamily Asset Management FAQ**
### **What Is Multifamily Asset Management?**
Multifamily asset management is the strategic oversight of an apartment property after acquisition to maximize income, increase property value, control expenses, and achieve investment goals. Asset managers work closely with property management teams to improve operations, occupancy, resident satisfaction, and overall financial performance.
### **Why Is Multifamily Asset Management Important?**
Multifamily asset management is important because it directly impacts a property’s profitability and long term success. Effective asset management helps owners increase net operating income, optimize rents, reduce unnecessary expenses, and create value that can significantly increase a property’s market value.
### **What Does a Multifamily Asset Manager Do?**
A multifamily asset manager oversees the property’s business plan, financial performance, capital improvements, property management company, and investor reporting. Their goal is to ensure the property performs according to projections while identifying opportunities to improve returns and mitigate risks.
### **How Does Multifamily Asset Management Increase Property Value?**
Multifamily asset management increases property value by growing net operating income through rent increases, occupancy improvements, operational efficiencies, and strategic renovations. Because multifamily properties are often valued based on income, increasing profitability can lead to substantial appreciation.
### **What Is the Difference Between Asset Management and Property Management?**
Property management focuses on the day to day operations of a property, including leasing, maintenance, rent collection, and resident relations. Asset management operates at a higher strategic level by overseeing financial performance, business plans, capital expenditures, and long term investment objectives.
### **What Are the Key Metrics in Multifamily Asset Management?**
Key metrics in multifamily asset management include occupancy rate, economic occupancy, net operating income, operating expense ratio, rent growth, delinquency rates, renewal rates, and cash flow. These metrics help investors evaluate performance and identify areas for improvement.
### **How Often Should Multifamily Asset Managers Review Performance?**
Multifamily asset managers typically review performance weekly, monthly, and quarterly. Regular reviews help identify trends, monitor expenses, track leasing activity, and ensure the property remains aligned with its investment objectives.
### **What Is a Value Add Multifamily Asset Management Strategy?**
A value add multifamily asset management strategy focuses on increasing property income and value through operational improvements, renovations, amenity upgrades, expense reductions, and rent optimization. The goal is to create additional equity while improving the resident experience.
### **How Does Market Selection Impact Multifamily Asset Management?**
Market selection plays a critical role in multifamily asset management because job growth, population growth, infrastructure development, and housing demand influence occupancy levels and rental growth. Strong markets often provide more opportunities for successful execution of a property’s business plan.
### **Can Multifamily Asset Management Help Reduce Investment Risk?**
Yes, multifamily asset management helps reduce investment risk by proactively monitoring financial performance, addressing operational issues, maintaining occupancy, managing expenses, and adapting business strategies to changing market conditions. Strong asset management can help protect investor capital during economic uncertainty.
### **What Skills Are Needed for Successful Multifamily Asset Management?**
Successful multifamily asset management requires financial analysis, budgeting, leadership, communication, market research, negotiation, project management, and problem solving skills. Experience with property operations and real estate investing can also provide a significant advantage.
### **How Do Investors Benefit from Strong Multifamily Asset Management?**
Investors benefit from strong multifamily asset management through increased cash flow, higher property values, improved operational efficiency, reduced risk, and stronger long term returns. Effective asset management is often one of the most important factors in the success of a multifamily investment.
00:00:29:05 – 00:00:47:06
Speaker 1
Welcome to Multifamily Rockstars. So as you guys know, these are the episodes where we deep dive into our guest deals and, you know, give you some actionable items so you can get started, some practical items so you can get started and you know, so you can do your first deal, especially if you’re brand new to multifamily. And I’ve got my co-host Marc Nagy with me here as usual.
00:00:47:07 – 00:00:50:10
Speaker 2
Good on rod. Good to be back in, 2025. New year.
00:00:50:11 – 00:01:10:08
Speaker 1
Happy new year. Happy new year, brother. Good to be here. Well, we have got a real treat today. She’s what you would call an original if you watched that vampire series. You know, in my warrior program. And, her name is Jennifer Barner, and she’s a founder of Lighthouse Ventures. And, just a beautiful, beautiful soul, beautiful human being.
00:01:10:08 – 00:01:30:12
Speaker 1
And, and she actually, we did do an interview with her way back when. I mean, we’re at I don’t know how many how many interviews we had now, 809 hundred. A lot, yeah. Anyway, so a long time ago. So a lot a lot of water under the bridge since that interview. So it’s just a treat to actually have you in the Rockstar series here.
00:01:30:17 – 00:01:34:06
Speaker 1
It’s long overdue. Welcome. Welcome back. Jennifer.
00:01:34:08 – 00:01:45:10
Speaker 3
Oh, it’s a pleasure to be here, rod. I just love the warrior group. So much. They’ve added so much to my life, both personally and financially. So thank you for having me on.
00:01:45:12 – 00:02:09:18
Speaker 1
No question. I know you’re now in, almost 1200 doors in five states. And you’ve achieved your goal of putting your four children through college debt free. You’ve you’ve the six six plex to your net worth. You know, you’ve done coaching for us. Is this just, incredible journey, from where you started. But why don’t you tell us how you started?
00:02:09:18 – 00:02:16:08
Speaker 1
Okay. And take us back and tell that little story about your transition from single to multi as well. I love that story.
00:02:16:08 – 00:02:42:04
Speaker 3
And, well, I didn’t know anything about real estate. I have a finance degree, and I had always been asking our financial advisor, how do I invest in real estate? And they kept saying, well, you can’t. And then I was invited to a real estate conference. It was the Rich dad conference. And she stood up there. The gal that was presenting and said, you know, I started out using my IRA in real estate and I’m like, wait, what?
00:02:42:05 – 00:03:09:09
Speaker 3
How could you do this? And she said, if they’re telling you, you can’t, it’s me means they can’t. They’re not a qualified custodian. And that was a game changer for our life. We have four children and they were fast approaching college. We had 4 in 6 years. And so I knew after to that 2008 when the market collapsed, that we lost half of everything we had, save for.
00:03:09:09 – 00:03:32:07
Speaker 3
And so I was looking for something. So real estate came into our lives at a really important time. And after one year of being in single family, I just started praying, Lord, show me another way and all of a sudden monopoly kind of came into my mind and I was thinking, I need to pivot to big buildings. So I started listening to as many podcasts as I could.
00:03:32:07 – 00:03:49:08
Speaker 3
I kept coming back to you, rod, over and over and over, and I think you’d only been doing the podcast probably six months. And then you said, you know, I’m thinking about doing some coaching and if you’re interested, reach out to me so I, you know, I.
00:03:49:13 – 00:03:51:06
Speaker 1
Could actually sign you up personally.
00:03:51:09 – 00:03:52:15
Speaker 3
Yes. You did.
00:03:52:17 – 00:03:56:02
Speaker 1
Holy cow. Wow. You really are an original. Holy cow.
00:03:56:03 – 00:03:57:12
Speaker 2
2017\.
00:03:57:14 – 00:04:06:02
Speaker 3
It was 2017. Your first. I was there on the front row. In 2018. It was January 2018. I was on the front row.
00:04:06:03 – 00:04:07:12
Speaker 1
That was Tampa.
00:04:07:14 – 00:04:31:09
Speaker 3
Yes, that was Tampa and 350 people in that room. It was a great boot camp. And I’ll tell you, your boot camps are the same and they’re so good even. I mean, they’re it was so good back then and it’s still so good. That’s what I thank you for the program. Yeah, it’s.
00:04:31:13 – 00:04:41:08
Speaker 1
Thank you. Well, now we’re up to a thousand people. So we’ve we’ve we’ve we’ve we’ve improved our population a little bit and, and we’re now at I don’t know what 2000 warriors Mark I.
00:04:41:08 – 00:04:42:07
Speaker 2
Don’t know somewhere around there.
00:04:42:07 – 00:05:00:17
Speaker 1
Yeah. Yeah somewhere around there. 2000 warriors I think there are 250,000 plus units that they own that we can’t keep track anymore. We’ve got a coaching call today, actually, right after this interview. And I’ve got, you know, every now in these coaching calls, I go through all this, they, they close this deal, they close this deal, they close this deal just to inspire everybody.
00:05:00:17 – 00:05:16:02
Speaker 1
And I think I saw like 8 to 10 that I’m going to bring up this on this call just in the last three weeks. So. Or month rather. Yeah. It’s crazy. It’s crazy what’s going on. So anyway, so you came to the boot camp and it’s been all downhill since then. Right?
00:05:16:04 – 00:05:38:19
Speaker 3
No, you know, I, I jumped in with both feet and I was like, this is it. This is my path to getting into something, you know, going faster. I needed to go as fast as I could because I had four kids that I got to put through college. And although my husband has a great job and we’d been saving so diligently, we still didn’t have enough because of escalating costs of tuition.
00:05:38:21 – 00:06:00:06
Speaker 3
So, you know, about a year and a half into your program, though, I called you and I said, rod, I have been looking high and low, turning over every rock. I’ve underwritten 250 deals, and I still don’t have a deal done. And you said, well, in the meantime, go back to doing what you were doing. And so I went back to flipping homes.
00:06:00:12 – 00:06:26:01
Speaker 3
And then, as life would have it, Covid hit. And when everybody else started putting on the brakes, that’s when I saw my opportunity and I said, now’s the time. And so I left my backyard of Kansas City, and I went to another market where I saw huge signs of growth, which was the Northwest Arkansas area where Walmart is headquartered.
00:06:26:01 – 00:06:50:06
Speaker 3
J.B. hunt, Tyson Foods, and they’re building new highways down in that area, and it’s just exploding. So I got together with a broker, and I just mentioned my frustration of being in multifamily, and no brokers will ever call me back. And I was whining, lots of whining. And he took compassion on me and said, you know what? I think I got a property for you.
00:06:50:06 – 00:07:05:21
Speaker 3
I haven’t listed it. But you know, why don’t you take a look at the financials? I’m telling you what, I underwrote it and I was like, wait, I got to do this again. Something must be off of my spreadsheet because it turned green. Meaning it’s go time.
00:07:05:23 – 00:07:06:18
Speaker 1
Right?
00:07:06:20 – 00:07:12:06
Speaker 3
And we got that deal under contract and it’s been the best. So when.
00:07:12:06 – 00:07:14:12
Speaker 1
Was that? That was 20 2021.
00:07:14:14 – 00:07:18:06
Speaker 3
That was 2020. We closed 2020. Yeah we it took us.
00:07:18:09 – 00:07:21:12
Speaker 1
Where in Arkansas was it. Bentonville where they are.
00:07:21:12 – 00:07:26:12
Speaker 3
We’re at Springdale. Springdale which is sandwiched between Bentonville and Fayetteville.
00:07:26:14 – 00:07:27:14
Speaker 1
Gotcha. That’s so funny.
00:07:27:14 – 00:07:32:08
Speaker 2
We just bought a deal two weeks ago, and, Northwest Arkansas and Fort Smith right up there.
00:07:32:10 – 00:07:33:10
Speaker 3
There you go.
00:07:33:15 – 00:07:48:11
Speaker 2
Yes. And I bet I probably rode the Covid boom up from there, if I had to guess. Yeah. Tell us about this deal. I know you said all the lights turned green, right? What, what about this deal? Looked good. What were you guys going to do to this deal? Bring us. Bring us into this?
00:07:48:13 – 00:08:02:01
Speaker 3
Yeah. So, you know, and one of the things that you always love to see is a high expense ratio. When you’re looking at a new property, because it’s a sign that it’s probably being mis or mismanaged.
00:08:02:01 – 00:08:02:24
Speaker 1
Mismanaged.
00:08:03:01 – 00:08:33:07
Speaker 3
Yeah. So that was a clue. And then the property management company, they didn’t seem like they were overly concerned that they were sitting at a 7% vacancy in a market that was most other properties in the area were all 100% occupied, and their ranks were sitting at $450 to 625. And it wasn’t a property where hubcaps are missing off the cars and cars are up on blocks.
00:08:33:07 – 00:09:01:14
Speaker 3
I mean, it’s a nice property. So those and it was sitting right next door to the Central water, government office that was brand new. So I’m looking at that property going, this is a home run. I just don’t know how we don’t succeed on this property. And financing was still really low at 3.51. Nice. We were able to get fixed debt.
00:09:01:16 – 00:09:16:02
Speaker 3
Now we missed out on getting interest only because it was a smaller market. But yeah, we we were very, very conservative conservative. I partnered with Ed Mizell. That was the first deal.
00:09:16:04 – 00:09:18:17
Speaker 1
And he’s another way. He’s another warrior, by the way. Right.
00:09:18:23 – 00:09:20:16
Speaker 2
Just had him on a couple weeks ago. Yeah.
00:09:20:16 – 00:09:21:17
Speaker 1
Yes we did. That’s right.
00:09:21:17 – 00:09:48:13
Speaker 3
Okay. Yeah. The beautiful thing about that is and you’re going to love this. We underwrote it. We submitted our letter of intent to buy, and they came back and they kind of laughed at our, our offer because it was $500,000 under what they were asking. And then Ed said, you know, we need to go back and let’s let’s look at our underwriting and see if we can come up at all.
00:09:48:15 – 00:10:12:03
Speaker 3
So as we’re underwriting it, we noticed the square footage that they were representing was larger than it actually was. So we tweaked our our offer and we came down even further on our offer. And it’s like he said, go ahead and submit that. And I said, Ed, they already declined our first offer. He goes, I know, but you never know.
00:10:12:03 – 00:10:33:07
Speaker 3
These things could turn and they may decide that they want to get out. And so we better go with the number we would really want to buy it at. I’m like, all right, fair I’ll submitted. So I submitted the new one and three weeks later they reached out and they said, hey, we accepted your offer. And I’m like, I said, which one?
00:10:33:09 – 00:10:39:10
Speaker 3
I. And they accepted the lower offer.
00:10:39:12 – 00:10:43:07
Speaker 1
Wow. Did they tell you why? I’m just curious.
00:10:43:09 – 00:10:45:07
Speaker 3
They were just ready to move on.
00:10:45:09 – 00:11:02:15
Speaker 1
They were done. They were done. Yeah. And guys, that’s that’s the way it works. Now, let me interject something real quick before you move on. You know, very often, and I tell my warriors this all the time, you know, if they say no, circle back because, you know, they may get other offers, they may even accept another offer that falls through.
00:11:02:15 – 00:11:15:22
Speaker 1
I can’t tell you how often you get it. If you circle back and stay at top of mind with the broker, and, well that’s fantastic. So how many units was it? And, and and how did you finance it? What was the debt?
00:11:15:24 – 00:11:19:21
Speaker 3
Yeah. So we got, Freddie Mae.
00:11:19:23 – 00:11:22:00
Speaker 1
I was Freddie Mac, Freddie Mac debt. Okay, good.
00:11:22:06 – 00:11:33:15
Speaker 3
Excuse me, Freddie Mac. We got a seven year term. Okay? And it was a step down. Prepayment penalty.
00:11:33:17 – 00:11:34:02
Speaker 1
Right.
00:11:34:06 – 00:11:45:17
Speaker 3
And we started getting offers just a year later on this property, wanting to buy it, but we didn’t sell because of that prepayment. Yeah. That we were going to have.
00:11:45:19 – 00:12:03:09
Speaker 1
Yeah. Let me explain real quick. You know that’s that’s called conforming debt guys. Meaning it’s non-recourse. Meaning if they foreclose they’re not going to come after you personally, which of course you don’t want them to foreclose regardless, but they’re only going to take the property back, which is it’s conforming non-recourse debt. But with that they have very steep prepayment penalties.
00:12:03:09 – 00:12:25:07
Speaker 1
And what she means by step down is like the year one, it may be 5%, year two, 5%, year 34321 down to zero ultimately in year 7 or 6. And so and that’s significant when you’re talking about millions of dollars, that’s a big money that you’d lose. And so, you know, the best way to sell an asset like that for you today would be an assumption.
00:12:25:07 – 00:12:29:11
Speaker 1
But you’re probably pushing up against, you know, year 5 or 6 at this point, aren’t you?
00:12:29:13 – 00:12:32:03
Speaker 3
Yeah. We’re heading into our fifth year.
00:12:32:05 – 00:12:50:04
Speaker 1
Yeah. Fifth year. So my assumption may may or may not be feasible this this late in the game. But but that’s you know, that’s a very appealing interest rate because that’s a fraction of what they are right now. So but but anyway please continue. So step down interest rate and and the rents were 450 to 600. Is that what I heard you say?
00:12:50:09 – 00:12:53:22
Speaker 1
Yes. Good lord. So where are they at today? Just out of curiosity.
00:12:53:22 – 00:13:27:06
Speaker 3
So today we’re sitting at 850. Okay. 5% occupied again. Wow. And so you had asked about what was our plan going into it. So we thought we’ll go in here. We had budgeted $1,800 to do light fixtures, change the classic gold colored walls to gray and then replace, not appliances, but the, lavatory sink faucets. You know, the tub faucet, you know, those kind of things.
00:13:27:06 – 00:13:47:14
Speaker 3
Also, the kitchen sink faucet. Just upgrade them a little bit and also get rid of that old plastic gold on the door handle and the, the hinges and bring them up a little bit. Do the silver that was you know, the polished chrome was popular was ago. Yeah. So that’s what we were budgeting and we started to implement that.
00:13:47:16 – 00:14:01:16
Speaker 3
But as fast as we were doing that, the classic units were approaching. They were within $25 of our renovated units or lightly renovated units. So after three months, we stopped all the.
00:14:01:16 – 00:14:22:21
Speaker 1
Stops, all renovations. And by the way, guys, just just so you understand what she means by classic is that’s the way they are today. Okay? That’s that’s a term that’s used for the condition of the units today. And then so you call them classics and, and and that’s very common where you start doing renovations. You’re not getting the multiple that you need to make sense I tell you, let me give you a rule of thumb on this, guys.
00:14:23:01 – 00:14:41:13
Speaker 1
If you, you should be able to recapture the amount of money you do in your renovation, ideally within three years. Okay, so if you’re going to spend. What is it? 3600? I can’t do the math in my head, but. But whatever you spend to on your renovation, you want to recapture it in three years.
00:14:41:14 – 00:14:46:07
Speaker 2
Okay, so if you spend 3600, you want to get at least $100 rent from that. The math. That’s right.
00:14:46:10 – 00:14:55:20
Speaker 1
That’s it. There you go, there you go. But but so. So you just realized that the bump wasn’t there, so it’s like, why spend the money? Okay. Got it. Okay. Fantastic.
00:14:56:01 – 00:15:00:12
Speaker 2
So what happened after that, then? Did you just start renting out all the classics? What what what happened then?
00:15:00:14 – 00:15:26:12
Speaker 3
Yeah. So now what we’re doing is we just decided, all right, we’re going to scale back that plan. Not not touch anything other than the paint color. So you started changing the classic gold walls to gray, and that’s all we needed. And we’re still doing that to this day. And we’re still 100% full. And we got to we got to push them again.
00:15:26:16 – 00:15:35:18
Speaker 3
So about every three months we have the conversation, is it time to push another $25. So we just keep pushing $25 every three months.
00:15:35:19 – 00:15:56:16
Speaker 1
Those rents those rents, you know, if you look at it on a national scale, it’s still very low. 850 and 950 is very low. If you look nationally. So I think you still have a long way to go. So you’re a now a, almost 1200 units in five states. And you said, I think you told us before we started recording there, all with other warriors that you’ve partnered with.
00:15:56:16 – 00:16:15:12
Speaker 1
Other words. Is that accurate? Yeah. By the way, guys, if you are interested in applying to our warrior program, text the word crush to 72345. And, I mean, it’s what would you say about the program if you had a few seconds to talk about the program? Jennifer.
00:16:15:14 – 00:16:40:18
Speaker 3
Well, I as a coach now, I tell people, you don’t you want to do people you want to do business with, people that are being trained in the same manner that you are, that are learning the same underwriting skills that you are, that have the same characters and integrity that you do. And so what I love about your program, rod, is you attract that same kind of person.
00:16:40:20 – 00:17:00:23
Speaker 3
And so, you know, it’s it just makes it way easier to do business that have been trained under the same philosophies and skills that you’re trying to train everybody. I have so much more confidence and doing deals with people that have been have went through your program, because I know that they’ve gotten a good education.
00:17:01:00 – 00:17:14:10
Speaker 1
Yeah. Oh, thank you, thank you. So again guys, if you’re interested text the word crush to 723, 4 or 5. And and we can help you crush it in this exciting exciting business. Go ahead. Mark.
00:17:14:10 – 00:17:32:22
Speaker 2
What one thing I, you kind of, glossed over there a minute ago, as you said, it took you, you know, a year and a half right in this without getting any deals done and a lot of people listening and be like, oh, my God, that’s so long. Like, they would quit before that, probably. But now you’re at 1200 doors and you’ve done once you did that first deal.
00:17:32:22 – 00:17:46:21
Speaker 2
As you know, very often we see that domino effect, right? The second, the third, the fourth, the fifth. What happened after that? And how did you what was that key moment or catalyst that kind of got you to scale up to where you’re at today? After that first one?
00:17:46:23 – 00:18:10:24
Speaker 3
Yeah. So after that first one, six months later, I was invited to be a loan guarantor with Ed on another deal in North Carolina. So I think I proved myself worthy of being a good business partner. And so he invited me to come be, his partner on that deal. And then he invited me to be a partner on the next deal and then the next deal.
00:18:10:24 – 00:18:32:08
Speaker 3
And so it just worked out that we worked well together. I think our skill set probably complemented each other. So, and then the latest deals I’ve been doing, I’ve been raising capital for other people’s deals because I haven’t had time to look for my own deals. And, you know, just kind of our head down on asset management at this point also.
00:18:32:10 – 00:18:33:13
Speaker 1
Yeah. Yeah, yeah.
00:18:33:13 – 00:18:51:01
Speaker 2
So what were those initial roles then? You know, going back to that first deal, you know, you said you and Ed kind of played complementary roles. What what sort of roles did you take on. What did he take on? I don’t know if there were other team members involved as well. What did that look like for the listeners listening who may need to figure out what they want to do?
00:18:51:03 – 00:19:17:22
Speaker 3
Yeah. So, and really quickly put together a spreadsheet of all the things we needed to do to have success at the property. You know, you know, starting with, you know, week one, these are the things we need to do. Thankfully, I was coming from a single family background where I already had a single family portfolio of about 30 doors and I had been managing those myself.
00:19:17:24 – 00:19:40:00
Speaker 3
And so I already had management experience. And so I was able to manage our expenses or watch those expenses as we were, you know, initially we were renovating, so I was really keeping a good eye on idea on that. And then we would meet every single morning and make sure we went through our checklist and who’s doing what.
00:19:40:00 – 00:19:51:16
Speaker 3
And we would just assign roles and tasks to each other to make sure we were handling everything that needed to be done so that we would come out of the gates really strong.
00:19:51:18 – 00:20:15:19
Speaker 1
Oh, that’s a very, very good, good. Yeah, yeah, I want to interject something. You know, you had those 30 houses. You didn’t just have management experience. You had construction experience as well. So you were used to dealing with vendors and and repairs. Minor major whatever with 30 houses. And you’ve encountered major repairs as well. And so and probably some major renovations also, which is fantastic experience on the asset management side.
00:20:15:21 – 00:20:34:09
Speaker 1
Now, I know that Ed is fantastic at raising money. He’ll talk to anybody. He’s he’s a networker extraordinaire. Would you say you brought in more, of the analytical piece or because you’re raising money now as well? Or were you both. I know he’s a little analytical as well, but he’s he’s great at it. Networking.
00:20:34:11 – 00:20:56:14
Speaker 3
Yeah. So that was one of the hurdles because I wasn’t going to be investing in my own state. And it was one of the hurdles that I had to overcome is how do I get all these people that I had been talking up multifamily with in my own community? How do I get them to now pivot and go to Arkansas?
00:20:56:16 – 00:21:24:00
Speaker 3
And so what I started finding is the more I started talking about Arkansas and the different markets, and I was just I created a meetup locally, and I invited all my friends and people I knew that were in real estate from single family to come over here to multifamily and let’s talk multifamily. Let’s, let’s work together. Let’s try to build a community of investors that one, invest in these.
00:21:24:00 – 00:21:47:04
Speaker 3
And so what ended up happening is, as I was striking out on local opportunities, I started sharing with them about the other markets that surrounded the Kansas City area. And, you know, they started to listen to me and started realizing, hey, you know, we need to take this seriously. Jennifer doesn’t think she’s going to be able to find anything in Kansas City.
00:21:47:10 – 00:22:17:08
Speaker 3
So we need to be preparing ourselves that we’re going elsewhere to invest. And so what I now do, I mean, just like you all do, you look at the growth factors and the different cities and who’s booming, who’s not. And so it’s very easy now for me to look at a city and say, okay, here’s the reason I’m going over here, and I invite you to join me because here’s what I’m seeing.
00:22:17:10 – 00:22:43:22
Speaker 3
And as soon as you can share with your investors the growth indicators of a market, they’re going to go with you. But when you’re talking about complimentary skills and I share a lot of the same skills, I’ve become a good capital raiser, but I think I became a good capital raiser because I was posting about all the different flips I’ve done over the last five years.
00:22:43:24 – 00:23:07:18
Speaker 3
I’ve done 45 flips. So when you’re talking about construction experience, I have that now. And people just when I was reaching out to them to say, do you want to be part of this deal? I kept hearing over and over that we have confidence in you after watching you over the last 3 to 5 years in this space that you know what you’re doing, and we feel comfortable investing with you.
00:23:07:20 – 00:23:26:07
Speaker 1
Isn’t that interesting? So. So I’m sorry. Sorry to interrupt, but but. Yeah. So so you going back in to single family? Yeah. Showing what you’re doing has spring boarded the multifamily capital raising piece. Isn’t that interesting? Wow. It’s funny how it all builds on itself. Wow.
00:23:26:07 – 00:23:51:18
Speaker 3
Well, you know, Ron, I look back and when you told me to go back and do you know, I always think that it wasn’t a set back. It was a set up for further success. And it really did give me the the courage to go back into multifamily and say, you know what? I know what I’m doing. You know, I can spot when somebody has taken advantage of us in a heartbeat.
00:23:51:18 – 00:24:15:10
Speaker 3
Now, when I get calls and like, what the heck is this? Come on, people, you know. So I think when people come into multifamily, you have to partner with somebody that has already got a portfolio of single family homes or some kind of portfolio experience, or building or construction just so you’re not taken advantage of. Yeah.
00:24:15:12 – 00:24:39:13
Speaker 1
Yeah. No, it’s super, super helpful. You know, if you’ve done some single fam and that’s the natural progression anyways to go from single family to multifamily. So again, if you’re considering getting some guidance, you know, so you can experience the life you’re looking for this year rather than, you know, seven, eight years from now. Text crush to 72345 just to see if the warrior program might be able to help you, you know, overcome any challenges that you have.
00:24:39:15 – 00:25:02:03
Speaker 1
So you can accomplish what you want. And, you know, and I don’t remember where my mindset was when I suggested for you to get back into it. I think you you were floundering and I was like, okay, you love single family. Just do that. Keep playing with this. Stay, you know, keep kids, keep consuming information. I think that’s probably the way the conversation went and, and, and, and don’t give up on this and, and and you didn’t and so.
00:25:02:05 – 00:25:20:21
Speaker 2
So I know you talked about the different markets that you’ve been looking at doing all the research. I am very bullish on the Midwest myself. Right now as well, because it hasn’t had the inventory spike, you know, from the Covid, building and everything. What do you like moving forward? Can you share any secret markets that you like or.
00:25:20:23 – 00:25:27:01
Speaker 1
Yeah. Where are you invested now? Where do you like where are you. Yeah. Where are you invested now as well at all of that?
00:25:27:03 – 00:25:56:21
Speaker 3
Yeah, I love that. So during Covid, we pivoted down to North Carolina, South Carolina, Georgia and Florida. And we have seen insurance just escalate to the point where it’s not affordable in Florida anymore. So we went up 340% in that market alone. So I doubt I’ll be looking in the near future in that market till we can they can get all that figured out.
00:25:56:23 – 00:26:18:24
Speaker 3
I like the Midwest. I still like the Northwest Arkansas area. I like Dallas a lot. I like you know, Fort Worth. I don’t know if people are aware, but there was a tycoon that used to own a lot of the land. Just to the I want to say throw. You know what? I don’t know who it was.
00:26:19:01 – 00:26:25:20
Speaker 1
Well, Perot owned all the land where they built the airport. That was that was. He was a billionaire. What? No. Not him. Okay, that’s not it.
00:26:25:20 – 00:26:49:11
Speaker 3
No. So they were landlocked, which is why Dallas had all the growth. Fort worth really never continued to grow. And it’s because a tycoon owned a ton of the land, and he wasn’t willing to sell it off. Well, in the last two years, he started selling off the land. So Amazon’s taken a big chunk. I want to say Microsoft has taken a big chunk of it.
00:26:49:13 – 00:27:22:19
Speaker 3
So you’re starting to see that land explode. And so I really like these bedroom communities in Fort Worth. A lot of them were built in the 80s. And you know as well as I do Ron and Mark that cap rates have decompressed and we’re starting to see fire sales on a lot of buildings. I’ve already started to see a lot of properties come to auctions, but anything in Texas that’s surrounding the Dallas Fort Worth area is just it’s crawling.
00:27:22:19 – 00:27:33:10
Speaker 3
It’s that urban crawl. And I’m starting to see a lot of similarities between it and Northwest Arkansas. So Mark, we should partner up.
00:27:33:12 – 00:27:36:14
Speaker 2
We should. I was going to mention that after the podcast hearing.
00:27:36:16 – 00:27:54:18
Speaker 1
About, well, that’s that’s the benefit of being in a group like this guys is, is is it’s all about I just had lunch with a warrior an hour ago and we’re looking at doing something together as well. And, but, well, listen, Jennifer, I really appreciate you taking a few minutes and coming on the show.
00:27:54:18 – 00:28:17:04
Speaker 1
I know you’re going to be at the boot camp. Here in a couple weeks and doing a presentation. And, you know, we do case studies on deals. You’ll be doing a case study on on. I think that the deal we just talked about maybe showing what you did with the more detail and, and so, yeah, if you’re not guys, if you’re not signed up for the boot camps coming up January 25th and 26th, what were you thinking?
00:28:17:04 – 00:28:30:03
Speaker 1
Because it, is going to be awesome. I don’t sell anything there. It’s just training for two days, so. But, Jennifer, thanks for coming on, sweetie. It’s so great to see you. And I just love it every time I’m around your energy.
00:28:30:05 – 00:28:37:02
Speaker 3
Well, likewise. Thank you so much again. It’s been a pleasure. And I’m so grateful for this group and for you. Rod. Thank you, thank you.
---
### [The Asset Class Billionaires Are Quietly Buying](https://rodkhleif.com/podcasts/manufactured-housing-investing-with-ali-nassir/)
**Published:** June 15, 2026
**Author:** Bryan Hoover
**Excerpt:** The Asset Class Billionaires Are Quietly Buying
**Content:**
# Manufactured Housing Investing with Ali Nassir
Manufactured housing investing has become one of the most resilient real estate strategies in today’s market, and few investors understand the asset class better than Ali Nassir. As a second-generation manufactured housing operator with decades of experience, Ali has participated in thousands of mobile home and manufactured housing units while navigating multiple economic cycles, interest rate environments, and market disruptions. In this conversation, he shares why manufactured housing communities continue to outperform many traditional real estate sectors and why affordable housing remains one of the strongest long-term investment themes.
## Why Manufactured Housing Investing Continues to Thrive
Ali explains that manufactured housing communities occupy a unique position within the real estate industry because they provide one of the most affordable paths to homeownership. As housing costs continue to rise across the country, demand for affordable housing solutions remains strong. This creates a compelling opportunity for investors who understand how to identify, acquire, and improve manufactured housing communities.
One of the biggest advantages discussed is tenant retention. Unlike apartment renters who can easily move to another building, manufactured housing residents often own their homes and lease only the land beneath them. Since moving a manufactured home can be expensive and impractical, residents tend to stay much longer, creating stable occupancy and predictable cash flow for owners.
## The Best Business Model for Manufactured Housing Communities
A major topic of discussion is the difference between owning rental homes versus operating a lot-rent model. Ali emphasizes that the most attractive manufactured housing investments typically focus on lot rent, where residents own their homes and the community owner rents the land.
This approach offers several advantages:
- Reduced maintenance responsibilities
- Greater resident pride of ownership
- Lower operating expenses
- Stronger long-term retention
- More scalable management
Ali also explains how experienced operators create additional profit centers within their communities. These can include home sales, seller financing programs, note income, and vertically integrated management systems that improve overall returns while creating more value for residents.
## Finding Deals in a Competitive Market
Although manufactured housing investing has become increasingly popular, Ali believes strong opportunities still exist for investors willing to focus on distressed assets and off-market acquisitions. Drawing from his background in business turnarounds and distressed investments, he discusses the importance of identifying underperforming communities where operational improvements can unlock significant value.
His preferred acquisition criteria often focus on secondary markets and communities large enough to support professional management. While competition has increased, he notes that life events such as retirement, estate transitions, and ownership fatigue continue to create opportunities for investors who maintain strong relationships and local market expertise.
## Economic Trends, Inflation, and Real Estate Opportunities
The conversation also explores broader economic trends affecting investors today. Ali and Rod discuss inflation, rising costs, interest rates, and the growing influence of artificial intelligence on the workforce. While many professionals are concerned about job disruption, both emphasize the importance of owning hard assets that can provide income and inflation protection.
Manufactured housing investing stands out because affordable housing demand tends to remain strong regardless of economic conditions. As consumers face higher living costs, affordable housing options often become even more attractive, positioning manufactured housing communities as a potentially recession-resistant asset class.
The discussion highlights the importance of maintaining a long-term perspective, understanding demographic trends, and staying adaptable as economic conditions evolve. Investors who focus on fundamentals, cash flow, and real assets may be better positioned to capitalize on future opportunities.
## About Ali Nassir
Ali Nassir is the Managing Partner of RISE 360 and a second-generation manufactured housing investor. His family has been involved in the manufactured housing industry since 1981, and throughout his career he has participated in thousands of manufactured housing units while also investing in distressed businesses and commercial real estate opportunities. His expertise spans acquisitions, underwriting, operations, asset management, and value-add strategies within the manufactured housing sector.
If you want to hear the full conversation and detailed insights, watch the podcast video or read the complete transcript below.
## **Manufactured Housing Investing FAQ**
## **What Is Manufactured Housing Investing?**
Manufactured housing investing is a real estate investment strategy focused on acquiring, operating, and improving manufactured housing communities or mobile home parks. Investors generate income through lot rent, home sales, seller financing, and value add improvements while providing affordable housing options to residents.
## **Why Is Manufactured Housing Investing Popular?**
Manufactured housing investing is popular because it offers strong cash flow, lower operating expenses compared to many other asset classes, and high demand for affordable housing. The sector has gained attention from investors seeking recession resistant real estate investments and long term wealth creation.
## **How Does Manufactured Housing Investing Work?**
Manufactured housing investing typically involves purchasing a manufactured housing community and collecting rent from residents who lease the land beneath their homes. Some investors also generate additional revenue through home sales, financing programs, utility reimbursements, and community improvements.
## **What Are the Benefits of Manufactured Housing Investing?**
Manufactured housing investing offers several advantages, including stable occupancy, strong resident retention, affordable housing demand, scalable operations, and multiple revenue streams. Many investors also appreciate the lower maintenance burden when residents own their homes and rent only the lot.
## **What Is the Difference Between a Manufactured Housing Community and a Mobile Home Park?**
The terms are often used interchangeably, but manufactured housing community is the modern industry term. Mobile homes generally refer to homes built before 1976, while manufactured homes are built according to federal construction standards established by the U.S. Department of Housing and Urban Development.
## **Why Do Investors Prefer Lot Rent Communities?**
Many investors prefer lot rent communities because residents own their homes while leasing the land. This model reduces maintenance responsibilities, encourages pride of ownership, lowers operating costs, and often results in longer resident stays compared to traditional rental properties.
## **How Do Investors Make Money in Manufactured Housing Investing?**
Investors can generate income through monthly lot rent, home sales, seller financed notes, utility income, and property appreciation. As occupancy increases and operating performance improves, the overall value of the community can rise significantly.
## **Is Manufactured Housing Investing Recession Resistant?**
Manufactured housing investing is often considered one of the more recession resistant real estate sectors because it provides affordable housing. During economic downturns, demand for lower cost housing options may increase as consumers seek more affordable living arrangements.
## **What Should Investors Look for When Buying a Manufactured Housing Community?**
Investors typically evaluate occupancy rates, lot count, market demand, infrastructure condition, utility systems, rent growth potential, and management efficiency. Strong locations with opportunities for operational improvements often present the best value add opportunities.
## **How Many Lots Should a Manufactured Housing Community Have?**
While smaller communities can be profitable, many experienced investors prefer communities with at least 50 to 100 lots. Larger communities often provide better economies of scale, support on site management, and create more operational efficiency.
## **Can Manufactured Housing Communities Increase in Value?**
Yes. Manufactured housing communities are commonly valued based on their net operating income. As investors increase occupancy, improve operations, and grow revenue, the property’s value can increase substantially.
## **Is Manufactured Housing Investing a Good Long Term Strategy?**
Many investors view manufactured housing investing as a strong long term strategy due to the ongoing need for affordable housing, limited new community development, high resident retention, and the potential for consistent cash flow and appreciation over time.
00:00:24:27 – 00:00:43:10
Rod Khleif
Welcome back to lifetime cash flow through real estate investing. I’m Rod Khleif, and I’m thrilled you’re here. And I know you’re going to get tremendous value from the gentleman I’m interviewing. Today’s name is Ali Nasser and he’s the managing partner of rice. 360 rice 360 is manufactured housing. We won’t call them trailer parks. They’re manufactured housing. We’re going to have a lot of fun today.
00:00:43:10 – 00:01:05:13
Rod Khleif
It’s an asset class. Absolutely love. So we’re going to dig into it. But his signature is cigars. Now he typically smokes a cigar when he does an interview. And so and he didn’t bring his match with him or matches with him. And so I brought a tool that I like to use when I’m lighting my fireplace, because I think it’s, you know, the difference between men and boys is the price of their toys.
00:01:05:13 – 00:01:07:10
Rod Khleif
Right. So I’ve got your lighter here.
00:01:07:11 – 00:01:12:16
Ali Nassir
Oh my gosh. Wow, that would work. You couldn’t see it.
00:01:12:17 – 00:01:21:01
Rod Khleif
If you’re just listening. But it’s a freaking torch that it’s almost like a flame thrower. But anyway, that was a joke. I brought a smaller one to that. That won’t be quite as.
00:01:21:01 – 00:01:30:07
Ali Nassir
Dangerous as well. You know, I might want to use the big one. All right, give it a try. Give it a try. Just be careful. We actually use torches, but nothing of this size. Yeah, yeah, yeah. Now, what am I doing to. I just push.
00:01:30:07 – 00:01:31:21
Rod Khleif
That button kind of hard.
00:01:31:29 – 00:01:33:23
Ali Nassir
Oh, yeah? Yeah, like, click.
00:01:33:23 – 00:01:34:21
Rod Khleif
It hard. There you go.
00:01:34:23 – 00:01:41:09
Ali Nassir
There you go. Yeah. Let’s get this baby lit up. This is a league of provider number nine. Okay? Okay.
00:01:41:14 – 00:01:52:10
Rod Khleif
So his signature is is smoking cigars. In his interviews, he asked to smoke if he could smoke in here, which has never happened in here, but. Wow. I think that’s pretty well lit.
00:01:52:11 – 00:02:00:25
Ali Nassir
Yeah. Thank you for letting me do this here. I do appreciate it. Yeah. Amazing torch. Yeah. Right. And I’m gonna have to like, I love I love stupid.
00:02:00:25 – 00:02:17:17
Rod Khleif
Shit like that, but, Well, welcome to show brother. So this is your signature. I told you my signature, which I become known for, is, you know, black jeans and flip flops. I teach thousands of people a year that way. Not because I’m trying to be coolest. Because my feet hurt. You know, I did my first interview. I’m sorry.
00:02:17:18 – 00:02:33:00
Rod Khleif
My first boot camp in in a in a suit. And I wore tight black shoes. And you’re comfortable. You got sneakers on. You’re comfortable today, too. But I was freaking miserable. Yes, my first one. I’m like, screw this, I don’t want to do it. And then I thought, you know what? Why not just do it comfortable? Just do what I want.
00:02:33:02 – 00:02:39:27
Rod Khleif
Where would I want? And I loved it, and people didn’t care. So, you know, you know, it’s great when you become more and more free from the opinion of others.
00:02:39:29 – 00:02:44:26
Ali Nassir
That’s it, that’s it. You know, I was a bow tie and suspenders kind of guy for many, many years.
00:02:44:28 – 00:02:45:14
Rod Khleif
Bow ties.
00:02:45:16 – 00:02:49:04
Ali Nassir
Wow. On every day, even if I didn’t have an event or that was.
00:02:49:11 – 00:02:52:00
Rod Khleif
Where did you come from? What did you do? Prior to mobile home parks.
00:02:52:00 – 00:03:03:01
Ali Nassir
So I’m second generation in parks. I’ve done this all my life, okay. But concurrently or simultaneously. I was kind of, you know, my father, much like, I think maybe a similar story. Immigrant story.
00:03:03:02 – 00:03:03:28
Rod Khleif
I’m an immigrant. Yeah.
00:03:04:00 – 00:03:23:04
Ali Nassir
Yeah. To you and yours with your mother. You know, he said early on. And he’s an amazing man. He’s got, bless him. He’s, you know, he said, hey, I’m, I’m going to teach you how to fish. I’m not going to give you fish. Good. So, so, so, as a family, we worked in the family business, which was mobile home parks.
00:03:23:05 – 00:03:30:12
Ali Nassir
No kidding. And we all had to contribute, and I was really fond of it. I was just a sponge around this guy who was like a 1 in 1,000,000,000. Not because.
00:03:30:13 – 00:03:31:13
Rod Khleif
Is he still with us or. Oh.
00:03:31:13 – 00:03:46:25
Ali Nassir
Yeah, okay. But not because of not. You know, I joke all the time Indian population is a billion plus from India, right? Right. And I’m South Asian and Indian Pakistani. And so, you know, he’s not one in a building just because of the population size. He’s 1 in 1,000,000,000 because he’s a surreal entrepreneur. You know, serial entrepreneur. Excuse me.
00:03:46:25 – 00:04:01:23
Ali Nassir
Love it. And when he said he’s not going to give me fish, basically that meant that I to answer your question, that meant that at 17, I started venturing out in business on my own. So I’ve done a number of things, but the common theme has been rod distressed assets.
00:04:01:24 – 00:04:05:28
Rod Khleif
Real estate. So you’ve done other real estate asset classes in your in your journey here?
00:04:06:05 – 00:04:12:02
Ali Nassir
Yes, absolutely. Other real estate asset classes but also distressed assets in general. So going concerns Main Street businesses.
00:04:12:03 – 00:04:13:12
Rod Khleif
Oh you bought businesses as well.
00:04:13:13 – 00:04:27:11
Ali Nassir
Absolutely. So I took the the M&A model or even a VC model of throwing, you know, ten deals up in the air, knowing that one’s going to be a grand slam. Or maybe you get a couple of home runs and they’re not all going to make it because they’re distressed.
00:04:27:11 – 00:04:34:03
Rod Khleif
So did you did you do roll ups or did you do multiple multiple in the same asset class? Or when you said, do you throw a bunch in the air? I was just curious.
00:04:34:03 – 00:04:51:10
Ali Nassir
I did I did a multiple a bunch of different Main Street type of businesses over the years, and I had a central management team, okay, CTO, CFO, myself as a general manager or CEO and whatnot, and we would basically contract ourselves out to these distressed businesses, get them stabilized and flip them.
00:04:51:12 – 00:05:11:13
Rod Khleif
Interesting. So you stepped in without actually putting any cash in and just help stabilize them. Got a piece of the upside and sold them. Right. Oh, what an interesting model. That’s right. What was your just we’re kind of digressing here a little bit. Sure. But but I’m interested in buying businesses. I think there’s an incredible opportunity. There’s 10,000 people a day turning 65 in this country, and they want to retire.
00:05:11:13 – 00:05:30:11
Rod Khleif
And a lot of them own businesses. There’s 10,000 people a day, 9 or 10,000 turning 80. In this country. I’m very into senior housing. I’ve got six unit six, six assisted living facilities under contract right now in Texas. Screaming deal. But but anyway. But that’s about you not me. But anyway. So so what businesses did you like the most.
00:05:30:13 – 00:05:38:15
Rod Khleif
You know you see the most promising. Now when you answer, keep in mind what AI is going to do to eliminate some of these businesses. So I’m just curious what your thoughts on.
00:05:38:16 – 00:05:58:05
Ali Nassir
Well, you know, the reality. I mean, things may have changed, but at least in my experience back in the day, and I don’t do that anymore. I happen to be very fond of transportation logistics oriented businesses because I understood I was fascinated just by optimizing truckloads or not loads, but any any vehicles.
00:05:58:06 – 00:05:59:29
Rod Khleif
So trucking companies and things of that nature.
00:06:00:00 – 00:06:15:24
Ali Nassir
I shouldn’t say that exactly. I misled you like the truckload model, the concept of of, you know, the idea of a truck coming back empty with any vehicle coming back empty frustrated me, and I wanted to see how we could leverage that because that’s what happens. Most of the time.
00:06:15:26 – 00:06:16:07
Rod Khleif
Same with.
00:06:16:07 – 00:06:28:09
Ali Nassir
Ships, with ships, with Ubers, with anything. Right. With Fedex trucks and whatnot. And so I got into really I ended up doing more courier limo, black car, that kind of business more than anything else.
00:06:28:10 – 00:06:28:25
Rod Khleif
Interesting.
00:06:28:25 – 00:06:47:29
Ali Nassir
But but I’ve done HVAC, I’ve done a flower shop, I’ve done a coffee shop. And this is really not to digress, because the main well, that was kind of I had two worlds, rod. Okay, that the mobile home park business we’ve been in as a family, like I said, I’m second generation, so since 1981. Wow. And so that’s always been steady and constant.
00:06:47:29 – 00:07:19:17
Ali Nassir
And the reason I’m so focused on that even today is that experience in doing M&A deals, doing distressed deals of Main Street businesses and of other commercial real estate classes only solidified only further reinforced evidence to me of why this asset class and I challenge. With all due respect, I would challenge you or anybody in a debate about why this asset class mobile home park stands in a unique category of its own, unlike any other.
00:07:19:18 – 00:07:42:16
Rod Khleif
I don’t disagree with you. Actually, I don’t disagree with you at all. It’s a fantastic asset class. Now, that said, you know, a lot of people know that a lot of people are in it. It’s much, much harder to find deals than it was 8 or 9 years ago. Sure. You know, in fact, I don’t know if you know this, but I actually had six virtual assistants logging every mobile home park in the whole country, state by state.
00:07:42:16 – 00:07:54:16
Rod Khleif
And we actually had them. A lot of them are misclassified in the public record. So I’d have them fly around on Google Earth if they see one, look around, see those others around it, geocode them and collect them. I never did anything with it.
00:07:54:23 – 00:07:57:15
Ali Nassir
You used the T1 lines back in the day to do that. Yeah yeah.
00:07:57:15 – 00:08:14:09
Rod Khleif
Yeah yeah. And I did all that and and then, then I had them break down the entities. Right. You know, because the most of them are owned in entities and we’d get their home addresses. So I was going to mail them at their home addresses. Yes. Yeah. I had six just you know, I had six virtual assistants. Not in India and the Philippines.
00:08:14:11 – 00:08:32:20
Rod Khleif
Yes. Working for $12 an hour, $1.90 an hour each. Right. And they were happy to get it. I wasn’t like taking advantage of them. So I had six people working for under 12 bucks an hour. Wow. Back in the day. Yeah. Wow. Yeah, it was crazy. But anyway, I digress. So no, I love the asset class. So let’s talk about your your your portfolio and and you know where you’re at now.
00:08:32:20 – 00:08:34:06
Rod Khleif
Where are you geographically.
00:08:34:06 – 00:08:47:04
Ali Nassir
So currently we’re and we have been for a long time as a family office. We’ve always been in California okay. I have done deals out of state. I don’t have any current currently anything out of state. Okay. Although, you know, I’m not a post.
00:08:47:05 – 00:08:48:07
Rod Khleif
All your stuff’s in California.
00:08:48:07 – 00:08:48:25
Ali Nassir
In California.
00:08:48:26 – 00:09:11:13
Rod Khleif
Oh, fantastic. Well, that’s gone crazy. Although I just did a post like a few minutes ago. Okay. I just literally a few minutes ago. Yes. California. Is this legislature for an exit tax for for wealthy people? Yes. Okay, Washington has it, Connecticut has it. New York has it. There. They’re all grouping together to do an exit tax so you can’t leave the state.
00:09:11:14 – 00:09:31:13
Rod Khleif
So you may want to look at that as far as your net worth because there’s also a billionaire tax. They’re talking about doing a billionaire tax of 5% of the net worth of someone, not their liquidity, their net worth. So you could have a billionaire that’s worth $100 billion. That’s maybe only 100 million liquid. And he’s got a $5 billion tax.
00:09:31:15 – 00:09:33:17
Rod Khleif
Is that the stupidest fucking thing you’ve ever heard?
00:09:33:18 – 00:09:34:26
Ali Nassir
It’s fucking crazy. I mean.
00:09:34:27 – 00:09:52:21
Rod Khleif
It’s so stupid because if these guys leave, they’re taking, like. Like Howard Schultz leaving Washington. Not only did he leave moved to Florida, his whole organization is moving to Tennessee. Think about all that tax revenue and who’s going to pay it. The people that voted that stupid shit in is what? Who’s going to pay it?
00:09:52:21 – 00:09:57:24
Ali Nassir
I can’t tell you how many of my peers are already leaving. Yeah, and you already have big names leaving, like, you know, Elon.
00:09:57:28 – 00:10:19:21
Rod Khleif
Oh, yeah. Sure, sure. Google guy. I mean, they’re all they’re they’re not stupid if they’re going to tax net worth of a billionaire. I mean, listen, you’re talking about a billionaire that’s got and thousands of employees probably created hundreds of millionaires. And and they’re going to leave the state and probably take their businesses with them. You can’t make up this stupid shit like, come on.
00:10:19:22 – 00:10:28:11
Ali Nassir
Yeah. Your point is so valid. Like, you’re not always even though you may be a multi-millionaire or even a billion, you’re not always liquid to be able to. And so that is a serious.
00:10:28:11 – 00:10:45:11
Rod Khleif
And you can’t leave now because you’re going to pay an extra tax because, I mean, I’m sure you’re not a billionaire, but I’m sure you’re no question you’re a millionaire. And so, you know, that’s just crazy stuff. They’re they’re trying to legislate anyway. It is I kind of went off the deep end. I literally just literally just recorded a live for my team to post about that because it’s in today’s news.
00:10:45:11 – 00:10:46:18
Rod Khleif
And since Fox News today.
00:10:46:19 – 00:11:00:13
Ali Nassir
Yeah, you know, you’re not alone. Everybody I talk to thinks I’m nuts for investing in California, right? Every California unions typically that I know most are investing outside of state. And non Californians don’t want to come in. But you know rod.
00:11:00:15 – 00:11:05:09
Rod Khleif
Well I’m sure you’ve done really well there because the rents have gone through the roof. And you know, I mean.
00:11:05:12 – 00:11:06:19
Ali Nassir
Very which is good.
00:11:06:20 – 00:11:17:11
Rod Khleif
But you’ve got rent controls, you’ve got eviction issues in some of those areas where it takes forever to get somebody out. You know, it’s overtaxed, it’s overregulated.
00:11:17:14 – 00:11:19:04
Ali Nassir
There’s I can tell you there’s.
00:11:19:05 – 00:11:21:18
Rod Khleif
What’s your experience as a, as an actual California.
00:11:21:18 – 00:11:38:01
Ali Nassir
Well, you know, so even more than that now the cat’s out of the bag in the sense that and I’m just as a layman, I’m just going to, you know, put it like this, that now everybody kind of knows. Well, and I guess because of these other asset classes being so saturated, we’ve seen a frenzy to your point earlier where you see everybody’s getting in in this space.
00:11:38:07 – 00:11:54:08
Ali Nassir
Oh, sure. And, you know, including not just investors, not just funds, but the government, the lenders, the insurance carriers, everybody realizes, hey, wait a minute. You guys have been making too much money. We want a piece of that pie. We want more of that pie now. And so all the regulations are getting tougher results.
00:11:54:09 – 00:11:59:07
Rod Khleif
Well, I’m talking California specifically. Are you? You’re saying the regulations getting tougher nationwide?
00:11:59:09 – 00:12:07:07
Ali Nassir
No. Well, nationwide, but specifically in California. It’s more to your point, like the rent control, right? The issues, the insurance requirements because of earthquakes and fire hazard.
00:12:07:10 – 00:12:15:03
Rod Khleif
Oh my God. And these poor people lost their houses to fire. They’re still waiting to get permits. I mean, it takes forever to get a permit. And I mean, anyway, we could go down.
00:12:15:03 – 00:12:15:18
Ali Nassir
That rabbit.
00:12:15:18 – 00:12:39:24
Rod Khleif
Hole forever, but but, Yeah, no, I, I people know that, you know, I won’t invest in a blue state. Life’s too fricking short for that brain damage. When I’m here in Florida, it’s a red state. I’ve got assets in Tennessee, you know, Texas, Florida, Ohio, the Carolinas. And and, you know, I just it’s for me, it’s just a cost of doing business.
00:12:39:27 – 00:12:41:24
Rod Khleif
It’s just a brain damage thing, that’s all.
00:12:41:24 – 00:12:50:08
Ali Nassir
It’s not for everyone. But, you know, I guess for me, having a Rolodex going back to the 80s of bankers and accountants.
00:12:50:08 – 00:13:01:04
Rod Khleif
And by the way, you’re 20 year olds. That means a list of people with their phone numbers. We used to have this thing where where card. It wasn’t on your phone. It wasn’t in your computer. It was these cards called a Rolodex. Anyway.
00:13:01:06 – 00:13:10:25
Ali Nassir
You roll it next, so to speak, right? You know, it’s unique. I have a unique opportunity, right? Because I can source deals off market deals. Okay? Sure, sure.
00:13:10:27 – 00:13:14:08
Rod Khleif
You probably raise money for them if you need it, right? Do you, do you syndicate.
00:13:14:09 – 00:13:17:03
Ali Nassir
We just started that now. So so so that’s.
00:13:17:03 – 00:13:18:03
Rod Khleif
Probably why you’re here.
00:13:18:04 – 00:13:42:00
Ali Nassir
That’s right. I mean, you know, so my world as a family office that’s on autopilot and kind of stabilized and almost exiting really. And so but I’m not done. I’m at 56. I’m ready to keep going. And so there’s a lot of people who’ve come to me over the years that want to get in the game who are passive, don’t have the 45 years to go back and learn everything and reinvent the wheel so they’ll invest with us passively.
00:13:42:01 – 00:13:42:16
Ali Nassir
Advice three.
00:13:42:16 – 00:13:44:07
Rod Khleif
64\. Sure, sure, sure.
00:13:44:10 – 00:13:51:16
Ali Nassir
May I borrow your torch again? It died out there. Thank you. Yes, please.
00:13:51:17 – 00:13:57:02
Rod Khleif
No, no, I just want to watch you. What? You like that thing again? Because it’s it’s a it’s a burning.
00:13:57:04 – 00:13:59:28
Ali Nassir
Although this is this is amazing.
00:14:00:00 – 00:14:15:27
Rod Khleif
Now we’re gonna smell this shit for the next two weeks and up in the studio, just so you know. But. Yes. Thank you. Roger. You did warn me. You did warn me. But I thought it’d be kind of cool, I appreciate that. Yeah. No worries, no worries. So are you going to continue just to invest in California?
00:14:15:27 – 00:14:18:27
Rod Khleif
Is that the plan or are you going to. You’re thinking elsewhere. What are your thoughts?
00:14:18:28 – 00:14:22:00
Ali Nassir
You know, people ask me all the time, what’s your by box and where’s your geographic.
00:14:22:01 – 00:14:23:15
Rod Khleif
Investor investment criteria.
00:14:23:16 – 00:14:44:16
Ali Nassir
Yeah. And I’ll tell you that my you know, I’m getting I’m getting more and more concerned about using the word by box or criteria box only because and I’ll answer your question. Right. But only because people start limiting themselves, I think within that box. And to me the first criteria is, is does the deal make sense? Do the numbers make sense?
00:14:44:17 – 00:14:49:03
Ali Nassir
Right. And yes, I would prefer to do it in California if I can, because I like the idea.
00:14:49:07 – 00:14:51:06
Rod Khleif
You’re familiar. I mean, it’s it’s your backyard.
00:14:51:12 – 00:14:58:10
Ali Nassir
It’s in my backyard. And I like the idea of the convenience of being able to drive to something. Yeah. Just especially with these days as the world’s getting crazy.
00:14:58:10 – 00:15:15:16
Rod Khleif
I’ll tell you something. The most successful operators I see in every asset class are geographically specific. They stick with in their backyard, and so they can go kick it and raise hell with their employees if they’re screwing up or whatever, they can go view it. And I’ve learned that the hard way, most successful ones, so I don’t disagree with that at all.
00:15:15:17 – 00:15:16:18
Rod Khleif
Now that said.
00:15:16:20 – 00:15:16:28
Ali Nassir
That.
00:15:16:28 – 00:15:39:09
Rod Khleif
Said, I disagree with your comment about a buy box and here’s why. Okay, because I believe to be an expert you need specificity. You need you need focus. And if you’re all not now, you may be an exception because of your level of experience. But you know, I teach okay, my students, I brag for a minute. My coaching students are their results eclipse everyone else combined, including big names you’d recognize.
00:15:39:10 – 00:15:55:09
Rod Khleif
But I teach them to focus because focus is power. Yes. And that that investment criteria by box helps them focus because there’s a lot of properties. Stick with one market, learn it really well. Focus on that one market. And that’s the only you know my my my.
00:15:55:11 – 00:16:09:16
Ali Nassir
I wouldn’t I don’t disagree with that at all. Especially for people who are kind of relatively new. You know, for me there are some exceptions and I guess I’m giving you my specific view. But but even then I have a by box, if you would. Sure. And I just wanted to make sure that people understand. The audience understands that.
00:16:09:20 – 00:16:09:24
Ali Nassir
Well.
00:16:09:24 – 00:16:10:20
Rod Khleif
You’re an opportunist.
00:16:10:22 – 00:16:19:21
Ali Nassir
Exactly. Yeah. We don’t want to be limited. And so the by box to answer your question is secondary markets 2 to 3 star parks 1 to 5. You know one being the the what’s.
00:16:19:21 – 00:16:21:02
Rod Khleif
Your minimum lot count.
00:16:21:03 – 00:16:26:05
Ali Nassir
Minimum lot count for me is 100. For anybody else getting in the game I would suggest at least 5050.
00:16:26:07 – 00:16:27:10
Rod Khleif
So you can have on site management.
00:16:27:12 – 00:16:27:29
Ali Nassir
Exactly.
00:16:28:02 – 00:16:37:24
Rod Khleif
You do not want to be going collecting rents from a mobile home park right. But yeah 100 is good. Okay. I mean, just out of curiosity, what’s your account now? Where are you at? As far as lots.
00:16:37:26 – 00:16:46:10
Ali Nassir
So I’m in the business still of buying and selling. Okay, I don’t hold. Okay. And you know, when people ask me that and you compare it, for example.
00:16:46:12 – 00:16:47:20
Rod Khleif
How many of you had. Let’s put it.
00:16:47:20 – 00:17:02:08
Ali Nassir
That way. I’ve touched at least 10,000. I would say close to 10,000 units. That’s a lot over the over the decades. Okay. Probably have somewhere between 2 and 3000 right now. Well, that’s a lot too. Yeah, 2500, let’s say how many parks? Seven parks.
00:17:02:08 – 00:17:02:24
Rod Khleif
Seven parks.
00:17:02:27 – 00:17:08:08
Ali Nassir
Yeah. Okay. So some of them are really large, you know, 200, 300 pads. And the point is that.
00:17:08:14 – 00:17:13:00
Rod Khleif
Are you all. Sorry, sorry to interrupt. Are you all lot rent?
00:17:13:03 – 00:17:13:16
Ali Nassir
Yes.
00:17:13:17 – 00:17:31:18
Rod Khleif
Okay. So, by the way, what I’m talking about here, guys, is, you know, a lot of mobile home communities own the homes and rent the homes out. And the best model is not to do that is to convert them to lot rent and have the person that’s in that home buy it as quickly as possible. For a lot of reasons one pride of ownership.
00:17:31:18 – 00:17:35:21
Rod Khleif
Two maintenance on these things will kill you. You’re with me on.
00:17:35:24 – 00:17:42:21
Ali Nassir
You’re. Absolutely. And you mentioned on your podcast before about how being vertically integrated is the ideal way to set this up. And that’s how we’re set up.
00:17:42:24 – 00:17:51:05
Rod Khleif
So so you’ve got a construction company, you’ve got, you know, you’ve got a property management company, all of that. So you that’s what you mean by vertically integrated.
00:17:51:07 – 00:17:55:08
Ali Nassir
I do mean that I don’t have exactly the construction component because I’ve never gotten exactly that.
00:17:55:08 – 00:17:57:06
Rod Khleif
But you’ve got a maintenance.
00:17:57:08 – 00:17:57:14
Ali Nassir
Yes.
00:17:57:14 – 00:17:58:12
Rod Khleif
We’ve got management company.
00:17:58:13 – 00:18:09:16
Ali Nassir
Absolutely. We’ve got, we’ve got we certainly have the asset management, the property management. But some of the things we’ve added, which I see others doing the same now and that’s great, is a dealer arm for example. We’ll buy the homes wholesale. Right. We won’t rent them.
00:18:09:17 – 00:18:09:25
Rod Khleif
Right.
00:18:09:26 – 00:18:11:11
Ali Nassir
You sell you sell them. Sell them.
00:18:11:11 – 00:18:19:15
Rod Khleif
Yeah. You carry the paper or you help them buy it. Whatever it takes. That’s it. And and you know, if you’ve got empty lots, you’re crazy not to do that.
00:18:19:20 – 00:18:33:22
Ali Nassir
Well, the whole the whole reason you’re buying a distressed community is because you’re probably if it’s 60% occupied, let’s say you’re probably buying it around 60% of value, right? Give or take. Okay. And so the way to get to.
00:18:33:24 – 00:18:35:10
Rod Khleif
You believe those deals still exist.
00:18:35:10 – 00:18:51:06
Ali Nassir
I do. You know, I knew you were going to ask that as saturated as the market is and it’s getting more and more difficult. Yeah. You know, you can’t especially like in California being such a large population, being such a large, having a large.
00:18:51:08 – 00:19:00:03
Rod Khleif
Cost of living where mobile home parks, you know, is a real, you know, benefit to, to a certain demographic in that state.
00:19:00:04 – 00:19:09:26
Ali Nassir
Right. And then like Florida, we have, we have something like over 5000 communities there. Right. And so, you know, we have a lot of communities and.
00:19:09:28 – 00:19:12:28
Ali Nassir
Death, divorce, those kind of things don’t happen. I mean, no.
00:19:13:00 – 00:19:31:06
Rod Khleif
Life gets in the way. You bet. And obviously the best deals are ones where people have held it forever. They’re tired. They’re ready to get out. Mom and pops is the expression you hear a lot now 100 space parks typically not going to be a mom and pop, but but but there’s a lot of competition. Like I said, my one of my best friends, Kevin Bumpus, my brother, worked for him.
00:19:31:06 – 00:19:50:23
Rod Khleif
He my brother owns several parks. He’s he’s retired now and sold him off. And but you know, I love the business. Don’t get me wrong, I love it. I it’s got legs. It’s got it’s it’s going to be there forever. You can’t build them anymore. Nobody wants a mobile home park in their backyard. So you’re not going to get it approved unless you’re out in the middle of nowhere.
00:19:50:29 – 00:20:08:22
Rod Khleif
And you know, and the other thing is, is with a mobile home, you know, it’s not like an apartment complex where someone can just move into another apartment complex if they own the home. Moving a home is not a cheap endeavor, right? So you’ve got a whole lot better stick than you do in an apartment.
00:20:08:23 – 00:20:19:27
Ali Nassir
Oh my gosh. Our our retention, frankly, is usually a lifetime in a tenant. Yeah, literally a lifetime. Yeah. Because who’s going to move $100,000 mobile home. Right. You know, when it costs you 25,000 or something to move it.
00:20:19:28 – 00:20:20:20
Rod Khleif
Oh, it’s that much?
00:20:20:21 – 00:20:21:08
Ali Nassir
Oh, yeah.
00:20:21:09 – 00:20:34:04
Rod Khleif
I mean, it used to be 5000 back when I five, 7000. Okay, well, see, there you go. And so they’re stuck and they have to stay. And then if they don’t pay, they get evicted. You you repossess that mobile home and you resell it.
00:20:34:05 – 00:20:42:03
Ali Nassir
Right. And it may be much lower in other states, like maybe, you know, 5 to $10,000 per section and most homes are double wides. I see, so.
00:20:42:04 – 00:20:42:29
Rod Khleif
It’s okay.
00:20:43:00 – 00:20:47:06
Ali Nassir
Even if it’s 5000 per section, you’re still at $10,000 roughly, including transportation.
00:20:47:07 – 00:21:05:19
Rod Khleif
And they can’t afford to. Yeah, that’s just not going to happen. So so no, I love the asset class. And you know, I like I said I was going to get into it then 2008 and nine happened. No, no that’s not. No. Never mind. I’m thinking about something else. No, I just decided to do multifamily instead. Yeah, but.
00:21:05:21 – 00:21:32:09
Ali Nassir
Well, if you’re looking at hedging your bet over more tenants. Yeah. If you’re looking at longer customer or tenant retention, if you’re if those are concerns for you, you know, the thing about manufactured housing, the politically correct term manufactured housing communities, the thing about our space, which I’ve seen since the Iran war back in late 70s, early 80s when mortgage rates, by the way, hit almost, what, 20% they.
00:21:32:09 – 00:21:40:20
Rod Khleif
Did in the late 70s, they were 18% 18. I was 18. In 1978, interest rates were 18%. Right. We were doing backflips when they hit seven.
00:21:40:21 – 00:21:55:21
Ali Nassir
Yes. And they they even got as high as 2021 at some point. They really like, I think 80 or 81. I was a kid two obviously, but but but I remember, you know, you could only get gas every other day of the, every other day because of the license plate, you know, with, with the and mortgage rates went through the roof.
00:21:55:24 – 00:22:10:17
Ali Nassir
And by the way, similar to, I think your story just I’m just getting into a tangent here. My father was originally growing up, you know, he was in single family homes, I think, like like you’ve done. Right? Oh, yeah. And we had about 120 homes in Orange County.
00:22:10:18 – 00:22:11:00
Rod Khleif
Nice.
00:22:11:01 – 00:22:18:16
Ali Nassir
In Southern California. Nice. And I think today in today’s dollars, that would be what, a million. I know don’t give me 500 homes in Denver. You know what I’m talking.
00:22:18:16 – 00:22:23:15
Rod Khleif
About dude, I would be netting if I sold my 500 houses in Denver. I would be netting a million a month.
00:22:23:16 – 00:22:24:20
Ali Nassir
I get it, I get it.
00:22:24:21 – 00:22:34:26
Rod Khleif
But I wouldn’t have met my ex-wife, who I love dearly. Still, my best friend. I wouldn’t have done many, many things. I built a beautiful mansion on the beach. I live in an amazing place now. None of that would have happened.
00:22:34:27 – 00:22:36:12
Ali Nassir
None of that would have happened. So there’s no regrets.
00:22:36:14 – 00:22:36:27
Rod Khleif
It’s all good.
00:22:37:02 – 00:22:59:07
Ali Nassir
It’s all good. But the point I was making is, you know, when when mortgage rates went that high, those houses came down like a deck of cards, like, like as if they were made out of deck of cards. And they all, everything just collapsed overnight. The bottom line and we I think he salvaged enough liquidity, maybe out of like 30 homes out of those 120 to buy a park.
00:22:59:12 – 00:23:01:11
Rod Khleif
So that’s what he did. And that’s what he saw. What happened?
00:23:01:14 – 00:23:04:08
Ali Nassir
Oh yeah. We actually before that move from New York to and this.
00:23:04:10 – 00:23:05:09
Rod Khleif
This was when when.
00:23:05:09 – 00:23:08:03
Ali Nassir
This is 1981 81. Wow.
00:23:08:04 – 00:23:09:07
Rod Khleif
So that’s when he bought his first.
00:23:09:07 – 00:23:12:03
Ali Nassir
Park July 9th, 1981. I love it, and.
00:23:12:06 – 00:23:14:20
Rod Khleif
I wish you’d have brought him. It would have been fun to have you both here.
00:23:14:22 – 00:23:23:18
Ali Nassir
You know, I wish I could get him around one of these days. He’s going to come back out. He’s been going through some challenges now. He’s 82 okay. But he’s he’s mentally sharp as a razor.
00:23:23:18 – 00:23:42:14
Rod Khleif
And that would have been a real treat. Well you know I yeah I you know I lost $50 million in 2008 and nine. And yeah you talk about a house of cards. I mean, I was only at a 30% loan to value, and I still crashed and burned. Wow. That’s how bad it was. And of course, California was horrible to California, Vegas, Florida.
00:23:42:15 – 00:23:43:25
Rod Khleif
I mean, they just crashed and burned.
00:23:44:01 – 00:23:44:20
Ali Nassir
Yeah, yeah.
00:23:44:21 – 00:23:50:11
Rod Khleif
But so so let’s have some fun here. What do you think AI is going to do?
00:23:50:14 – 00:23:56:03
Ali Nassir
You know, that’s interesting. AI is already helping our industry in some ways. Sure. Obviously on the back end.
00:23:56:10 – 00:24:02:24
Rod Khleif
But what about all these people that that are that are in school for legal, accounting, architecture or engineering?
00:24:02:27 – 00:24:07:11
Ali Nassir
It you know, you know, I, I’m from Silicon Valley.
00:24:07:12 – 00:24:26:29
Rod Khleif
Right, right, right. I mean, I just I just heard Oracle is laying off upwards of 30,000 people. I called my cousin who worked for Oracle. He left him three months ago to go teach, thank God. But 30,000 people. Amazon’s laid off I think 10,000 meta thousand tens. I mean yeah it’s there on the forefront of it.
00:24:27:01 – 00:24:29:07
Ali Nassir
And this is just a start right. That’s the point.
00:24:29:10 – 00:24:37:23
Rod Khleif
Yeah. These are the guys that are developing the AI. My daughter, my daughter does my SEO. I told her, baby, you got to find something else to do because open clause going to do it for us.
00:24:37:24 – 00:24:49:24
Ali Nassir
You know all of a sudden I have three teenagers. Right. Well actually. The oldest one just turned 2016, 18 and 20. And they haven’t looked at mobile home parks. And they don’t they don’t want to know anything about it from dad. Right. But all of a sudden.
00:24:49:25 – 00:24:50:06
Rod Khleif
Now they’re.
00:24:50:06 – 00:24:52:14
Ali Nassir
Interested in the trailer parks are starting to look a little prettier.
00:24:52:15 – 00:25:08:29
Rod Khleif
My, my daughter just bought my daughter just bought her first triplex in Tampa. Oh, my God, it’s a piece of shit. My maintenance guy’s been up there for three months, but she’s she’s. I think it’s about about ready for her. But no, finally she’s in it, so that’s good. Awesome. Yeah. Yeah, yeah. But, you know, I hear you.
00:25:08:29 – 00:25:12:22
Rod Khleif
They don’t want to listen to you. You know, they want to hear from somebody else. And I teach this stuff so you.
00:25:12:22 – 00:25:22:01
Ali Nassir
Know, but with with the AI impact I think being in hard assets, being in commercial real estate and whatnot, obviously this is important. You know, as a, as.
00:25:22:03 – 00:25:38:13
Rod Khleif
A I think, you know, and I’ve been shouting this from the rooftops, if you have a job that could be threatened by a for God’s sakes, don’t wait for the freaking shoe to drop. Don’t dig your hole in the sand. Get into what I teach, get your ass to one of my boot camps, or learn how to buy businesses, or learn how to do AI or do something.
00:25:38:19 – 00:25:41:13
Rod Khleif
Don’t let the shoe drop because it’s coming. It is.
00:25:41:19 – 00:25:42:02
Ali Nassir
It’s here.
00:25:42:03 – 00:25:42:09
Rod Khleif
Yeah.
00:25:42:10 – 00:25:43:15
Ali Nassir
It’s here. Yeah.
00:25:43:16 – 00:26:03:00
Rod Khleif
My my my marketing manager, Matt, who was here earlier because we were shooting some stuff basically once he’s got this open clause set up, it’s going to do 95% of his work. It’s going to analyze what to run, what, what’s viral, what’s working. Do the ads do the do the posts, do all this stuff? I mean, he said 95% of his works going to.
00:26:03:01 – 00:26:08:04
Ali Nassir
Be gone. It’s crazy. Yeah, it’s crazy. But yeah, you know, I’m not afraid of it. I mean, we’ve been. Are you.
00:26:08:04 – 00:26:09:04
Rod Khleif
Implementing any of it yet?
00:26:09:08 – 00:26:16:08
Ali Nassir
We already are. I’m I’m learning still myself. Same. But my team is amazing. They they use it for almost everything.
00:26:16:09 – 00:26:16:23
Rod Khleif
Same.
00:26:16:24 – 00:26:35:09
Ali Nassir
Yeah. And so and I’m, you know, I used to be living in Silicon Valley. We were early adopters. Oh, right. For technology. And I’m not as quick as I as I used to be, but so I am learning and I think it’s we’re we’re not afraid of it. Right. You know, the point is to embrace the future because it’s here.
00:26:35:10 – 00:26:41:04
Ali Nassir
Right. And, and and we’ve seen technology revolutions. Excuse me before. Sure.
00:26:41:05 – 00:26:43:16
Rod Khleif
Technological revolution. This is the biggest one, though.
00:26:43:17 – 00:26:43:28
Ali Nassir
It is.
00:26:43:29 – 00:26:44:29
Rod Khleif
Absolutely this this one.
00:26:45:06 – 00:26:46:25
Ali Nassir
This is unprecedented.
00:26:46:25 – 00:27:12:12
Rod Khleif
Unprecedented. Yeah. No, there’s no telling you know you know Elon’s talking about universal income. But who wants that. You know I mean you know no that’s not going to be a lot of money. And and so you know I don’t and you know, he’s not always right about everything, smart guy. But but you know, it’s a, it’s a it’s an interesting I think we’re living in one of the most interesting times in history just to see what’s going to happen over the next ten years.
00:27:12:12 – 00:27:16:09
Rod Khleif
It’s going to be crazy, you know, robots everywhere, you know?
00:27:16:10 – 00:27:33:18
Ali Nassir
So let me switch to a tangent there because, you know, at the beginning of the year when everybody was wishing Happy New Year to people, as we should, I was I was walking around wishing everybody a happy Q2 second quarter. And people like were puzzled. And I wanted to explain, hey, you know, we really need to have a generational mindset.
00:27:33:19 – 00:27:56:00
Ali Nassir
Number one, and this is really 2026 is the beginning of of the second quarter of the century. And it also happens to Mark, I think we were you know, we’re talking about all these things together at a macro level. It also happens to mark the 80th year of our currency as a global currency reserve. It our 250th year as a nation.
00:27:56:00 – 00:28:04:09
Ali Nassir
And and not to sound pessimistic or negative, because I’m really grateful to be an American. And what? Oh. Me too. You know what?
00:28:04:13 – 00:28:06:01
Rod Khleif
And there’s some crazy shit.
00:28:06:01 – 00:28:24:22
Ali Nassir
Happening, crazy shit happening. And, you know, as a consumer and there’s a there’s a victim of consumerism because I’ve always wanted the gadgets and all that stuff. You know, as a consumer, I’m concerned that I’m going to pay 17 bucks for a latte instead of 3 or 5 or whatever, so that bother. But as an investor, as a commercial real estate investor, I’m actually excited.
00:28:24:24 – 00:28:25:15
Ali Nassir
Well, hell yeah.
00:28:25:16 – 00:28:42:03
Rod Khleif
Because debt stays the same. And if and if inflation causes rents to go up, there goes the value of our property exponentially. Right? For every dollar of increase in NOI net operating income, it’s upwards 17 to $20 in value. That’s right. So. Hello. It’s an inflation. It’s a beautiful thing for us.
00:28:42:04 – 00:28:43:25
Ali Nassir
It is. And of course.
00:28:43:25 – 00:28:46:06
Rod Khleif
I get hate when I say that online I know.
00:28:46:08 – 00:28:56:21
Ali Nassir
I know I hear but but it’s the reality is as an investor this is the opportunity. I heard you say it recently in one of your other episodes where, you know, this is the time where you start seeing more and more creative financing.
00:28:56:23 – 00:29:16:19
Rod Khleif
Oh, sure. Oh yeah. We’re seeing a lot of seller financing. We’re seeing sellers stay in deals. Right. You know, for a piece of the equity, you know, and yeah, there’s a lot of creativity happening right now which always happens when it when we’re in a situation like this I mean we’re seeing heavily discounted multifamily deals. You know, a lot of anything that was bought in 21 and 22 is is struggling.
00:29:16:22 – 00:29:30:11
Rod Khleif
Okay. And, you know, even foregoing dustbowl ray debt, even if they didn’t get adjustable rate debt expenses have gone through the roof. Hell I’m paying maintenance supervisor $40 an hour, right? You know, which is crazy.
00:29:30:14 – 00:29:31:07
Ali Nassir
If you can find them.
00:29:31:08 – 00:29:41:22
Rod Khleif
Yeah, if you can find them. Exactly. They’re hard to find. They’re going to be like gold. You know, we’re talking about how all the trades are going to make more money than the freaking white collar workers right now.
00:29:41:25 – 00:29:49:11
Ali Nassir
Isn’t isn’t it? Found the father of AI who was with Google for some time. I think he said something about, you know, if I had to advise my children today.
00:29:49:15 – 00:29:50:15
Rod Khleif
What a plumber.
00:29:50:17 – 00:29:50:28
Ali Nassir
Become a.
00:29:50:28 – 00:29:52:23
Rod Khleif
Plumber, right? Yeah.
00:29:52:23 – 00:29:53:00
Ali Nassir
Yeah.
00:29:53:03 – 00:29:53:28
Rod Khleif
Sure, sure.
00:29:54:04 – 00:29:54:18
Ali Nassir
Yes.
00:29:54:20 – 00:30:15:29
Rod Khleif
Yeah. But yeah, it’s crazy times to kind of be really interesting to be a fly on the wall for this, for this portion of history. But. Right, you know, again, if you’re one of these people that’s worried about it, worried about your job potentially, for God’s sakes, pick a side hustle and get going. It’s an incredible opportunity. I’ve got six senior housing facilities under contract right now.
00:30:15:29 – 00:30:30:21
Rod Khleif
Super excited. I mean, we bought them for we’re buying them for 40,000 a bed and you can’t. I literally got an email from somebody yesterday that said, hey, you want to get on this $150 million deal? It’s 300 and some beds. It was 358,000 a bed.
00:30:30:22 – 00:30:31:09
Ali Nassir
Oh my God.
00:30:31:10 – 00:30:36:09
Rod Khleif
Yeah. And I’m buying this for $40 a bed. So these six units. So I mean screaming very exciting.
00:30:36:10 – 00:30:38:07
Ali Nassir
But I’m curious are you going to be are.
00:30:38:07 – 00:30:49:00
Rod Khleif
You know, not the operator we’re partnered with. An operator is going to take care of grandma. I’m just doing the real estate. That’s what I love, the elderly. Don’t get me wrong, I love the elderly, but I’m. No, I can’t do it. I don’t have the patience for.
00:30:49:00 – 00:30:49:08
Ali Nassir
That’s what.
00:30:49:08 – 00:30:49:18
Rod Khleif
I figured.
00:30:49:24 – 00:30:50:25
Ali Nassir
Just leveraging the dirt.
00:30:50:26 – 00:31:06:15
Rod Khleif
That’s right. Right. That’s it. Yeah, but super exciting. And yeah, I love that asset class. Like mobile home parks. I love the senior housing asset class. Just because it’s I mean, there’s the baby boomers. You look at it, you look at a graph and it looks like a rat going through a snake. Sorry about the analogy, but that’s what it.
00:31:06:15 – 00:31:15:22
Ali Nassir
Looks like. Well, you know, I think that’s not talked about enough. Demographics. Right. You know how that really impacts the overall economy in a big way. And people just don’t mention it enough.
00:31:15:29 – 00:31:33:09
Rod Khleif
You know, it’s funny, I saw Harry dent and economists speak. Oh I love yeah, I saw him speak, I don’t know, 25 years ago. And and he, he predicted the 0809 crash and had I listened, had I listened, I wouldn’t have lost 50 million. Woulda coulda shoulda. But anyway.
00:31:33:12 – 00:31:35:02
Ali Nassir
He asked to clarify. Harry. Audience.
00:31:35:03 – 00:31:42:19
Rod Khleif
Yeah. Harry s dent. Yeah, he’s a sharp guy. I’ve had him on the podcast. He’s a sharp guy and I think he lives in Puerto Rico for the taxi fits.
00:31:42:20 – 00:31:42:27
Ali Nassir
Yeah.
00:31:42:28 – 00:31:47:23
Rod Khleif
That’s right. Yeah. Him and the other doom and gloom. Peter Schiff.
00:31:47:25 – 00:31:48:27
Ali Nassir
Peter Schiff is another one.
00:31:48:28 – 00:31:59:19
Rod Khleif
Yeah, yeah, yeah, yeah. But anyway, we’re having a lot of fun here. But no, I mean, mobile home parks are fantastic. I’m sorry. Manufactured housing. You are fantastic.
00:31:59:21 – 00:32:02:04
Ali Nassir
I use them interchangeably, too, because I’m trying to get used to it, but.
00:32:02:04 – 00:32:04:10
Rod Khleif
Yeah. Yeah, but,
00:32:04:12 – 00:32:25:29
Ali Nassir
But, you know, I mean, I think just to your point, I mean, as good as the residential, excuse me, the assisted living, it can be very lucrative. Yeah. And it is just the reason I’m so bullish on on mobile home parks. Another reason among many is, you know, I mean, if you’re talking about as the economy takes a hit.
00:32:26:01 – 00:32:27:21
Ali Nassir
Yeah. Takes a shit.
00:32:27:23 – 00:32:42:23
Rod Khleif
Yeah. I mean, I’m going to tell you something that’s going to infect multifamily, that’s going to affect my core business. Right. Because those people, you know, have to pay their rent right now. The only caveat with that is the government helped us during Covid. We got hundreds of thousands of dollars in rent relief. So I’m guessing they’ll step up again.
00:32:42:25 – 00:32:56:10
Rod Khleif
You know, shopping centers didn’t get help. Mobile, you know, office didn’t get help. But we got help and but but I know where you’re going with this. You’re going to say manufactured housing. I mean, that will always be in demand. Well, because it’s the lowest, lowest entry point, right?
00:32:56:11 – 00:33:09:25
Ali Nassir
Yes. I mean, you know, you already know this, but for the audience, for their sake, you know, you’re talking about affordable housing, right? So anytime the economy takes a shit and everybody comes down a notch in their lifestyle, right? We’re the last stop. If you want ownership.
00:33:09:27 – 00:33:30:22
Rod Khleif
You’ll always have occupancy. And see, that’s the that’s the same thought process I’m using for senior housing because these seniors have their, you know, they have nest eggs built up so they can afford. So they’re not going to get as hammered by, you know, by the economy. The only caveat would be if if they’re going to sell their house to pay for it, because then maybe the house prices will go down.
00:33:30:29 – 00:33:52:04
Rod Khleif
But but yeah, you know, I’m looking for recession resistant solutions. That’s it. That’s mobile home manufacturer communities. Definitely their senior housing I think is there you know, I think I think businesses that provide services are there. That’s why I was asking you about businesses because I’ve been thinking about buying businesses as well, you know, service related or other types of things, laundromats, whatever.
00:33:52:09 – 00:34:17:18
Ali Nassir
Sure. And I just wanted the audience to know that even though I’m second generation in the park business, it’s by choice. Like, I went and did these other things, and I and I did well in some of them. And some of them, I lost my ass, you know? But the point is that I learned through those experiences and actually being an appraiser of mobile home parks early in the day, I wanted to because I learned the street smarts at home from dad, but I wanted to actually understand the fundamentals of underwriting to make sure that I really understood the business.
00:34:17:19 – 00:34:20:22
Ali Nassir
So I became an appraiser. It wasn’t for the money, obviously. You know.
00:34:20:24 – 00:34:23:28
Rod Khleif
That’s not a fun thing. I mean, are you analytical? You consider yourself analytical?
00:34:24:00 – 00:34:43:29
Ali Nassir
Not anymore. So much. But I did want to understand the fundamentals early on. That’s very analytical. It is, it is. And I could do it back in the day, you know. But I think the point is that you really need to be able to understand the fundamentals, the underwriting on these deals. Right. So that was important because obviously you could make more money as a broker or as an agent.
00:34:44:02 – 00:34:44:06
Rod Khleif
Sure.
00:34:44:11 – 00:34:53:21
Ali Nassir
But I did that for that benefit. And the point is that the experience with the Main Street businesses and and valuations and whatnot only made me stronger in this space.
00:34:53:23 – 00:35:01:04
Rod Khleif
I don’t listen, I see it absolutely. I’m in agreement with you. It’s a great asset class. If you can find the deals. It’s a great asset class.
00:35:01:06 – 00:35:12:09
Ali Nassir
It’s getting harder and harder to find. And the point that you asked me earlier about how many units, I think the exception of. So I’m not limited to a community of 100 plus. Okay. I think the in essence for anybody.
00:35:12:10 – 00:35:14:04
Rod Khleif
In a couple of 50s, right?
00:35:14:04 – 00:35:24:29
Ali Nassir
Yeah. If you can buy a cluster 2 or 3, we get a deal in Stockton, California, where it was three communities that made up at least, you know, 50 to 100 units. There you go. This is back in the day. And so so I’ll do that. Yeah.
00:35:24:29 – 00:35:40:24
Rod Khleif
It’s the same thing with multifamily. You know, I’ll tell people, you know, if you’ve got a 20 unit or 30 unit and you’re looking you’ve got evaluate unit size and if that, if that, if that community adds to your ability in that market to have some economies of scale and maybe have one manager handle them both, it’s a no brainer, right?
00:35:40:25 – 00:35:41:02
Rod Khleif
Yeah.
00:35:41:09 – 00:35:46:14
Ali Nassir
So so that’s what we’re having to do more and more of now as you see the. Sure sure sure.
00:35:46:15 – 00:35:58:19
Rod Khleif
You got it’s like it’s like assemblage when you’re buying, when you’re buying pieces of land to put in a like a big corner, you buy you buy one lot at a time and you’re kind of assembling, right? I mean, it’s the same dynamic. Maybe, maybe that’s not a great example, but.
00:35:58:21 – 00:36:17:06
Ali Nassir
You know, it is. And at that end, the vertical integration that you talked about, you know, I think the fact that you have additional profit centers within that same community. Sure. Because we’re turning lemons into lemonade. Sure. You can profit on the home sale. You can profit on the note. So now those 300 pads are like 900 pads in terms of the rate of return, because you’ve got, you know, different profit centers.
00:36:17:08 – 00:36:21:19
Ali Nassir
And so that’s become more and more important as the saturation.
00:36:21:21 – 00:36:39:10
Rod Khleif
Is. It’s interesting you say that I was I was at a senior housing conference last week, and there was a guy there that talk about different profit centers. They’re like how you can have you could have a pharmacy component. You could have, you know, home like a home health care component. You can have like a physical therapy component as additional revenue.
00:36:39:10 – 00:36:43:11
Rod Khleif
So it’s always great when you can incorporate other revenues. That’s right.
00:36:43:13 – 00:36:43:23
Ali Nassir
That’s right.
00:36:43:24 – 00:37:02:00
Rod Khleif
So let’s shift gears for a minute and have some fun. We pre-fame this. We talked about this offline. What are some of the geopolitical concerns or factors that people don’t talk about or don’t think about when they’re evaluating different asset classes or different businesses or just life in general?
00:37:02:03 – 00:37:27:08
Ali Nassir
Oh, thanks for asking. Right. Actually, I’m glad you brought it back up because, you know, I think we all talk about well, not we all. Many of us talk about tariffs, for example, or sanctions or mortgage rates and things of that sort, which are all important and we should know. But I don’t know if people many of the investors, especially new to the game, are thinking about the underlying influence, the impact from global issues that directly.
00:37:27:11 – 00:37:27:20
Rod Khleif
Give me an.
00:37:27:20 – 00:37:46:13
Ali Nassir
Example that directly impact your pocket book and ability to borrow example, the Japanese yen and what’s happening with the yen. So all of a sudden now the bonds the Japan selling actually offer greater yields for the Japanese and for other investors, which was helping.
00:37:46:14 – 00:37:46:22
Rod Khleif
Then the.
00:37:46:23 – 00:37:57:24
Ali Nassir
US bonds, then the US bonds. And so that’s actually going to drive up our yields. And so that, you know, the fact that you could borrow at 0% in Japan, right.
00:37:57:27 – 00:37:58:15
Rod Khleif
And long.
00:37:58:16 – 00:38:05:00
Ali Nassir
Term for, for decades. Right. And then take that money and invest in U.S. Treasury bonds at a 5% profit.
00:38:05:05 – 00:38:05:24
Rod Khleif
Wow.
00:38:06:00 – 00:38:10:00
Ali Nassir
Which then was trickled down to the banks who loaned to commercial real estate assets.
00:38:10:01 – 00:38:11:07
Rod Khleif
Right, right.
00:38:11:08 – 00:38:20:04
Ali Nassir
Is going away because the bond yield in Japan is increasing. So that is an example. The petrodollar system.
00:38:20:07 – 00:38:45:16
Rod Khleif
What did you hear? Did you I don’t know if it was. It was just bullshit on TikTok because I my mind numbingly look through TikTok occasionally. And somebody posted that Iran was offering China and Russia free access if they decoupled from the from the dollar in their petrol. Yeah. Oh no, not free access. Offered them discounted oil or something I might.
00:38:45:17 – 00:38:47:14
Ali Nassir
Yeah. They get access to the Strait of Hormuz right.
00:38:47:16 – 00:38:50:11
Rod Khleif
But also they’re able to buy all if they decouple from.
00:38:50:11 – 00:39:09:12
Ali Nassir
The dollar and they buy it in the, in the Chinese yuan. Right, right. And so that is starting to happen. And it’s a small amount and absolute dollars today. I mean, I think it’s a few billion dollars that are being transacted outside of the dollar. So in relative terms that’s small. But the trajectory, the fact that it’s happening and the trajectory and I don’t sobering.
00:39:09:15 – 00:39:10:10
Rod Khleif
Know, it’s sobering.
00:39:10:11 – 00:39:27:26
Ali Nassir
Yeah. For sure. It’s not even a political conversation. I’m just talking about it as an investor and saying, okay, how does that impact the math? What do we need to do to prepare and how do we buy better? How do we prepare for that? And maybe it’s being more liquid. Maybe it’s coming up with other resources. Maybe it’s understanding creative financing, whatever.
00:39:28:00 – 00:39:29:22
Rod Khleif
How do you feel about precious metals?
00:39:29:26 – 00:39:30:29
Ali Nassir
You know.
00:39:31:01 – 00:39:37:08
Rod Khleif
Because I mean, mine have gone through the freaking roof. They have their in a vault downtown here and it’s been amazing.
00:39:37:08 – 00:39:54:15
Ali Nassir
So I’m not an expert by any means. But I’ll say this I understand why people are putting their money’s in precious metals as a commodity, as commodities, and it is an asset. Hard asset to me. It’s not a it’s not a it’s not a, an income generating asset.
00:39:54:16 – 00:40:07:11
Rod Khleif
No it’s not. And I like income generating assets as well. For me it’s my shit. Hit the fan fund. That’s right. That’s what it is. I bought it as a as a hedge. And I mean I bought it at 1500 an ounce and it’s been like 5500, which is just extraordinary.
00:40:07:12 – 00:40:16:07
Ali Nassir
I’m glad you’re sharing that with the audience because that’s exactly what it is. It’s a hedge. Yeah. Right. And it’s good to put an X amount, but it’s not it’s not a true investment in the sense that it’s not.
00:40:16:07 – 00:40:32:24
Rod Khleif
I don’t disagree with you. I don’t disagree with you at all. I like cash flowing assets. Right. That the reason I did it is I have a shiny penny syndrome. So, you know, I’ve built 29 businesses so far in my career. Yeah, yeah. Most of them were seminars. I call them failure. I don’t call my failures anything but seminars.
00:40:32:24 – 00:40:53:26
Rod Khleif
Most of them were seminars, but several worth a lot of money. But but, you know, I that’s to prevent me from taking my money and investing in something without fully thinking it through. So I put it in gold. It’s a pain in the ass to liquidate it. And so I that was kind of my way of, you know, I know myself and that’s, that’s kind of and it’s and it’s also been a, you know, an incredible run so far.
00:40:53:26 – 00:41:04:22
Rod Khleif
So yeah, it’s very exciting. But anyway. No, I don’t disagree with you at all. I’m all about cash flowing assets, businesses, real estate, you know, mobile home parks, multifamily senior housing, all these other cash flowing assets.
00:41:04:26 – 00:41:27:20
Ali Nassir
Well, you mentioned commodities. And it made me also think about rare earth minerals, which is becoming another issue that we have to be concerned about that directly impacts. Again, it’s all about the math. It’s not about politics for me. It’s about the math. So so if that impacts how much your cell phone costs or how much it costs us to get missiles or your cars or whatnot, everything trickles down to, you know, and I’m sorry, I’m jumping to another tangent.
00:41:27:22 – 00:41:34:20
Ali Nassir
We’re expecting, what, 500 million in commercial real estate bank defaults this year?
00:41:34:23 – 00:41:45:07
Rod Khleif
It’s a it’s a wall of a trillion. So who knows. But I mean my my SEC attorney spent about a month and a half told me he got six apartment foreclosure clients in one day.
00:41:45:13 – 00:41:51:03
Ali Nassir
See? So so this is and people say, well, it’s not my asset class or whatever, but it still impacts all of us.
00:41:51:04 – 00:41:54:10
Rod Khleif
Well, it impacts us, but it’s also incredible opportunity.
00:41:54:11 – 00:41:54:22
Ali Nassir
It is.
00:41:54:23 – 00:41:54:28
Rod Khleif
Yeah.
00:41:54:29 – 00:41:56:02
Ali Nassir
I mean that’s that’s the main.
00:41:56:03 – 00:42:05:07
Rod Khleif
Thing, you know. You know Warren Buffett’s famous quote, be fearful when others are greedy. It’s been a lot of greed these last few years. But the second part of that is being greedy when others are fearful. And there’s a lot of fear now.
00:42:05:08 – 00:42:13:15
Ali Nassir
I’m so glad you said that, because I think a lot of people, to your point, in Warren Buffett’s point, a lot of people are about to get sidelined. Yeah, the herd is going to move to the side.
00:42:13:17 – 00:42:14:12
Rod Khleif
That’s what always happens.
00:42:14:13 – 00:42:15:02
Ali Nassir
It’s what always.
00:42:15:02 – 00:42:15:24
Rod Khleif
Has a shame.
00:42:15:25 – 00:42:17:14
Ali Nassir
Right? But this is our time to strike.
00:42:17:15 – 00:42:25:09
Rod Khleif
This is this is the time to do it right now. It’s the best time. So if you’re thinking about it, get your ass to my boot camp, for God’s sakes. That’s it. No, that’s. That’s it.
00:42:25:10 – 00:42:25:29
Ali Nassir
That’s it.
00:42:26:01 – 00:42:33:05
Rod Khleif
Anyway, I appreciate you coming in here. Brother’s such a pleasure to meet you. It’s been a lot of fun having us this wide ranging conversation with you.
00:42:33:06 – 00:42:36:21
Ali Nassir
Thank you for having me. I really appreciate it. And thanks for letting me have my cigar.
00:42:36:22 – 00:42:43:11
Rod Khleif
Oh. You bet. You bet. We’ll be smelling it here for a couple of months. Yep. Thanks. All right, buddy, thank you. Yes, that was good.
**Podcast Categories:** Podcasts
---
### [How Smart Investors Legally Avoid Hundreds of Thousands in Taxes](https://rodkhleif.com/podcasts/1031-exchange-rules-with-lance-growth/)
**Published:** June 8, 2026
**Author:** Bryan Hoover
**Excerpt:** How Smart Investors Legally Avoid Hundreds of Thousands in Taxes
**Content:**
# Understanding 1031 Exchange Rules with Lance Growth
For real estate investors looking to preserve capital and accelerate portfolio growth, understanding **1031 Exchange Rules** is essential. In this episode of Lifetime Cash Flow Through Real Estate Investing, Rod Khleif sits down with **Lance Growth**, CEO of Growth 1031, to discuss how investors can legally defer capital gains taxes, keep more money working for them, and strategically reposition their real estate holdings.
The conversation explores the fundamentals of 1031 exchanges, common mistakes investors make, and how today’s market trends are influencing where capital is flowing across the country. Whether you’re selling a rental property, scaling into larger assets, or considering alternative investment structures, Lance provides practical guidance investors can apply immediately.
## What Are 1031 Exchange Rules?
A 1031 exchange allows investors to defer capital gains taxes when selling an investment property and reinvesting the proceeds into another qualifying investment property. Rather than paying taxes at the time of sale, investors can continue growing their portfolios by keeping those funds invested.
Lance explains that many investors underestimate the true tax impact of selling a property. Between federal taxes, state taxes, and depreciation recapture, investors can often lose more than 30% of their profits to taxes. A properly executed 1031 exchange helps preserve that capital, allowing it to remain invested and potentially generate additional returns.
The strategy applies to investment and business-use real estate and has become one of the most powerful wealth-building tools available to real estate investors in the United States.
## The Critical Timelines Investors Must Follow
One of the most important aspects of 1031 Exchange Rules is understanding the strict deadlines involved. Lance breaks down the two key requirements that every investor must know before initiating an exchange.
Investors have:
- 45 days to identify replacement properties
- 180 days to close on the replacement property
Missing either deadline can cause the exchange to fail, resulting in the investor owing the deferred taxes. According to Lance, the most common reason exchanges fail is not because of paperwork or compliance issues, but because investors cannot find suitable replacement properties within the 45-day identification period.
This makes planning ahead and working with experienced professionals especially important.
## How 1031 Exchanges Help Investors Build Wealth Faster
One of the most compelling points discussed in the episode is how tax deferral creates a compounding effect for investors. Rather than losing a significant portion of sale proceeds to taxes, investors can redeploy the full amount into larger or more profitable opportunities.
Rod and Lance discuss examples where investors may save hundreds of thousands of dollars through a single exchange. Those funds can then be leveraged into additional acquisitions, property improvements, or portfolio expansion.
The conversation also highlights how refinancing replacement properties can provide access to equity without triggering a taxable event, creating another powerful wealth-building strategy for experienced investors.
## 1031 Exchanges, Cost Segregation, and Bonus Depreciation
Many investors wonder whether they can combine 1031 exchanges with other tax-saving strategies. Lance and Rod discuss how cost segregation studies and bonus depreciation can complement an investor’s overall tax strategy.
Cost segregation accelerates depreciation by breaking down property components into shorter useful lives, creating larger deductions in earlier years of ownership. While the two strategies serve different purposes, investors can use both as part of a comprehensive approach to maximizing after-tax returns.
The discussion emphasizes the importance of understanding how each tool works and working with qualified professionals to create the most efficient tax strategy possible.
## Why Capital Is Migrating to New Markets
Beyond tax strategies, Lance shares his observations on investor behavior and market migration trends. He notes that many investors continue moving capital away from highly regulated and high-tax states toward business-friendly markets such as Florida, Texas, and the Carolinas.
Population growth, favorable tax environments, and business expansion continue attracting both individual and institutional investors to these regions. As capital follows migration patterns, investors are increasingly seeking opportunities in markets with strong demographic and economic fundamentals.
Understanding these trends can help investors identify markets with long-term growth potential and position themselves ahead of broader shifts in demand.
## Delaware Statutory Trusts and 1031 Exchanges
Another important topic covered is the growing popularity of Delaware Statutory Trusts (DSTs). These structures allow investors to place 1031 exchange proceeds into professionally managed real estate investments while maintaining eligibility for tax deferral.
For investors who want passive ownership without direct management responsibilities, DSTs can provide access to institutional-quality assets while still satisfying exchange requirements. Lance explains why DSTs have become a popular solution for investors seeking diversification, passive income, and continued tax advantages.
As more investors look for hands-off investment options, DSTs continue gaining attention as a viable component of long-term real estate planning.
## About Lance Growth
**Lance Growth** is the CEO of Growth 1031, a company specializing in 1031 exchange services for real estate investors nationwide. Originally from Saint Lucia, Lance earned his Juris Doctor degree from Thomas Jefferson School of Law and built his career helping investors navigate complex tax-deferral strategies. Through Growth 1031, he assists clients with exchange planning, compliance, and investment structuring while educating investors on how to preserve and grow wealth through real estate.
If you want to hear the full conversation and detailed insights, watch the podcast video or read the complete transcript below.
## **1031 Exchange Rules FAQ**
## **What Are 1031 Exchange Rules?**
1031 Exchange Rules are IRS guidelines that allow real estate investors to defer capital gains taxes when selling an investment property and reinvesting the proceeds into another qualifying investment property. The exchange must follow specific timing, identification, and ownership requirements to maintain tax-deferred status.
## **How Does a 1031 Exchange Work?**
A 1031 exchange works by allowing investors to sell an investment property and use the proceeds to purchase another investment property without immediately paying capital gains taxes. The funds are held by a qualified intermediary during the exchange process, ensuring the investor never takes direct possession of the sale proceeds.
## **What Properties Qualify for a 1031 Exchange?**
Most investment and business-use real estate qualifies for a 1031 exchange. Examples include rental properties, apartment buildings, commercial real estate, industrial properties, self-storage facilities, mobile home parks, and raw land held for investment purposes. Primary residences generally do not qualify.
## **What Is the 45 Day Rule in a 1031 Exchange?**
The 45 day rule requires investors to identify potential replacement properties within 45 calendar days of selling their relinquished property. Missing this deadline typically disqualifies the exchange and triggers the associated tax liability.
## **What Is the 180 Day Rule in a 1031 Exchange?**
The 180 day rule requires investors to complete the purchase of their replacement property within 180 days of the sale of their original property. This timeline includes the initial 45 day identification period.
## **Can You Identify Multiple Properties in a 1031 Exchange?**
Yes. Investors can identify multiple replacement properties under IRS guidelines. The most common method is the Three Property Rule, which allows investors to identify up to three properties regardless of value. Another option is the 200 Percent Rule, which permits identifying more properties as long as their combined value does not exceed 200 percent of the relinquished property’s value.
## **Do You Have to Reinvest All the Proceeds in a 1031 Exchange?**
To fully defer capital gains taxes, investors generally must reinvest all net proceeds from the sale and acquire replacement property of equal or greater value. Any cash retained from the transaction may become taxable and is commonly referred to as “boot.”
## **Can You Use a 1031 Exchange for Multifamily Real Estate?**
Yes. Multifamily real estate is one of the most common asset classes used in 1031 exchanges. Investors frequently exchange single family rentals, duplexes, or smaller multifamily properties into larger apartment communities to increase cash flow, scale their portfolios, and defer taxes.
## **What Is a Delaware Statutory Trust in a 1031 Exchange?**
A Delaware Statutory Trust, or DST, is a legal structure that allows investors to own fractional interests in institutional-quality real estate while still qualifying for 1031 exchange tax deferral. DSTs are often used by investors seeking passive ownership and professional asset management.
## **Can You Combine a 1031 Exchange With Cost Segregation?**
Yes. Investors can use both strategies as part of a comprehensive tax plan. A 1031 exchange defers capital gains taxes when selling a property, while cost segregation accelerates depreciation deductions on replacement properties to reduce taxable income.
## **What Happens If a 1031 Exchange Fails?**
If a 1031 exchange fails because the investor misses a deadline or violates IRS requirements, the transaction becomes fully taxable. Capital gains taxes, depreciation recapture taxes, and applicable state taxes may become due in the year of the sale.
## **Why Are 1031 Exchange Rules Important for Real Estate Investors?**
1031 Exchange Rules help investors preserve capital, increase purchasing power, and grow their real estate portfolios more efficiently. By deferring taxes that would otherwise reduce available investment capital, investors can reinvest more money into income-producing assets and accelerate long-term wealth creation.
00;00;19;17 – 00;00;37;03
Rod Khleif
Welcome back to lifetime cash Flow through real estate investing. I’m Rod Khleif and I am thrilled you’re here. And I’m sure you’re going to get tremendous value from the gentleman I’m interviewing today. We were just talking before we started recording because I just came back from Saint Lucia the day before yesterday, and that’s where he’s from. So we’ve had some pleasant conversation about that.
00;00;37;06 – 00;00;52;19
Rod Khleif
But, his name is Lance growth, and Lance is the CEO of growth. 1031 so we’re going to talk about 1031 exchanges and quite a few other things. So, he’s got kind of a very interesting background, which I’m looking forward to having him describe rather than me. Welcome, brother.
00;00;52;22 – 00;00;53;21
Lance Growth
Appreciate being here.
00;00;53;21 – 00;00;56;21
Rod Khleif
Yeah. So tell us who you are, man. Where’d you come from?
00;00;56;23 – 00;01;16;11
Lance Growth
Well, that’s a tough one. Born in Saint Lucia, right? I came to this country when I was about seven, raised and kind of to northeast Connecticut. I went to school out there, started boxing out there and became state champion about 2006. Left that, decided to go to law school. California Thomas Jefferson School of Law,
00;01;16;14 – 00;01;17;05
Rod Khleif
Get your JD.
00;01;17;08 – 00;01;28;09
Lance Growth
Yeah, I got my JD, built the company out there and decided to get a second office in New York. And, as of most recently, three months ago, got out third office in Atlanta.
00;01;28;10 – 00;01;45;07
Rod Khleif
Atlanta. Okay. Yeah. Fantastic. So you got three offices. And you do 1031 exchanges. Can you, why don’t for for the for the three people listening that don’t know what a ten is, can you describe you.
00;01;45;10 – 00;02;08;10
Lance Growth
Know, you would be shocked, as I do, speaking probably twice a week in real estate offices and, you’d be shocked how many of those guys don’t seem like, you know, you’re real estate agents. As in, you have to be an agent on the real estate topic. I mean, you may need to know these things right? But to put things simple, a 1031 exchange is basically a tax shelter that protects people from the capital gains tax.
00;02;08;10 – 00;02;26;22
Lance Growth
And for those who don’t know what that is, it’s basically a tax on your capital asset, whatever you sell. So if you’re selling your home you live in, you’re going to have capital gains tax. If you’re selling your investment property at the point of sale, you’re going to have capital gains tax. A 121 homeowner’s exemption is what most people are familiar with.
00;02;26;22 – 00;02;50;00
Lance Growth
It protects the capital gains tax for your primary residence. But a 1031 is basically the number one tool you use to avoid the capital gains tax on your investment property. So anytime you’re selling a property this simple example, you bought it at 100,000. You’re selling at 200,000 won or 100,000 profit. Between state tax, federal taxes. Call your depreciation, recapture tax.
00;02;50;00 – 00;03;07;01
Lance Growth
You typically face a blended average of roughly 30 to 33% on that profit. So that little example we use a 100 profit. You got to give up 30,000. So a 1031 exchange allows you to keep that money in your pocket. Whether it’s 30,000 or 30 million it applies. So everybody.
00;03;07;04 – 00;03;19;00
Rod Khleif
Talk about, the mechanics of, of doing a 1031 because there’s some, there’s some rules and some timelines. Could you, could you, you know, at a high level speak to that.
00;03;19;03 – 00;03;38;18
Lance Growth
Yeah. Keep it simple. It’s, you know, people get excited and want to sell their property. Fine. Agent. Agent says I’ll do it for you. You list the property. The moment people get under contract or in escrow, that’s kind of when a 1031 exchange has to start. Because what happens is we basically step in, we assign ourselves into the contract.
00;03;38;21 – 00;03;58;06
Lance Growth
So instead of them actually getting the funds at closing, we open up a special account for them. And then the moment they actually close and they have 45 days to find a new property and they have 180 days to actually close on that property, meaning get their name on title to that property. So it has some pretty strict guidelines in terms of time.
00;03;58;06 – 00;04;02;12
Rod Khleif
So 45 days to identify the property and then 120 days.
00;04;02;15 – 00;04;03;02
Lance Growth
80\.
00;04;03;04 – 00;04;13;20
Rod Khleif
180 to close. And so and then and then basically you deferring the tax is really the bottom line. It’s a deferment. Yeah. Right.
00;04;13;24 – 00;04;15;09
Lance Growth
Defer defer defer. Right.
00;04;15;10 – 00;04;29;20
Rod Khleif
Di yeah, exactly. You defer. And, if you never sell, you never pay the tax. The beautiful thing about real estate now, how what are the differences here between that and in like doing a cost segregation and bonus depreciation.
00;04;29;22 – 00;04;49;13
Lance Growth
Well with cost seg you’re basically taking the you don’t all the the cost that you go into these properties and you basically it’s like you’re taking a deduction for your costs. 1031 and you’re not taking hey, I did this, I fixed this all the, all the little cost. And you use it as, you know, deductions against your tax liability.
00;04;49;18 – 00;05;03;19
Lance Growth
You’re basically just telling the government, hey, I’m following these steps. I know I have all these taxes because I follow these steps. I don’t want to pay it. So it’s just a very kind of clean way. A lot less expensive than caustic and a lot less complicated.
00;05;03;22 – 00;05;44;16
Rod Khleif
Okay. Well, I’d like to elaborate on that a little bit, because I’ve done both quite a bit. So, you know, cost segregation, you’re basically accelerating the depreciation. Right. So, you know, typically the straight line, what is it, 30 year depreciation? With the cost segregation, you’re taking all the different components in the building, and an engineer is assigning or a remaining life to those components, from roof shingles to concrete pavement to walls to windows, doors and and so you accelerate it, and, and that coupled with bonus depreciation, you can have as much as 60, 70% right off year one.
00;05;44;16 – 00;05;51;07
Rod Khleif
Right. When you come in, have you seen people do that and then also do a 1031 exchange?
00;05;51;07 – 00;06;07;23
Lance Growth
No, we do the reverse. It’s funny you bring that up because I had two guys yesterday give me a call like, hey, we don’t like to do 1031 exchanges. We’re not that great at it. Can you do our 1031 exchanges? And should you have any bond that need cost seg. No problem. I use cost segregation for clients that fail a 1031 exchange.
00;06;08;00 – 00;06;28;15
Lance Growth
So they sell the property, they close, they come into the exchange, they have 45 days to identify. Then they have 180 days to actually close. Right? They you know, the most common reason a 1031 exchange fails is because of the 45 day rule. People cannot find a property in 45 day it. Should that happen, the only penalty is hey, you still have your tax liability, right?
00;06;28;17 – 00;06;37;27
Lance Growth
So what I would then do is send them over to call segregation guys that can then hey, since you do have this tax liability, this is what we can do to mitigate it. And as you mentioned, you.
00;06;37;27 – 00;06;39;24
Rod Khleif
Could do a cost saving a sale.
00;06;39;26 – 00;06;44;01
Lance Growth
I didn’t know after when they oh, so with the 1031 remember they are selling.
00;06;44;04 – 00;07;00;19
Rod Khleif
Oh I see, I see on the new property. Yeah. Okay. You do a processing on the new property. Got it. And that’s what threw me. But but you can’t do it. Like if somebody has like I’ve done lots of cost segues. Yeah I’ve done lots of, you know, with bonus depreciation if I sell one of those properties, can I not do a 1031.
00;07;00;22 – 00;07;01;26
Lance Growth
Absolutely. Oh you hundred.
00;07;01;28 – 00;07;02;26
Rod Khleif
Okay. All right, all right.
00;07;02;27 – 00;07;05;03
Lance Growth
Long as the property is utilized for business or investment.
00;07;05;03 – 00;07;05;19
Rod Khleif
Right okay.
00;07;05;19 – 00;07;05;29
Lance Growth
Can you use.
00;07;05;29 – 00;07;26;03
Rod Khleif
Okay. So you could do both and you can do both in that scenario. Good. So talk you know, you talk a lot about Airbnb and short term rentals. You know, you’re seeing a lot of municipalities, I think probably because the hotel lobbies crack down on Airbnb.
00;07;26;06 – 00;07;27;12
Lance Growth
Crackdown is an understatement.
00;07;27;12 – 00;07;39;16
Rod Khleif
Yeah. And I mean, I’ve seen it. I’ve seen Airbnb really suffer. My my brother’s got some cabins in the Blue Ridge Mountains of Georgia. He had to sell 1 or 2 of them because, you know, the truly dropped. What do you know about it?
00;07;39;18 – 00;07;52;11
Lance Growth
Well, one, remember, we have offices, headquarters in San Diego, second office in New York. Those are probably the two most stringent states for the rules against, short term rentals.
00;07;52;13 – 00;07;53;09
Rod Khleif
00;07;53;11 – 00;08;13;27
Lance Growth
I’ll just go with the top one. You look at New York, New York terrifyingly came down there like, hey, you cannot do this unless you follow these rules. The main one being you register with the city. And then the registration process is beyond cumbersome. And then they give you these strict guidelines, like you, you have to own the property.
00;08;13;27 – 00;08;28;13
Lance Growth
It can’t be less than this amount of days. You have to follow these guidelines. And they basically made it. I think they took it down like 90% of the, you know, active, Airbnb. It’s just all got shut down end to end.
00;08;28;13 – 00;08;29;28
Rod Khleif
I’m always looking, Tommy.
00;08;29;28 – 00;08;37;04
Lance Growth
I don’t don’t you dare get me into politics. But you do it, all right? Do not do it. My God, do not.
00;08;37;06 – 00;08;39;20
Rod Khleif
We can have a lot of fun with it, but. Okay, sure enough.
00;08;39;22 – 00;09;00;05
Lance Growth
But you look at here’s here’s the, here’s the good and the bad, the both sides. The fact is, is, you know, Airbnb is a simple app that made the common man become an overnight investor, which gave them supplemental income, which is amazing. I you myself, when I was in law school, I would go I would go and stay at my friend’s house.
00;09;00;05 – 00;09;35;16
Lance Growth
Airbnb be my place for, you know, if you like a few extra bucks. It was amazing. But you look at what’s going on with the market, like, many of these homes were meant to be just that homes for families for, you know, starting people coming up homes. But so many people, especially a lot of even institutional guys, disguise themselves in a little LLC purchase all these homes, you know, that were meant to be just for that and turned them, converted them into investment properties, not into institutional sense of, you know, office space and this and that.
00;09;35;21 – 00;09;47;25
Lance Growth
But they turned so many, properties that were meant to be homes into these investments. So a lot of people, when they kind of struggle finding homes is because so many of them got gobbled up by investments. So that’s kind of that’s.
00;09;47;25 – 00;09;56;14
Rod Khleif
Good advice right there because I, I actually disagree, but fair enough. Fair enough. So that’s why that’s why they do it. They that’s why they crack down.
00;09;56;16 – 00;10;15;20
Lance Growth
They mainly did it. It was a combination of doing it to kind of protect the, the, the the home buyers market because the real estate association did were the ones on the other side, like, hey, this is impacting this. And also to prevent, just kind of the rising complaints. You have highly populated, densely populated cities like New York.
00;10;15;22 – 00;10;25;15
Lance Growth
And then you have, you know, they’ll say a mom and pop in one and one unit next door, and then you just have regular occurring customers coming that started to become traffic to traffic.
00;10;25;15 – 00;10;39;02
Rod Khleif
Yeah, that makes sense. So that makes sense. I you know, one of the questions that you gave me to ask is relating to investor capital. Yeah. What do you think’s happening with with investor money right now. Relocating to where.
00;10;39;04 – 00;10;58;12
Lance Growth
Well, it’s as simple as this is taking the same path. The migration took after Covid. I mean, the government literally came down and said, hey, people, stay away from people. So the most densely populated areas, such as California, New York, they literally fled, and then they went to places, one that offered more value for land, two that had less regulations.
00;10;58;14 – 00;11;18;02
Lance Growth
Generally. But, you know, of course, short term rental regulations and, three they went to places that were a little more kind of appealing because you take during Covid, I mean, people were they were hiring ice cream trucks because the morgues got filled up too fast and people were in the cold and they said, okay, we’re going to leave this place.
00;11;18;02 – 00;11;37;14
Lance Growth
I’m gonna go to Florida. So you look at Miami. Miami is a completely different animal. In the past five years, it has seen such a overpopulation of people. That coupled with the fact, like the governor at the time, literally kind of held up a sign. While most states were extremely stringent on their Covid policies. Wear a mask, wear a mask, wear a mask.
00;11;37;17 – 00;12;00;07
Lance Growth
The governor of, you know, at the time was like, we’re still holding spring break, come on down. And and in reality, it actually attracted a lot of investors. I always say it attracted all the Cowboys, the gunslingers and the guys who take risks. And then it kind of paid off because while they went there, like, oh, I don’t want to be here because of these regulations, the fact is, so many people who now work from home was like, hey, I don’t want to work from home in a cold place.
00;12;00;13 – 00;12;08;10
Lance Growth
I’m going to work from home some place that a lot warmer, that I get more land. I don’t have to worry about all these taxes. And they followed the migration of people.
00;12;08;10 – 00;12;28;00
Rod Khleif
So yeah, I think it’s more than just Covid. Absolutely. It’s definitely political. A lot of people are moving for the politics. I mean, you know, like like, you know, again, we don’t want to go into politics, but, you know, Monday me went toe to toe with Griffin, the billionaire owning their own citadel and, you know, stood in front of his condo and he said, okay, no worries.
00;12;28;00 – 00;12;57;01
Rod Khleif
I’m taking my my, we’re going to we’re going to relocate to Florida and build the headquarters there and basically, move billions and billions of tax revenue out of the state. And so, you know, I and I think a lot of people are seeing the onerous regulations and, and taxation and rules in these, in these states. And that’s why they’re leaving California in New York, and they’re going to Texas and Florida and, and the like the Carolinas are a huge recipient of people.
00;12;57;01 – 00;13;04;08
Lance Growth
In North Carolina. My God, yeah. Charleston girl. Yeah. Everywhere is, all that. Yeah. The heavy there’s been a heavy migration and.
00;13;04;11 – 00;13;22;17
Rod Khleif
You’re seeing all the, you know that like that billionaire tax in California, you’re seeing just, you know, people like Jeff Bezos and, and, Howard Schultz from Starbucks and all these guys are moving to Florida because they don’t have that, that, that tax. So they’re losing billions in tax revenue. It’s just.
00;13;22;20 – 00;13;25;04
Lance Growth
And it’s still started with Covid because.
00;13;25;07 – 00;13;26;18
Rod Khleif
That was that was the first piece. Yeah.
00;13;26;19 – 00;13;44;04
Lance Growth
As a as a whole Covid you know you say it’s political. But I always look at it it’s not just political. It’s more institutional. Covid basically put a hammer on, all the institutions that prior we just kind of automatically respected assume they were running fine, assume they were ran by institutions.
00;13;44;04 – 00;13;45;03
Rod Khleif
What specifically you were.
00;13;45;03 – 00;14;06;09
Lance Growth
Covid, you think about it. The George Floyd thing happened during Covid. That put a hammer to people’s view of the justice system. People were out in the streets. They were very upset. Covid in itself put a hammer to the medical institution. We at one point took at word whatever the doctor said. You take the issues with Fauci and all these different things.
00;14;06;09 – 00;14;10;08
Lance Growth
People lost faith in it. And as a whole, especially California. I can tell you.
00;14;10;08 – 00;14;11;23
Rod Khleif
Personal mental institutions or.
00;14;11;28 – 00;14;28;28
Lance Growth
Governmental institutions, especially, especially in general, the government institutions, which leans on politics in California. But people do pay these high taxes, you know, they’re just carrying on with their lives. But then the actual emergency arose and people were like, okay, we pay these high taxes. We expected you guys, can we.
00;14;28;28 – 00;14;32;04
Rod Khleif
Maybe get my home rebuilt? That burned down? Yeah. Exactly.
00;14;32;04 – 00;14;35;12
Lance Growth
Yeah. So as a whole, there’s less faith in.
00;14;35;15 – 00;14;35;27
Rod Khleif
No.
00;14;35;29 – 00;14;36;21
Lance Growth
Just different things. Yeah.
00;14;36;21 – 00;14;57;09
Rod Khleif
No question. And, and, I mean, the exodus from these high tax states is, I mean, it’s in the news every single day. I’ve done I’ve done social posts about it. You know, besides just the billionaire tax, it, they’re, they’re, you know, just over taxing. And they keep bringing in new regulations that cause more cost, more money.
00;14;57;12 – 00;15;00;10
Rod Khleif
Yeah. I’m, I’m, you know, again, trying to try to.
00;15;00;18 – 00;15;03;12
Lance Growth
You are doing good. We’re going to stay away from it. I’m doing my.
00;15;03;12 – 00;15;23;24
Rod Khleif
Best. I’m doing my best. You know, we got the mayoral race in L.A. right now, and, I think that help us, but, so, you know, how does, you know, if you’re in one of these overregulated markets and, you know, you’re seeing your you’re being taxed heavily? How does a 1031 exchange come into play in that regard?
00;15;24;01 – 00;15;35;03
Lance Growth
Oh, you think about it. You’re being taxed heavily. When you are in these are these specifically California and New York are the two highest tax,
00;15;35;06 – 00;15;35;22
Rod Khleif
Right.
00;15;35;25 – 00;15;51;29
Lance Growth
Places. Right. And when people think when people think about their taxes, they always just think kind of one tax like what’s your tax rate, like 15%? I’m like, yeah that’s your state tax right. Capital gains tax is literally a collection of state tax. Federal tax what’s called your depreciation recapture tax. So it’s a blended average of all these different taxes.
00;15;52;01 – 00;16;11;13
Lance Growth
In California. In New York it is the highest where you’re looking closer to 32, 33%. So when these people kind of, see these taxes, typically they didn’t use a 1031 exchange like the example I give you. You start off, you bought it, you bought it at 100,000. You sell at a million as 900 profit with those.
00;16;11;13 – 00;16;23;15
Lance Growth
When you sell with those tax rates, you got to give up almost $320,000 to taxes. But if you use a 1031 and follow the guidelines, you get to keep $320,000, you know.
00;16;23;15 – 00;16;23;29
Rod Khleif
Stays in.
00;16;23;29 – 00;16;26;15
Lance Growth
The property, stays in the property, stays in your pocket.
00;16;26;15 – 00;16;28;29
Rod Khleif
You refinanced your new property. You can pull it out.
00;16;29;00 – 00;16;29;19
Lance Growth
Exactly.
00;16;29;19 – 00;16;30;03
Rod Khleif
Free.
00;16;30;05 – 00;16;37;04
Lance Growth
So it slick ways I tell people to get around. They’re like, hey, why don’t you borrow against it and try to take it out at the most taxable point of fact?
00;16;37;04 – 00;16;55;21
Rod Khleif
I mean, it’s like the it’s it’s a, you know, a higher version of the Bir strategy. Buy, renovate, refinance, repeat. And yeah, you know, you don’t pay taxes that way. So reason Trump didn’t want his tax returns shown because he doesn’t pay taxes I haven’t paid taxes. You know because they they, you know, stimulate the economy with with real estate ownership.
00;16;55;21 – 00;17;14;01
Rod Khleif
And so they, they you know, give you tax benefits for owning real estate. It’s a reason 90% of the world’s millionaires either made it in real estate or they invest in real estate. And its benefits are extraordinary, including the 1031 exchange. So, you know, it’s just one of those things they they don’t I don’t think they have it anywhere but the United States.
00;17;14;07 – 00;17;16;00
Rod Khleif
Do they are you aware U.S only?
00;17;16;00 – 00;17;16;20
Lance Growth
Yeah.
00;17;16;22 – 00;17;24;15
Rod Khleif
But for you personally, you’ve got a law degree. Yeah. Why didn’t you become an attorney? Oh, why did you get into this?
00;17;24;17 – 00;17;41;27
Lance Growth
You know, honestly, I was working in, San Diego, and I was working in the, call the business law clinic. Diego borders Mexico, right? So, you know, people would come in because they could use the law students to kind of get free legal work. And I would always get all these Mexicans coming in and barely speak English like.
00;17;41;27 – 00;17;46;00
Rod Khleif
Hey, Bobby, I need to be for my LLC. I need to buy this building. I’m like.
00;17;46;03 – 00;17;54;28
Lance Growth
All right, cool. Here we go. No problem. And then it’ll be like six months later before we’re even done with a semester at, like, half of these guys will come back in, like.
00;17;55;00 – 00;17;59;24
Rod Khleif
Bye bye. Need to sell it, like, oh, wait, so you didn’t like it? Bottom line.
00;17;59;24 – 00;18;05;27
Lance Growth
No, I, I was I was inspired by it because I would see I would see what they bought it for. Oh, I see what.
00;18;05;27 – 00;18;08;04
Rod Khleif
And you were doing mostly real estate law then as well.
00;18;08;07 – 00;18;24;28
Lance Growth
No, I was doing all types of things. But the ones that always stood out was like these Mexicans who could barely speak English. Buying these cheap properties, coming back within months and selling it at a profit. Well, and then when they sold it, they were always freaking out about the tax. This is literally how I got into it.
00;18;24;28 – 00;18;43;01
Lance Growth
They were freaking out about the taxes and I’m like, figure it out. And I would go and I would research. And I stumbled on 1031 and, and I was just cranking them out for all these guys. And then when I graduated, I honestly, I just remember typing and indeed I just said 1031 and found out it was a whole industry.
00;18;43;02 – 00;19;02;26
Lance Growth
Right? So it really was kind of like these really poor Mexican guys barely speak English, like doing everything they can to buy these properties and coming back, selling it at a profit and having the, the, the intelligence to know, like, hey, I had these taxes, I’m sure there’s something you can do. And in doing so, it literally built my career and.
00;19;02;26 – 00;19;09;06
Rod Khleif
Just shows the, the, the, goomba of immigrants, you know, they got to get out there and make make it happen.
00;19;09;06 – 00;19;11;15
Lance Growth
So are you talking to an immigrants? Yeah. Me too. Yeah.
00;19;11;15 – 00;19;29;23
Rod Khleif
Me too. I’m. I’m from the Netherlands. Yeah. You know, it’s funny. I was in San Diego. I, I went to the CPI clinic for stem cells in Tijuana. Yeah, the one Joe Rogan talks about a couple of times, and they you fly into San Diego and they, they bring you across the border. That’s just triggered. I was just there a couple months ago.
00;19;29;26 – 00;19;42;01
Rod Khleif
So, you know, what sorts of things are you. So that’s why you got in the business basically. Yeah. So so what sorts of things are you seeing with your investors then? You know, when they utilize the 1031, what sort of things are you seeing?
00;19;42;03 – 00;19;58;18
Lance Growth
One you know, what’s funny is no matter how sophisticated the investor, I think they’re a little shell shocked when they realize how much money they saved. Yeah. So they’re these these especially the more technical ones. They have all these models and the models, you know. All right. And then they take out the taxes and they’re like, yeah, but you can put that back.
00;19;58;18 – 00;20;19;27
Lance Growth
And it’s like, Holy crap, I have 33% more to do to to to kind of reinvest. And what we’re seeing is these guys, I swear, man, people are it. It used to be our industry is oblivious to people, but everyone uses it. You’re seeing just all types of investors getting very strategic about how they’re placing their capital.
00;20;19;29 – 00;20;44;05
Lance Growth
Like, I like I got guys going into a lot of things called DST, short for Delaware Statutory Trust. These guys are researching these DST. They’re like, hey, if we’re going to go into these Dswd student housing, we’re going to make sure there’s a huge university next door and that is going to be there consistently. And it has a strong population of people that get financial aid, because when people get financial aid, they get that check at the beginning of the year and it pays for, you know, the entire semester.
00;20;44;05 – 00;20;54;01
Rod Khleif
Start in a but how do they utilize a DST Delaware statutory trust with a 1031 exchange? Are they able to put those proceeds into the trust?
00;20;54;01 – 00;20;58;17
Lance Growth
Oh brother. DST is are probably the main recipients of 1031 Exchange Capital.
00;20;58;17 – 00;21;02;14
Rod Khleif
Okay. We need to talk about that. So so so so elaborate on that a little bit.
00;21;02;15 – 00;21;23;02
Lance Growth
Look up a guy named Tim Snodgrass. This guy is like the godfather of DST. He was part of the group that lobbied Congress to say, hey, right. Right after 2008, everything was about tenet and common. Tenet and common. You throw 30 people on one property. Tenet and comedy all have equal rights, equal responsibility, blah blah, blah, blah, blah.
00;21;23;04 – 00;21;38;26
Lance Growth
And in 2008 came and it’s like half of these people, you got 30 people on one asset and a tenant in common, one building. Half of them are sophisticated investors, just like, hey, we can see a storm coming. You need to sell this. The other half is like grandma whose nephew told them, you know, hey, just do this.
00;21;38;26 – 00;21;58;03
Lance Growth
And they’re like, I don’t know. And then things collapsed because they needed a unanimous decision or majority decision. A DST is basically the trust that owns the asset, the trustee, the financial advisors and so on are the managers. They run it. They make all the decisions. The investors now are just simple beneficiaries. They have no rights to tell you what to do.
00;21;58;03 – 00;22;17;07
Lance Growth
Whatever they are, just respond. They are just have the rights to the income that is generated from this. And along the line. Of course, the DST gives them all the fees to make it beneficial for them. But the the that particular type of entity structure was lobby to Congress to say, hey, because one rule would 1031 exchange. It’s a name on the title on the sale property has to be the name of the replacement property.
00;22;17;10 – 00;22;24;26
Lance Growth
They say, hey, but can we please allow these DST structures to, take the name those receive the funds, receive their name.
00;22;24;26 – 00;22;27;06
Rod Khleif
So there’s not a specific property outlined at that point?
00;22;27;10 – 00;22;31;21
Lance Growth
No, there’s always a property out. There is always a property. Okay. These guys, these.
00;22;31;21 – 00;22;39;04
Rod Khleif
Guys have to be a property as well. Still identified. But you can use the DST, as an additional tax strategy.
00;22;39;07 – 00;22;48;09
Lance Growth
Use a DST is no matter how complicated and fancy the word sound, they’re just properties. They just took title. Don’t even use DST, the district title in a trust.
00;22;48;09 – 00;22;49;29
Rod Khleif
To what benefit?
00;22;50;01 – 00;23;09;01
Lance Growth
Because the trust gives them extra liability in terms of protection in case for the investor. It’s the same way investors when they owned a property, they want to own the property in their name. They want to put it in an LLC to get an extra layer of protection against their personal income. The DST goes a little further because it’s a trust, so you can cut off investors and they incorporate most of these trust in Delaware.
00;23;09;01 – 00;23;11;20
Lance Growth
So the trust gets treated better than a person.
00;23;11;21 – 00;23;15;29
Rod Khleif
Yeah. No Delaware delivers where all my LLCs are they have the best creditor protection.
00;23;16;00 – 00;23;17;22
Lance Growth
Exactly.
00;23;17;25 – 00;23;46;04
Rod Khleif
Okay. Okay. Well, so if you want to learn more about 1030 year changes, Lance’s company’s growth. 1031 growth. 1030 1.com and, yeah, I mean, 1031 exchanges have been around a long time. I’ve 1031 packages of houses into into other real estate back in the day. And so, you know, any, any investment property can be 1031 and, you know, it’s a great strategy.
00;23;46;04 – 00;23;51;10
Rod Khleif
Now, now, correct me if I’m wrong. You can actually identify more than one property, even if you don’t close on it. Right?
00;23;51;13 – 00;24;06;09
Lance Growth
Yeah. There’s two ways of identifying. The first one is called the three property rule. But you basically have three options and it doesn’t matter how expensive. So you know, one rule would a 1031. In exchange you have to own as much real estate as you sold. So if you sell it a million at the end of it, you got to buy a million with the three property rule.
00;24;06;10 – 00;24;28;23
Lance Growth
It doesn’t matter how expensive you can identify one property for 1,000,001 property for 10 million, one property for 20 mil, whatever. Just as long as you only have three options. The other option is called the 200% rule, which a lot of California clients utilize because, they sell one structure, let’s say 1 million in California, but now they want to go buy multiple cheaper properties in Texas, which is commonly the case.
00;24;28;23 – 00;24;45;06
Lance Growth
So basically, as long as you as soon as you get over three, you’re in the, three you’re in the 200% rule. Because under that rule, you can identify an unlimited number of properties, provided that the aggregated sum doesn’t exceed 200% of your initial sales price. And that’s just a fancy way of saying you can identify as many as you want.
00;24;45;09 – 00;24;48;17
Lance Growth
But the total value of those properties can’t be double what you saw.
00;24;48;19 – 00;25;06;13
Rod Khleif
When you identify you hat. Those are the ones you have to close on. You can’t like identify extras and select 1 or 2 that you end up closing on. Or you have to whatever you identify has to be closed on. Correct. I see, I thought, I thought differently, I thought you could identify a handful and then just end up closing on one of them.
00;25;06;15 – 00;25;13;29
Lance Growth
You can you can identify a handful and just end up closing on one of them. You just want to make sure that one you close is great and that it’s okay.
00;25;13;29 – 00;25;15;17
Rod Khleif
So you can identify more. Okay.
00;25;15;21 – 00;25;25;29
Lance Growth
And if you’re still within a 45 day rule, let’s say you close on Monday. Ten days later, you identify 20 days later falls apart. Great. You’re still within a 45 day rule retractor. Identify.
00;25;25;29 – 00;25;42;23
Rod Khleif
But let’s say you have the 45 day rule and you identify and you identify 3 or 4 properties, but you only end up closing one of them. That fits the guidelines. You’re still okay. You’re great. Okay, good. Yeah, that’s what I thought. I just wasn’t sure if I was hearing you correctly. Well, listen, brother, I appreciate you coming in and talking about this.
00;25;42;25 – 00;26;02;27
Rod Khleif
You know, this is, you know, just a strategy. You need to know if you’re going to be in this business. Guys, as well as cost segregation as well as bonus depreciation. And, you know, this is just this, again, this is a reason that 90% of the world’s millionaires are in real estate and real estate, or they invest their money from another business in real estate because of these incredible benefits.
00;26;03;04 – 00;26;04;05
Rod Khleif
Well, I appreciate you coming in.
00;26;04;11 – 00;26;05;01
Lance Growth
My pleasure.
00;26;05;01 – 00;26;05;11
Rod Khleif
All right.
**Podcast Categories:** Podcasts
---
### [He Quit Surgery and Built a $2 Billion Real Estate Portfolio](https://rodkhleif.com/podcasts/capital-raising-for-real-estate-syndications-with-tyson-cobb/)
**Published:** June 5, 2026
**Author:** Bryan Hoover
**Excerpt:** He Quit Surgery and Built a $2 Billion Real Estate Portfolio
**Content:**
# Capital Raising for Real Estate Syndications with Tyson Cobb
Capital raising for real estate syndications has become one of the most valuable skills for investors seeking to scale beyond individual deals and build significant wealth through partnerships. In this episode of Lifetime Cash Flow Through Real Estate Investing, Tyson Cobb shares his remarkable journey from orthopedic surgeon to full-time real estate investor, capital raiser, and participant in more than $2 billion in assets under management.
Tyson explains how his initial interest in real estate was driven by a desire to gain freedom over his time. While his medical career provided substantial income, it did not provide the flexibility and control he ultimately wanted. After investing in farmland and ranch properties, he transitioned into commercial real estate, purchasing a triple net gas station investment that opened his eyes to the powerful tax advantages, cash flow opportunities, and leverage available through real estate ownership.
## How Capital Raising Became Tyson Cobb’s Competitive Advantage
One of the biggest turning points in Tyson Cobb’s investing career came when he realized he did not need to master every aspect of multifamily investing to become successful. While many investors focus on acquisitions, underwriting, or asset management, Tyson discovered that capital raising for real estate syndications was a skill that aligned naturally with his network and strengths.
After partnering on a multifamily investment opportunity, he was asked to help complete a capital raise. By simply reaching out to colleagues and professional contacts, he successfully helped fill the remaining equity requirements. That experience revealed a scalable path that eventually led to raising tens of millions of dollars annually.
His growth trajectory demonstrates the power of specialization:
- Started by raising capital from close personal and professional relationships
- Built systems and marketing infrastructure to expand investor outreach
- Leveraged social media, networking, and relationship-based marketing
- Scaled annual capital raises from a few million dollars to a goal of $100 million annually
Tyson emphasizes that investors who focus on one key skill and become exceptional at it can accelerate their growth far faster than trying to master every role within a real estate syndication business.
## The Power of Masterminds and Strategic Networking
A major theme throughout the conversation is the importance of surrounding yourself with high-level entrepreneurs and investors. Tyson credits much of his success to consistently investing in masterminds, coaching groups, and educational communities where he can learn directly from experienced operators.
He currently participates in numerous mastermind groups and invests heavily in personal and professional development each year. According to Tyson, proximity to successful people dramatically shortens the learning curve because investors gain access to strategies, relationships, and insights that would otherwise take years to discover independently.
The discussion highlights how networking often creates opportunities that are impossible to predict. Strategic partnerships, investment opportunities, and business ventures frequently emerge from relationships built within these communities.
## Exploring Multiple Investment Strategies Beyond Multifamily
Although multifamily investing remains a core focus, Tyson Cobb has expanded into several alternative investment strategies that offer unique opportunities for diversification and growth.
Some of the asset classes and investment vehicles discussed include:
- Multifamily apartment communities
- Triple net commercial real estate
- Medical office real estate
- Gas station portfolios
- Business acquisition roll-ups
- Marina investments
- Vineyard investments
- Industrial real estate
- Self-storage opportunities
His experience demonstrates how investors can use the same fundamental principles of capital raising, partnerships, and operational efficiency across multiple asset classes.
## Understanding the Roll-Up Strategy
One of the most educational portions of the conversation focuses on roll-up strategies. Tyson explains how investors can acquire multiple businesses or properties within the same niche and combine them into a larger portfolio.
As portfolios grow, operational efficiencies improve, management becomes more streamlined, and the overall enterprise becomes more attractive to institutional buyers. This creates the potential for significant valuation increases at exit because buyers are often willing to pay a premium for scale and convenience.
The roll-up model can be applied to numerous industries, including paving companies, marinas, medical facilities, and commercial real estate portfolios. Tyson believes this strategy offers compelling opportunities for investors seeking both cash flow and long-term value creation.
## Why Tyson Cobb Likes Triple Net Investments
Another key topic is Tyson’s focus on triple net real estate. Unlike multifamily properties, where owners often face unpredictable expenses such as insurance increases, maintenance costs, and property taxes, triple net leases transfer many of these responsibilities to the tenant.
Benefits Tyson highlights include:
- Predictable cash flow
- Reduced management responsibilities
- Long-term lease stability
- Tenant-paid expenses
- Built-in annual rent increases
- Strong financing opportunities
These characteristics make triple net properties particularly attractive for investors seeking dependable income streams with less operational complexity.
## About Tyson Cobb
Tyson Cobb is an orthopedic surgeon turned real estate investor, capital raiser, and entrepreneur. After transitioning from medicine into full-time investing, he built a diversified portfolio spanning multifamily, triple net commercial real estate, business acquisitions, and alternative investments. Through strategic partnerships, capital raising expertise, and continuous education, Tyson has participated in more than $2 billion in assets under management and has become a respected leader in the real estate investment community.
If you want to hear the full conversation and detailed insights, watch the podcast video or read the complete transcript below.
## **Capital Raising for Real Estate Syndications FAQ**
### **What Is Capital Raising for Real Estate Syndications?**
Capital raising for real estate syndications is the process of securing investment capital from passive investors to acquire, operate, and improve real estate assets. Sponsors or syndicators combine funds from multiple investors to purchase properties that would often be too large or expensive to acquire individually. This strategy is commonly used in multifamily real estate, self-storage, mobile home parks, industrial properties, and other commercial real estate sectors.
### **Why Is Capital Raising Important in Real Estate Syndications?**
Capital raising is essential because it allows syndicators to scale their portfolios without relying solely on their own funds. By bringing together investors who want passive income and potential appreciation, sponsors can pursue larger investment opportunities while sharing both the risks and rewards of ownership.
### **How Does Capital Raising for Real Estate Syndications Work?**
A syndicator identifies an investment opportunity, performs due diligence, secures financing, and then raises equity from investors to complete the acquisition. Investors contribute capital in exchange for ownership interests in the deal and may receive distributions from cash flow, profits from refinancing, or proceeds from a future sale.
### **Who Can Raise Capital for Real Estate Syndications?**
Individuals or firms acting as syndicators can raise capital for real estate syndications if they comply with applicable securities laws and regulations. Successful capital raisers often build strong investor networks, establish credibility, provide educational content, and maintain transparent communication throughout the investment process.
### **What Are the Benefits of Capital Raising for Real Estate Syndications?**
Capital raising creates opportunities for both sponsors and investors. Sponsors can acquire larger properties and grow their businesses more rapidly, while investors gain access to professionally managed real estate investments without the responsibilities of day-to-day operations. Additional benefits may include passive income, diversification, tax advantages, and long-term wealth creation.
### **What Types of Real Estate Use Syndication Capital Raises?**
Real estate syndications are commonly used for multifamily apartments, self-storage facilities, mobile home parks, industrial buildings, office properties, retail centers, senior housing, student housing, and triple net leased properties. The syndication model can be applied to virtually any commercial real estate asset class.
### **How Do Capital Raisers Find Real Estate Investors?**
Many capital raisers build relationships through networking events, real estate conferences, mastermind groups, podcasts, educational content, social media platforms, webinars, email marketing, and referrals. Consistently providing value and maintaining investor trust are often key factors in attracting long-term investment partners.
### **What Skills Are Needed for Capital Raising in Real Estate Syndications?**
Successful capital raisers typically develop skills in relationship building, communication, investor education, marketing, financial analysis, presentation delivery, and networking. The ability to explain investment opportunities clearly and build investor confidence is often just as important as understanding the real estate itself.
### **Can Doctors, Business Owners, and Professionals Become Capital Raisers?**
Yes. Many successful capital raisers come from professional backgrounds such as medicine, law, engineering, finance, and business ownership. These individuals often leverage their existing professional networks and credibility to connect investors with high quality real estate opportunities.
### **What Is the Difference Between a Capital Raiser and a Syndicator?**
A syndicator is generally responsible for sourcing deals, overseeing operations, managing the investment, and coordinating the overall project. A capital raiser focuses primarily on attracting investors and securing equity for the transaction. In many syndications, capital raisers are active members of the general partnership team and contribute additional value beyond fundraising.
### **How Much Capital Can Be Raised Through Real Estate Syndications?**
The amount varies widely depending on the size of the investment, the experience of the sponsor, and the strength of the investor network. Some syndicators begin by raising a few hundred thousand dollars, while experienced operators may raise tens or even hundreds of millions of dollars annually for large real estate portfolios.
### **Why Is Capital Raising for Real Estate Syndications Growing in Popularity?**
Capital raising for real estate syndications continues to grow because more investors are seeking passive income opportunities, portfolio diversification, and exposure to commercial real estate. At the same time, sponsors can access larger investment opportunities by partnering with investors who want professional management and the potential for attractive risk adjusted returns.
00:00:28:24 – 00:00:55:23
Rod Khleif
Welcome back to life time cash flow through real estate investing. I’m Rod Khleif, and I’m thrilled that you’re here. You’re going to get tremendous value from the gentleman I’m interviewing. Interviewing today. Orthopedic surgeon, turned real estate investor, capital raiser, and, kick ass warrior in my program. And I was just telling him before we started recording, we just found out yesterday that my warriors now own 305,000 multifamily units alone.
00:00:56:00 – 00:01:07:20
Rod Khleif
Which is more than everybody else that teaches this combined. So I’m very, very proud of that. But, the gentleman I’m interviewing today, his name is Tyson Cobb, very dynamic guy. And, really looking forward to this. Welcome to the show, brother.
00:01:07:22 – 00:01:13:22
Tyson Cobb
Good morning. Ron. Thanks for the, invite. It’s a pleasure to be here. Congrats on the, on the number. That’s impressive.
00:01:13:24 – 00:01:30:14
Rod Khleif
Yeah. No, it’s it’s really exciting. It just kind of blows my mind, you know, and, of course, that’s all we know about. So we know it’s a lot more than that. And of course, as you know, every other asset class is represented. I mean, tons of senior housing, tons of student housing, self-storage, mobile home parks, industrial, flex.
00:01:30:14 – 00:01:51:05
Rod Khleif
I mean, the team is doing everything at this point. So it’s very, very exciting. And roll ups, which, we can talk about with you. So, you know, why don’t you give us a little background, you know, orthopedic surgeons make really good money. Why real estate? So let let me just let you have the mic and, take it away, brother.
00:01:51:07 – 00:02:17:16
Tyson Cobb
Yeah. So thank you. Just a little background. So I’ve been an orthopedic surgeon for many, many years, decades on decades. And, have done some investing here and there. Grew up on a farm and ranch in Texas. So I’ve been doing farm ground for a while. And, started I left my group in 2019 and moved into real estate investing and, became a real estate professional.
00:02:17:16 – 00:02:37:24
Tyson Cobb
And, started in triple net space and just bought a gas station for, right, at 3 million. And, the bank paid for 80% of it. I paid for 20% of it. And, got all the depreciation and all the cash flow. And I said, this just feels like cheating. That year was the first year in my entire adult life that didn’t pay any taxes.
00:02:37:24 – 00:03:00:18
Tyson Cobb
And, was just, astonished that it was even possible. And to answer your question, the move was to get my time back, because surgeons make a lot of money, but we don’t have any time, no control of our time. So, I, you know, I have full control. I mean, I do what I want, what I want with who I want, every day of my life now.
00:03:00:20 – 00:03:25:02
Tyson Cobb
And, you know, I love hanging out with entrepreneurs. You know, it’s a fun group of people. You know, they’re very diverse. You know, they’re very optimistic. They’re, you know, very gold minded. Driven people. And it’s just fun to see what everybody’s doing when you get together. Masterminds like yours, like you mentioned, you know, you guys, you know, your basis is on multifamily.
00:03:25:02 – 00:03:27:15
Tyson Cobb
But the reality is the Warriors group, they’re doing.
00:03:27:15 – 00:03:29:03
Rod Khleif
Everything.
00:03:29:05 – 00:03:58:04
Tyson Cobb
And, you know, we do oil and gas and we do, self-storage, we do multifamily and we do business acquisitions and we do roll ups. And, we just started a, a deal where we’re, providing, medical and, psychiatric care for kids that have been rescued from, trafficking. And it’s paying 18 to 22%, quarterly real time.
00:03:58:04 – 00:04:16:09
Tyson Cobb
It’s not accrued. So it’s just an incredible investment, an incredible purpose. I mean, we get a lot of flow. We just go to a ton of meetings and, we’ve done a lot of stuff with people in your group, as you know. And, I think numbers are low because I haven’t updated mine in a long time, but.
00:04:16:12 – 00:04:43:10
Rod Khleif
Well, yeah, well, I’m sure, and, we’re missing a lot, but but the thing, the thing, that, That’s interesting. So one of the things that I admire about you, Tyson, is I’ve seen you participate in so many different types of groups, okay? Like, like, you know, you’re always traveling, going to somebody’s mastermind. You know, we even talked about Alex from mostly.
00:04:43:10 – 00:05:02:19
Rod Khleif
And you’d gone to his thing in Vegas, for example. And there’s something I was exploring on on enhancing marketing. And I know you’ve got a whole marketing team for your equity raising and, you know, talk about that for a minute. Talk about, you know, why you do that? And, and the benefit of it, if you would, please.
00:05:02:19 – 00:05:04:07
Rod Khleif
Because I think it’s valuable.
00:05:04:09 – 00:05:27:15
Tyson Cobb
Yeah. So, I mean, there’s there’s no way I would be where I am right now if it hadn’t been for, masterminds like the one you run. So let me just back up, and then you’ll probably have to remind me where we were. Because every time I do this, I lose my space. But, my first GPD deal, was with a guy from a mastermind, and, I found a property that I wanted to syndicate.
00:05:27:15 – 00:05:47:00
Tyson Cobb
Didn’t know anything about syndicate. And I had just been investing. Is a limited partner, which is a very good way to to start this, because it allows you to peek in without falling off the cliff. But I just invested in a multifamily deal and, found this, property about a mile from the house. Reach out to him, and he agrees to help me.
00:05:47:00 – 00:06:08:18
Tyson Cobb
Syndicated falls through, and, he says, you know, I can tell you won’t do the GP thing. He said, won’t you just join our team? That you’re already investing with in, in, in San Antonio? And I said, oh, it’d be great. What would you want me to do? And he said, well, you know, first thing we need to do is finished capital raise because we’d already closed on the building, but, we’re still raising CapEx.
00:06:08:18 – 00:06:29:08
Tyson Cobb
He said, can you raise capital? And I’m like, wow, Gabe, I don’t know. I never thought about raising capital. Oddly enough, you know, at that stage, it had never really crossed my mind. And, so I made a few phone calls and by the end of the week, the raise was done, and, actually just called to my orthopedic friends and said, hey, you know, I’m, I’m investing in this.
00:06:29:08 – 00:06:40:03
Tyson Cobb
We have some more spaces available if you want to get in. It’s available and end of the week we were done. Showed up at your boot camp in, Denver.
00:06:40:05 – 00:06:42:03
Rod Khleif
And. Wow, that’s been a while.
00:06:42:05 – 00:07:07:09
Tyson Cobb
Yeah. About a week later, and you said, you know, there’s a lot of moving parts and multifamily, and you should really try to learn them all, but. But you said, the reality is this is a team sport, and you only have to be really good at one thing. And the light came on and I’d been putting in tons and tons of offers, trying to trying to get something, but, and at the same time was investing as a limited partner in other people’s deals.
00:07:07:11 – 00:07:25:15
Tyson Cobb
And, I went home and shoved all my acquisition stuff off the desk and just started working on building partnerships and, doing things. So, as you know, point out here for the listeners, you can’t just raise capital on a deal. You know, there’s other things that you can do without, you know, actually being boots on the ground.
00:07:25:15 – 00:07:34:09
Tyson Cobb
So, like the deal we partnered with, you know, I helped, negotiate the bulk white fee and helped negotiate the pickleball courts. But,
00:07:34:11 – 00:07:52:02
Rod Khleif
Let me stop here for one second. So Tyson invested in one of our assets in San Antonio, and like he said, you cannot just be a capital raiser. You have to be actively involved in the deal in some format. So, Tyson, Nick, you know, researched, what we needed to do to convert the tennis courts to pickleball.
00:07:52:04 – 00:07:53:13
Rod Khleif
What was the other thing you said you did?
00:07:53:13 – 00:07:55:19
Tyson Cobb
I forgot to negotiate the bulk Wi-Fi. Oh.
00:07:55:19 – 00:08:11:08
Rod Khleif
That’s right. Yeah, we got bulk Wi-Fi. Which which bring, you know, brings a few dollars to the bottom line where we get Wi-Fi to the whole complex and we bill it out to the tenants. And so he’s actively involved, and he participates in our, you know, when our asset management calls consistently. And so yeah. So I’m sorry to interrupt.
00:08:11:08 – 00:08:13:04
Rod Khleif
I just wanted to elaborate on what you just said.
00:08:13:06 – 00:08:40:12
Tyson Cobb
No, it’s fine. But I was just pointing out the importance of that with my life because, I mean, my whole everything I’ve done has changed as a result of, attending, your boot camp in Denver. Because when the light came on, and I realized I’d been on the wrong path, you know, it’s, I’m trying to remember was at Collins that said, you know, some people kind of climb the mountain to figure out that they’ve been on the wrong mountain the whole time, or the the ladders were leaning against the wrong wall.
00:08:40:12 – 00:09:05:20
Tyson Cobb
Well, that was me, my ladder leaning against the wrong wall, but I didn’t know it. And, but the light did. Come on. There and turned everything around, with my rose de career. So I have been very, very, very aggressive about joining masterminds. I’m at about 12 right now. And as you have jumped in, have joined two in the last year, as you mentioned, I’m doing the Alex Rosie thing.
00:09:05:20 – 00:09:23:11
Tyson Cobb
I absolutely love it. I love hanging out with smart people like you that just can just breathe, progress, into, into your mind and just point out things that you would otherwise not realize. You know, just like.
00:09:23:13 – 00:09:43:16
Rod Khleif
The learning curve, man, it does when you’re around people that think what you think is hard is easy. You’ll pick up little, little things. You know, I formed an actual mastermind you call my warriors. A mastermind is really not a mastermind. It’s really more a coaching program. But but I did have a mastermind, and I had probably 40 or $50 billion in assets represented in it because I wanted to be around.
00:09:43:16 – 00:10:13:20
Rod Khleif
People think that that thought what I thought was hard was easy. And, you know, you pick up these little things that save you tons of money, tons of time, just little nuances that that take you years to get on your own. And, you know, when I learned that strategy from Tony Robbins, he talks about he tries to find the best in the world when he wants to do something and, and, and like, he tells the example of how he wanted to be a, a polo player, and he and he studied under the best in the, in the country, literally, and had to beg him to, to train him.
00:10:13:20 – 00:10:34:13
Rod Khleif
And then he, he became the polo player of the year, a new polo player of the year in one year. And and that’s what you do when you get around people in these masterminds. That’s the message I kind of wanted to to have you help. You know, quantify is just the value of this continual learning and, and Europe, you how long do you go to school to be a surgeon?
00:10:34:13 – 00:10:35:04
Rod Khleif
Forever.
00:10:35:04 – 00:10:50:14
Tyson Cobb
So I was I was, rodeo cowboy before I was so. Yeah. So I was, in undergrad, I was rodeo in. And that was my passion at that time. So my focus wasn’t on school, so it took me a little longer to get out of,
00:10:50:16 – 00:10:54:11
Rod Khleif
But what’s the minimum to do it? I there’s a there’s a message here that I wanted to do.
00:10:54:11 – 00:11:07:00
Tyson Cobb
So I should have done it for. But it took me more like seven to get that done. And then medical schools, four and then, residencies five. And then I did a fellowship after that, which was one year. So it, you know, it adds up pretty quickly.
00:11:07:02 – 00:11:33:10
Rod Khleif
That’s a lot of years. And the point is, I guess the point I’m making, you know, a lot of people go to college, they go to school. And, I’m not going to trash it. But look, your your education didn’t stop when you got your medical degree and, you know, you did the surgery for a long time, but you can’t you didn’t you didn’t lose the message in that, that if you stop growing and you stop learning, you start dying.
00:11:33:10 – 00:11:50:17
Rod Khleif
And that’s the bottom line. Now you took it to a whole nother level, but, very impressive level. But it’s it’s, you know, something that I try to shout from the rooftops, you know, there’s formal education, there’s there’s school. But for most people, they don’t do a damn thing with it. Now, you’re an exception in that regard, but you’re a great example of, you know, pivoting.
00:11:50:17 – 00:12:17:01
Rod Khleif
I mean, I’ve got warriors that are pharmacists, numerous dentists, engineers, architects that went to really technical school and, and training and still aren’t getting the freedom that they want and deserve. And so, you know, and so talk about some of the different asset classes you’ve been involved with because you’ve been all over the place. And I’d love to drill down on some of this because as I was mentioning, I interviewed I know you, you’re involved.
00:12:17:04 – 00:12:29:11
Rod Khleif
You were involved in a paving roll up where you’re buying paving companies. And I interviewed the CEO of that company a few days ago here, my studio. Brilliant guy. But talk about some of the different things you’ve done and are doing, if you would.
00:12:29:13 – 00:13:01:19
Tyson Cobb
You know. So the roll up strategies were in multiple roll up strategies. So just to back off on the roll up strategy itself and you can do that with real estate. You can do it with business. We’ve got a Marina roll up, the roll up that you mentioned. So the roll up strategy, I mean, you basically just figure out, what it is you want to do and, and then you just keep doing that, you just keep adding it, and your portfolio just keeps getting bigger and bigger, whether it be businesses or, or triple net medical or whatever the case might be.
00:13:01:21 – 00:13:20:18
Rod Khleif
So so let me elaborate on what you just said because it wasn’t completely clear. You buy individual businesses, okay. That’s what you do. You buy these businesses, you buy paving companies, you buy medical facilities, you buy marinas. That’s cool. I haven’t heard that one yet. That’s awesome. I love that one. And, and and once you get a few of them together, speak.
00:13:20:21 – 00:13:23:13
Rod Khleif
Speak to what happens economically.
00:13:23:15 – 00:13:45:22
Tyson Cobb
You know, so a lot of different things happen there. So number one, you get better at management. At you get better at scaling. So the businesses a lot of times you can combine combined. So you might be able to sell a yard off, when you get two of them that are geographically close, with, with the, the medical side of it, you just get better and faster about getting these things together.
00:13:45:22 – 00:14:07:16
Tyson Cobb
So we’re we’re able to close a triple net now about every week. And we just built that momentum over the over time. So you’re building your team and people become aware of the fact that you’re looking for medical, buildings. And so they start sending you stuff so your deal flow goes up. Everything heightens over time, and you get that compounding effect.
00:14:07:18 – 00:14:09:18
Tyson Cobb
And,
00:14:09:20 – 00:14:13:07
Rod Khleif
So but talk about the why talk about the exit.
00:14:13:09 – 00:14:46:04
Tyson Cobb
Yeah. So the, the big the big bump is the exit on the back end. So as that folio grows and over time, you can attract people that can write a lot bigger check. So instead of a $10 million check, they can write a $100 million check or a $200 million check or whatever the number might be, and they’re going to pay, a premium for the convenience and the cost savings and the time savings to be able to buy that portfolio all at one time, as opposed to trying to buy them and put them together over time.
00:14:46:06 – 00:14:59:07
Tyson Cobb
And, so that’s the the primary goal behind all of that. But it does have advantages, in the process as well. Got it. So that it’s easier and more efficient.
00:14:59:09 – 00:15:25:00
Rod Khleif
Sure. And as you’re buying as the team is buying these facilities, they are they’re enhancing things. They’re in implementing things that maybe these business owners hadn’t implemented there. There’s economies of scale that are implemented. You know, any time you get multiple businesses, same thing like like like our our asset that you you’re in with me and in San Antonio we’ve got an asset a mile away and we’re able to do some, some economies of scale there as well.
00:15:25:00 – 00:15:35:05
Rod Khleif
So same concept. So what other asset classes have you been involved in besides the multifamily. And these roll ups? If I feel like there’s more that you’ve done, is that correct or.
00:15:35:11 – 00:15:57:16
Tyson Cobb
Yeah, we’ve done we did a raise for a vineyard and, interiors and. Yeah. And we got the paving deal that you mentioned. We have other, business acquisition roll ups that we’re working on, and we have three different triple net roll ups. We got one industrial one that includes, gas stations, which kicks out a ton of depreciation.
00:15:57:18 – 00:16:01:12
Tyson Cobb
The medical that I mentioned earlier, we’ve done to.
00:16:01:12 – 00:16:04:15
Rod Khleif
Explain triple net to my listeners that may have not heard that before.
00:16:04:15 – 00:16:26:14
Tyson Cobb
Yeah. So triple net is, is, extremely convenient. Way to to purchase real estate. So over the with the with an absolutely triple net, the tenant pays for everything. So, a lot of the problems that we run into with management, properties like multifamily over the past few years are, you know, what’s happening with taxes are going up.
00:16:26:14 – 00:16:53:23
Tyson Cobb
What’s happening with insurance is sometimes the insurance alone will kill a deal. It has on many occasions, especially in some locations, all of that’s paid by the tenant. So it’s easy math at that point. So we’re doing long term 15, 20 year, triple net leases. And we’re getting this with the fixed debt. So it’s just math at that point, this is going to be our annual, income, from this here’s our annual, debt payment.
00:16:54:00 – 00:17:17:17
Tyson Cobb
It stays the same and is level. The income’s going up because we got annual bumps every year. So that getting better and your spread just keeps getting better over time. So it does provide a nice, consistent cash flow. So unlike, a lot of the value add type deals that we get involved in, with this, it’s fairly predictable monthly cash flow.
00:17:17:17 – 00:17:35:14
Rod Khleif
So yeah, it’s easier, so much easier because you’re, you’re not having to deal with hardly anything in a triple that situation. And that’s why I want you to elaborate on it. So I’m just curious, how much money have you raised? Since you’ve gotten involved in this and became a capital raiser after my boot camp? I’m just curious, do you have any idea?
00:17:35:17 – 00:17:37:00
Rod Khleif
Because I know it’s. No, I haven’t.
00:17:37:02 – 00:17:53:12
Tyson Cobb
I haven’t sat down to add it all. But, just kind of roughly, I think we raised, I went to your boot camp in, I think September of 22. Okay. And, I reached.
00:17:53:12 – 00:17:59:20
Rod Khleif
My mom at that one. Was that the one? My mom was that I don’t remember. Okay. Yeah. You do remember. I do a.
00:17:59:20 – 00:18:03:07
Tyson Cobb
Lot of your meetings. I mean, I’ve seen her, but I can’t remember which one it was.
00:18:03:09 – 00:18:20:17
Rod Khleif
Okay, well, if you saw her, that was it. Then. Yeah, because I think there was one in Denver, and they brought her in a wheelchair, and I lost all the footage of that. And I’m behind the curtain crying like a little girl because she’s the reason I got in real estate. My brother’s border brought, broader, to the event, and it’s very emotional for me.
00:18:20:17 – 00:18:31:24
Rod Khleif
But, yeah, I was just curious because that just triggered. Because that was in Denver and, yeah, unfortunately, we lost all the footage, but, but, so 22, and I think that’s.
00:18:32:03 – 00:18:46:13
Tyson Cobb
About 2.5 million. And at the end of that year, and then we raised somewhere around two and a half the year after because it, I transitioned from basically just, raising money from very close friends. Right, to having to move into a tougher arena.
00:18:46:15 – 00:18:59:06
Rod Khleif
And when you started marketing, I mean, you’re doing you’ve got a whole team, from what I understand, you’ve got DA’s you’ve got people helping you. You know, you’re doing stuff on LinkedIn, Facebook, elsewhere, and just to raise equity. And it’s a it’s brilliant.
00:18:59:08 – 00:19:09:20
Tyson Cobb
Yeah. So we did two and a half, two and a half, 17.5. And then somewhere between 36 and 40 last year, depending on.
00:19:09:22 – 00:19:15:12
Rod Khleif
Where you start, you’re, you’re pushing, you’re pushing 80 million bucks. Holy cow.
00:19:15:13 – 00:19:26:03
Tyson Cobb
Our goal is 100 million this year, trying to get there, but that’s our stretch goal. But, you know, for you to be able to have, you know, swing for the bleachers.
00:19:26:05 – 00:19:50:02
Rod Khleif
Yeah. No, you shoot for them, you shoot for the stars. You hit the moon. You’re still doing great. So, you know, I love the Marina idea because I love boating. What a great idea to roll up marinas. Interesting. As it relates to the warrior group you joined. Because it’s just your basic premise to get around as many people as possible that are doing what you want to do.
00:19:50:05 – 00:19:59:06
Rod Khleif
Or was there some other outcome you were looking for? After my bootcamp, because I’m assuming you joined at that bootcamp, what would be my guess?
00:19:59:08 – 00:20:21:05
Tyson Cobb
Yeah. I mean, it just was apparent that, One of the guys in the first mastermind, I call them all masterminds. They’re just paid groups, right? So whatever you want to call them. But, first Bay Group I was in, he said, you know, the easiest and the fastest way to get somewhere in life, is to hang out with people that are already where you want to be.
00:20:21:07 – 00:20:41:23
Tyson Cobb
Yeah, and that’s so true. So, I mean, you can’t be over here looking at people over there and expect to just close that gap. I mean, you can’t close it, but it takes a lot longer. As you mentioned earlier, you just shave a ton of time and expense off the curve. Getting in these groups. And I spend probably a quarter of a million a year in these people.
00:20:41:23 – 00:20:43:10
Rod Khleif
Okay. Now, between wow or.
00:20:43:10 – 00:20:50:08
Tyson Cobb
Between paying for them and going to them. But I’m telling you, it accelerates my growth like nothing else.
00:20:50:10 – 00:20:55:19
Rod Khleif
You how how many units, how many units are you in now? Just just, And deals, would you say?
00:20:55:21 – 00:20:57:20
Tyson Cobb
Yeah, I quit counting at 10,000.
00:20:58:00 – 00:20:59:20
Rod Khleif
10,000. There you go. Okay.
00:21:00:01 – 00:21:04:03
Tyson Cobb
We’re over 2 billion total.
00:21:04:05 – 00:21:32:14
Rod Khleif
AUM assets under management. Yeah, that’s that’s extraordinary, brother. By the way, if you’re interested in applying to my warrior program, text the word crush to 72345. And I, you know, again. And that’s how you apply. We don’t take everybody text the word crush to seven, two, three, four, five. And, you know, like I said, I’m I’m just blown away that our student results at this point eclipse everybody else that teaches this combined by quite a bit actually.
00:21:32:14 – 00:21:55:00
Rod Khleif
And because we did analysis so very very exciting. Well listen brother, I appreciate you coming on the show. It’s, such a treat. You know, we had our I know you didn’t make the warrior event this last weekend. I know how busy you are, but, we had a few hundred warriors here in Sarasota. We get them together because, you know, that’s the whole purpose of the group is to connect people and network them.
00:21:55:00 – 00:22:11:03
Rod Khleif
Because we discovered out of those units that they own, they’re almost all done between warriors. And I know you’ve done a ton of work with with other warriors. So. Yeah, but listen, I appreciate you coming on, brother. Say hi to the boss for me. Your better half and, and and you take care of yourself, okay?
00:22:11:05 – 00:22:26:03
Tyson Cobb
Appreciate the invite. Really enjoyed it. I hated to miss, Sarasota, but we, we’d actually, we donated a mastermind at our form, for a charity event. So we were. We were at that weekend, so, we would have been there.
00:22:26:05 – 00:22:30:17
Rod Khleif
That’s that’s a good reason. All right, brother, be well. Thanks, man. All right. Take care. Thank you.
**Podcast Categories:** Podcasts
---
### [Wall Street’s Biggest Lie Exposed](https://rodkhleif.com/podcasts/main-street-investing-with-russel-gray/)
**Published:** June 1, 2026
**Author:** Bryan Hoover
**Excerpt:** Wall Street’s Biggest Lie Exposed
**Content:**
# Main Street Investing and Cash Flow Strategy with Russel Gray
In this episode of Lifetime Cash Flow Through Real Estate Investing, Russel Gray shares a deep and timely discussion about Main Street investing, real estate cash flow, financial resilience, and the changing economic landscape facing investors in 2025. Drawing on decades of experience in real estate, entrepreneurship, investor education, and financial markets, Russel explains why wealthy professionals, business owners, and real estate investors must rethink traditional investing strategies and focus on cash flow, productivity, and real assets.
## Why Main Street Investing Matters More Than Ever
Russel Gray believes the future belongs to Main Street investors who focus on owning productive assets instead of relying on Wall Street speculation. Throughout the conversation, he explains how many investors became dependent on rising asset prices rather than sustainable income producing investments. According to Russel, this mindset created dangerous exposure during both the 2008 financial crisis and the current multifamily real estate correction.
He emphasizes that Main Street investing is about owning businesses and real estate assets that provide reliable cash flow while serving basic human needs. Multifamily housing, essential businesses, and productive commercial assets remain attractive because they generate ongoing income regardless of market volatility. Russel repeatedly stresses that real wealth is created through resilient cash flow, not temporary equity spikes driven by speculation or artificially inflated markets.
## The Difference Between Real Equity and Fake Equity
One of the most valuable lessons discussed in the episode is Russel Gray’s distinction between “real equity” and “fake equity.” He explains how many investors mistake rising property values for true wealth, even when those gains are disconnected from actual income production.
Using simple examples from residential and multifamily real estate, Russel demonstrates how easy money, low interest rates, and speculative demand can create the illusion of wealth. However, when cash flow does not support valuations, investors become vulnerable during market corrections. He explains that true equity is created by stable cash flow and operational performance, especially in multifamily real estate investing.
Several key themes emerge from this discussion:
- Cash flow is the foundation of long term wealth
- Multifamily investing works best when properties are operated like businesses
- Investors must understand debt, interest rates, and capital markets
- Real assets tied to human necessity outperform speculative assets over time
Russel also explains why many multifamily syndicators are currently struggling. Rising interest rates exposed deals that relied too heavily on appreciation instead of sustainable income. Investors who failed to lock in conservative financing structures or maintain operational discipline are now facing significant losses.
## Lessons From the 2008 Financial Crisis
Both Russel Gray and Rod Khleif openly discuss the painful lessons they learned during the 2008 collapse. Russel explains that before the crash, he underestimated the impact Wall Street and the bond markets could have on Main Street real estate investors. He believed his portfolio was insulated from broader financial instability, only to discover how interconnected the financial system truly was.
The episode provides a detailed explanation of how mortgage backed securities, excessive leverage, and Federal Reserve policy contributed to the housing crash. Russel also connects those same concepts to today’s market conditions, warning investors to remain cautious about overleveraged deals and inflated valuations.
At the same time, he points out that difficult market cycles create extraordinary opportunities for disciplined investors who focus on fundamentals. Investors with strong cash flowing assets and conservative debt structures are often able to survive downturns and acquire distressed opportunities at favorable prices.
## AI, Productivity, and the Future of Entrepreneurship
Another major topic in the conversation is artificial intelligence and its impact on Main Street investing and entrepreneurship. Russel Gray believes AI will dramatically reshape business ownership, productivity, and investing over the next decade.
He argues that AI presents two very different futures depending on how people respond. Employees who rely on repetitive task based jobs may face growing disruption, while entrepreneurs who learn to leverage AI tools could experience unprecedented productivity gains. Russel encourages younger generations to focus on entrepreneurship, operational skills, sales, and business ownership rather than depending solely on traditional career paths.
The discussion highlights several important opportunities emerging from AI:
- Buying and modernizing small businesses owned by retiring baby boomers
- Using AI to improve operational efficiency and marketing
- Increasing productivity in real estate operations and acquisitions
- Building scalable Main Street businesses with lower overhead
Russel believes the next generation of entrepreneurs will combine technology, AI, and practical business ownership to create wealth far more efficiently than previous generations.
## Russel Gray’s Perspective on Mentorship and Investor Education
A recurring theme throughout the podcast is the importance of mentorship. Russel shares how his own entrepreneurial background, sales training, and investor education shaped his success over the years. He explains that information alone is no longer enough in today’s environment. Investors need guidance, community, and direct mentorship from experienced operators who have survived multiple market cycles.
He also discusses the evolution of investor education through the Real Estate Guys platform and his newer initiatives focused on entrepreneurship and financial literacy. Russel strongly believes that real learning happens through relationships, problem solving, and implementation rather than simply consuming online content.
## About Russel Gray
Russel Gray is a longtime real estate investor, entrepreneur, educator, and former co-host of the highly influential Real Estate Guys Radio Show. Over the last two decades, he has helped educate investors on real estate syndication, cash flow investing, entrepreneurship, and financial markets. Russel is also involved with Collective Inner Circle alongside several prominent real estate and economic thought leaders.
His work today focuses heavily on Main Street investing, entrepreneurship, mentorship, financial education, and helping investors adapt to rapidly changing economic conditions.
If you want to hear the full conversation and detailed insights, watch the podcast video or read the complete transcript below.
## **Main Street Investing FAQ**
## **What Is Main Street Investing?**
Main Street investing is an investment philosophy focused on owning real assets, businesses, and income producing investments that generate consistent cash flow and long term wealth. Unlike speculative Wall Street investing, Main Street investing emphasizes tangible assets such as multifamily real estate, small businesses, commercial properties, and essential service companies that provide real economic value.
## **Why Is Main Street Investing Important in 2025?**
Main Street investing has become increasingly important in 2025 because investors are seeking stability, cash flow, and protection against inflation and market volatility. Many wealthy professionals and business owners are shifting away from speculative investments and focusing on real assets that can produce reliable income during uncertain economic conditions.
## **How Does Main Street Investing Differ From Wall Street Investing?**
Main Street investing focuses on owning productive assets that generate income and serve essential human needs, while Wall Street investing often centers around stocks, paper assets, and speculative growth. Main Street investors typically prioritize cash flow, operational control, and long term stability over short term price appreciation.
## **Why Do Real Estate Investors Prefer Main Street Investing?**
Many real estate investors prefer Main Street investing because it allows them to build wealth through rental income, appreciation, tax advantages, and leverage. Multifamily real estate investing, in particular, provides recurring monthly cash flow while also offering long term asset growth and inflation protection.
## **What Types of Assets Are Common in Main Street Investing?**
Common Main Street investing assets include multifamily apartment communities, mobile home parks, self storage facilities, industrial real estate, small businesses, commercial properties, and essential service companies. Investors often target businesses and properties that perform well regardless of broader economic cycles.
## **How Does Cash Flow Impact Main Street Investing?**
Cash flow is one of the most important components of Main Street investing because it provides ongoing income and financial resilience. Investors who focus on cash flowing assets are often better positioned to survive economic downturns, rising interest rates, and market corrections.
## **Is Multifamily Real Estate a Good Main Street Investment?**
Multifamily real estate is widely considered one of the strongest Main Street investing opportunities because housing remains a basic human necessity. Apartment communities can generate recurring rental income, provide tax benefits, and create long term wealth through operational improvements and market appreciation.
## **Why Are Investors Moving Away From Speculative Investments?**
Many investors are moving away from speculative investments because rising interest rates, inflation, and economic uncertainty have exposed the risks of relying solely on appreciation. Main Street investing offers a more stable approach focused on income generation, asset ownership, and operational performance.
## **How Can AI Impact Main Street Investing?**
Artificial intelligence is transforming Main Street investing by improving operational efficiency, marketing, underwriting, customer service, and business productivity. Investors and entrepreneurs who leverage AI tools can often reduce expenses, streamline operations, and scale their businesses more effectively.
## **Can Main Street Investing Help Protect Against Inflation?**
Main Street investing can help protect against inflation because many real assets naturally increase in value over time. Multifamily real estate, small businesses, and income producing properties often have the ability to raise rents, increase pricing, and maintain cash flow during inflationary environments.
## **What Skills Are Important for Main Street Investors?**
Successful Main Street investors typically develop skills in sales, negotiation, leadership, underwriting, business operations, networking, and capital raising. Understanding cash flow analysis and market fundamentals is also critical for long term success.
## **Why Is Mentorship Important in Main Street Investing?**
Mentorship is important in Main Street investing because experienced investors can help shorten the learning curve and prevent costly mistakes. Many successful real estate investors accelerate their growth by learning directly from operators who have already navigated market cycles and economic downturns.
## **How Can Beginners Start With Main Street Investing?**
Beginners can start with Main Street investing by learning about cash flow, studying real estate markets, networking with experienced investors, and building financial literacy. Many investors begin with smaller rental properties, passive syndication investments, or partnerships before scaling into larger commercial real estate opportunities.
## **What Is the Long Term Goal of Main Street Investing?**
The long term goal of Main Street investing is to create sustainable wealth, financial independence, and resilient income streams through ownership of productive assets. Investors who focus on cash flow and operational excellence often build wealth that can endure across multiple economic cycles.
00:00:00:01 – 00:00:23:03
Rod Khleif
Welcome back to life time cash flow through real estate investing. I’m Rod Khleif and I’m thrilled you’re here. And I’ve got a real blast from the past for me here today. So I was interviewed on the Real Estate Guys podcast, which has been around forever, a lifetime ago, and Russel Gray was one of the interviewees. And, and I knew we’d met.
00:00:23:03 – 00:00:30:10
Rod Khleif
I just couldn’t remember where if he’d been on my show or vice versa. But it’s just a real treat to have him here today. Welcome back. Welcome to the show, rusty.
00:00:30:10 – 00:00:42:02
Russel Gray
Yeah. No. It’s good. It’s great to be here. And congratulations. And everything you’ve done. It’s. You’re part of the old guard like we were, right. There’s no question. Wave of thought leaders had pulled Main Street into real estate investing.
00:00:42:07 – 00:01:06:10
Rod Khleif
No question. You know, it’s it’s interesting. I was telling Russel that I came to his event and I’m sorry. Your partner’s name? Robert Helms. Robert helms. Yeah, I came to Robert and Russel’s, event. Oh, my God, it had to be had to be ten, 11 years ago. Robert Kiyosaki was there and it was about syndication and, and got a picture with Robert and, that was funny.
00:01:06:10 – 00:01:31:09
Rod Khleif
And, and, it was in Phoenix. And we just know pretty much all the same people, you know, people that have that have, you know, been thought leaders in the space. We, you know, we talked about one of them and, and, yeah. Just, this is going to be a lot of fun. But, you know, Robert, Russel rather Russel is, really bullish on Main Street versus Wall Street.
00:01:31:09 – 00:01:39:08
Rod Khleif
And so we’re going to talk about all that today. So anyway, why don’t why don’t you do a much better job of introducing yourself than I just did.
00:01:39:10 – 00:02:04:21
Russel Gray
Yeah. So, you know, I talked about kind of being one of the old guard, for me, I grew up, in Silicon Valley. Before it was Silicon Valley. My dad was a high tech entrepreneur there. So he was an immigrant from the Philippines. And, so I kind of grew up with the, entrepreneurial mindset. And yet I saw tech as being something that would be very difficult to kind of keep up with.
00:02:04:21 – 00:02:27:09
Russel Gray
And so I just wanted to chart my own path. And, I ended up moving to Southern California. My dad’s younger brother, taught me outside sales and I discovered that sales is the essential life skill. And anything you want to do in business, if you can sell, you can survive. And so that that turned out to be more valuable than any college education I could have gotten.
00:02:27:09 – 00:02:47:17
Russel Gray
I started my first business. I bought my first piece of property all before I was 19 years old, and, you know, I made a lot of mistakes. And I think, you know, I talk openly. In fact, I talk a lot more about my mistakes than anything I’ve ever done. Well, because I think all the best lessons are in the mistakes, and people don’t like to talk about them.
00:02:47:18 – 00:03:10:13
Russel Gray
And I feel like I paid full price for the lessons, so I. I’m always talking about what I learned in those, in those difficult times. And so I made some mistakes. But I left Southern California, came back to, to Silicon Valley and went into outside sales. And there I was very, very fortunate to end up in some of the best sales training ever.
00:03:10:13 – 00:03:16:03
Russel Gray
I got handed a set of tapes by a buddy of mine for a guy I’m sure you know and love, Tom Hopkins.
00:03:16:03 – 00:03:17:18
Rod Khleif
Oh my God, he’s been on the show twice.
00:03:17:18 – 00:03:22:23
Russel Gray
Yeah. So Tom, Tom and I become good friends and my my current wife is very good friend.
00:03:22:23 – 00:03:42:07
Rod Khleif
Well, please give him my regards. Yeah, he, you know, I just sorry to interrupt for a second, but Tom is such a beautiful soul. And and he started this, this, this thing with me because he sends a handwritten note. That’s one of his things after each interview. So he sent me a couple, and I mentioned it. And I’ve got a wall in the other building here with hundreds and hundreds of thank you cards from students and what I.
00:03:42:07 – 00:03:45:01
Rod Khleif
Anyway, I digress, but yeah, Tom’s a wonderful.
00:03:45:05 – 00:04:10:07
Russel Gray
Well, you know, the point is, is that there’s classic and timeless wisdom and Tom is is one of those guys. The stuff he taught me in the mid 80s is just as valuable today. It doesn’t change, you know, in the mid 2020s. Right. And so I would encourage any young person who’s out there who happens to stumble across this to just invest time in learning how to sell.
00:04:10:09 – 00:04:28:03
Russel Gray
It’s a subset. Selling is really the core skill of leadership and communication. If you want to run a business, if you want to shepherd investors through ups and downs, lead a team, you need to raise capital. Whatever you want to do if you know how to sell, if you really understand, how to win friends and Influence people.
00:04:28:03 – 00:04:57:12
Russel Gray
Dale Carnegie’s classic work. I need my sales training, how to win funds and influence. I love it because I love adapted the things that I learned. And then I got a chance to go through some corporate training that was very, very valuable. And it taught me how to do business to business, selling. And in today’s world, where I believe that so much of the old structure is falling apart, and I think in that transition that we’re in right now and have been going through for a while, people get lost.
00:04:57:12 – 00:05:28:01
Russel Gray
And I want to encourage people to to don’t get lost in that lag. There’s some lags going on as we transition from one system to another, one dominant demographic to another, whereas we’re going through these changes and you try to apply the old rules to the new thinking. You’re to the new new reality, you can get lost, but at the same time, don’t throw away some of this classic wisdom because some of the old guys have something to say.
00:05:28:01 – 00:05:36:14
Russel Gray
And I think the younger people, you know, I always appreciated the older guys when they would invest in me. And I try to do the same thing now, the same that I’m on the other side of the equation.
00:05:36:18 – 00:05:57:09
Rod Khleif
I yeah, you know, it’s funny. I’ve got I’ve got a couple of Tom Hopkins books downstairs in my library. You were perusing earlier and, you know, I call it influence as well. It’s not just sales. It’s your ability to influence and and, you know, you I want to circle back to a couple things. You said, you know, you talked about mistakes, and I call them seminars, and I got that from Tony Robbins, and I call them seminars.
00:05:57:09 – 00:06:18:11
Rod Khleif
You know, I, I lost $50 million in 2008 and nine and, you know, I have, I do boot camps, I do virtual boot camps, and I have some of my students come on, my warriors and I always ask the question, talk about a seminar. Because, like you said, I think you learn more from from the, the when you get your butt kicked than you do from the successes.
00:06:18:11 – 00:06:25:22
Rod Khleif
And so, you know, they expect it. And we always go through that. But talk about what you’re doing now to know bring us current here.
00:06:26:01 – 00:06:51:14
Russel Gray
Well it’s interesting because it it it’s back to the future and it’s also changed because of what I went through. I lost not 50 million but many millions in 2008 as well. Right. And that changed me. Yeah. Because I realized my ignorance, my naivete, my my feeling of being safely insulated from the shenanigans on Wall Street. Yeah.
00:06:51:16 – 00:06:59:22
Russel Gray
That what happened there wouldn’t get on me. And I was naive enough to listen to people like Ben Bernanke, who goes, oh, this subprime thing is, wow.
00:07:00:00 – 00:07:01:04
Rod Khleif
I haven’t heard that name, and I’m not.
00:07:01:04 – 00:07:28:23
Russel Gray
Going to be a problem, you know? And because I didn’t understand the mechanics of the system, I couldn’t tell when the when the wave I was riding was going to break. I couldn’t tell when the momentum was going to shift. I had my whole portfolio, my whole business. Everything was geared for sunshine. So even though I remain optimistic, I definitely understand to be balanced and you got to play defense too.
00:07:29:00 – 00:07:57:18
Russel Gray
So, when I first got started in the financial space, after I had spent some time in the life insurance and securities industry, I realized that most of the training in that space was given by salespeople who had a very narrow agenda to teach you enough to buy their product. But the integration, putting it all together was very difficult, and that’s why people would turn their money over to financial advisors on Wall Street.
00:07:57:20 – 00:08:21:01
Russel Gray
But of course, having been in that space too, I understand those guys really didn’t know what they were talking about. They were still talking what the analysts were pushing down and they were selling whatever gave them their promotion, just like medicine and pharma. I mean, that’s just that’s maybe the dark side of capitalism and profit motives is sometimes people get myopic and they put their short term interests above the long term interests of the clients.
00:08:21:01 – 00:08:21:23
Rod Khleif
Very commodity.
00:08:21:23 – 00:08:46:23
Russel Gray
So what what I realized is that what people needed was context. And I it being in Silicon Valley and in the 90s and everything was.com and I was really watching the internet roll out and I could see how information, you know, the idea that we’re in the information age, I really felt like we were going to move into that age of wisdom where wisdom was going to be more valuable.
00:08:46:23 – 00:09:06:23
Russel Gray
Context was going to be the premium product and content. All the bits of information were going to become ubiquitous, and it’s only become more so even with AI is only regurgitating what thought leaders have produced. And I think that’s going to produce a whole new other opportunity. We can talk about that in a minute.
00:09:07:05 – 00:09:08:00
Rod Khleif
Let’s definitely talk.
00:09:08:01 – 00:09:41:05
Russel Gray
But but, but so I came up with this idea. I looked at church, I said, what is the most resilient, most proven, most powerful, most transformative method of human education and development at mass scale? And I looked around like, oh, it’s a church, and church has done better than colleges. It’s done better. It’s done better than any, any form of anything that has produced people who can think for themselves and can can live according to a philosophy or creed or principle.
00:09:41:09 – 00:10:07:19
Russel Gray
So I said, I want to create an investor mentoring program around that same model. And I believe that humans weren’t designed to sit and just consume information and regurgitate it. But we learn by doing. We learn by working with someone, having someone show us. And that the old adage that when the student is ready, the teacher appears. That’s how why it’s so important to be in a mentoring relationship.
00:10:07:19 – 00:10:20:20
Russel Gray
Because if you have to solve 100 hard problems to get to your next million dollar income, then the question is not if you can solve them. The question is how fast can you sell about.
00:10:20:20 – 00:10:21:06
Rod Khleif
Speed.
00:10:21:08 – 00:10:38:06
Russel Gray
Right? If you if it takes you. I do this all the time. If it takes you three months, 90 days to solve each hard problem, you’re going to take 24 years to get there. But if you can do it in a month, it’s only going to take you eight. If you can do it in a week, it’s only going to take you two.
00:10:38:08 – 00:10:59:19
Russel Gray
So who are you connected to? How fast can you get an answer from someone who’s been there, done that because the information is available. That’s why YouTube so popular. You can look things up, but that’s not the same as being mentored. So I think having those live interactive communities that you can be a part of small groups, if you will, mentoring clubs.
00:10:59:21 – 00:11:21:11
Russel Gray
And so I, I, I had met Robert Helms looking for faculty to build out this concept of investor mentoring clubs, and we did a version of it for ten years in Silicon Valley. And people like Kathy, Fit Key and Real World Network looked at what we were doing. Go, hey, we’re going to do that too. So I felt like that innovation gave birth to, you know, a bit of a movement.
00:11:21:12 – 00:11:40:19
Russel Gray
A little while later, the same thing happened in the syndication space. We talked about this earlier, but I saw the Jobs Act, and and I wrote a report, New Law Breaks Wall Street monopoly. And I believe there was can be huge opportunity in Main Street mom and pops competing with Wall Street because we were going to be able to advertise and I felt like we had a better product.
00:11:40:19 – 00:12:07:03
Russel Gray
Yeah. And yet the financial education that’s out there still very much geared towards buy low sell high speculative gambling mentality. And Kiyosaki came along with the idea of cash flow and how important cash flow was. And I think he began to break that paradigm. And obviously people resonated. They don’t get a job, start a business, don’t invest for capital gains or speculation, but invest for cash flow.
00:12:07:04 – 00:12:09:05
Rod Khleif
So the name of my podcast, Russel.
00:12:09:07 – 00:12:22:01
Russel Gray
Bell, is so, so, so it’s like, well, how do we teach people how to do that at scale? And so a couple years ago, I made the difficult decision to walk away from my partnership with Robert.
00:12:22:01 – 00:12:28:00
Rod Khleif
And just to give a little framework, guys, you and Robert had the Real Estate Guys podcast for how many years?
00:12:28:00 – 00:12:31:10
Russel Gray
So he started the show in 1997. Okay. Other guy.
00:12:31:10 – 00:12:31:21
Rod Khleif
Okay.
00:12:31:21 – 00:12:51:08
Russel Gray
And it was a radio show in the San Francisco Bay area, and that’s how I found him. And I went to one of his seminars, and in 2004, the original co-host resigned, and Robert and I had already been working together for a couple of years doing investor education. He says, hey, would you be willing to step in as my temporary co-host until I find a permanent replacement?
00:12:51:10 – 00:12:57:15
Russel Gray
I said, sure, yeah, but because we’d been teaching together for a couple of years, we had some real mojo and so.
00:12:57:15 – 00:12:58:15
Rod Khleif
Some synergies, I mean.
00:12:58:15 – 00:13:01:15
Russel Gray
I recall so I, we just kept doing it.
00:13:01:17 – 00:13:03:05
Rod Khleif
And, how long did you do it?
00:13:03:05 – 00:13:29:01
Russel Gray
All all told, I was co-host for 20 years. Robert and I were together for 24 years. Holy cow. Yeah. So it was it was like, it was hard. But now we’re still partners in Collective Inner Circle with George Gammon, Ken McElroy, Jason Hartman, and then Robert and I. So that, okay, that partnership began just as I was getting ready to leave the real estate guys and I and I, and I told the guys that go, hey, I, you know, if you want Robert and you don’t want me, that’s okay.
00:13:29:03 – 00:13:31:22
Russel Gray
But, you know, we’re not going to be a package anymore.
00:13:32:01 – 00:13:43:14
Rod Khleif
Yeah. No, I’m some of these names you’re thrown out there. Ken McElroy, wonderful human being. He’s been on the show a couple of times. And Kathy Fett, he, of course, is a great friend. You know, these are all old guards. We’re old guards.
00:13:43:14 – 00:14:05:20
Russel Gray
And so that’s that’s the whole that’s the whole point. Yeah. And so with the first thing I did when I left the real estate guys was, I had this experience the year before. Our friend, our mutual friend Robert Kiyosaki, invited me, and a bunch of his friends to go to, Arizona State University, where he was appearing with Dennis Prager at a pretty controversial event.
00:14:05:20 – 00:14:35:21
Russel Gray
Apparently it was just about health, wealth and happiness. And he brought in his cardiologist, Doctor Rada. And, he was there and Charlie Kirk was there. And so it was at ASU, and there was all these professors that were protesting, and they were very upset because Prager is a conservative Christian guy. Right. And so we went to support Robert, because he asked us to and I ended up in the VIP, back room, and I met Charlie and I said, hey, Charlie, I got an idea.
00:14:35:21 – 00:14:58:01
Russel Gray
Let me tell you, you’re really you’re young guy, you know, I’ve got this idea. And I explained to him the thesis for, what I wanted to do called the Raising Capitalists Project. It was to pair, experience entrepreneurs and investors with parents of kids when the parents don’t know how to start a business, and they think the only thing they can do is send their kid to college to give them a better life.
00:14:58:01 – 00:15:18:13
Russel Gray
It’s like, no, no, start a family business and let the kids mentor or apprentice with you in the business. And and you can be apprentice yourself. And he goes, I love it. I want to help you. Here’s my email. I have you on the show. And so it took me a little while. Then in January of 24, I, sat with, went to dinner with Mark, Victor Hanson and Crystal Hanson.
00:15:18:15 – 00:15:20:04
Rod Khleif
And they I’ve had Mark on the show Chicken.
00:15:20:04 – 00:15:24:18
Russel Gray
Soup of the soul for you young people have never heard of Mark, bestselling book author in history.
00:15:24:18 – 00:15:26:15
Rod Khleif
Best best selling book and,
00:15:26:17 – 00:15:27:22
Russel Gray
600 million book.
00:15:27:22 – 00:15:32:21
Rod Khleif
600 million. Yeah. He was on the podcast a while back. He’s a wonderful human being as well. Yeah.
00:15:32:21 – 00:15:52:00
Russel Gray
So, so he he and Craig, he goes, look, I will help you. I will support you. I’ll open doors for you. Nice. And so I thought about that and I thought, well, I got Charlie Kirk who really understands you. What a travesty. And and then you’ve got Mark Victor Hanson, who is just legend in the publishing business. They both think this is a banger idea.
00:15:52:00 – 00:16:06:06
Russel Gray
Both ends of the spectrum. So I’m like, okay, so, three months later I told Robert, you know, I’m, I’m I need to break up. I’m trying to find a smooth exit. There isn’t one. I’m going to rip the Band-Aid off. So it’s a little awkward, but we got through it.
00:16:06:07 – 00:16:06:22
Rod Khleif
Okay.
00:16:07:00 – 00:16:28:03
Russel Gray
And in July, I launched the foundation. Or the raising capitalist foundation I created as A501 C3 nonprofit. And I went to Freedom Fest, a conference put on by a friend of mine, Mark Scanlon. And it was July 13th, 2024. That and I’m getting ready to go on stage to speak. And I’m sitting there waiting to go on stage.
00:16:28:03 – 00:16:37:06
Russel Gray
A guy who’s got the stage in front of me is finishing up, and everybody’s phones are going off. Trump had just been shot in Pennsylvania.
00:16:37:06 – 00:16:38:02
Rod Khleif
Good lord.
00:16:38:04 – 00:17:01:12
Russel Gray
It’s always you remember that that day. Wow. That day. So I went up and I gave my talk and everybody of course was distracted. But I got good video. It’s up on the Raising capitalists.org website. And I explained the thesis of what I wanted to do. So that was kind of step one and the idea of take mentoring, but now take mentoring and not just make it about investing because I didn’t create the real estate guys brand.
00:17:01:12 – 00:17:05:19
Russel Gray
I kind of you know, inherited it or, you know, we.
00:17:05:21 – 00:17:08:14
Rod Khleif
I was a you were big a big piece of it.
00:17:08:14 – 00:17:24:17
Russel Gray
Well, no, I mean I became the business strategy. I mean, there’s a lot of things. I mean, my fingerprints were all over it for sure, but it was always Robert Show. It was always his thing. I wanted to do more than real estate and more than real estate investing. So when I saw syndication, I really pushed hard to move in that direction.
00:17:24:17 – 00:17:40:19
Russel Gray
I go, this is a chance for us to be Biggerpockets was coming up. I’m like, we’re not going to be bigger pockets, right? I’ve talked to Brandon. I’m not going to work hundred hour weeks. I mean, what he did to build that thing nearly killed him, right? And it was great. And it’s been been very, very good for real estate and real estate investing.
00:17:40:19 – 00:17:55:06
Russel Gray
But I wanted to go next level. I go, what’s missing? What’s missing is how do you raise millions of dollars and play this game at the next level? I go, we know how to do that. We can teach people how to do that. Nobody’s in that space yet. We can pioneer this thing. Right? And so we did. Yeah.
00:17:55:06 – 00:17:58:12
Rod Khleif
You did. I went to the event, for God’s sakes, and nobody was doing it.
00:17:58:12 – 00:18:04:12
Russel Gray
Yeah, nobody was doing it. Now Hunter Thompson’s into it. Oh, sure. You got Brad some rock. There’s a lot of guys you.
00:18:04:14 – 00:18:05:08
Rod Khleif
Oh, I oh, sure.
00:18:05:08 – 00:18:32:00
Russel Gray
A lot of a lot of. It’s great. It needs to happen. My goal when we started that thing was to pull hundreds of billions of dollars a year out of Wall Street and bring it back to Main Street, because I just think it’s absolutely ridiculous that Main Street gets up every day and does the real work, and then they pay their taxes and they live below their means and do the right thing, and then they take their savings and they send it to Wall Street, and Wall Street gambles with it.
00:18:32:06 – 00:18:54:22
Russel Gray
And when they win, they keep most of it. And when they lose, they put it to the public either directly because the investors take the loss or usually they get bailed out. And everybody who is an honest worker who even if you don’t invest in Wall Street, you get inflation. And if you don’t know how to invest to win from it, of course you know all about it.
00:18:55:03 – 00:18:57:02
Rod Khleif
You’re preaching to the choir here, my friend.
00:18:57:02 – 00:19:12:02
Russel Gray
Okay, but, but but there’s a lot of people who don’t understand it. And what’s bad now is. Well, the mind your own business crowd. I gave this talk at the New Orleans Investment Conference last year, and I go, look, you guys are the salt of the earth, right? The mind, your own business crowd, the people that get up every day.
00:19:12:02 – 00:19:36:13
Russel Gray
You take care of business, you pay your taxes. You pay the bills. You create jobs. You create great products. You provide the services we all depend on. God bless you. But here’s the problem. Well, you’re busy minding your own business like Nero fiddling while Rome burns. These people have taken your children’s minds and they’ve polluted them to believe that you cheated.
00:19:36:15 – 00:19:39:09
Russel Gray
There are millennials out there that are on a tear.
00:19:39:10 – 00:19:39:15
Rod Khleif
00:19:39:18 – 00:19:40:23
Russel Gray
To to call out the.
00:19:40:23 – 00:19:48:17
Rod Khleif
Boomers. You be careful. Careful. You’re you’re heading down a path that I’m very, very animated about. And I agree completely.
00:19:48:19 – 00:20:10:23
Russel Gray
We need to come together because because the millennials are right. They inherited a raw deal. The system is rigged. What they don’t understand is the boomers inherited a bad deal. Now, it may not seem like it because we wrote a 40 year bond bubble that created equity everywhere. Robert and I wrote a book, equity Happens, and it was based on this premise.
00:20:11:03 – 00:20:43:05
Russel Gray
Like just buy a piece of property, wait ten years, you’re going to double your equity, right? Right. That’s just the deal. But I think that game’s about to change, and I think it needs to. It means the old guard is going to have to learn to play the game a new way. But I think the millennials need to understand that our parents let Nixon take us off the gold standard, and their parents let FDR confiscate all the gold, and their parents let the Federal Reserve come into existence, which is the genesis of the whole problem.
00:20:43:06 – 00:21:16:08
Rod Khleif
Listen, I remember when I was nine years old and immigrate to the country three years prior to that. So this is 1969. Hamburgers were $0.10, gas was $0.24 a gallon. And, and and there were multiple there were, fractions of a penny on the, on the price of gas where I was like 24.9. You remember this? Yeah. And and you know what has happened to the dollar because of all these things you just mentioned is, is a travesty, candidly.
00:21:16:10 – 00:21:39:10
Rod Khleif
And, you know, I’ll tell you, it’s, you know, I invest in gold. Thank God, when it was $1,500. And it’s been an incredible thing. You know, I’ve got quite a bit of it in a vault downtown, you know, and but yeah, this inflation thing has been. And, you know, I had an economist sitting in that in that seat, I don’t know, about a year and a half ago.
00:21:39:12 – 00:22:05:23
Rod Khleif
And he, he said that 80% of the U.S. currency was created in the Biden administration, literally up to 2020, only 20% of the currency U.S. currency in circulation was around, and another 80% was created those four years. And we’re wondering why there’s inflation. I mean, you know, it’s it’s it’s inevitable. Now, you it indicated before we started recording that you think there’s going to be another round of that.
00:22:05:23 – 00:22:08:02
Rod Khleif
Do you think there’s either inflation is going to continue.
00:22:08:02 – 00:22:30:01
Russel Gray
Well you know I mean this is may be controversial. I’m kind of warming up for this mastermind we’re about to do. But but I don’t think that we are in a business as usual. Political or geopolitical environment. Oh, no, I think I think the system that we are, a part of is coming to an end. And it was going to come to an end no matter now.
00:22:30:01 – 00:22:31:16
Rod Khleif
What system specifically.
00:22:31:18 – 00:22:54:01
Russel Gray
The, the, the, central bank, the Federal Reserve, the fiat money system. So this was an experiment, right? We came the world came off the gold standard, effectively, officially in 1971 when Nixon broke Nixon’s standard. So there’s there’s a lot of history there. And if you’re new, I’m just going to encourage you study the history. I’m I’m working on a series to teach the history.
00:22:54:01 – 00:23:15:22
Russel Gray
Mike Maloney did a great series called The Hidden Secrets of Money, and that teaches it pretty well. But I think there’s pieces that are missing. And I love Mike. We’re good friends. Fact he’s a member of our mastermind. This is Kiyosaki, so hopefully I’m going to see him both this weekend. But I think that that, you know, I have the benefit of I raised, five millennials.
00:23:16:00 – 00:23:35:15
Russel Gray
So I know a little bit about the way they think. I know a little bit about what their life has been like. I know a little bit about the challenges that they’ve faced. Unfortunately, my kids are basically entrepreneurs, and so they, by and large, have done pretty well. And I think we’ll continue to do pretty well because of the way they think.
00:23:35:17 – 00:23:38:17
Russel Gray
They take personal responsibility. They don’t blame. Right.
00:23:38:19 – 00:24:05:16
Rod Khleif
And I’ll wait a minute. I want to stop you there. That is, that’s that’s a, rare thing for millennials right now. I mean, I can’t tell you how many. You know, I get a lot of hate, honestly, online. You know, no one should have owned 800 houses. And, you know, people that that there’s an entitled, you know, piece to this that, that, you know, you’re blessed that your children don’t, you know, didn’t grow up that way.
00:24:05:18 – 00:24:06:08
Rod Khleif
Well.
00:24:06:10 – 00:24:29:03
Russel Gray
Like I said, I was raised by an immigrant entrepreneur. Right. Fled. Japanese occupied, Philippines. Oh, wow. And so he knows what tyranny looks like firsthand. And so he has a real appreciation for America. Right. And the Constitution and the liberties that we basically take for granted in some case, we actually abuse. Right. And so, I kind of come by that a little bit, honestly.
00:24:29:03 – 00:24:44:23
Russel Gray
He also realized as an immigrant, nobody was going to hand him anything. He was going to have to figure it out. And so, he didn’t talk a lot to me, but I watch him, and he was a very, very hard worker, and he was a risk taker. He wasn’t afraid to bet on himself. And so, I got a chance to see that.
00:24:44:23 – 00:25:03:00
Russel Gray
And I think some of that got off on me. The other thing is he he left me to my own devices. And so early in my life, I resented him. I felt like he ignored me. He’d been selfish. But as I got older, I realized because I had to figure it out, I figured it out. But as I began to, we homeschooled our children.
00:25:03:00 – 00:25:29:19
Russel Gray
Oh, wow. And so as I went through that process and I began to study so I could teach, I realized that so much of what I had learned about history and the way the world worked was, I’m not going to say it was false, but it was lacking. There were so many things that were missing, and those missing pieces allowed you to draw, either bad conclusions or no conclusions whatsoever.
00:25:29:19 – 00:25:48:15
Russel Gray
And so you could regurgitate information and pass a test, but you didn’t really understand the way things worked. And so I found my ignorance again in 2008, I quadrupled down on it because that was very painful. But it wasn’t the first time I’d seen lost my dad lost everything in the 87 crash. Oh, no. Can I was in the securities industry at the time.
00:25:48:15 – 00:25:50:10
Russel Gray
And so I go, look, I don’t understand.
00:25:50:10 – 00:25:52:03
Rod Khleif
Is that the SNL one I’m for?
00:25:52:05 – 00:26:12:16
Russel Gray
No, no, I’m SNL came a couple years later, but that was Black Monday. Oh, God. That was the beginning of the Alan Greenspan what they called the Greenspan or the fed put. Got it. Ronald Reagan administration reaction to that was to form what they called the President’s Working Group, which is essentially the Plunge protection team. And they found out because of the way values work.
00:26:12:16 – 00:26:28:06
Russel Gray
And this is a whole thing, I could go off on why equity is fake. And, you know, I wrote equity happens and you can make a lot of money with equity. But you better turn it into something real. If you just went around, you know, posing with your balance sheet and go, hey, assets minus liabilities equals net worth.
00:26:28:06 – 00:26:41:15
Russel Gray
And you think or something like, I’m guessing when you lost $50 million, it wasn’t cash flow equity. Primarily it was equity. Yeah. Because equity is fickle. Equity is fake. And people who don’t understand what real equity is versus fake equity.
00:26:41:15 – 00:26:43:00
Rod Khleif
Well, would you describe it, please?
00:26:43:00 – 00:26:44:15
Russel Gray
Well, so fake equity is very.
00:26:44:15 – 00:26:56:06
Rod Khleif
Simple is what I had basically you know, I had it and my real estate was worth 50 million more than I owed on it. And so I thought I was golden. And so no, it’s this is very interesting conversation for me.
00:26:56:06 – 00:27:20:02
Russel Gray
So this is the essence of it. Right? Okay. You talk about the system changing. Right. So the system was changing because the system was all based on, on fake fake money, fake equity and real estate investors will get it. I give it to you in a real estate way so you can understand it. And I’ll explain to you how it, it it it, applies to most of Main Street out there with their four on one case.
00:27:20:04 – 00:27:50:08
Russel Gray
So in, in real estate, if you had $1 million economy, there’s only $1 million total purchasing power. That is it, right? That is all there is. And there are only ten houses. That’s all the product. That’s it. Ten houses. They are all 100% identical down to, you know, the fiber in the carpet. They’re identical. Right. If you were to value each one of those houses, you would take $1 million total available divided by ten total inventory, right?
00:27:50:11 – 00:28:10:05
Russel Gray
$100,000 each. But because there’s $1 million in the economy, the participants in the economy are doing what they do, and somebody ends up with a couple hundred thousand says, hey, I want to buy a house for 200,000. So he goes and buys one of the houses for 200,000, and the guy who sold it can rent it, you know, it’s got the 200,000.
00:28:10:06 – 00:28:38:09
Russel Gray
Okay. So you still got oh, you still got $1 million in the economy. One guy got $200,000 for his house. That transaction settled. So for that buyer and that seller and that buyer and seller alone, that house was worth 200,000. I got you. But there are nine other people now who all think their house is worth 200,000, and an appraiser will come give them that value.
00:28:38:11 – 00:28:46:07
Russel Gray
So now you think you are in a $2 million economy. But where did the money come from? It didn’t. Got it. It doesn’t exist.
00:28:46:08 – 00:28:48:17
Rod Khleif
Oh that’s fascinating. Yeah. Absolutely fascinating.
00:28:48:17 – 00:29:13:08
Russel Gray
So now you’ve got the S&P 500 hitting all time highs right. Driven by seven stocks. Everybody else is a loser. And people like oh well you can’t beat the indexes. Now you go back to a government that wants to control public perception. That creates a plunge protection team that can buy those seven stocks. Yeah. Now they can create fake prosperity.
00:29:13:08 – 00:29:15:13
Russel Gray
So you don’t cry when you have to pay, which.
00:29:15:13 – 00:29:16:06
Rod Khleif
Is what they did.
00:29:16:09 – 00:29:17:18
Russel Gray
Which is exactly what they did.
00:29:17:20 – 00:29:22:03
Rod Khleif
So so do you feel like there’s a reckoning on the horizon?
00:29:22:03 – 00:29:24:02
Russel Gray
100%. Yeah, 100%.
00:29:24:02 – 00:29:29:17
Rod Khleif
Yeah, I do too, actually, but I didn’t I never heard that explain that well before. That’s fascinating. Well, you.
00:29:29:17 – 00:29:31:18
Russel Gray
Know, when you want to teach kids, you got to just like.
00:29:31:18 – 00:29:32:03
Rod Khleif
Yeah.
00:29:32:06 – 00:29:44:18
Russel Gray
Dumb it down. Or if I can teach it to an old greater than than than, you know, that way in kids hockey taught me that I I’d go on Kiyosaki show and I’d go to be all smart, right. He would just rip me. Yeah.
00:29:44:18 – 00:29:45:18
Rod Khleif
No kidding bro.
00:29:45:19 – 00:29:51:20
Russel Gray
Come on, you’re killing me. Wow. But but he’d keep it simple. Keep it simple. Like, okay, I got to keep.
00:29:51:20 – 00:30:01:19
Rod Khleif
No, I totally get it. Wow. That’s that’s very, very interesting. So so you believe that we’re going to see some pain in the stock market in the in the future here.
00:30:01:21 – 00:30:25:00
Russel Gray
Yeah. Well so so Cusack you wrote this in prophecy credit where credit is due. He just looked at demographics. We’re probably going to talk demographics who were talking on it before we hit record. Right. And you know, demographically you’ve got boomers who control a lot of the wealth and they’re getting to required minimum distributions. They’re getting to the season of life where they need the money.
00:30:25:01 – 00:30:44:18
Russel Gray
Some of them are going to pass the money on, and the heirs are going to sell everything and spend the money and do what they want to do. So the idea is there’s going to be some pressure downward on the stock market. And so I think that the sooner you just start focusing on what’s real and essential.
00:30:44:21 – 00:30:46:03
Russel Gray
We talked about residential.
00:30:46:04 – 00:30:48:12
Rod Khleif
Define defined define define rule in a sense.
00:30:48:13 – 00:31:07:14
Russel Gray
Well if it serves a basic human need first of all if it’s tangible if it’s real okay. Right. Equity’s not real. It’s it’s an abstract. It’s a it’s this idea. Right. It’s only real if you make it real if you realize the gains. So unrealized gains aren’t really real. Really.
00:31:07:16 – 00:31:09:10
Rod Khleif
They’re not real. I learned that the hard way.
00:31:09:10 – 00:31:26:21
Russel Gray
They’re not real. Right. And so yeah, guys like you and me, when we go through that, it’s like, okay, obviously the way I thought was wrong because, you know, I’m partners with Ken McElroy in the collective inner circle. And I should get just get a chance to spend a lot of time with Kenny. And Kenny was always a cash flow guy.
00:31:27:00 – 00:31:52:19
Russel Gray
And so I lost everything in 2008. And I go, not my fault. Nobody saw it coming. Nobody could have seen it coming. I’m a victim. And that lasted for about 90 days. And then I looked at Ken, and Ken was crushing it. Ken was making all this money and I’m like, okay, wait a minute. Two guys basically the same age in the same market, in the same economic situation.
00:31:52:19 – 00:32:07:00
Russel Gray
One guy gets his butt handed to him and another guy’s making a fortune. So obviously it’s not the externals if they aren’t the things that I can’t control, right? You can’t control how you were when you were born. I was in control. What’s going on? The market?
00:32:07:00 – 00:32:09:23
Rod Khleif
What was his secret? Was it cash flow? That’s it. Okay.
00:32:10:01 – 00:32:35:08
Russel Gray
Thank you. He. He just invested for cash flow. So I said, okay, I’m going to study this like, it’s it’s like. And then I began to realize that equity there’s two types of equity homeowners get equity from comps. And comps come from a combination of interest rates and salaries, where people can way overpay for a house based on its economic utility as a place to live.
00:32:35:08 – 00:32:53:03
Russel Gray
Right? Because today you can’t buy a house and rent it for anything that makes sense, right? That tells you that it’s been way overbid. It’s actual utility, but people buy it. Why? Because they think it’s going to keep doing that. That’s a dangerous game to play now in commercial. And you’re you know I’m a multifamily guy.
00:32:53:03 – 00:32:53:21
Rod Khleif
Oh we’re seeing them right.
00:32:53:21 – 00:33:20:15
Russel Gray
Do you totally understand that the numbers the cash flow is actually where the equity comes from. So it’s impacted by the interest rates. Right. And so people who understand apartments for example, should be able to understand the bond market. But in my experience, they don’t know. And so for those of you who are out there who understand, you’ve been listening to rod and you’re like, okay, I get real estate.
00:33:20:15 – 00:33:43:18
Russel Gray
Let me just explain to you that real estate in the bond market, right in, in in real estate with with the multifamily property, if the rent stays the same and the cap rate goes up, what happens to the equity. Yeah. Goes down. Yeah. Right. And if the rent stays the same and the cap rate goes down, what happens to the equity it goes up.
00:33:43:19 – 00:34:09:01
Russel Gray
Bonds are exactly the same way. Bonds are exactly the same way. So if you have a bond that was issued at a coupon, it’s rate, it’s yield and interest rates go down, the value of that bond goes up. And so people who trade bonds for equity will buy bonds in a declining interest rate environment, thinking that’s going to continue to happen.
00:34:09:01 – 00:34:26:12
Russel Gray
And they can flip the bond for a profit. That’s why, you know, back in the day when bonds were half a bit, you know, half a point 50 basis points of who in the world would buy a bond at 50 basis points. Somebody who thinks it’s going to go to 25 basis points, right. That’s who’s going to buy that bond because they’re going to flip it.
00:34:26:14 – 00:34:45:17
Russel Gray
Right. So when you understand the paper side of the business like, oh okay I get it now. But when it got down to the zero bound now you’re like, oh hey, the rates can’t go down any further. So now this is a very dangerous game. How do you continue to make money. Well they’re going to they have to keep the rates down.
00:34:45:17 – 00:35:01:15
Russel Gray
So they need to continue to buy the bonds. So the only way for me to take those every few basis points is I got a lever up to the gills. I got to be in there at 100 to 1. Now, if I go in at 100 to 1 and I get even a little bit of a bump, I can make some profit.
00:35:01:17 – 00:35:15:08
Russel Gray
But we all know leverage. That’s a two edged sword. Sure is. Right. And so when that cuts the other way and that’s, you know, when Silicon Valley bank crash, the fed was trying to stop all this, cranked it up, crushed everybody including multifamily.
00:35:15:08 – 00:35:15:21
Rod Khleif
Yeah.
00:35:15:23 – 00:35:29:18
Russel Gray
And people who didn’t see it coming because they didn’t understand the bond market. Same thing in 2008. The bond market is what killed real estate. Real estate didn’t kill the bond market. The bond market killed really, really well.
00:35:29:18 – 00:35:31:22
Rod Khleif
Subprime played a big role in that as well.
00:35:31:22 – 00:35:43:04
Russel Gray
It did. But but and that that is a whole different thing, okay. That that that grew out of the government subsidizing housing.
00:35:43:04 – 00:35:44:03
Rod Khleif
Now there you go.
00:35:44:03 – 00:36:11:17
Russel Gray
No, that’s exactly. And so the government pushed all the prime lenders out to the edges of safety. And when when the economy hiccup a little bit, then the, then those, those payments that everybody started speculating on real estate. And as that began to happen, that was happening because so what happened in 92, Bill Clinton got elected and he immediately went after the health care system.
00:36:11:18 – 00:36:35:12
Russel Gray
He sent Hillary to go after health care, and they tried to socialized health care. Then what Obama of ultimately did Clinton tried to do in 92, the country pushed back and handed Bill Clinton the first Republican Congress in 40 some odd years. And that was the contract with America. Newt Gingrich, that combination of Bill Clinton moving to the middle because he just saw what happened.
00:36:35:12 – 00:36:55:20
Russel Gray
And Newt Gingrich’s contract with America balanced the budget. And part of that balancing was refinancing long term debt with short term debt. Okay. So now they’re not as many treasuries to buy. And so people on Wall Street like we need bonds to sell because these are the chips in the casino.
00:36:55:22 – 00:36:56:11
Rod Khleif
And so they.
00:36:56:11 – 00:37:06:04
Russel Gray
Started. So we’re going to create mortgage backed securities. So they created mortgage backed securities and started pumping all this money. I was in the mortgage business at the time.
00:37:06:09 – 00:37:06:23
Rod Khleif
So was I.
00:37:06:23 – 00:37:19:20
Russel Gray
So all this money started coming in and and the LTV got higher, 100, 425% piggy back loans. You had I mean, it was.
00:37:19:20 – 00:37:21:01
Rod Khleif
Just no income,
00:37:21:03 – 00:37:44:21
Russel Gray
Verification. No income, no job. Yeah. No assets like all of that hap if all of that happened because you flooded the marketplace with money that was being printed out of thin out, remember, I went back to the comps, right? If you overlaid those ten houses that now think they’re worth $200,000 with a lending system that can print money out of thin.
00:37:44:21 – 00:37:46:07
Rod Khleif
Air, which is what happened.
00:37:46:07 – 00:37:52:06
Russel Gray
Which is what happens, that million of equity can turn into cash, but there’s no additional product.
00:37:52:06 – 00:37:53:13
Rod Khleif
Right. Which which is.
00:37:53:19 – 00:37:55:11
Russel Gray
Which is what inflation is.
00:37:55:13 – 00:38:13:06
Rod Khleif
Yeah. You know, you were talking about cash flow. And back when I lost everything, I came to the realization that it was cash flow. I because I had 800 houses that just weren’t cash flowing, even though I was that 30% loan to value. So I wrote a book and I’m just going to talk about this for a second called How to Create Lifetime Cash Flow Through Multifamily Properties.
00:38:13:06 – 00:38:23:08
Rod Khleif
But the subtitle is The New Rules of Real Estate Investing, i.e. the new rules are cash flow period, and they aren’t the new rules. But that was my realization that it’s all about cash flow.
00:38:23:08 – 00:38:50:03
Russel Gray
It’s all about cash. And real equity is a derivative of cash flow. Yeah, right. And so if you had $5,000, let’s say let’s say you had a $50,000 a year coming in in passive income, right? In a 10%, market, that’s $500,000 net worth. In a 5% market, it’s $1 million net worth. Right. And so it’s what people are willing to pay for the cash flow.
00:38:50:03 – 00:39:18:02
Russel Gray
And when people are willing to pay for something that doesn’t have cash flow, it’s fake. Or when people pay way past that, what the cash flow is worth, it’s fake. And if you can’t tell the difference between prices going up based on speculation or prices going up based on cash flow, so you can use like a grim a gross rent multiplier, you can look at a market, you say, okay, a $100,000 property and it’s spinning off $10,000 a year, gross rents.
00:39:18:02 – 00:39:39:10
Russel Gray
Right? Okay. So that is a ten gram, and then it goes up and then it goes up and now it’s $150,000 property, and it’s still spitting off $10,000. Now it’s a 15 gram. But if you go over here and this property went from 100 to 150, but the rents went to 15,000. Yeah, those aren’t the same.
00:39:39:10 – 00:39:40:09
Rod Khleif
Yeah. And this.
00:39:40:09 – 00:39:42:08
Russel Gray
One real. This one’s.
00:39:42:08 – 00:39:58:01
Rod Khleif
Fake. And that’s why there’s going to be a reckoning by fake. Well, this is why there’s going to be a reckoning. And which is why right now there’s a crisis happening in multifamily. I mean, I, I, I can’t tell you how many deals I’m seeing being sold for the debt, you know, that had a lot of equity in them.
00:39:58:01 – 00:40:14:02
Rod Khleif
And so, you know, there’s a there’s a meltdown happening right now. In fact, you mentioned Brandon Turner. He just made the news for a $15 million loss on a, you know, an equity on a deal. And he’s a wonderful guy. I hate to see it. I mean, I’ve seen very, very sophisticated operators having their asses handed to them.
00:40:14:02 – 00:40:14:06
Rod Khleif
Right.
00:40:14:06 – 00:40:32:05
Russel Gray
Well, you know, this is what I mean. It’s. What were. Ken’s brilliant. Ken saw it coming. Ken started doing cash and refinances to get ahead of it. To lock is interest rates longer term? Right. And he started restructuring to make sure that the cash flows were sustainable. Because if the cash flows are sustainable, over.
00:40:32:05 – 00:40:33:06
Rod Khleif
Time you survive.
00:40:33:07 – 00:40:57:17
Russel Gray
Anything else will take care of itself. Yeah, right. And that’s why, you know, you can’t even look at your finances. Right. Wall Street would tell you a $5 million assets, no debt equals a $5 million net worth. You’re a penta millionaire. Woo. Yeah, right. You have no income. Now. You got a $3 million asset base, $2 million of debt and $1 million assets minus liabilities.
00:40:57:17 – 00:41:15:22
Russel Gray
Equal net worth. But you get $50,000 a year coming in. Who’s richer in the real world? Exactly right. And so? So. But they don’t focus you on that. They focus you on the your net worth. They do it on your 401 K. They do it in the stock market. Everybody talks about the Dow Jones up the Nasdaq up and down.
00:41:16:03 – 00:41:40:21
Russel Gray
Nobody talks about PE ratios. Nobody talks about cash flow. Nobody talks about dividend yields. And they don’t even like to talk. You mentioned gold. Nobody likes to talk about gold or real money. So it’s about sound money and real assets. Real that produce. So it’s sound it sound money real assets and productivity. If you invest in those three things you’re going to have resilient wealth.
00:41:40:22 – 00:41:41:04
Rod Khleif
Yeah.
00:41:41:10 – 00:41:48:22
Russel Gray
And resiliency is so much more important than having these giant sugar spikes of equity and then having the rug pulled out.
00:41:49:00 – 00:42:13:19
Rod Khleif
You know, your the best strategy in real estate is to hold it, but you’ve got to have the resilience like you like Kenny Kenny has his you know. Yeah. He he mentioned that when I had him on the show recently. You know, and it’s all about resilience because if you can hold the real estate, my God, your golden I period in of story that the because it it just keeps it keeps and.
00:42:13:19 – 00:42:17:12
Russel Gray
It’s not just the financing structure. You got to get the market right. You got to of course.
00:42:17:15 – 00:42:18:19
Rod Khleif
And of course, of course, of course.
00:42:18:20 – 00:42:43:21
Russel Gray
The demographics right. You got to get the management right. It’s a business correct. And a lot of people get into it because they think it’s like a stock and it’ll just take care of itself. No. Right. This is a big mistake. If you want to be a main Street investor, you’re either going to be great at picking great operators or you’re going to become a great operator, great, because if you don’t invest in great operators or become a great operator, you’re throwing your money away.
00:42:44:01 – 00:43:09:02
Rod Khleif
This is what you know, this is, you know, I’m blessed to say, in my coaching program, we’ve only lost one deal that I’m aware of, and I don’t think. I think 300,000 units, we’re counting it. We’re about 275,000. We know we’re missing a ton, but, you know, it’s because, you know, the conservative nature of what I teach is, and, and because of my own losses, you know, because my own seminar and we call it.
00:43:09:02 – 00:43:26:14
Rod Khleif
But, let’s talk about eye for a minute. Give me your thoughts on the impact. You know, you feel like there’s a reckoning economically in this country, and I do, too. And I hope it’s not as bad as I think it could be. But, of course, again, the thing to remember, with crisis comes opportunity. So don’t fear it.
00:43:26:16 – 00:43:48:01
Rod Khleif
Anticipate and plan for it. But talk about I because I can tell you what we’re doing, which is just groundbreaking. You know, I’ve we’ve implemented Open Claw where it’s a standalone machine, and it’s basically doing 95% of my my marketing team’s marketing right now. It’s extraordinary. In fact, we’re we’re going to start implementing it for other companies.
00:43:48:01 – 00:43:50:08
Rod Khleif
But what are your thoughts on the impact of AI?
00:43:50:13 – 00:44:15:21
Russel Gray
So I think there’s a couple things with AI. I think it’s a subset of a bigger solution, which is good. And it’s the flip side of opportunities problem. The flip side of problem is opportunity, right? They go hand in hand. You can’t have one without the other. So you just have to accept that if you are a young person out there and you are being trained to do a job, to be a cog in a machine, AI and robotics are a threat to your livelihood.
00:44:15:21 – 00:44:32:10
Russel Gray
Yes, if you are an entrepreneur who are going to use AI and robots in order to improve productivity, you are sitting on a goldmine right now. You need to decide which side of that fence you want to be on. I think it’s a no brainer you want to be an entrepreneur. It’s why I created the Main Street Capitalist Show.
00:44:32:10 – 00:44:52:15
Russel Gray
I’m working on a program called Main Street Startup, teaching people how to start businesses from scratch with nothing except and focus on the handful of skills they really need to have. One of those skills is going to be AI, right? You got to learn how to use it. Now, the part of the bigger solution that it’s going to bring is productivity.
00:44:52:17 – 00:45:15:16
Russel Gray
The only way we get out of the economic mess we’re in is we have to do two things, and we have to do them concurrently. We have got to fix our financial system and get out of the fake money system. We’ve got to get back to real money and a sound financial system. I think a lot of what’s going on geopolitically is taking us there.
00:45:15:16 – 00:45:35:12
Russel Gray
I hope I’m right. We’re going to find out. The second thing is you have to become hyper productive. It’s it’s physically impossible for us to cut enough. And, in at the current rate of production, to be able to deal with the level of debt that exists in the world. So either it’s all going to collapse and take equity with it.
00:45:35:12 – 00:45:57:00
Russel Gray
You need to be prepared for that. So your defense is to build a basis of investing in things that cash flow, that serve basic human needs and are essential. Right? If you’re doing that, then the odds of you surviving whatever disruption happens are going to be much higher than if you’re out there on something. A little bit more fringy.
00:45:57:02 – 00:46:16:12
Russel Gray
But I think that we’re going to have hyper productivity. I did a talk at Best Ever Conference year before last. It’s up on my website. Russel gray.com. And I talked about what I thought the Trump agenda economic agenda was going to be. He was six weeks into his presidency. I said, I think the guy thinks like a builder.
00:46:16:12 – 00:46:34:19
Russel Gray
I’ve been studying him way before. He was a politician because he was a real estate guy. He’s the only guy ever sat in the white House I’ve actually ever met and talked with. Right? I’m friends with people who worked many years with him. They spent a lot of quality time with his long time attorney, George Ross got a chance to ask a lot of behind the scenes question.
00:46:35:00 – 00:46:53:03
Russel Gray
So the guy looks like he’s a chaotic mess. I don’t believe that’s true. For a minute. I think he’s got an agenda. I think it’s very clear. I think part of his power and his technique is to keep everybody off balance all the time, and it drives all the prognosticators and everybody who’s trying to play off him or manipulate him crazy.
00:46:53:06 – 00:47:14:00
Russel Gray
Now am I saying he’s perfect? He walks on water. No, no, no, I’m not saying that at all. Am I saying he’s going to be successful? No, I’m just telling you what I think he’s doing. Yeah. And what I think he’s doing is focusing on revitalizing Main Street. When I asked him, what’s your what’s the Trump administration’s, policy look like for housing, he goes, one word answer.
00:47:14:00 – 00:47:35:18
Russel Gray
He goes, jobs. I’m going to create jobs. That was it. And you look at the idea that so many people in investing have spent time looking at, monetary policy. What’s the fed going to do? When’s the next lifeline coming from the fed? Fiscal policy. What’s the government going to do when the next lifeline of money coming in from the government?
00:47:35:18 – 00:47:56:23
Russel Gray
What they haven’t been looking at is trade policy. When is foreign capital going to start coming in and building up main Street? Trump has been primarily focus on that. And he’s using fiscal policy primarily military and also in AI and energy to to drive Main Street productivity until he can get these factories back. Right. So this is what’s happening.
00:47:56:23 – 00:48:18:05
Russel Gray
So I think we’re in this lag right now. That is going to be epic. If you’re a millennial or a Gen Z out there young person coming up, please don’t be discouraged and don’t sell capitalism out. Right. Crony capitalism monopolies I’m with you. Get rid of it. Right? We don’t need that. But we need we need entrepreneurs who start real businesses on Main Street.
00:48:18:06 – 00:48:19:18
Russel Gray
There’s going to be a lot of them.
00:48:19:19 – 00:48:21:17
Rod Khleif
Or buy them and and build them up.
00:48:21:17 – 00:48:39:00
Russel Gray
But but AI is going to be the key. So so right now, if I’m a young person and I know I can figure out how to raise capital, I can do an owner carry back on a boomer business. Somebody who is afraid of AI doesn’t understand AI. Most of the drive and hustle, he’s just riding the wave. Lazy landlord syndrome.
00:48:39:00 – 00:48:53:03
Russel Gray
If you will. You’re going to have an opportunity to buy that business, have that, that guy or gal who started that thing, sit on your board, be an investor in your business, and then you you bring your young hustle and AI and robotics into that.
00:48:53:03 – 00:48:54:07
Rod Khleif
And social media.
00:48:54:07 – 00:48:56:17
Russel Gray
You are going to kill it, crush.
00:48:56:17 – 00:48:57:13
Rod Khleif
It, kill it. Yeah.
00:48:57:14 – 00:49:20:11
Russel Gray
And and that’s going to get America out of these doldrums. If if we do not allow the Federal Reserve to print that productivity away right, right. Because that’s what will happen. That’s what they did with the.com.com price of everything should be cheaper. The natural order of things is deflation right. The fed didn’t inflate 2%. They say our targets 2%.
00:49:20:11 – 00:49:44:14
Russel Gray
But you’re an entrepreneur. If you drove your cost down 20% and they pushed the price up too, they sucked up 22%. Yeah, right. And so if if we let the financial system, we let those wizards on Wall Street and in the Federal Reserve steal the productivity gains of AI, it is going to be the biggest miss in American history.
00:49:44:14 – 00:50:01:10
Russel Gray
Main Street has got to stand up. Main streets got a demand, a sound money system. And then we got to go produce like nobody’s ever produced before. And then we don’t have to back down from being the most prosperous, greatest nation. But it won’t be fake. It’ll be real. And that’s what we need to get back to.
00:50:01:10 – 00:50:20:13
Rod Khleif
Oh that’s beautiful. Love that man. Love it, love it. Well, I really appreciate you coming on the show. If you guys are interested in following Russel it’s Russel gray.com spelled gray y. And, this has been a real hoot for me. Buddy, I got to tell you, I’ve really enjoyed myself. So I appreciate you. I’m really glad you’re in the area where you could.
00:50:20:13 – 00:50:27:10
Rod Khleif
We could do this in person like this. And, would love to have you back sometime. So, I appreciate you coming in, my friend.
00:50:27:10 – 00:50:28:17
Russel Gray
Appreciate it. Thank you so much.
00:50:28:17 – 00:50:29:04
Rod Khleif
You bet.
**Podcast Categories:** Podcasts
---
### [How a Mobile Home Park Deal Raised $2M in 30 Days](https://rodkhleif.com/podcasts/mobile-home-park-syndication-with-tim-davis/)
**Published:** May 29, 2026
**Author:** Bryan Hoover
**Excerpt:** How a Mobile Home Park Deal Raised $2M in 30 Days
**Content:**
# Mobile Home Park Syndication Strategies with Tim Davis
Mobile home park syndication has become an increasingly attractive strategy for real estate investors looking for affordable housing opportunities, strong cash flow, and value add potential. On this episode of Multifamily Rockstars, Tim Davis shares how he transitioned from single family rentals into multifamily investing and ultimately completed his own mobile home park syndication deal. With decades of experience in construction, property management, and brokerage, Tim breaks down how investors can uncover overlooked opportunities and structure profitable real estate deals even in today’s challenging market.
## How Tim Davis Built a Real Estate Investing Career
Tim Davis began investing in real estate at just 18 years old after purchasing his first rental property. What started as an accidental landlord experience quickly evolved into a lifelong career in real estate investing. Over the years, he expanded his expertise through construction, brokerage, and property management while building a portfolio of rental properties throughout Central Florida.
Today, Tim owns and operates a real estate brokerage and property management company managing hundreds of rental units. He also invested passively in nearly 700 multifamily units as a limited partner before stepping into syndication himself. His experience highlights how long term consistency, practical knowledge, and networking can help investors scale from small residential properties into larger commercial real estate opportunities.
## Why Mobile Home Park Syndication Stands Out
One of the most valuable lessons from the conversation is why mobile home park syndication has become such an appealing investment strategy. Tim explains that affordable housing demand continues to grow, particularly in markets like Central Florida where rental rates have risen significantly. The mobile home park he acquired offered below market rents, operational inefficiencies, and significant upside through better management.
Rather than following the traditional mobile home park model where tenants own their homes and pay lot rent, Tim’s strategy involved park owned homes. This approach created more operational responsibilities but also gave his team greater control over renovations, tenant quality, and rental income growth. By improving tenant screening, addressing deferred maintenance, and raising rents to market levels, the property’s cash flow improved substantially within the first year.
Key value add strategies discussed in the episode include:
- Replacing poor tenant screening systems with professional management
- Renovating deferred maintenance issues on older mobile homes
- Increasing below market rents while maintaining affordability
- Removing non paying tenants and improving occupancy
- Structuring investor returns through preferred equity payments
The deal ultimately raised approximately $2 million from investors in less than 30 days, demonstrating strong investor appetite for affordable housing investments and creative real estate syndication opportunities.
## Finding Off Market and Overlooked Deals
Another major takeaway from the episode is how Tim Davis sourced the mobile home park opportunity. The deal was discovered on the residential MLS through a broker who primarily handled residential properties. According to Tim and Rod Khleif, this is an often overlooked strategy that can uncover hidden commercial real estate opportunities before institutional buyers find them.
Because many residential agents do not fully understand how to market multifamily or mobile home park assets, investors willing to dig through residential listings can sometimes find highly discounted deals. Tim identified the opportunity while presenting a “deal or no deal” underwriting exercise at a local real estate investing group.
This conversation reinforces the importance of:
1. Building relationships with residential real estate agents
2. Reviewing MLS listings consistently for overlooked commercial assets
3. Leveraging underwriting knowledge to identify hidden value
4. Moving quickly when unique opportunities appear
For newer investors, this serves as an important reminder that great deals are often found where others are not looking.
## Navigating High Interest Rates and Creative Financing
The episode also explores how rising interest rates have impacted multifamily investing and commercial real estate acquisitions. Tim discusses how financing challenges have slowed transaction volume while simultaneously creating buying opportunities for investors prepared with capital and strong relationships.
Creative financing strategies such as seller financing and syndication equity structures are becoming increasingly important in today’s market environment. Tim’s mobile home park acquisition was financed entirely through investor capital rather than traditional bank financing, allowing the partnership to provide preferred returns directly to investors while avoiding difficult lending conditions.
Rod Khleif also explains how many operators are struggling with bridge loans, adjustable debt, and expensive rate caps, creating distress across the multifamily sector. According to the discussion, this environment may present one of the best buying opportunities investors have seen in years.
## The Importance of Networking and Multifamily Education
Throughout the episode, Tim Davis emphasizes the importance of education, mentorship, and networking when scaling into larger real estate investments. After years of experience in residential real estate, he joined Rod Khleif’s Warrior program to learn multifamily syndication and expand his investment network.
Tim credits much of his growth to surrounding himself with experienced investors, attending real estate networking events, and partnering with people whose strengths complemented his own. While his expertise lies in construction, deal structuring, and problem solving, he actively partnered with analytical underwriters and operators to strengthen his investment team.
For investors looking to transition into larger commercial real estate deals, this episode demonstrates how combining practical experience with mentorship and strategic relationships can significantly accelerate growth.
## About Tim Davis
Tim Davis is a real estate broker, licensed general contractor, real estate investor, and property management operator based in Central Florida. He has over four decades of experience in construction and real estate investing and currently manages hundreds of rental units through his brokerage and management company. Tim has invested in nearly 700 multifamily units as a limited partner and recently completed his own successful mobile home park syndication focused on affordable housing and operational improvements.
## If you want to hear the full conversation and detailed insights, watch the podcast video or read the complete transcript below.
**Mobile Home Park Syndication FAQ**
**What Is Mobile Home Park Syndication?**
Mobile home park syndication is a real estate investment strategy where multiple investors pool capital together to purchase and operate a mobile home park. A syndicator or sponsor manages the acquisition, financing, renovations, operations, and investor relations while passive investors provide funding in exchange for ownership shares and potential returns.
**Why Is Mobile Home Park Syndication Popular in 2025?**
Mobile home park syndication has gained popularity in 2025 because affordable housing demand continues to increase across the United States. Rising home prices and apartment rents have pushed more residents toward manufactured housing communities, creating strong occupancy rates and stable cash flow opportunities for investors.
**How Does Mobile Home Park Syndication Work?**
In a mobile home park syndication, the general partners identify the investment opportunity, secure financing, manage renovations, and oversee operations. Limited partners invest capital into the deal and typically receive preferred returns and profit distributions without handling day to day management responsibilities.
**What Are the Benefits of Investing in Mobile Home Parks?**
Mobile home parks can offer several benefits including consistent cash flow, lower tenant turnover, reduced competition compared to multifamily apartments, and strong demand for affordable housing. Many investors also appreciate the value add potential through operational improvements, rent increases, and occupancy optimization.
**What Is the Difference Between Lot Rent and Park Owned Homes?**
Lot rent communities involve tenants owning their own mobile homes while paying monthly rent for the land underneath. Park owned home communities are structured more like apartment complexes where the operator owns both the homes and the land. Park owned homes can generate higher revenue but often require more maintenance and management.
**How Do Investors Make Money Through Mobile Home Park Syndication?**
Investors in mobile home park syndications typically earn income through cash flow distributions, preferred returns, property appreciation, and profit sharing during refinancing or sale events. Returns depend on factors such as occupancy rates, operational improvements, financing terms, and market conditions.
**What Makes Mobile Home Parks Attractive During High Interest Rates?**
Mobile home parks often remain resilient during periods of high interest rates because they provide affordable housing options for tenants. Investors can also find motivated sellers, seller financing opportunities, and underperforming assets that create strong value add potential despite tighter lending conditions.
**What Should Investors Look for in a Mobile Home Park Syndication Deal?**
Investors should evaluate occupancy levels, tenant quality, rent growth potential, deferred maintenance, infrastructure condition, management experience, financing structure, and market demand. Understanding whether the community contains tenant owned homes or park owned homes is also critical for assessing operational risk and profitability.
**Can Beginners Invest in Mobile Home Park Syndication?**
Yes, beginners can invest passively in mobile home park syndications as limited partners. This allows investors to gain exposure to commercial real estate without actively managing properties. Many investors use passive investing as a way to learn the business before eventually becoming operators themselves.
**Why Are Mobile Home Parks Considered Recession Resistant?**
Mobile home parks are often considered recession resistant because affordable housing remains in demand regardless of economic conditions. During financial downturns, many renters seek lower cost housing alternatives, which can increase demand for manufactured housing communities and stabilize occupancy levels.
00:00:59:18 – 00:01:24:24
Rod Khleif
Welcome back to the new version of Multifamily Rockstars. And maybe you haven’t heard, but because of feedback, because we’re always asking for feedback from you guys and the fact that we’re always trying to make things better, you know, constant and never ending improvement. We’ve decided to make these episodes more deep dives into our guests deals, and really give you more practical and actionable items for you to get started and to actually for yourself to do your own first deal, especially if you’re new to multifamily.
00:01:25:02 – 00:01:28:24
Rod Khleif
Now, of course, I’ve got my co-host, Mark Nagy here with me. Hey, Raj, what’s going on?
00:01:28:24 – 00:01:38:09
Tim Davis
I don’t know about you, but, I’ve been super busy with so many, price reductions on deals lately. My whole inbox is filled with brokers lately, so things are going that way now.
00:01:38:09 – 00:01:57:06
Rod Khleif
We’ve got a we’ve got a deal under contract in San Antonio that just an absolute screaming deal. In fact, on that note, let me just say this. If you’re accredited, text the word partner to 72345 to check it out. I mean, it’s it’s extraordinary. The one next door sold for 137,000 a door, and we’re getting this one for 100.
00:01:57:12 – 00:02:17:17
Rod Khleif
It’s just an unbelievable deal. Deals are starting to come. Well, listen, we’ve got a great interview for you today. He’s actually a bestselling author. His name is Tim Davis, and he’s a real estate broker. He’s a licensed GC building contractor, real estate investor. And he owns and operates his own, real estate brokerage and property management company.
00:02:17:19 – 00:02:35:17
Rod Khleif
He’s got, you know, he’s in quite a few doors as a limited partner. Almost 700 is limited partner. He’s got his 60 doors himself that he owns himself and, and he’s done his syndication on a mobile home park, which we haven’t talked about before here, which is. Which is unusual. Not unusual, but unusual to be on this show.
00:02:35:19 – 00:02:39:01
Rod Khleif
So, his name is Tim Davis. And, welcome, brother. Good to see you.
00:02:39:04 – 00:02:40:11
Mark Nagy
Thanks, rod. Appreciate it.
00:02:40:12 – 00:02:54:10
Rod Khleif
Glad you’re here. Glad you’re here. So why don’t you take a few minutes and just kind of give us some background on you? You know why? Real estate and, you know, kind of kind of bring us from a little bit about your past and bring us current.
00:02:54:13 – 00:03:18:19
Mark Nagy
Sure. Yeah. So I, I kind of fell into real estate when I was really young. I, I was, 18 when I bought my first rental property, and it was kind of an accident, accidental landlord back then. But it really intrigued me because I was, you know, 18 years old, married with a couple of kids, and, and we were,
00:03:18:21 – 00:03:24:02
Rod Khleif
Wait a minute, wait a minute, wait a minute, wait a minute, wait a minute, wait a minute. Did you say 18 and married with a couple kids?
00:03:24:04 – 00:03:24:12
Mark Nagy
Yeah.
00:03:24:15 – 00:03:27:05
Rod Khleif
Holy cow, you didn’t waste any time, brother.
00:03:27:05 – 00:03:52:18
Mark Nagy
Well, got married young, but, Yeah, I dropped out of high school, got married, and we were struggling, and. And I was able to buy my first rental property, and I actually bought it from my dad, who was, assembly God minister. He he, tried to get into real estate, but he he just didn’t make it. So he sold me my first rental property, which was pretty cool.
00:03:52:18 – 00:04:23:23
Mark Nagy
And I love the experience of getting, cash flow from it. And so I started working on, learning more and more about it as I went on. And so I’ve been doing this for quite a long time, 40, 40 to 43 years now. Wow. And wow. It’s been great experience and really and enjoyed my real estate journey of, work through construction.
00:04:24:00 – 00:04:51:10
Mark Nagy
And I did a lot of construction in my early days and then, worked, worked into actually getting my brokerage license probably 15 years ago and started a property management company, and we managed about 500, rental properties in Central Florida. And I started buying up a lot of rental property myself. And, and, right after the crash of 2008, 2009.
00:04:51:12 – 00:05:34:23
Mark Nagy
And, and so, was able to kind of semi retire about five years ago. And then I joined the warrior program probably three, three years ago because I really wanted to learn about, multifamily and really get into that. I had not been in that space in the past. And so, that’s when I jumped in as an LP, several deals and, and then we just did our very first, syndication on our own with, small mobile home park, which I thought was kind of interesting because it would have been hard to finance that through a bank.
00:05:34:23 – 00:05:57:21
Mark Nagy
So we ended up, getting 100% of the funds from our limited partners, and we’re giving them the, preferred rate of return from day one. We started giving them their preferred rate of return, just like we would have been paying a bank for, for a loan. So we decided to send them the money instead. And it’s been a pretty good, pretty good deal.
00:05:57:21 – 00:06:02:10
Mark Nagy
Everybody’s enjoyed that. They’re really, anxious to do the next deal with us.
00:06:02:10 – 00:06:06:00
Rod Khleif
So nice. Now, are you in Lakeland or where are you?
00:06:06:01 – 00:06:11:12
Mark Nagy
Yeah, yeah, I live in, like, I’ve been in, like 1976, so I’ve been here a long time.
00:06:11:13 – 00:06:27:19
Rod Khleif
Oh, you said Central Florida, and I’m like, yeah, that’s about as central as I could think of. Good guess. Okay. I didn’t know that. Or if I if you told me, I’d forgotten. Forgive me, but, forgot what I had for breakfast already. So. But. So you started in 2008, and nine. That’s good timing. Yeah. Good for you.
00:06:27:21 – 00:06:39:21
Rod Khleif
You know, I was I was hiding under a rock then, and, Yeah. So, so, you know, you’ve been in the warrior program. Have you been to a warrior event where we do the networking, all that business?
00:06:39:21 – 00:06:42:22
Mark Nagy
Absolutely. I go to every single one that you have.
00:06:42:24 – 00:07:01:05
Rod Khleif
All right, all right. Well, the reason I’m asking is we just had an interview, and, and, you know, she talks about being overwhelmed there in the networking piece, you know, because I tell everybody, do you want your superpower? Go meet other people. That’s one of the biggest benefits, would you agree of the of the of the events like that?
00:07:01:07 – 00:07:18:18
Rod Khleif
Now, guys, you can do this on your own. Go to meetup groups, go to, you know, get out there and meet people. But you’ve got to, you know, in this business, you got to line with people that shore up your deficiencies and, and and you know, you get get these symbiotic relationships like the most common is somebody that’s analytical with someone that’s outgoing.
00:07:18:20 – 00:07:25:15
Rod Khleif
But you know what? What is your experience been in the in the whole networking piece. So do you find that’s a skill set of yours?
00:07:25:17 – 00:07:55:24
Mark Nagy
Yeah. I love I love networking with, the guys at the warrior, especially lunchtime and dinner time. Those are some of the best times because you get together with them and just start talking about deals, finding out what they like to do. You know, as, as far as is my, superpowers, I guess we call them. And in the warrior program, you know, I’m, I, I’m a I love the structured deals, and I love to, solve problems.
00:07:56:01 – 00:08:08:05
Mark Nagy
I am not the detail guy that’s going to crunch the numbers and, you know, but I’ll look over the numbers once they’re once they’re there. But I’m I’m not the guy that’s gonna do all the underwriting.
00:08:08:07 – 00:08:08:21
Rod Khleif
Same here.
00:08:08:21 – 00:08:10:07
Mark Nagy
Probably the same, like.
00:08:10:09 – 00:08:18:15
Rod Khleif
Same here. Oh, yeah, I know, I listen, you know, we just throw those guys in a row in a room with a spreadsheet and throw a raw meat in once in a while. Keep them happy.
00:08:18:15 – 00:08:39:06
Tim Davis
Right now, walk me kind of through that process of figuring that out, because obviously you did a bunch of passive investing as an LP and then obviously, you know, you did the deal. What was the what’s the idea on the LP deals? Was that so that you could learn and kind of help figure out your super power, or was it just getting rid of some cash that you had that.
00:08:39:06 – 00:09:05:22
Mark Nagy
Well, yeah. No, it it was, you know, when I joined the program, you know, I wanted to get involved right away. And so I started talking to my coach and different people in the program, and, and they they suggested, you know, join, LP deal. So I was kind of anxious to do one. And, I think I jumped into one that that was kind of not well thought out.
00:09:05:22 – 00:09:26:17
Mark Nagy
But, you know, interestingly enough, it it ended up turning out real well. I’m thinking about it. I’m getting actually, they’re they’re giving us back our capital this month, and we’re getting about a 22% return on our investment, annual investment for 15 years. Yeah.
00:09:26:22 – 00:09:29:16
Rod Khleif
So I wouldn’t bitch about that too much. Yeah, yeah.
00:09:29:19 – 00:09:47:04
Mark Nagy
And, not at all, but but it was kind of a, it was kind of a weird deal. Wasn’t a warrior that that did it at first. I think he did join the program after a while, but but I was anxious to get into a deal and it was close by my home. It wasn’t too far away, so I.
00:09:47:05 – 00:10:06:14
Mark Nagy
I jumped into it and I had to help the guy along quite a bit because I do have a lot of it was a conversion, motel to to multi-family conversion interest. Oh, wow. Got a lot of experience in construction. So I knew I knew what he was facing. And so I helped him out a lot on that.
00:10:06:16 – 00:10:16:24
Mark Nagy
Even as an LP, I didn’t have any, you know, I didn’t have any responsibilities as a GP, but I kind of helped him through some, some issues and got them straightened out.
00:10:16:24 – 00:10:23:20
Tim Davis
And you’re a good LP to have as a passive investor. I bet he’s, he’s thankful that he brought you in on that deal then. Yeah.
00:10:23:22 – 00:10:46:02
Rod Khleif
Yeah. You know what types of listeners, would be able to relate to you, do you think? Tim, you know what? You know, we’ve got so many different personality styles, that listen to this show. You know, we’ve got analytical people, we’ve got, you know, more outgoing people, we’ve got more process driven people. We’ve got business owners and, you know, everything in between.
00:10:46:02 – 00:10:46:23
Rod Khleif
So.
00:10:47:00 – 00:11:08:11
Mark Nagy
Yeah, I who do you I, I think people that can relate to me are probably people that have like entrepreneurs that have gone through this. The school of hard knocks. You know, I meet a lot of guys at the Warrior program who are engineers. They got degrees and all this stuff. I don’t have that. I’ve just been in the school of hard knocks.
00:11:08:11 – 00:11:24:18
Mark Nagy
I’ve been through it and, you know, and so that’s that’s the that’s the kind of guy, you know, or guy or girl. It’s like, if I can do this, anybody can do it, you know, that kind of that kind of thing. That’s the way I look at it.
00:11:24:18 – 00:11:32:17
Tim Davis
So out of curiosity, what what made you decide to even join a group like ours instead of continuing with the, the School of hard knocks and multifamily?
00:11:32:19 – 00:11:56:24
Mark Nagy
I’m one of those people that I love to to continually educate myself. I’ve always been, self educator. And and I know one thing that if I can jump in to a program and I have, a teacher or a mentor or somebody that I can, that I can follow behind, that I can do what they’ve done or, you know, something similar to it.
00:11:56:24 – 00:12:12:04
Mark Nagy
And so that’s why I joined the warrior program, because I, I had read Rod’s book and I had, you know, watched some of the podcasts and been familiar with what he had done, how he came to area, in Polk County.
00:12:12:06 – 00:12:15:04
Rod Khleif
I sure did. Oh, that’s funny there. That’s right.
00:12:15:06 – 00:12:23:02
Mark Nagy
Yeah. I was really impressed with your presentation. Those those next. And okay, that’s why I joined.
00:12:23:04 – 00:12:39:06
Rod Khleif
Yeah. I think the last time I was a little annoyed because I drove I mean, it was like two hours each way for me. And there were like 13 people there. I’m like, oh my God, are you kidding me? And I didn’t get home till like, midnight. Yeah, I remember now. That’s funny. That’s really funny. So let me.
00:12:39:07 – 00:12:57:00
Rod Khleif
Yeah. Let me ask you this. What do you think is your superpower? You know, because we talk about superpower. We use that word because everybody that, you know, this is a team sport, you bring your superpower to the team and you align with people that you know that that are, you know, stronger where you’re not as strong. What what what do you think you bring to a team, buddy?
00:12:57:04 – 00:13:01:05
Rod Khleif
I mean, besides construction, we know you’re great at that, obviously, because, you know, you mentioned.
00:13:01:05 – 00:13:25:02
Mark Nagy
Earlier that the the construction knowledge is one of the things that, that I can bring to the team. You know, helping structure deals. I know a lot of people, too. I can bring a lot of capital to the to the table. That’s how I did the, mobile home park. You know, those were all people that I knew that put together.
00:13:25:07 – 00:13:49:19
Mark Nagy
And, we raised, you know, about $2 million in 30, 30 days or less. Nice. You know, so those are some of the things that I can I can bring to the table if, you know, if somebody wanted me to come alongside them and help, definitely understanding construction is probably one of the strongest things that I have.
00:13:49:21 – 00:13:50:17
Rod Khleif
Yeah.
00:13:50:19 – 00:14:08:15
Tim Davis
Speaking of this deal, correct me if I’m wrong on any of this. You have kind of a an interesting story jumping into this of how you found this deal. I think you you mentioned you found it, you were underwriting an Atari, I think, and you liked it. Tell the story about how you found and where you found it, where you even got the deal from.
00:14:08:15 – 00:14:11:08
Tim Davis
And then we kind of jump into the deal further from there.
00:14:11:10 – 00:14:35:10
Mark Nagy
Yeah. So. So I am the focus group leader for a different CPH or a different, Ria it’s called the Central Florida Real Estate Association. It’s from Orlando, and I’ve been the focus group leader for the landlord ING group. They have this group, we meet once a month and we, we talk about landlords and being a landlord and different issues like that.
00:14:35:12 – 00:15:02:24
Mark Nagy
So one of the, or twice a year, I usually have, have it set up where we do a little segment called Deal or No Deal. And for that I, we do some real quick underwriting. It’s nothing that it’s, you know, it’s nothing real intense. But we I give them some ideas of how to look at a deal and determine whether or not there’s potential there that you want to look at a little bit closer.
00:15:03:01 – 00:15:29:24
Mark Nagy
And so I found several several like duplexes, quads, you know, different things on the MLS. And I actually found two mobile home parks, and it was on the Multiple Listing Service. And I was like, man, let me take a look at these. So we took a look at them and as I was presenting them at, at the focus group and we were going through the numbers, I was like, there might be a deal here.
00:15:30:01 – 00:15:51:16
Mark Nagy
And so I actually started looking at it a little bit closer, and I actually put both of the mobile home parks under contract and started our due diligence on both of them. One of them dropped out. It was it was not, not represented properly because the guy that was trying to sell it, I think he’s trying to pull a fast one on us.
00:15:51:18 – 00:16:17:18
Mark Nagy
But the other one, it was a mom and pop and, it was hard to get some of the information out of them, but that being, that I’ve done this a long time and I’ve, you know, I’m pretty good at and negotiating. I actually pulled the information out. Got it got it all put together, did our underwriting and, and I felt pretty confident that this deal was something that we could do.
00:16:17:18 – 00:16:25:22
Mark Nagy
So we went ahead and move forward and and, closed it in May of last year, and it’s been a pretty good deal.
00:16:25:24 – 00:16:46:21
Rod Khleif
I’ll tell you when you, find a deal that it’s hard to get the information on, get excited because everyone else gives up. Oh, yeah. And and and and if you if you push through, you know, you can you can find a phenomenal deal that way. And that’s pretty interesting how you found that deal. Talk a little bit more about the actual asset.
00:16:47:01 – 00:17:02:05
Rod Khleif
You know. And what let’s do. We can talk about mobile home parks a little bit. I know quite a bit about them, although I’ve never owned one. My brother has owned hundreds of, of spaces and has been involved in the management of thousands of spaces. So I know a lot about the asset class.
00:17:02:07 – 00:17:14:05
Mark Nagy
Well, one one interesting thing, I do have some mobile home experience because, back when I was 18, 18 to 25, I worked in a mobile home factory, so I actually. Oh, no kidding. Now they’re put.
00:17:14:05 – 00:17:24:11
Rod Khleif
Together in Central Florida. Yeah, yeah, they have them there. It’s like they just there’s like a conveyor belt. A frickin mobile. Homes go down the line and they add things all the way down the line. Oh that’s awesome.
00:17:24:16 – 00:17:31:07
Mark Nagy
I actually had a little bit of experience, so I know how they’re put together. But anyways, cheap.
00:17:31:09 – 00:17:33:19
Rod Khleif
Yeah, but like.
00:17:33:21 – 00:17:56:16
Mark Nagy
Yeah, but, this one, all the mobile homes are owned by the park, so it’s, it’s all like having an apartment complex. We had to we had to do our due diligence by inspecting these things because there was some deferred maintenance. And I saw quite a bit of it, but I wasn’t scared of it because I know how they’re put together, and I know what what to do to fix them.
00:17:56:22 – 00:18:14:04
Mark Nagy
And, the, the tenants that they had were very, had very bad habits. Let me put it that way. So we, we had to really start just culling them out as soon as we got in there.
00:18:14:07 – 00:18:17:07
Tim Davis
Like what? Like paying late or not paying on time.
00:18:17:07 – 00:18:49:01
Mark Nagy
Like, what’s paying it all? Paying late, not paying at all. Yeah, there was there was quite a bit of issues. I don’t think that 50% of the people were not qualified to be in there. Wow. Because Mom and Pop that were running before they they had a very poor system of, of qualifying people. And we’ve got a professional management company that, that, that we that I own and, and so we, we know how to actually do that.
00:18:49:01 – 00:19:10:12
Mark Nagy
So we were able to turn it around pretty quick. We still got about 2 or 3 units that that need some rehab. And then we’ll have it all full by the end of this first quarter. But, it it’s a little challenging at first because of the, of the bad habits and the, you know, the, the clientele that was in there.
00:19:10:14 – 00:19:31:19
Rod Khleif
Well, I’ll tell you, you know, the common business model is not to do what you’re doing. It’s to actually convert them to lot rent and have them on the home that, you know, and all that. What you’re doing is, is more challenging. And I you know, that’s why when you told me it was a mobile home park, I asked you if you lived near it because you’d be managing and you told me I had a management company, which of course makes that a whole lot easier.
00:19:31:19 – 00:19:57:00
Rod Khleif
But, you know, they are they are tough to manage and and typically with a mobile home park, you, you know, I wouldn’t consider one of us. It was at least 50 spaces so I could have an on site manager. And so that’s why I asked the question. And like I say, you know, my knowledge of these things is, is as you go in, you’d see if the numbers make sense, if you can sell them the home and then they’re paying you, you know, a fee for the home.
00:19:57:00 – 00:20:05:17
Rod Khleif
And they’re paying you lot rent and all that. And and that’s a more common approach. But, you know, with a management company, with a management company, you can make it work. Yeah.
00:20:05:19 – 00:20:24:10
Mark Nagy
Yeah, I’ve seen the approach that you that you’re talking about I’ve seen that before. The only problem that I see with with that sometimes and depending on the, the condition of the mobile homes, if they’re in rough condition already and you sell them to somebody, they’re not going to maintain them and they’re just going to probably go downhill.
00:20:24:12 – 00:20:48:22
Mark Nagy
So yeah. So, you know, what we’re doing is, is doing some repairs, doing some, some, fixing the deferred maintenance that was on all of them and trying to get them up to speed. We could convert it later once we, you know, once we get them all in good operational order. But, for right now, but, you know, we’re we’re doing all right.
00:20:48:22 – 00:20:51:10
Mark Nagy
The way we, we have is working.
00:20:51:12 – 00:21:08:17
Tim Davis
Well, I see your five year projections here on this deal. You’re almost going to double double rents. Which would be crazy. And from what I’m hearing, again, you correct me if I’m wrong. If we could go a little deeper, it sounds like it’s very similar to a multifamily value add and that you’re just managing it better, increasing rents, bringing in new tenants.
00:21:08:17 – 00:21:14:06
Tim Davis
Is that the entire play on this deal, or is there something else that’s bring it on so high that we’re missing?
00:21:14:08 – 00:21:38:22
Mark Nagy
No, I mean, it was under the the rents were low when we got it. We knew they were low. And that’s what made it appealing because we knew we could get higher rents. But it’s still affordable living. You know, it’s not this is not even like your average rent. Polk County I think it’s about $1,500. So we’re around 1100, per door there, maybe a little bit more.
00:21:38:23 – 00:21:41:13
Rod Khleif
But single wides are double wide.
00:21:41:15 – 00:21:42:22
Mark Nagy
They’re single wides.
00:21:42:24 – 00:21:44:20
Rod Khleif
Oh wow. And you’re getting 1100.
00:21:44:22 – 00:21:47:16
Mark Nagy
Holy crap. Yeah, I know, wow.
00:21:47:20 – 00:21:49:05
Rod Khleif
I don’t even know what to say to that.
00:21:49:05 – 00:22:04:23
Tim Davis
Holy cow. Now that’s funny that you mentioned this deal was on the MLS. Was this with a commercial broker that this just happened to be overlooked, or was this with a residential broker that came across this deal? How how did this deal get overlooked, do you think by other investors.
00:22:04:23 – 00:22:16:15
Mark Nagy
The the broker that had it was a friend of the owner. So yeah, she was she was more a residential residential realtor.
00:22:16:17 – 00:22:47:23
Rod Khleif
She really and that’s that’s actually I sorry to interrupt. That’s actually a ninja trick honestly, is to get aligned with residential brokers in a market. I can tell you it’s really interesting that where it’s at, because, you know, Kevin Bup is right. He is that he had a mobile home park, course. And all of that stuff. And I, I was actually went to one of his events in Orlando, which is right down the road, and we went to look at a like a 100 and some space park that he had bought, in orange, orange something, Florida.
00:22:47:23 – 00:23:10:12
Rod Khleif
It was I just know it was Orange County. I feel like it. Then the city name had orange in it. But anyway, it was $2 million and he found it in the residential MLS because the broker didn’t have a clue what to do with it. You know, by the way, guys, what what what happens is someone will buy a house from a residential broker, but maybe they’ve got a mobile home park in this case, or a ten unit, eight unit six unit 20 unit.
00:23:10:14 – 00:23:30:03
Rod Khleif
And they’re going to go to that residential broker to sell it, who hasn’t got a freaking clue how to sell it. So they’ll throw it in the residential MLS and you can get phenomenal deals. So, you know, one of the things I teach in my bootcamp is connect with a residential broker in your submarket. And, and you can, you know, you can get deals nobody else has seen.
00:23:30:05 – 00:23:32:17
Rod Khleif
So yeah. All right. That’s good.
00:23:32:19 – 00:23:39:18
Tim Davis
The best way to do that Tim, you can give your advice. Did you yourself have access to the MLS or did you have a broker that.
00:23:39:18 – 00:23:43:00
Mark Nagy
You worked on? I’m a licensed broker. Yeah okay.
00:23:43:02 – 00:23:44:16
Tim Davis
So you had direct access then.
00:23:44:22 – 00:23:45:05
Mark Nagy
Yeah.
00:23:45:06 – 00:23:49:06
Tim Davis
So that kind of gave you a little bit of an advantage just digging into the MLS yourself then.
00:23:49:08 – 00:23:50:05
Mark Nagy
Right.
00:23:50:07 – 00:24:00:16
Tim Davis
But I would say another good tip. Just on top of that, if you don’t have access, find a residential agent or somebody that can give you access. So that way you can find those people because otherwise it’s rough.
00:24:00:18 – 00:24:11:17
Rod Khleif
Oh hold on not not give you access necessarily, but put an alert in that if any multifamily property hits the MLS, they’ll let you know and you’ll take care of them. They’ll write the contract.
00:24:11:17 – 00:24:12:15
Tim Davis
Depends where you live. Yeah.
00:24:12:15 – 00:24:22:23
Rod Khleif
No no no. Yeah yeah. So, okay. So let me ask you this. What’s a hot topic in multifamily that everybody’s talking about right now?
00:24:22:23 – 00:24:45:14
Mark Nagy
The the hottest topic that I’ve seen lately is, you know, the interest rates being so high, it’s it’s made it very difficult. So financing has made it difficult for to make the numbers work. You know, that’s why, you know, I was looking at your deal. In fact, I think I’m going to invest in in your, deal in San Antonio.
00:24:45:16 – 00:24:48:20
Mark Nagy
Yeah. Because you got that, That’s doable.
00:24:48:22 – 00:25:06:21
Rod Khleif
Well, yeah. Yeah. I’ll describe that deal real quick. So we’ve got a 296 unit asset a mile away from this, one mile and a half away, and this is 200 units, and these units are much nicer than the one we have, which is always in the 90% plus range occupancy. I mean, the units are larger. They all have fireplaces.
00:25:06:21 – 00:25:27:03
Rod Khleif
They all have washer dryer hookups, none of which we have in the other asset. And this on a lake. We’ve got 37 units on a lake. But but we’re assuming a four and a four plus percent interest rate. That’s still got seven years on it. Which is a fantastic loan. So it’s, it’s great debt. 37 units on the lakefront.
00:25:27:03 – 00:25:46:23
Rod Khleif
If I didn’t say that already. You know, it’s a it’s a nice. And the unit that built that. I’m sorry. The, asset next door sold for 137,000 a unit, like a year and a half ago. One across the lake. Sold for 120,000 a unit. They’re same vintage. And this. We’re getting this one for 100. I mean, it’s a screaming deal.
00:25:46:23 – 00:26:05:22
Rod Khleif
So very, very exciting. I need some work. We gotta roll our sleeves up. We’re putting a ton of CapEx into it, a ton of renovation cost. But I mean, they’re going to be really nice. And we’re done. So very excited about it. And yeah, by the way, if you’re a, an accredited investor, text the word partner to seven, two, three, 4 or 5 and let’s talk about it because we still got a little room left.
00:26:05:22 – 00:26:26:22
Rod Khleif
I mean, it’s getting close to being full, but there’s still some room left on it. Yeah. You know, you talk about the debt and, you know, it’s, it’s it’s creating opportunity and there are deals coming. So, you know, I think, if if there was a time to get in this business, it is right frickin now because we’re already seeing the deals, and and there’s going to be a lot more.
00:26:26:22 – 00:26:29:04
Rod Khleif
So you know, very exciting, exciting time.
00:26:29:04 – 00:26:36:07
Mark Nagy
That one right now. Close, close by that, we got some seller financing available on it at 5%.
00:26:36:09 – 00:26:54:21
Rod Khleif
So see, that’s happening more often too because it’s the sales are way down. So what we’re talking about with this bad debt guys is, you know, if you’ve got loan that’s coming due or you’ve got one of these bridge loans that’s adjustable and you’re getting killed with the payments, you know, if you either have to sell or refinance neither one or easy.
00:26:54:21 – 00:27:18:10
Rod Khleif
Right now, sales are down 8,590%. Number one, refinancing is hard because you have to pay what’s called a rate cap. And I’ll give you an example of what’s happened with rate caps. If you were in 2020 and you had a $100 million loan and you wanted to cap the interest rate for three years at 3%, okay, three year rate cap, 3%, that was around $23,000 in 2020.
00:27:18:12 – 00:27:37:14
Rod Khleif
Okay, that same rate cap today. Alyssa’s still eight months ago when I saw this. So it’s probably worse than that now. But $300 million loan for one year is 2.3 million. Okay, to give you an idea. And you got to buy these two to to manage the the risk on these loans. And people don’t have that kind of money.
00:27:37:14 – 00:27:56:15
Rod Khleif
And then, you know, because the interest rates have gone up and their payments have gone up, they don’t qualify to refinance anyway. So a lot of deals that are in big trouble. So, you know, again, we’ve, we’ve set up an opportunity fund to, to, to, you know, hopefully capitalize on some of these deals. And, you know, I think, I think there’s a lot of opportunity coming.
00:27:56:15 – 00:28:07:15
Tim Davis
So yeah. Tim, tell us about that without giving maybe specifics on location, anything like that. What tell us about this deal. Is that a multifamily deal? Why are they selling. Where did you find it.
00:28:07:17 – 00:28:41:20
Mark Nagy
Yeah it is yeah I won’t I won’t give too many details because we don’t have it under contract yet. We’re still in the beginning process, but it’s, it’s a group of duplexes that, guy built, years ago with when he was building another community. And I think there’s 150, 158 or something like that. And so he he’s got it’s free and clear and, he, he built it along with this other community that he actually sold off.
00:28:41:20 – 00:28:48:09
Mark Nagy
And he kept this community, and he’s been renting it out, and he’s just, tired, landlord ready to to move.
00:28:48:09 – 00:28:58:13
Rod Khleif
Oh, my God, what a screaming deal. Holy cow. How exciting is that? Well, listen, let me ask you a question. You know, I know you joined the warrior program. How have you enjoyed it? Has it been good?
00:28:58:15 – 00:29:12:03
Mark Nagy
Absolutely. Yeah. Yeah, I really enjoyed it. I go, every time you have one of the warrior only pro, the events I really like those. Yeah, the other ones are good too. But the warrior only events are phenomenal.
00:29:12:05 – 00:29:30:16
Rod Khleif
It’s all warriors, and it’s an incredible group. By the way, guys, if you’re interested in applying to the program, text the word crush to seven, two, three, 4 or 5, and, and that’s how you apply text crush to seven, two, three, 4 or 5. You know, I think my warriors own somewhere between 180 and 190,000 units that we know of.
00:29:30:16 – 00:29:34:17
Rod Khleif
We can’t keep track anymore. But, it’s it’s not insignificant. And by the.
00:29:34:17 – 00:29:44:17
Tim Davis
Way, on that topic, we have a warrior event coming up in two months, in Florida. So if you’ve been considering something like this, now might be a good time because we’ve got one coming up here shortly.
00:29:44:19 – 00:29:58:06
Rod Khleif
Yeah. In April. Yeah. Now we’ve got a warrior event here in Sarasota, which it’s an awesome venue that we do it at to the west. And it’s been a lot of fun. We’ve been there 2 or 3 times already, so. Yeah. Yeah. Well, anyway, Tim, thanks for coming on the show, brother. That’s been a lot of fun.
00:29:58:06 – 00:30:12:18
Rod Khleif
I really appreciate you sharing your wisdom. And, you know, looking forward to seeing, seeing where you were at a year or two from now, which I’m sure will be extraordinary. And that deal you’re working on sounds familiar. You get it? Yeah. Take care. Brother, I appreciate you.
00:30:12:18 – 00:30:14:11
Mark Nagy
All right. I’ll see you in April.
00:30:14:13 – 00:30:16:08
Rod Khleif
All right. Thanks. Thanks. Take care.
**Podcast Categories:** Multifamily Rock Stars, Podcasts
---
### [He Bought 108 Building and 104 Came From Cold Calling](https://rodkhleif.com/podcasts/industrial-sale-leaseback-strategy-with-joel-friedland/)
**Published:** May 25, 2026
**Author:** Bryan Hoover
**Excerpt:** He Bought 108 Building and 104 Came From Cold Calling
**Content:**
# How Joel Friedland Uses an Industrial Sale Leaseback Strategy to Build Long Term Wealth
In this episode of the **Lifetime Cash Flow Through Real Estate Investing** podcast, Joel Friedland shares how he built a highly specialized industrial real estate business focused on long term ownership, conservative investing, and direct-to-owner acquisitions. With more than four decades of experience, Joel explains why his industrial sale leaseback strategy has allowed him to acquire over 100 buildings while avoiding many of the risks that derail investors during market downturns.
Unlike traditional multifamily value add investing, Joel’s approach centers around purchasing industrial buildings directly from business owners who want to unlock equity from their real estate while continuing to operate their companies. By structuring sale leaseback agreements, he creates predictable income for investors while giving sellers flexibility during retirement planning, succession issues, or business transitions.
# Why Industrial Sale Leasebacks Are Becoming More Popular
Joel explains that demographic trends are creating a major opportunity in industrial real estate investing. Thousands of business owners are reaching retirement age every day, and many own the buildings their companies operate from. Instead of selling both the business and property together, many owners are discovering that a sale leaseback allows them to free up capital while continuing operations during a transition period.
This industrial sale leaseback strategy creates several advantages:
- Business owners gain liquidity without immediately relocating
- Investors acquire income-producing industrial assets
- Tenants maintain operational continuity
- Investors often secure future upside when a replacement tenant is brought in later
Joel emphasizes that most of his acquisitions come directly from cold calling and door-to-door relationship building rather than brokers. Out of more than 100 industrial buildings acquired, only four came through traditional brokerage channels. That hands-on approach has helped his team consistently uncover off-market opportunities in the Chicago industrial market.
# The Power of Market Specialization in Industrial Real Estate
One of the biggest lessons Joel shares is the importance of hyper-focused specialization. Rather than investing nationally across multiple asset classes, he has spent decades mastering a single market: industrial buildings in the Chicago area.
His investment philosophy is built around knowing every industrial corridor, municipality, tax structure, and tenant demand trend inside his market. Joel explains that this deep local knowledge gives investors confidence because his team understands exactly which submarkets create long term value and which ones should be avoided entirely.
He also highlights how important operational efficiency becomes when investors stay geographically focused. By avoiding excessive travel and remaining concentrated in one market, his team can manage assets more effectively while maintaining strong broker relationships and direct owner connections.
# Staying Power Matters More Than Leverage
A major theme throughout the conversation is Joel’s belief in “staying power.” Influenced by one of his longtime mentors, Joel structures many of his deals without traditional debt financing. While this approach limits aggressive returns, he believes it dramatically improves survivability during difficult market cycles.
Joel shares multiple stories where conservative financing protected investor capital during vacancies, tenant issues, and operational setbacks. He argues that many investors lose valuable real estate not because the property itself is bad, but because leverage removes their ability to survive temporary problems.
For investors focused on long term wealth creation, Joel believes real estate ownership should prioritize durability over maximum short term returns. His strategy centers around keeping properties for decades, increasing rents gradually over time, and allowing appreciation and cash flow to compound.
# Lessons From Expanding Outside His Core Market
Joel also discusses one of his biggest investing mistakes: expanding into out-of-state industrial properties outside his expertise. After building a successful Chicago operation, he partnered on a large industrial acquisition in Columbus, Ohio that ultimately became a costly lesson.
The experience reinforced several key principles:
1. Stay within your core competency
2. Invest in markets you deeply understand
3. Choose partners carefully
4. Avoid oversized deals outside your proven model
5. Maintain conservative underwriting standards
The failed expansion ultimately pushed Joel back toward the strategy that built his success in the first place: smaller industrial properties, local market expertise, and disciplined acquisitions.
# Joel Friedland’s Background in Industrial Real Estate
Joel Friedland has spent more than 40 years specializing in industrial real estate acquisitions, syndication, and property management throughout the Chicago market. Over his career, he has acquired more than 100 industrial buildings and developed a reputation for sourcing off-market opportunities through direct outreach and relationship-driven investing.
Known for his conservative investment philosophy and focus on debt-free acquisitions, Joel has mentored numerous brokers and investors while building a portfolio designed for long term ownership and consistent cash flow.
If you want to hear the full conversation and detailed insights, watch the podcast video or read the complete transcript below.
## **Industrial Sale Leaseback FAQ**
## **What Is an Industrial Sale Leaseback Strategy?**
An industrial sale leaseback strategy is a real estate investment structure where a business owner sells their industrial property to an investor and then leases the building back to continue operating their business. This approach allows business owners to unlock equity tied up in real estate while maintaining operational control of the property. Investors benefit by acquiring income producing industrial assets with existing tenants already in place.
## **Why Is an Industrial Sale Leaseback Strategy Popular in 2025?**
The industrial sale leaseback strategy is gaining popularity in 2025 because many business owners are approaching retirement and looking for ways to access capital without disrupting operations. Rising demand for industrial properties, supply chain growth, and increased interest in warehouse and manufacturing facilities have also made industrial real estate an attractive asset class for investors seeking long term cash flow and stability.
## **How Does an Industrial Sale Leaseback Work?**
In an industrial sale leaseback transaction, the business owner sells the building to an investor and simultaneously signs a lease agreement to remain in the property as a tenant. The investor receives rental income while the seller gains immediate liquidity that can be used for business expansion, debt reduction, retirement planning, or other investments.
## **What Are the Benefits of an Industrial Sale Leaseback for Investors?**
Industrial sale leasebacks offer investors several advantages, including immediate cash flow, long term tenant occupancy, reduced vacancy risk, and potential property appreciation. Investors can also acquire off market industrial properties directly from owners, often at more favorable pricing than competitive broker listed deals.
## **Why Do Business Owners Choose Industrial Sale Leasebacks?**
Many business owners choose industrial sale leasebacks because they want to free up capital without relocating their operations. Instead of having large amounts of equity tied up in a building, they can convert that equity into cash while continuing to run their company from the same location. This strategy is especially common among family owned manufacturing and distribution businesses.
## **What Types of Properties Are Used in Industrial Sale Leasebacks?**
Industrial sale leasebacks commonly involve warehouses, manufacturing facilities, distribution centers, flex industrial properties, and logistics buildings. Investors often focus on properties with strong transportation access, functional layouts, loading docks, and locations near major highways or industrial corridors.
## **Are Industrial Sale Leasebacks Considered Low Risk Investments?**
Industrial sale leasebacks are often viewed as lower risk compared to speculative real estate investments because they typically include an existing tenant at acquisition. However, investors still need to evaluate tenant financial strength, lease terms, property condition, market demand, and long term location fundamentals before purchasing a property.
## **How Do Investors Find Industrial Sale Leaseback Opportunities?**
Many investors source industrial sale leaseback opportunities through direct outreach, cold calling, broker relationships, networking, and targeted marketing campaigns. Off market deals are especially valuable because they may provide better pricing and less competition compared to publicly listed industrial properties.
## **What Makes Industrial Real Estate Attractive to Investors?**
Industrial real estate continues to attract investors because of strong tenant demand, e commerce growth, supply chain expansion, and historically lower operating costs compared to other commercial asset classes. Industrial properties also tend to have longer lease terms and fewer management responsibilities than multifamily or retail properties.
## **What Should Investors Look for in an Industrial Sale Leaseback Deal?**
Investors evaluating an industrial sale leaseback strategy should focus on tenant stability, lease duration, property functionality, market demand, transportation access, and long term appreciation potential. Understanding local industrial market trends and maintaining conservative underwriting standards are also critical for long term success.
00:00:33:07 – 00:00:48:13
Rod Khleif
Welcome back to life time cash flow through real estate investing. I’m Rod Khleif and I’m thrilled you’re here. I know you’re going to get tremendous value from the gentleman I’m interviewing. Today is a super nice guy. His name is Joel Friedland, and Joel has been in the business as long as I have, has suffered as much as I have.
00:00:48:13 – 00:00:59:11
Rod Khleif
And so we’re going to have a lot of fun talking about war stories and bemoaning, some of the stuff that’s happened to us, but, I’m kind of kidding, but, we’re going to have a lot of fun today. Joel, welcome to the show, brother.
00:00:59:13 – 00:01:01:18
Joel Friedland
Thank thank you, rod. Great to see you.
00:01:01:20 – 00:01:24:01
Rod Khleif
Thank likewise. Thank you. So why don’t you, tell a little bit of your story? You’ve been in the business, I think, 43 years. I think I got your beat by a handful of years. But, you know who’s who’s who’s who’s taken notes here, but, Yeah. So, why real estate, what you’ve done in real estate, what you’ve learned, you know, just kind of high level initially.
00:01:24:01 – 00:01:25:24
Rod Khleif
And then we’ll drill down, have some fun.
00:01:26:01 – 00:01:57:19
Joel Friedland
Sure. Well, first of all, I’m an industrial real estate. So I know so many people understand the multifamily business very well, and they understand, buying homes and build to rent. Industrial is a completely different world where we, we mainly, buy and own and manage single tenant buildings, one tenant per building. And the buildings are big enough that, the tenants pay rent in the tens of thousands of dollars a month sometimes.
00:01:57:21 – 00:02:28:23
Joel Friedland
And one of the ways that, we, we learn our lessons is from our mentors. And I had the most fabulous mentors in the 1980s. I graduated from the University of Michigan, and I went to work for a family. Their last name was a ski, and it was a father, Milt, and his two sons, Steve and Randy, and their daughter, Bonnie and they owned 84 industrial buildings in 1981.
00:02:29:00 – 00:02:35:22
Joel Friedland
And you remember 1981? It was a an economic disaster. And when Milt.
00:02:35:22 – 00:02:53:07
Rod Khleif
Yeah, we had we had interest rates as high as 18% back in 78 when I got in the business, and it took a long time. I remember doing backflips when they hit 7%. That was a very tumultuous time. Was that was that the SNL situation back then as well, or oh my, we’re getting the dates. Okay, okay.
00:02:53:12 – 00:03:22:15
Joel Friedland
That was that was your a few years later, but got it. I sat with Milt in the conference room at his office and I said, what can I help you with? And he said, well, I’ve got 84 buildings and ten of them are vacant, and your job is going to be to go walk around in industrial parks. You’re going to take your car, you’re going to drive and park in an industrial park where let’s say they have 700 buildings and you’re going to go door to door and you’re going to find me tenants.
00:03:22:18 – 00:03:26:03
Rod Khleif
That’s that’s guerilla marketing right there, baby. That’s good strategy. Okay.
00:03:26:04 – 00:03:50:00
Joel Friedland
I went to one place, you know, I used to I used all different kinds of techniques when I walk in the door. So sometimes I would say, hey, would you consider moving down the street? I have a vacant building, one time I walked into a place, and just because I was in one of those good moods, I said to the two guys that were sitting at the front desk, they were right next to each other, and I said, hey, you guys want to move out of this dump?
00:03:50:02 – 00:04:15:13
Joel Friedland
And I was just kidding. And they said, dump just a minute. So they come back for they disappeared for about a minute. They come back and they’re pushing a wheelchair with an old man. And they said, this is our dad. He owns this dump. And and the dad said, what did you call my place? I said, no, no, I was kidding.
00:04:15:13 – 00:04:36:08
Joel Friedland
I was just kidding. How are you to look at a building that I have available down the street? And the father said, boys, throw him out. They literally there were these big guys. I’m 51. Took me under this arm and one took me under this arm and they carried me out the front door and threw me into the parking lot.
00:04:36:10 – 00:04:50:18
Joel Friedland
And I landed on my knee. And I was wearing a suit. In those days, everybody wear a suit all right? And I ripped my pants and I had a bloody knee. Needless to say, I never called anything a dump after that.
00:04:50:20 – 00:05:11:23
Rod Khleif
You know, those are called seminars. I call them seminars. I ask my students at my boot camps on panels to talk about seminars. That’s a good one. So. So you you’re in you’re in industrial now. You do single tenant. So that’s not flex space. I’ve got students to do flex space. So you’re doing larger industrial. So you’re looking at the bay height or the or the truck mount height.
00:05:11:23 – 00:05:31:00
Rod Khleif
You’re looking at the door height. You’re looking at the square footage location, all of that stuff. So let me ask you this. You know, because I’m all about value add, and, and I like value add opportunities. Now, with the single tenant building, do you try to find buildings? I mean, sorry if I interrupted your your your bio here.
00:05:31:00 – 00:05:48:13
Rod Khleif
Okay. Yeah. I’m I’m already thinking I want I got questions I want to ask. So when you are looking at these buildings, are you looking for empty buildings. Is that primarily what you want to find so you can co-create value? Or are you looking for a building that’s occupied that may have some modest rent increases, and you’re going to bank on that?
00:05:48:13 – 00:05:50:14
Rod Khleif
I’m just curious. Or both, I don’t know.
00:05:50:17 – 00:05:54:23
Joel Friedland
So so over the years we’ve bought 108 buildings.
00:05:55:00 – 00:05:55:20
Rod Khleif
Wow.
00:05:55:22 – 00:05:58:15
Joel Friedland
And they’re all value add. Everything okay.
00:05:58:17 – 00:05:59:04
Rod Khleif
Okay.
00:05:59:08 – 00:06:20:20
Joel Friedland
And value add to to me is different than it is to some people in the multifamily world, right? I’m not looking to fix it up and get more rent. I’m looking to buy a building that already has a tenant. Maybe for a couple of years. We do something called a sale leaseback. So first of all, I think you’ll find this interesting.
00:06:20:22 – 00:06:48:02
Joel Friedland
We’ve only bought four buildings through brokers. The other 104 have all been through cold calling, literally cold calling door to door. So like for example, last year we bought seven buildings and my summer intern found one. He walked in this place in a town called wood Dale, 10,000 square foot building, and he talked to the, lady that was in the front office.
00:06:48:02 – 00:07:06:14
Joel Friedland
And he said, would you consider selling your building? And she said, no. So he walked out and there were a bunch of interns with me and wood Dale that day, and I saw him walking out and he looked really dejected. And I said, Jordan, what’s the matter? He says, she threw me out. I said, we’re going back in.
00:07:06:16 – 00:07:44:16
Joel Friedland
And he said, you know what? I said, we’re going to go back in. So he and I walked back in and I said, hi, I’m Joel, Jordan’s my summer intern. And what’s your name? And she said, my my name is Linda. Said, hi, Linda, we would like to buy your building, and we’re not asking you to leave or we’d like to buy it so that you can have some cash for your operations, and you’ll lease it back and give us the ability to make a return so that my investors, I have a group of syndicated investors can make a 7% return, and we’d love to buy the building.
00:07:44:16 – 00:08:08:21
Joel Friedland
And you can stay as long as you want. You can stay a year, two years, ten years, whatever you like. And she says, well, let me call my sister. She’s in the other room. So she says, Sue, come in here. So it turns out they’re twins and they’re rh they’re and they’re in their mid 60s. Right. And so I’m looking at these two women and they look identical to each other.
00:08:08:23 – 00:08:28:12
Joel Friedland
And you know these these blond haired women and and they both had a similar haircut. It was crazy. And I said hi Sue. This is Jordan, my intern. I’m Joel. We’d like to buy your building and lease it back to you. And Sue said, no, no, we’re not selling. We’re not selling. So I walked out with Jordan.
00:08:28:12 – 00:08:49:10
Joel Friedland
I said, I guess you were right. They’re not selling. Three weeks later, I get a conference call from Linda and Sue. Joel, we were thinking about your stop in, and we kept your information. We’d like to sell the building and lease it back. Yeah. I said, all right. I’d love to come over and talk to you about it.
00:08:49:12 – 00:08:55:12
Joel Friedland
So I assembled the whole group of five interns so that they could watch what it was like to.
00:08:55:15 – 00:08:56:12
Rod Khleif
See you in action.
00:08:56:12 – 00:09:20:12
Joel Friedland
Sure. Yeah. Negotiate. Negotiate a purchase and a lease. And I went over with the boys, and we talked to Sue and Linda, and I said, we’ll pay you a million to, which is $120 a square foot, and we’ll lease it back to you for $120,000 a year. And they said, we need to do some checking. We think we might be able to do better.
00:09:20:14 – 00:09:40:13
Joel Friedland
We have some brokers who’ve told us it’s worth more than that. And again, a couple weeks went by and they called me back and they said, okay, we’ll do it. We’d like a two year lease back. We want to sell our business. Our dad started the business in the 1960s, and he built this building in 1986, in our dad died.
00:09:40:13 – 00:09:52:21
Joel Friedland
It’s hard for us to let it go, but we believe you’d be a good owner and I think a good landlord. And it’ll give us the time to sell the business and retire. Yeah. And I a fantastic.
00:09:52:23 – 00:10:14:02
Rod Khleif
Sounds like a win win win all the way down the line. Honestly, that’s that’s a fantastic strategy, Joel. You know, and there are so many bills especially now there’s what 10,000 people a day turning 65 in this country. A lot of them owned businesses. A lot of those businesses own real estate. What a fantastic idea to have them relinquish the real estate piece while they’re selling their business.
00:10:14:02 – 00:10:21:05
Rod Khleif
I that’s a that’s a fantastic model. That’s probably going to be very effective in today’s day and age. Would you concur?
00:10:21:07 – 00:10:40:11
Joel Friedland
Oh yeah. Well this is this is our model. So our model is we don’t like buying vacant although we do occasionally. We like to have some income. And the reason we like a nice little two year or three year lease back is because about a year before the lease is up, we put the building on the market to find a new tenant.
00:10:40:13 – 00:10:41:10
Rod Khleif
Right? Of course, the.
00:10:41:10 – 00:10:57:10
Joel Friedland
Beauty of having that year is that during that year we do have some income coming in and the investors are getting paid and it gives us a runway to. So how do we create value in a value add? We find a new tenant. That’s how.
00:10:57:10 – 00:11:15:23
Rod Khleif
We gotcha. So so it’s 2 or 3 years down the road. Ideally if the if that business owner is, is you know, agreeable to that timeline, you know, if they go ten years, that maybe the value adds not a as quick as it were, but, Got it. Okay. Well, that’s a hell of a model.
00:11:16:03 – 00:11:20:09
Rod Khleif
And, are you geographically specific or where do you buy these things?
00:11:20:11 – 00:11:23:00
Joel Friedland
Well, only in the Chicago area.
00:11:23:02 – 00:11:24:16
Rod Khleif
Oh, wow. Just Chicago.
00:11:24:16 – 00:11:55:14
Joel Friedland
Wow. Chicago. No airplanes. No. No travel. Okay, our investors, I think, trust us, because we are market experts, like laser focus like nobody else. I can go to a wedding and sit next to someone that there’s 20,000 industrial companies in Chicago, and there’s, 17,000 industrial buildings, you know, 17,000, I’m guessing, over the last 40. So over many years I’ve been in at least half of them.
00:11:55:16 – 00:12:21:11
Joel Friedland
And I drive by them all the time. So my, my wife thinks it’s great party trick. I’m sitting next to someone at a wedding and I say, so what do you do? Oh, well, I’m in the, candy business. I manufacture candy in Chicago. Oh, okay. Tell me approximately where you are. So the guy say, I’m on Roosevelt Road and I’ll say, oh, 2700 Roosevelt.
00:12:21:13 – 00:12:41:16
Joel Friedland
You must be element bars. It’s a white precast building with six docks in front. And they’ll go like, what are you on? That’s funny. Sure. It’s a factory. It’s really crazy. We have to know the market. We have to know the values. And that’s our thing is really understanding the market just to.
00:12:41:17 – 00:13:07:05
Rod Khleif
Well, that’s secret. That’s the secret to success. I tell my students, the, the, the most successful operators I see are the ones that are geographically specific. Now, that’s that’s in the multifamily world, but it’s the same thing for what you’re saying. You know, if you’re if you’re diluted all over the place, you don’t know what the what the demands are, what the you know, what the, the demographics are for that market and and you’re, you’re going to lose and very often and so, no, I love it.
00:13:07:05 – 00:13:25:15
Rod Khleif
And and Chicago’s huge. Okay. I remember my father lived in Sleepy Hollow near East Dundee. And, and I would jog down the street there. And I remember seeing lots of industrial. But at that time, this is probably eight, ten years ago. There were a lot of empties. I mean, I saw a lot of and I mean, I was like, holy cows, a lot of empty industrial buildings here.
00:13:25:21 – 00:13:37:06
Rod Khleif
Just, just just jogging down the street from his place. And that’s just triggered a memory for me. But, but, but yeah, that Chicagoland area is, is enormous. So that’s a fairly big footprint.
00:13:37:08 – 00:14:01:16
Joel Friedland
I’ll tell you how specific we get. You probably haven’t heard this. There’s 40 municipalities in the Chicago area that have industrial properties. There are only 20 that will buy in the other 20 or forbid. So I, I can’t stand them. They’re just crap markets like the values don’t go up there in the wrong county. It’s an older, ugly park.
00:14:01:18 – 00:14:06:07
Joel Friedland
There’s certain areas. So there’s a place called DuPage County just to be very sure.
00:14:06:07 – 00:14:07:12
Rod Khleif
No, I’m familiar with it.
00:14:07:14 – 00:14:18:20
Joel Friedland
And DuPage County is where everybody wants to be. Why? Real estate taxes are lower, buildings are newer. It’s prettier, better curb appeal and more access to the highways for their trucks.
00:14:18:22 – 00:14:26:15
Rod Khleif
Because, well, that’s the big thing, isn’t it? The access doesn’t really matter what they look like unless they’re getting retail traffic. Who cares, right? Or am I, am I not?
00:14:26:17 – 00:14:28:07
Joel Friedland
Yeah. Curb appeal does matter.
00:14:28:11 – 00:14:29:14
Rod Khleif
It does.
00:14:29:16 – 00:14:53:21
Joel Friedland
Yeah. You get better rent for a building because these these people who own industrial businesses, manufacturers, primarily distributors, they have a self-image. The reason that they may have a nice house or a fancy car is they have an image of themselves like, hey, I’m, I’m a cool guy. I’ve got cool stuff. Right? So they don’t want to drive up to a building that looks like a piece of crap because it’s interesting.
00:14:53:23 – 00:14:56:10
Joel Friedland
Their image of themselves is the picture.
00:14:56:11 – 00:15:11:14
Rod Khleif
That’s that’s really interesting, Joel, because you know me, I’d like I don’t care. I don’t care if it looks like a dump outside, as long as it serves the purpose of I’m not bringing any people there, who cares? You know, I remember having a real estate office in a home that was a kind of a piece of junk.
00:15:11:14 – 00:15:22:15
Rod Khleif
But that’s interesting. How how could affect your self-image? I totally get that. That’s that’s fascinating. So, you know, I know Chicago’s Cook County, right? So you do you do a lot of business there as well.
00:15:22:17 – 00:15:25:06
Joel Friedland
We do. With seven buildings in the city.
00:15:25:08 – 00:15:25:21
Rod Khleif
Okay.
00:15:25:22 – 00:15:26:14
Joel Friedland
Oh, we got some.
00:15:26:16 – 00:15:45:15
Rod Khleif
I use I used to own a, well, I shouldn’t say owned, I used to I, I built a law practice in Illinois, and this was a lifetime ago when I had a litigation support company. And so I’m very familiar with, with the area, I mean, enough to be dangerous. I would say that, we were helping families that were losing their homes in foreclosure.
00:15:45:15 – 00:16:03:05
Rod Khleif
It was a it was a good business. Back in the day. A friend of mine bought it, and I’m actually going to his wedding today. That’s kind of funny. Yeah, the guy, the guy that bought it, I’m going to his wedding. Yeah. But, anyway, so. So, you know, what are some tools that you utilize? I mean, I see you utilize in terms, which is fantastic because they don’t really cost much of anything.
00:16:03:07 – 00:16:12:20
Rod Khleif
And that’s great for them, too. They get to learn the business, and you’re, you’re, you’re, you’re paying it forward. But what are some resources and tools that have helped you along in this journey?
00:16:12:22 – 00:16:45:05
Joel Friedland
So we have people who are specialists with us. So we have we have property management and accounting. And then we have an acquisitions team in our acquisitions team. It’s primarily, I hate to say, young guys, but it’s a it’s a very male dominated business. Industrial is mostly men. If there’s 300 active industrial real estate people in Chicago, with some exceptions, I’d say 90% are men.
00:16:45:07 – 00:17:07:18
Joel Friedland
And it’s a young man’s business to go find deals. It’s not it’s not an old guy business, although I do, I still do go door to door to look for buildings and but but the these we’ve got Logan Logan is our secret weapon right now. He just is on the street. And what he does is he he goes door to door and we have various hands out handouts.
00:17:07:18 – 00:17:29:16
Joel Friedland
So it depends on what building it is and who the tenant is, how big of a company it is, whether it’s privately owned or whether it’s a division of a much larger company, maybe based in Germany or in in Japan. And he he hands out something that’s a leave it there so they can know who stopped in. And we get calls from these things.
00:17:29:16 – 00:17:36:13
Joel Friedland
So the greatest tool really is the leaflets that we hand out when we go door to door to.
00:17:36:19 – 00:17:46:15
Rod Khleif
So what do they say? Give me an idea. What they say might be interested in buying your building. Have you ever thought about selling and leasing it back? Or you have to know what the ownership structure is, right? Because they may not own it, right?
00:17:46:17 – 00:17:58:21
Joel Friedland
Right, right. And so we have, a sales force, CRM, where we have all the buildings listed and we know who the owners are. Gotcha. Or who the tenants are.
00:17:58:23 – 00:18:03:15
Rod Khleif
And we like lube net, lube net, or something. You go in there and and look them up or costar.
00:18:03:17 – 00:18:29:02
Joel Friedland
Yeah, we use CoStar. We use loop net. But primarily we have our own system because we’ve assembled all this information over the past decades. Gotcha. We have a great database. And Logan is an example. Found four buildings door to door last year. Well, we’ve got about $14 million worth of buildings that Logan found by stopping in. And usually the first answer is like Sue and Linda.
00:18:29:02 – 00:18:57:22
Joel Friedland
The answer is no. We’re not looking to sell. Sure, sure. Then maybe they think about it and maybe something’s coming up. Maybe they have some alone that that needs to be renewed for the business and they need some cash. Or it’s possible that they’re at the age, you know, you know, most of our, our deals come from families who are fighting with each other because usually manufacturing, building buildings are owned by, by families where the grandfather started the business.
00:18:57:24 – 00:19:20:09
Joel Friedland
And they, they built it and they hired people and they added machines, and they just kept going and going. And that’s where the second generation comes in and works for dad. And then the third generation comes in and they’re all cousins. And by the time it gets there, someone doesn’t work as hard. Somebody is a little lazy, someone’s not that smart.
00:19:20:11 – 00:19:39:14
Joel Friedland
And then the wives or husbands get involved. Honey, it’s not fair the way your cousin’s treating you. You work so much harder, and they all get into these fights with each other, and that’s when they want to get rid of their business. So they sell the business to a private equity group, and now they’re still stuck with each other because they still own the building.
00:19:39:16 – 00:19:52:08
Joel Friedland
And that’s where we come in. People stay. We’ve got the three. These people who get divorced, sell their buildings, be paid. I and people who don’t get along don’t get along.
00:19:52:08 – 00:20:09:08
Rod Khleif
Okay. That’s the third one. I got to remember that one. The three days. I love that I knew the first two. Okay. Don’t get along well. That’s fascinating. You know, and that’s just human nature, but, interesting that that that, that you’ve seen that, that play out over time. That that’s a consistent, thing is it’s fascinating.
00:20:09:10 – 00:20:14:16
Rod Khleif
So you’re not interested in any other asset class? It is straight industrial, single tenant use.
00:20:14:18 – 00:20:26:02
Joel Friedland
Yeah. And you want to hear the craziest thing of all? Sure. We we buy debt free. We don’t put mortgages on, which I know goes against all the rules of leverage. And I know.
00:20:26:02 – 00:20:42:03
Rod Khleif
Well, I mean, you offer a 7% return. You know, that’s a very safe investment. I mean, you’re not going to lose the the property of the bank. Now, you could have less than that in return if you don’t rent it or re rent it or whatever. You know, like, I know I saw a lot of vacancy when I was jogging.
00:20:42:07 – 00:20:58:24
Rod Khleif
It’s been years ago, but, you know, you’ve got it. You’ve got to, you know, and I’m sure that now when you’re filling a building, you’ve got you. And I love the fact you give yourself a year. I mean, jeez, if you can’t do it in a year, go, go lay down. But but you give yourself a year.
00:20:59:01 – 00:21:08:18
Rod Khleif
So besides the guerilla marketing you mentioned, is there anything, any other marketing you do to try to fill these spaces? Yeah, by the way. And one of the thing, do you do them triple net?
00:21:08:20 – 00:21:09:19
Joel Friedland
No, no.
00:21:09:21 – 00:21:10:13
Rod Khleif
No you don’t.
00:21:10:15 – 00:21:12:10
Joel Friedland
It’s it’s double net.
00:21:12:12 – 00:21:12:21
Rod Khleif
Okay.
00:21:12:21 – 00:21:15:24
Joel Friedland
No, no tenant wants to put on a roof.
00:21:16:01 – 00:21:22:08
Rod Khleif
Okay. Got it, got it, got it. So you’re taking care of the maintenance and things that are heavy. Heavy lift.
00:21:22:10 – 00:21:23:05
Joel Friedland
Only the roof and.
00:21:23:05 – 00:21:24:20
Rod Khleif
The roof and Hvac.
00:21:24:22 – 00:21:48:08
Joel Friedland
And sometimes the Hvac and sometimes the parking lot, but. Gotcha. Usually just the roof and the structure. But here’s the other thing. We keep these buildings forever. We write our whole our whole thesis is real estate for the long term hold. We keep them. We don’t want to sell them. We want to lease them out. We want the rent to go up every year.
00:21:48:08 – 00:22:05:21
Joel Friedland
The key to our business is longevity and staying power. So the biggest issue we have is we can’t find what we want to buy. So when we have a great building, if we sell it, how do we replace it with anything as.
00:22:05:23 – 00:22:23:10
Rod Khleif
Oh no, I get it. You know, my first interview on the show was a billionaire named Albert Barris, who owns a McKinley Corporation in, Ann Arbor, Michigan, thousands, tens of thousands of apartments. And he said something that really stuck with me. And and you’re reminding me of it, which is I’m a real estate buyer, not a seller.
00:22:23:12 – 00:22:47:08
Rod Khleif
And, you know, and and I love that. Yeah, it’s kind of funny. And I he was my first interview billionaire, and I forgot to hit the record button an hour, and I looked down, I’m like, oh, shit. And he was, he was he was really cool. He’s been on the show several times, the wonderful guy. But in fact, just as an aside, I don’t know, do you utilize, iOS in your business at all from the book Traction the Entrepreneur’s Operating System?
00:22:47:08 – 00:22:48:15
Rod Khleif
Are you familiar with that or. No, I.
00:22:48:15 – 00:22:49:23
Joel Friedland
Am familiar with it, no.
00:22:49:23 – 00:22:56:02
Rod Khleif
Okay, okay. Well, we use it in my companies, and he’s referenced in that book. His company’s referenced in that book, which is called.
00:22:56:03 – 00:22:58:15
Joel Friedland
That was his dad. Right? Right. I was just you’re kidding.
00:22:58:21 – 00:22:59:20
Rod Khleif
Oh, wow.
00:22:59:22 – 00:23:03:08
Joel Friedland
I lived on Gettys Avenue in Ann Arbor.
00:23:03:10 – 00:23:04:07
Rod Khleif
No kidding.
00:23:04:09 – 00:23:06:16
Joel Friedland
They were my property manager and owner.
00:23:06:18 – 00:23:25:24
Rod Khleif
I’ll be damned. Well, yeah, that’s. That’s fascinating. Yeah. You know, it’s funny, I just, I sorry to derail the conversation, but, you know, I, I was going to have him speak at my mastermind. So I used to host the largest multifamily mastermind really in the world, probably about 40 or 50 billion in assets represented by the members. And and my assistant called his assistant, said, yeah, we’re going to fly Albert down first class.
00:23:25:24 – 00:23:51:13
Rod Khleif
We’re going to put him up in the Ritz-Carlton. And his assistant Nina is like, it’s okay. He’ll take his own jet. Thank you for that. But yes, like I was like, yeah, baby. Anyway, so, so, you know, I get a lot of people on my show that know they want to do something. They’re in a they’re in a rat race job, or they’re in a W2 job, even maybe high paying, very often, but they’re not where they want to be, freedom wise and and freedom time freedom, money, freedom.
00:23:51:13 – 00:24:01:06
Rod Khleif
You know, ability to travel freedom. What advice would you give them? You’ve been in the real estate a long time, you know, speak to that person. If you would.
00:24:01:08 – 00:24:10:07
Joel Friedland
Yeah. I, I mentor a lot of people over the years. We used to have a brokerage company. We did industrial brokerage. And by the way, you asked the other tools that we.
00:24:10:09 – 00:24:11:13
Rod Khleif
Oh, yeah. Sorry. Yeah.
00:24:11:16 – 00:24:40:11
Joel Friedland
The answer to that is the there’s a very, highly professional brokerage community that only does industrial. They don’t do anything but industrial. And they bring us most of our tenants. And the answer is do one thing, figure out one thing, get the best mentor in the world. Who’s the the number one person in your community that does that one thing.
00:24:40:13 – 00:25:00:19
Joel Friedland
And if you have to work for them for free and follow them around and shine their shoes, you got to have a mentor and do one thing. You know, I think you I told you this, my wife, had pancreas cancer and she survived it. Well, and we went and we saw five different teams of surgeons and oncologists.
00:25:00:19 – 00:25:29:03
Joel Friedland
Two years ago, we went to all the hospitals in the Midwest that were the most renowned pancreas cancer hospitals. And we interviewed teams. And who did we pick? We picked the one doctor, this guy, his name is Doug Evans. He’s in Milwaukee, which is north of Chicago. It’s not even in our town, but he was the best guy, doctor cam guy who he worked with the the oncologist, the best.
00:25:29:05 – 00:25:55:20
Joel Friedland
And why did we choose him? Because he’s a specialist that is the best at what he does beyond anybody that we talked to and even the other people we talked to, the other doctors said, if you don’t come to me, go to Doug Evans in Milwaukee. So what I would say to somebody and when when we had our brokerage company, I trained 70 brokers in industrial.
00:25:55:22 – 00:26:15:11
Joel Friedland
30 of them are still in, 40 of them either washed out or decided to do something different. But their mentorship that they got from me and from my partners was second to none. And they did one thing and they got great at it. And we’ve made a lot of millionaires out of people that we trained because they do the one thing that they learned.
00:26:15:11 – 00:26:24:17
Joel Friedland
So the answer is, I think pick something specific as hell, learn everything about it and be the best person at that period.
00:26:24:17 – 00:26:48:17
Rod Khleif
That’s great advice. That’s great advice. Yeah. And if it’s multifamily, for God’s sakes, come see me. You know, I will tell you, Joel, and you don’t know this about me, but, yeah, our program, our my warrior coaching program, which is my students, I have about 2000 students around the country. Those results, we believe they own about 300,000 units under my tutelage, which is more than everybody else that does this combined.
00:26:48:19 – 00:26:56:20
Rod Khleif
So I’d like to I’d like to think that I’m in that, I’m in that 1% of 1% as far as a mentor for multifamily. In fact, I know you aren’t.
00:26:56:23 – 00:26:59:21
Joel Friedland
Yeah, yeah, I watched you over the years, and I know you are.
00:26:59:23 – 00:27:20:01
Rod Khleif
Yeah. Thank you. So let me ask you this. You know, I love to ask this question because I think people learn more from failure and mistakes than they do from success. And there’s no question you’ve you’ve had your share of what we call seminars, you know, where where you got your butt handed to you. Talk about one of those, if you can think of one.
00:27:20:03 – 00:27:27:00
Rod Khleif
And I know you can just think of a one where there may be some some training and some messaging and some some some advice involved.
00:27:27:02 – 00:27:30:00
Joel Friedland
And then I’m thinking, I’m going to get in big trouble here.
00:27:30:02 – 00:27:31:04
Rod Khleif
That’s okay.
00:27:31:06 – 00:27:54:18
Joel Friedland
All right. I have a brother. I had a brother in law in Columbus, Ohio. No longer my brother in law. He and my sister in law live divorced. Great guy, great guy. Jeff, I decided that we needed to go national. This was in 2004, and so we bought a property in New York, and we bought a property in Florida, and then another one in Florida.
00:27:54:20 – 00:28:14:19
Joel Friedland
And my brother in law said, gee, Joel, I love what you’re doing in Chicago. And he was a civil engineer and he had some real estate experience. And he said, why don’t I moved to Chicago for three months? I’ll learn the industrial real estate business, and then I’ll come back to Columbus, Ohio, and I’ll buy buildings, and maybe you and your investors will back me.
00:28:14:19 – 00:28:37:15
Joel Friedland
And I said, Jeffrey, that’s great. So he moved to Chicago. He lived here. And, my sister in law lived with my in-laws a couple blocks away from where we live. He learned the business. He went back there and he picked a building and he said, I’ve got the perfect building. And you put in 800,000 and I’ll put in 800,000.
00:28:37:15 – 00:28:57:00
Joel Friedland
When I. When he says you, he means you’re you’re a group of investors. My investors bought $50,000, 100,000 each into a deal. Right. So for all the deals we have and maybe we have 200 investors altogether, and some are in this deal, some are in that deal. And they all trusted me. And I said, my brother in law found this building.
00:28:57:00 – 00:29:29:09
Joel Friedland
It’s 200,000ft² in Columbus. It’s on Brant now. 1033 Bretton L Avenue. And we bought the building and we knew that the tenants were leaving. Eventually we had to release it, and we went to Florida for Christmas break about a month later. And my brother in law, my father in law and the whole family, we were sitting at a restaurant, Nick’s Tomato Pie, which was over in Jupiter, and my father in law says, oh, look, look, there’s Ron.
00:29:29:11 – 00:29:47:08
Joel Friedland
Ron, Jonas. He he owns, a lot of real estate. He lives in my community, owns a lot of real estate in Columbus. Said you should go meet him. So I went over and I said, hey, Ron, I’m Joel, I’m Richard, son in law, and, I just bought a building in Columbus. He said, oh, which one?
00:29:47:10 – 00:30:12:14
Joel Friedland
I said, 1033 Bret Neil. He said, oh, the stabbing building. What I said the what? He said, oh, that’s the building that’s been on the market for like five years. And apparently the brokers brought someone to look at it. And while they were in the building, some crazy the homeless guy came after them with a knife. And so it’s known as the Stabbing building.
00:30:12:16 – 00:30:24:05
Joel Friedland
And I said to my brother in law, Jeff, I said, Jeffrey, did we buy the stabbing building? He said, oh, I didn’t tell you. I said, oh, wow. No, you didn’t fucking tell me.
00:30:24:07 – 00:30:25:03
Rod Khleif
Like.
00:30:25:05 – 00:30:52:05
Joel Friedland
What did we buy? What did you do? But I so here’s, here’s the mistake. It wasn’t in our wheelhouse because it wasn’t in Chicago. Right? We had had so much success by being local experts, right. Expanding into a market I didn’t know I picked a partner that I never should have picked. Big mistake. It’s 200,000ft². We like little buildings.
00:30:52:05 – 00:30:55:16
Joel Friedland
We like 30,000ft². They’re easier to lease. There we.
00:30:55:17 – 00:30:59:11
Rod Khleif
Go there. Much easier. A lot more. A lot more options with a smaller building.
00:30:59:17 – 00:31:21:03
Joel Friedland
Right. So our whole portfolio is made up of buildings under 100,000ft². The two. So I stretch to do 200. I picked the wrong partner. I went out of town and it turns out that the building was nothing but a disaster. And we we lost a lot of money. So I learned those lessons. And so that was my seminar.
00:31:21:05 – 00:31:22:03
Rod Khleif
Yeah, that’s a good one.
00:31:22:03 – 00:31:25:10
Joel Friedland
That’s building the last building that I bought out of town.
00:31:25:12 – 00:31:46:14
Rod Khleif
That was a good one. Wow. That’s a good one. So, you know, you’re a dynamic guy. You’re my age. You know, I spend a lot of time on motivation and psychology and how it really 80 to 90% of your success in anything is your mindset and psychology, you know, where do you get your drive? You know, what makes you jump out of bed and conquer the day, every day?
00:31:46:14 – 00:31:48:11
Rod Khleif
I’m just curious.
00:31:48:13 – 00:32:16:11
Joel Friedland
I was born this way, you know? Yeah. There’s an old an old Mark Twain quote. How come you’re so excited all the time? He says, I was born excited. I don’t know, okay. You know, I, I just when I was, 14, I started a lawn cutting business, you know, a door to door. My parents went out of town, and I went door to door in my neighborhood in over one weekend, I got 60 families just to hire me to cut their lawn.
00:32:16:12 – 00:32:17:17
Rod Khleif
Six, six, zero.
00:32:17:17 – 00:32:40:22
Joel Friedland
Hole in one weekend. Wow. So I went to the store. My parents were out of town. I hired a neighbor who could drive, who had a, pickup truck, and we went and we bought bags and bags of Scott’s fertilizer. All all, by the way, on credit Ferraro lawn, Lawn and Garden, which was in the area. I bought five lawn mowers.
00:32:40:24 – 00:33:01:14
Joel Friedland
I bought all kinds of, fertilizer spreaders. And I loaded this shit into my garage when my parents were out of town, and my parents come back from California, and they look in the garage, and they can’t get the car in the garage because it’s just chock full of landscaping supplies. My dad looks at me, says, young man, what did you do?
00:33:01:16 – 00:33:09:02
Joel Friedland
Right. That’s awesome. I started a lawn business. And so, yeah, I tell you, I just.
00:33:09:02 – 00:33:12:04
Rod Khleif
I’m so you. It’s been in your blood for a long time. Got it.
00:33:12:04 – 00:33:17:21
Joel Friedland
The other people person I like, I like sales, I like people.
00:33:17:23 – 00:33:20:10
Rod Khleif
Yeah, I like you. You’re an extrovert. Like me.
00:33:20:10 – 00:33:28:24
Joel Friedland
Yeah, yeah. And I like creativity. You know, I love I love being creative. Coming up with ideas that people haven’t thought of that are interesting, that are workable.
00:33:28:24 – 00:33:46:11
Rod Khleif
Yeah, yeah, I think I think, you know, you know, when you love what you do, you’re, you’re it’s much easier to innovate and be creative, because you’re loving what you’re doing and you’re passionate about it. You know, I think you need to be passionate to, you know, to to influence people, investors and sellers and brokers and everything else.
00:33:46:13 – 00:33:58:05
Rod Khleif
So you’ve had mentors your whole life, and I, me as well. I’ve, I’ve had many mentors. What’s what would you say? We just got a couple of last questions here. What would you say is the best advice you’ve ever received from a mentor?
00:33:58:05 – 00:34:26:18
Joel Friedland
Joel, I have a mentor named, Nate Wagner, who is turning 99 on July 12th. Wow. I’m writing a book about him. We have breakfast every Saturday, and we have for 15 years. The book is called breakfasts with Nate. And the best advice that Nate that anyone ever gave me was staying. Power in real estate is everything. And if you don’t have staying power, someone else.
00:34:26:23 – 00:34:45:15
Joel Friedland
When the market turns, will own the properties you used to own, and you won’t own them anymore because you can’t get through the rough times if you don’t have staying power, whatever that means. And that, by the way, is why we do these debt free deals. When I did my first debt free deal, I called Nate and I said, how would you like to go into a deal with me?
00:34:45:15 – 00:35:14:18
Joel Friedland
He says, look, Nate, they did very well in real estate for a long time. And because of his longevity, he even did better. Sort of like, you know, how, sure, Warren Buffett made most of his money in the last 30 years after he was 60. So did Nate and Nate more or less took the approach that he was going to be successful because he was going to have this ability to get through any tough period.
00:35:14:20 – 00:35:33:22
Joel Friedland
And he told me we were at breakfast one day and he said, if you if you don’t learn anything from me staying power. So I called him and I said, I’ve got this one building in Mundelein that I want to buy. It’s 20,000ft. It’s $1 million. How would you like to be partners with me on it? And we’ll do it debt free, he said.
00:35:33:24 – 00:35:40:16
Joel Friedland
I love that idea. I love that idea, he says. I’ll put up 950,000. You put up 50,000.
00:35:40:18 – 00:35:42:02
Rod Khleif
But I send for him.
00:35:42:02 – 00:36:07:22
Joel Friedland
950,000 is like 5000 to me. Right? So, so I said, okay, that would be great. And we bought the building and we had trouble the, the, the first tenant left. It was vacant for months. We made a deal with a furniture company. They didn’t keep the heat working in the winter time in the spring, pipes froze.
00:36:08:01 – 00:36:10:16
Rod Khleif
Yeah. The pipe sprinklers, sprinklers froze. Jesus.
00:36:10:16 – 00:36:33:23
Joel Friedland
And the guy moved out and he says, I can’t occupy the building because the sprinklers froze, so I’m not going to pay rent anymore. And I said, whoa, whoa, whoa, you were responsible for the heat. You can’t just not pay rent. He said, Sue me. My daughter’s a lawyer. Tough shit. And I said, great. So it had two problems and then it had a third problem.
00:36:33:24 – 00:36:53:12
Joel Friedland
Okay? It was one of the worst deals I ever made. But we made 4% for the three years we owned it each year on average. Why? Because Nate’s the whole position about staying power was you can’t lose very much if anything if there’s no lender.
00:36:53:14 – 00:36:55:10
Rod Khleif
Yeah. So yeah.
00:36:55:11 – 00:37:13:09
Joel Friedland
It would have been a deal. If we had borrowed 60%, we would have lost probably. I’d say half of our money. So yeah, we would have put up down 400,000, we would have lost 200,000 and said we made it was very it was it was light, modest.
00:37:13:09 – 00:37:26:10
Rod Khleif
It was modest. But you made money. You didn’t lose. I’m going to tell you something. I’m going to I want I’m going to I’m going to put a pin in that. That is some of the best advice I’ve ever heard. Joel. And I will tell you guys, I hope you heard that. It’s all about staying power in real estate.
00:37:26:14 – 00:37:46:02
Rod Khleif
I’ve, I’ve I’ve had my ass handed to me where I had debt and I lost everything. You guys know my story. Lost $50 million, and, you know, and I’ve got a nefarious partner right now I’m dealing with. I’m in mediation. We’ve. We’re losing some stuff. And you know, and I teach this thing. I teach this stuff, and that is fantastic advice.
00:37:46:04 – 00:38:02:23
Rod Khleif
Listen, Joel, I really appreciate you coming on the show, my friend. You’ve added tremendous value. And, and, I love what you’re doing. And, and as, you know, I know we’ve been trying to get together here for a couple of weeks for a long illness and everything else, but, it’s I’m glad we were able to get this done.
00:38:02:23 – 00:38:05:21
Rod Khleif
And thank you so much for sharing your wisdom, my friend.
00:38:05:23 – 00:38:12:00
Joel Friedland
You do such a great job with these podcasts. I sometimes I put them on while I’m falling asleep. I listen to you. I know this.
00:38:12:02 – 00:38:13:12
Rod Khleif
Well, that’ll do it. That’ll do it.
00:38:13:12 – 00:38:16:07
Joel Friedland
Take one way.
00:38:16:09 – 00:38:23:08
Rod Khleif
But but yeah. That’s funny. That’s very funny. Well, listen. Thanks, Joe. I appreciate you, brother. Take care.
**Podcast Categories:** Podcasts
---
### [How He Turned $25 Parking Spots Into $185K in Value](https://rodkhleif.com/podcasts/how-he-turned-25-parking-spots-into-185k-in-value/)
**Published:** May 22, 2026
**Author:** Bryan Hoover
**Excerpt:** How He Turned $25 Parking Spots Into $185K in Value
**Content:**
# How Alok Aggarwal Built Momentum Through Multifamily Asset Management
In this episode of the Lifetime Cash Flow Through Real Estate Investing Podcast, Alok Aggarwal shares how he transitioned from a long career in engineering and IT into multifamily real estate investing. After immigrating to the United States from India and spending years working in the oil and chemical industries, Alok realized he wanted more control over his financial future. Concerns about job security and long term scalability pushed him to move beyond single family investing and focus on multifamily properties.
What makes this conversation especially valuable is the practical breakdown of how multifamily asset management helped Alok quickly scale his portfolio. Within his first year in Rod Khleif’s Warrior program, he participated in three multifamily acquisitions totaling more than 140 units across Texas. The discussion highlights how underwriting, operational improvements, and hands on management can dramatically increase property value and investor returns.
## Why Multifamily Asset Management Creates Value
A major focus of the conversation is how strong multifamily asset management directly impacts profitability. Alok explains how his team identified operational inefficiencies and added new income streams to improve property performance. Rather than relying only on rent growth, they implemented several smaller revenue strategies that compounded into substantial increases in property value.
Some of the operational improvements discussed include:
- Reserved parking programs that generated additional monthly income
- Internet service packages for residents
- Valet trash services
- Occupancy stabilization through proactive management and marketing
One of the most powerful examples came from a 47 unit property in Alvin, Texas. By introducing reserved parking at $25 per month per space, the property created roughly $12,000 in annual revenue. Using prevailing market cap rates, that operational change alone increased the asset’s value by approximately $185,000.
This portion of the conversation demonstrates why multifamily asset management is often the difference between average operators and successful investors. Small operational improvements can create outsized equity gains when applied strategically across an apartment community.
## How Alok Evaluates Multifamily Markets
Throughout the episode, Alok repeatedly emphasizes the importance of local economic drivers when evaluating multifamily opportunities. Instead of chasing large urban cores exclusively, he targeted smaller Texas markets connected to strong employment centers and infrastructure growth.
For example, one property near Sealy, Texas benefited from its proximity to an Amazon warehouse and a newly announced Tesla battery plant. Another acquisition near College Station was surrounded by active oil production and energy jobs. Alok explains that understanding employment demand, schools, infrastructure, and workforce housing needs gave him confidence that these properties would maintain strong occupancy.
His approach highlights several key underwriting principles for multifamily investors:
## Key Lessons From the Episode
1. Focus on markets with stable or growing employment
2. Visit properties and competing assets in person whenever possible
3. Understand local demand drivers before investing
4. Build relationships with brokers through consistent underwriting
5. Learn every phase of the acquisition and management process
Alok also discusses how learning industry terminology, underwriting metrics, and broker communication helped him gain credibility quickly. Once brokers recognized that he understood cap rates, operations, and deal structure, they began sending him opportunities before they reached the broader market.
## From Passive Participation to Lead GP
Another valuable takeaway from the episode is Alok’s progression from participating in deals to becoming the lead general partner on his own acquisition. He explains how partnering with experienced operators early on gave him exposure to asset management, capital raising, lender communication, legal coordination, and property operations.
By the time he acquired his third deal, he had enough experience and confidence to manage the entire acquisition process himself. This included sourcing the deal, coordinating financing, working with attorneys, managing due diligence, interviewing property management companies, and overseeing operations after closing.
For newer investors, this serves as a strong example of how mentorship, networking, and consistent action can accelerate growth in multifamily real estate investing.
## About Alok Aggarwal
Alok Aggarwal is a Texas based multifamily investor and licensed real estate agent with a background in chemical engineering and IT. After years in the oil and chemical industries, he transitioned into real estate investing, initially focusing on single family properties before scaling into multifamily acquisitions. Through strategic underwriting and hands on multifamily asset management, Alok has rapidly expanded his experience across multiple apartment communities in Texas.
If you want to hear the full conversation and detailed insights, watch the podcast video or read the complete transcript below.
## **Multifamily Asset Management FAQ**
## **What is multifamily asset management?**
Multifamily asset management is the process of overseeing apartment communities to maximize profitability, increase property value, and improve operational performance. It includes managing occupancy, increasing revenue, reducing expenses, supervising property management companies, and executing long term investment strategies. Multifamily asset management plays a critical role in helping investors improve cash flow and grow equity in apartment properties.
## **Why is multifamily asset management important for investors?**
Multifamily asset management is important because it directly impacts a property’s net operating income and overall valuation. Strong asset management helps investors increase rental income, improve tenant retention, reduce operational inefficiencies, and identify new revenue opportunities. Effective management can significantly increase the value of a multifamily property over time.
## **How does multifamily asset management increase property value?**
Multifamily asset management increases property value by improving the income and performance of an apartment community. Investors can increase value through rent optimization, reducing vacancies, implementing utility reimbursements, adding premium amenities, reserved parking programs, internet packages, and operational efficiencies. Since multifamily properties are valued based on income, even small revenue increases can create substantial appreciation.
## **What does a multifamily asset manager do?**
A multifamily asset manager oversees the financial and operational performance of apartment investments. Responsibilities include reviewing budgets, monitoring occupancy, supervising renovations, managing property management companies, analyzing financial reports, and executing strategies to improve returns. Asset managers also work closely with investors, lenders, and contractors throughout the investment lifecycle.
## **What skills are important in multifamily asset management?**
Successful multifamily asset management requires strong analytical, financial, and communication skills. Investors benefit from understanding underwriting, market analysis, budgeting, property operations, lease performance, and capital improvement planning. Relationship building with brokers, lenders, contractors, and property managers is also essential for long term success.
## **How do investors improve occupancy in multifamily properties?**
Investors improve occupancy by focusing on resident satisfaction, competitive pricing, targeted marketing, and property improvements. Multifamily asset management strategies often include upgrading amenities, improving curb appeal, increasing online visibility, and strengthening leasing operations. Maintaining strong relationships with residents can also reduce turnover and improve retention rates.
## **What are common multifamily asset management strategies?**
Common multifamily asset management strategies include increasing rents through renovations, implementing utility billing programs, adding ancillary income streams, improving operational efficiency, and repositioning underperforming properties. Investors also focus on reducing bad debt, improving collections, and stabilizing occupancy to maximize returns.
## **How does underwriting help with multifamily asset management?**
Underwriting helps investors evaluate whether a multifamily property can achieve desired financial performance. Strong underwriting identifies revenue opportunities, operational risks, renovation costs, and market trends before acquisition. Accurate underwriting provides the foundation for a successful multifamily asset management plan.
## **What are the benefits of investing in multifamily real estate?**
Multifamily real estate offers investors recurring cash flow, scalability, tax advantages, and long term appreciation potential. Compared to single family investing, multifamily properties can provide stronger operational efficiencies and multiple income streams. Effective multifamily asset management helps investors maximize these benefits while reducing risk.
## **How can beginners learn multifamily asset management?**
Beginners can learn multifamily asset management through mentorship programs, real estate education, networking events, podcasts, underwriting practice, and hands on experience with smaller properties. Many successful investors start by partnering with experienced operators before managing larger multifamily assets independently.
00:00:32:21 – 00:00:52:24
Rod Khleif
Welcome back to multifamily Rock star. So as you guys know, this is where we do deep dives into our guests deals. And we give you practical and actionable tips to actually go out and do your own first deal, especially if you’re new or, you know, new to multifamily, for example. And today I’ve got warrior, Alok Agarwal and, he’s a licensed real estate agent in Texas.
00:00:53:04 – 00:01:04:14
Rod Khleif
Been in the business for 14 years in, in single family and some multifamily. But the background is in the oil business, right. You’ve got a, a degree in chemical engineering, is that correct?
00:01:04:16 – 00:01:06:08
Alok Aggarwal
Solutely right. Yeah. Okay.
00:01:06:14 – 00:01:26:17
Rod Khleif
Okay. Well, welcome to the show, my friend. Why don’t you, tell my listeners, give us a little background on who you are. Why real estate? You’ve got a, you know, fairly high level degree in engineering, and you’re in you’re in Houston where, you know, there’s a lot of, oil happening. You were you worked with Exxon and and some chemical companies.
00:01:26:17 – 00:01:32:00
Rod Khleif
So why talk about your background a little more and why real estate here?
00:01:32:00 – 00:01:56:21
Alok Aggarwal
So thanks. First, thank you for having me here, rod. And, excited to be here. And, yeah, thanks for the call. This. Well, like, my background and why I’m here, the the, we came to this country as a, immigrant from India, New Delhi in 2000. And my first, my first place was when I landed here was in, Miami, Florida in, Doral County, that Doral County.
00:01:56:23 – 00:02:15:03
Alok Aggarwal
So I was there for like few months. And then I was, then I was moved to New York, and then I got a job in, ExxonMobil, my first job in 2001. So I moved here. So basically like, working with the, many chemical companies here and there. But from 2000 onwards, I’m in Houston only 21 years.
00:02:15:05 – 00:02:32:02
Alok Aggarwal
So, my journey is like mainly the it industry. I work in the IT industry throughout my career. And while working there I felt like, you know, the job is not secure. You don’t know what’s going to happen tomorrow. It’s very, you know, very complicated now. And more and more is going to happen with this I think is, coming.
00:02:32:04 – 00:02:35:09
Rod Khleif
Oh, yeah. I was going to wipe out a lot of it. Jobs.
00:02:35:09 – 00:02:59:10
Alok Aggarwal
Yeah, absolutely. My friend Tara, you know, we are talking regular basis. So everybody having a fear not today but tomorrow is going to happen. But like in 20 1718 I plan to, you know, go go into parallel with some single family homes we started with there and then I found single family home is a good way to start, but later on realized, like, you know, after Covid, like there there should be some better way to scale scalability point of view.
00:02:59:12 – 00:03:17:21
Alok Aggarwal
So then I plan for looking for multifamily and all that asset class, different asset class. And blended with the, the the short clip program, which I like very much in the when I took the first video, it was great. Grab it and no regrets. Very good. I didn’t do any. I didn’t I didn’t attend any bootcamp. I didn’t go anywhere.
00:03:17:21 – 00:03:19:14
Alok Aggarwal
I just attend you directly.
00:03:19:16 – 00:03:32:09
Rod Khleif
So you just watched the video and and it’s been all downhill since then. But just as a joke. So so so then you join the warrior program. And this was in 2025, I think. Is that right?
00:03:32:10 – 00:03:37:04
Alok Aggarwal
I joined late 2024. But I started in 2025. So and so.
00:03:37:09 – 00:03:40:01
Rod Khleif
What did you do in 2025. What did you accomplish.
00:03:40:03 – 00:03:58:04
Alok Aggarwal
But like I think as I joined the program, like everyone, I was scared, no doubt about it. Like I didn’t know where to start, how to start. Then I had your first one year event and that was impressive. I mean, I couldn’t believe who who am I, I am meeting, I have 500 units door. I have 600 doors, I have thousand.
00:03:58:08 – 00:04:16:23
Alok Aggarwal
So, man, this is you can do it. So then. Then I was planning to talk couple of folks and a couple of warriors. Then I said, okay, let me take some action, let me take some action. It took me some time to figure it out. And 2025, I was contacted by some warrior and he was buying a set, close to colleagues.
00:04:16:23 – 00:04:20:13
Alok Aggarwal
To you. I’m sure you’re familiar with the Texas College Station. The place here called.
00:04:20:19 – 00:04:23:03
Rod Khleif
College Station, right in Texas. Right? Okay.
00:04:23:04 – 00:04:39:23
Alok Aggarwal
Yeah, yeah. So he bought he bought a, multifamily there. Any contact me. Hey, do you want to participate here? I said yes, sure. And I can do the asset management. So I involved there. So that was my first breakthrough. And as we all know, first breakthrough is very important to to come to understand.
00:04:39:23 – 00:04:57:03
Rod Khleif
Sure, sure. I it’s it’s the hardest one. The first deal is the hardest. It’s the scariest. It takes the longest. And I see it with my warriors. Once they get one, the next thing I know, there’s like three. What just happened? They realize that the fear is all between their ears. And so, so that first one, how big was that one?
00:04:57:05 – 00:04:58:19
Alok Aggarwal
That was 36 units.
00:04:58:22 – 00:04:59:10
Rod Khleif
36\.
00:04:59:10 – 00:05:04:19
Alok Aggarwal
Units. But this is units. Yeah, in College Station. Okay. Metro area. Yeah.
00:05:04:21 – 00:05:17:12
Rod Khleif
Okay. Okay. And, is it, I think it’s accurate that you ended up buying, three facilities in 2025. Another 62 unit and a 47 and a 47 unit. Is that correct?
00:05:17:12 – 00:05:32:18
Alok Aggarwal
That is correct. Yeah. So, like, back to back every three months. Six months? Actually every three months, we were, you know, there in the pipeline. So the first, the first one we did, Franklin, Texas, in College Station, I was cured. The first phase for the first pass, I went there, I said, no, this is not going to work is a small town.
00:05:32:18 – 00:05:50:12
Alok Aggarwal
It’s not going to work. Then I would I went there another time with the, with another warrior. We went through each apartment complex in a small town. We wanted to make sure the investors ourselves, we are not in the in the wrong place. And they were all around the pump jacks. You know, pump jacks are the oil, the small oilfields, you know.
00:05:50:14 – 00:06:03:20
Rod Khleif
Oh, they were right there. Pump jacks. Got it. Yeah. Your accent’s a little strong, so I may I may decipher some of the things you say from time to time. So pump jacks are are the are the pumps that you see in the middle of nowhere just pumping oil, correct?
00:06:03:22 – 00:06:22:18
Alok Aggarwal
That is correct. If you’re driving to Texas, you will see. Or by 10 or 36 some small machine is going up and down. That’s called projects. So those projects are nothing but getting some oil slowly slowly from the from the oil well. So when I went there I found there a lot of pump jacks all around and a big power plant.
00:06:22:18 – 00:06:30:20
Alok Aggarwal
Then I said okay maybe it is good. So basically I did my research, went there, went to the all apartments, hotels, all.
00:06:30:20 – 00:06:33:04
Rod Khleif
The competitors, all the competitors. Right.
00:06:33:06 – 00:06:45:10
Alok Aggarwal
And I found everybody’s like doing the, the praise, the one which we are. We were talking to to get it. So I mean, I said, okay, let’s do it. And then we close the deal and it is right now 100% occupied.
00:06:45:12 – 00:07:01:17
Rod Khleif
Wow, wow. Fantastic. Fantastic. That first asset in Franklin, that 36 unit, you did the deep underwriting. You saw that there were a bunch of wells around there. Now it’s 100% occupied. Do you recall what the purchase price was?
00:07:01:19 – 00:07:04:22
Alok Aggarwal
Yes, it was 1.8 million.
00:07:04:24 – 00:07:09:05
Rod Khleif
That’s not bad. And did you help raise money for it or did.
00:07:09:05 – 00:07:19:01
Alok Aggarwal
Yes. I just, when when we worked with the Warriors. So the plan was to, help in asset management because I was the only one close to that. That. Do you like that?
00:07:19:01 – 00:07:23:22
Rod Khleif
You live near it, right? So your boots on the ground to to help with the asset management. Got it. Yeah, yeah.
00:07:23:24 – 00:07:32:12
Alok Aggarwal
And I put some my money and then I didn’t do any capital raising that. No, no no I did, I did I did I did I small portion. Yes I think small capital is there also.
00:07:32:12 – 00:07:39:24
Rod Khleif
Okay. So you raised some money and and you’re responsible for the asset management on that team. Is that the same team that bought those other two assets?
00:07:40:01 – 00:07:40:23
Alok Aggarwal
No.
00:07:41:00 – 00:07:59:07
Rod Khleif
Okay. Different teams okay. Got it. Yeah okay. And and so again it says you talked to the residents, you walked around some small town, but you you felt like there was enough enough infrastructure, enough jobs to support the asset, which obviously is the case if you’re 100% occupied at this point.
00:07:59:09 – 00:08:00:14
Alok Aggarwal
Right? Correct. Yes.
00:08:00:14 – 00:08:12:02
Rod Khleif
Okay. Okay. And, and then, I see here your second deal was in Sealy, Texas, 67 doors. And why did you like that one?
00:08:12:04 – 00:08:40:08
Alok Aggarwal
Oh, that’s great question. So my whole whole concept like for me, for, for my investors, I believe like the the assets should be close to some, some place which is really appealing. Like the schools like the power plant like that. This one is the one we are talking Sealy Texas. It is next to Amazon. Amazon Warehouse. And at the time we signed the deal next month, Tesla announced their battery plant, which is like ten minutes from there.
00:08:40:10 – 00:08:46:11
Rod Khleif
So they’re they’re big battery plants, ten minutes from this asset. Wow. That’s huge. That’s huge. Because those are high paying jobs.
00:08:46:13 – 00:09:04:01
Alok Aggarwal
Absolutely. So it’s close to okay. So yeah it’s a it’s a it’s a very small town. It’s not a very small small town. It’s it’s a Houston metro area. But it’s just prompt me to, to work on the deal because of the location. It’s not far from me, like 30 minutes from my house, and I can very well manage there also.
00:09:04:01 – 00:09:10:05
Alok Aggarwal
So I’m there as a GP and working partially in the asset management, but I raise the capital in that one.
00:09:10:11 – 00:09:25:01
Rod Khleif
You did raise capital on that one. Got it. Okay. And then your third deal the same year was 47 doors in Alvin, Texas, which is another Houston metro Houston MSA, little, outlier to talk about that deal, 47 doors.
00:09:25:06 – 00:09:32:16
Alok Aggarwal
This is the deal which I was looking for since the beginning, like I wanted to do, you know, from start to end, because in your.
00:09:32:16 – 00:09:41:02
Rod Khleif
Program, you wanted to be the main GP and do, do, do the whole thing rather than participating with some. Okay. So you did all by yourself.
00:09:41:04 – 00:10:05:19
Alok Aggarwal
Kind of like I learned from your your last words. I mean, we should know each and every part of your deal. So starting from your deal, finding deals, sourcing alloy and your. So that was the part of your program. Like once you once you know each and every aspect of your of your dream. So then you know capital raising, talking to the lawyer, working with the lawyer, making the company’s formation and then you closing the deal, working with tons of documents.
00:10:05:21 – 00:10:17:16
Alok Aggarwal
And I was on the on the loan as well. So like, kind of like, working from each section of your deal and close the deal and then now, right now I’m managing. So I’m the frontrunner for the deal. So that is really, really in a big you’re.
00:10:17:16 – 00:10:40:07
Rod Khleif
The main GP we call it okay. And so what will happen a lot of time guys just give you a little backstory here is you know like in the warrior program there are a lot of GPS teams. And typically there’s one main person that that kind of heads it up, heads up a team. And you know, the that’s why, you know, if you’re interested in this business, you need to get around people that are doing it, whether it’s in the Warriors or not, but get around.
00:10:40:07 – 00:11:01:02
Rod Khleif
People are doing it because then you know, your first you do your first deal or two with a team. You add value like you added value with asset management and some and some raising some equity on that second deal. And and then you’re able to do it yourself. You don’t you don’t have to you know, you know, take a smaller slice of the deal that you would if, you know, initially.
00:11:01:04 – 00:11:17:03
Rod Khleif
So you were the, you were the lead GP and, and on that 47 unit, you got, you got agency debt, it looks like. And you, you basically manage the whole process. And you know, you’re talking about talk, you know, where you get with the syndication attorney. You have to do all the organizational charts. They do all that for you.
00:11:17:03 – 00:11:35:22
Rod Khleif
But you know being involved in that process, the operational documents, obtaining the loan, signing on the loan, dealing with all the, the, you know, the which is, you know, can be a little cumbersome. You know, all the different details. They, they, they make you go through to get the, to get the debt. So you learned a lot, right?
00:11:35:24 – 00:11:55:13
Rod Khleif
You learned a lot on that one. Yeah. Now, you know, you understand the whole process. And now and so you interviewed the property management companies. You’ve got a third party property management company there. Okay. Now you’re working with that property management company to help stabilize that asset. Would that be accurate? So what was the, what was the, occupancy when you purchased it?
00:11:55:15 – 00:12:19:05
Alok Aggarwal
Absolutely. Like the the time we bought it was like 96, 97%. It was just opposite to Alvin High School, which is the my strongest point. You cannot like you’re driving there. You will see that that apartment complex instantly. So that was my driving force. We bought it at 94, 95% occupancy. And the occupancy went down because we didn’t anticipate the person who was handling this.
00:12:19:07 – 00:12:25:17
Alok Aggarwal
She kind of, you know, parking here and there. So it went down to 84, 85% within 2 or 3 months.
00:12:25:19 – 00:12:28:14
Rod Khleif
I’m sorry. She was what was she doing? Was she misstating.
00:12:28:14 – 00:12:35:19
Alok Aggarwal
Kind of like trying to take the, the, the, the the residence from that apartment to the one she moved to another apartment.
00:12:35:19 – 00:12:56:22
Rod Khleif
Oh, you. Gotcha. Gotcha. So she she she poached she’s poached some of the residents because they liked her. Whatever. Okay. That’s that. I haven’t heard that one before. That’s that’s I mean, I could see that happening. But but that’s unusual that a person that she can actually get them to actually move to another complex. She must have probably offered some incentives or something.
00:12:56:22 – 00:13:11:10
Alok Aggarwal
Yeah, absolutely. Yeah. Who are these renewals do? And she, she was there for many years. So then we didn’t prepare for that. So then I rolled up my sleeves. I was there for almost twice the price. So we did a lot of promotions. We do a lot of marketing. Currently we are 100% occupied within like.
00:13:11:10 – 00:13:12:10
Rod Khleif
One more fantastic.
00:13:12:13 – 00:13:20:10
Alok Aggarwal
We bring it back 200 because the 80 is the 80 is good workforce. People up there working in oil companies nearby. Right. It has to be.
00:13:20:10 – 00:13:27:23
Rod Khleif
So there’s a big demand. Yeah, there’s a big demand is what you’re saying. Yeah. Fantastic. So what are you going to do to increase revenue there?
00:13:27:23 – 00:13:47:15
Alok Aggarwal
We did already. We implemented that’s I learned from your program. Like, you know, you had to bring the revenue higher. That’s your goal. And we implemented the very first day we we, bring the resort parking lot, the shaded one, not the covered one, covered one, but like the we we just got $25 for each parking spot we bring.
00:13:47:15 – 00:13:50:13
Alok Aggarwal
46, 40 are occupied right now.
00:13:50:15 – 00:13:54:17
Rod Khleif
So 40, 40, 46 of the parking spots are occupied.
00:13:54:18 – 00:14:03:24
Alok Aggarwal
Yes. We we, we brought 46, 1 to 46 number. The reserved parking out of 46, 40 US 40 are taken by the residents. So basically.
00:14:03:24 – 00:14:05:07
Rod Khleif
Oh that’s fantastic.
00:14:05:09 – 00:14:07:02
Alok Aggarwal
Yeah. Within one month. So.
00:14:07:04 – 00:14:23:03
Rod Khleif
But we’ll see you guys. What he’s talking about here is 25 bucks a month. So there’s 46 spots. You rented 40 of them, which is fantastic. I mean, just to do the math on that, let me I don’t know what that, what? The cap rate is over there. Do you have an idea what the cash rate is at.
00:14:23:03 – 00:14:26:11
Alok Aggarwal
Six 6%, 6.56%. Is the cap rate.
00:14:26:13 – 00:14:52:18
Rod Khleif
Okay, so. So, what about point? Oops. Hold on, hold on, hold on. 12,000 divided by .065. Okay. That that 25 bucks a month for 40 spaces was $185,000 increase in value. Okay okay. So so this is why we love this business guys okay. So again let me give you the math because I get hate up for this all the time.
00:14:52:18 – 00:15:19:13
Rod Khleif
You can’t do math. You’re so stupid. That’s not 185. The math. Here’s the math. Okay. You take the $25 times 40 spaces. You. And that’s the $1,000 I actually, I was surprised it was an exact number, but you annualize that it’s 12,000. Okay, so you annualize it. Divide that by 6.5%. See what you get. $184,615. I exaggerated by $400, but 185,000 freaking dollars for some paint on the parking lot.
00:15:19:15 – 00:15:22:06
Rod Khleif
Fantastic buddy, what else have you done there?
00:15:22:08 – 00:15:27:17
Alok Aggarwal
But, like, the next step is we are going to implement the tech package to tech package. We are in tech tech.
00:15:27:17 – 00:15:36:05
Rod Khleif
So so like like, internet. And and their ability to control the temperature and things like that or not.
00:15:36:08 – 00:15:36:20
Alok Aggarwal
Oh, that’s.
00:15:37:01 – 00:15:38:12
Rod Khleif
Just just internet.
00:15:38:14 – 00:15:39:06
Alok Aggarwal
Just internet.
00:15:39:06 – 00:15:53:06
Rod Khleif
Yes. Just internet. So you you’re doing a global internet package and you make a couple bucks, it because you can sell it to them for less than they can get it themselves. And you make money because you’re buying it at a discount because you’re buying the whole complex. Yeah.
00:15:53:06 – 00:15:53:20
Alok Aggarwal
So that’s me.
00:15:53:24 – 00:15:54:09
Rod Khleif
Love it.
00:15:54:09 – 00:15:58:20
Alok Aggarwal
So that’s love it. That’s number two. And number three we are working on right now. Value threshold. So we send.
00:15:59:00 – 00:16:17:24
Rod Khleif
Out valet valet trash where they’ll pick up the tray. Yeah they’ll pick up the trash. Got it. Love it. All of those things go to the bottom line I mean you know every little dollar matters. The guys the way this works is every dollar you increase, the net income can be as much as 17 to $20 in value increase for every dollar.
00:16:17:24 – 00:16:27:24
Rod Khleif
So it’s it’s it’s exponential. Well, that’s really cool. So, so what what are you are you going for larger assets now or do you like these smaller ones now?
00:16:27:24 – 00:16:48:05
Alok Aggarwal
I got a confidence on speaking. I was not sure is going to work for me. Right. How I’m going to handle it. So I started with 4050 units to 60 units, 4050. And after after joining this program, like, we have such a huge, massive network where I believe a lot in like three days, I’ve been contacted by three different warriors in Houston.
00:16:48:05 – 00:17:09:00
Alok Aggarwal
I said, I mean, I told everyone I’m in Houston, I will be in Houston deals. So I’m getting contract for bigger asset class in Houston for my families to be work together. Something like that. To underwrite and to find out that I’m on the go. So I go to the place to find out is the asset is good or bad and very good in underwriting.
00:17:09:02 – 00:17:28:04
Rod Khleif
You do the initial you knew the initial look. If somebody says, hey, we got this deal in Houston, go check it out. And a warrior does that. By the way, guys, if you’re interested in the warrior program, if you want to apply, text the word crush to seven, two, three, four, five. That’s how you apply. Or actually, we just set up a link.
00:17:28:04 – 00:17:51:04
Rod Khleif
Hang on one second. I’ve got to, my daughter just told me. What? Oh. Go to work with Broadcom. There you go. You could go to work with Broadcom. Or you could text crush to 72345. And and you know and it’s a there’s an application process. We don’t take everybody. You look us over we look you over. But just to brag for a minute I believe my warriors now own upwards of 300,000 units.
00:17:51:10 – 00:18:07:08
Rod Khleif
Which it just blows my mind. We’re counting it. We’re like 275,000. So very, very proud of that. Plus tons of senior housing, self-storage, student housing, mobile home parks, industrial, flex space, all of it. As you as you know, Alec, are you coming to the warrior event at the end of this month?
00:18:07:08 – 00:18:08:10
Alok Aggarwal
Well, yes. Yes.
00:18:08:12 – 00:18:22:07
Rod Khleif
Fantastic four. Fantastic. Yeah. So we do these warrior events ever? I probably just do one a year moving forward, maybe two. But, to get to get them together, warriors together because that’s, that’s really what, what, you know, has this take off.
00:18:22:08 – 00:18:43:07
Alok Aggarwal
I would like to add, like, you know, the once I train the program, there’s so many terms I learned, which I did so many, rehabs and single family. But I realized after this program, I got a lot of information, tons of framework information, like which is, which is which. You have to understand with the multifamily, if you do not know, you can not talk to the broker right now.
00:18:43:07 – 00:19:02:24
Alok Aggarwal
After listing your videos, getting a program. I’m very comfortable talking to the brokers and believe me or not, I’m getting aware that there’s some calls from the big broker, like, you know, initially for one year or six months, nobody calls, nobody talk. But I learned, you know, anyway, cap rates and to understand those into into deep into those words, those jargon.
00:19:02:24 – 00:19:17:01
Alok Aggarwal
And so after this, I realize once you have a knowledge of underwriting, you can talk to those, those big folks, they will come back to you, they will send you the deals before you go into the market, and you can work on those. So this is all because of the program. I, I must,
00:19:17:03 – 00:19:23:11
Rod Khleif
Not thank you, my friend. Thank you. Are you okay with, listeners reaching out to you?
00:19:23:13 – 00:19:24:16
Alok Aggarwal
Absolutely. They’ve got.
00:19:24:16 – 00:19:25:16
Rod Khleif
A question. Okay.
00:19:25:19 – 00:19:34:03
Alok Aggarwal
I can be reached at LinkedIn with my full name. Allow a group, and I have my email along. Okay. BW at gmail.com.
00:19:34:03 – 00:19:35:08
Rod Khleif
So perfect.
00:19:35:10 – 00:19:40:02
Alok Aggarwal
More than welcome to answer your questions or to work together is a perfect.
00:19:40:04 – 00:20:09:22
Rod Khleif
Perfect, perfect. Well, listen, Alec, I appreciate you coming on the show. I’m very impressed that you did three deals your first year. And we see that, regularly. But, you know, that’s those they all sound like, like fantastic deals. And you picked a little niche, really, these these smaller, you know, tertiary towns, but still, you know, in the MSA of Houston, and you did your homework to make sure there’s enough jobs and there are, and that’s why you’re 100% occupied, which is fantastic.
00:20:10:01 – 00:20:18:09
Rod Khleif
So, awesome work, buddy, and Alec. Thanks, brother. It’s great to see you, my friend. Make sure you come up and say hi in a couple of weeks in Sarasota, okay?
00:20:18:11 – 00:20:19:23
Alok Aggarwal
Sure. Thank you. All right, all right.
00:20:19:23 – 00:20:27:23
Rod Khleif
Take care. And I thank you for doing that video for me as well. I really appreciate the little the little selfie thing. All right. Take care. But take care. Bye now. Bye.
**Podcast Categories:** Multifamily Rock Stars, Podcasts
---
### [Why Buying Boring Businesses Is The Smartest Investment Of The Next Decade](https://rodkhleif.com/podcasts/why-buying-boring-businesses-is-the-smartest-investment-of-the-next-decade/)
**Published:** May 18, 2026
**Author:** Bryan Hoover
**Excerpt:** Why Buying Boring Businesses Is The Smartest Investment Of The Next Decade
**Content:**
# Buying Small Businesses with Anthony Perera
In this episode of Lifetime Cash Flow Through Real Estate Investing, Rod Khleif interviews entrepreneur and investor Anthony Perera about the growing opportunity in buying small businesses and scaling them into highly valuable assets. While many investors focus solely on multifamily real estate investing, Anthony explains why acquiring service based businesses can create substantial cash flow, equity growth, and long term wealth through strategic exits.
Anthony shares how he built and scaled multiple companies, including Air Pros, an HVAC business that grew from one truck and one technician into a company with more than 1,000 employees and approximately $250 million in revenue. He also discusses the launch of Exuma Capital, his family office focused on acquiring and growing businesses with strong fundamentals but inefficient systems, outdated operations, or untapped growth potential.
## Why Buying Small Businesses Is a Massive Opportunity
One of the biggest themes throughout the conversation is the demographic shift happening across America. With thousands of baby boomers retiring every day, many privately owned companies are entering the market without succession plans. Anthony explains that these businesses often generate strong cash flow but lack professional systems, automation, and modern leadership structures.
Rather than targeting startups or speculative ventures, Anthony focuses on stable businesses with EBITDA between $2 million and $5 million annually. His team looks for opportunities where operational improvements can dramatically increase enterprise value. Many of these companies have been operated as “lifestyle businesses” for decades, creating ideal conditions for optimization and future exits.
Key traits Anthony looks for include:
- Service based businesses resistant to AI disruption
- Companies with recurring demand and strong local reputations
- Businesses with outdated systems or inefficient operations
- Industries where consolidation and scale create higher valuation multiples
This strategy mirrors value add multifamily investing, where operational improvements increase property value and investor returns.
## How Exuma Capital Adds Value After Acquisition
Anthony explains that buying small businesses is only the beginning. The real value creation happens after the acquisition through professionalization, systems implementation, and operational scaling.
In one example, his team acquired a roofing company generating tens of millions in annual revenue that was still dispatching technicians using pen and paper. By implementing CRM systems, tracking KPIs, improving marketing attribution, and streamlining customer communication, they were able to modernize operations and position the company for future private equity acquisition.
The Exuma Capital team focuses heavily on:
- CRM and automation systems
- KPI tracking and business intelligence
- Sales process optimization
- Marketing attribution and lead conversion
- Leadership development and organizational structure
- Customer journey mapping
Anthony emphasizes that many small business owners have never documented or analyzed their customer experience. Simply improving response times, follow up systems, and sales processes can significantly improve profitability and business valuation.
## The Role of AI and Automation in Business Growth
Artificial intelligence was another major topic throughout the episode. Anthony and Rod discussed how AI is rapidly transforming marketing, sales, operations, and customer communication. Anthony believes businesses that adopt AI early will gain a significant competitive advantage over competitors still relying on manual systems.
His companies already use AI tools for:
- Sales call monitoring and quality assurance
- KPI reporting and dashboards
- Marketing automation
- Customer journey tracking
- Business acquisition sourcing
- Data analysis and forecasting
At the same time, Anthony intentionally focuses on industries where physical labor and human service remain essential. Roofing, HVAC, plumbing, inspections, and infrastructure services continue to require skilled workers even as automation improves backend operations.
## Social Media and Marketing Strategies That Drive Growth
Anthony also shares how social media marketing can completely transform small businesses when used strategically. He explains how he acquired a local coffee shop that was generating roughly $10,000 per week in revenue and grew it to approximately $35,000 per week largely through influencer marketing and local social media promotion.
Instead of spending massive budgets on traditional advertising, his team leveraged:
- Local food influencers
- Micro influencer partnerships
- Organic social media reach
- Community engagement
- Consistent content creation
The conversation highlights how many traditional businesses still underutilize modern marketing channels, creating enormous upside for operators willing to innovate.
## Lessons on Sales, Customer Experience, and Scaling
Anthony believes one of the biggest weaknesses in small businesses is the lack of intentional sales systems. His philosophy centers around deeply understanding the customer journey and improving every touchpoint.
He explains that business owners should regularly go through their own buying process to identify friction points and inefficiencies. From the first phone call to follow up communication, every interaction impacts conversion rates and long term customer value.
The discussion also covers:
- Why value eliminates price objections
- The importance of listening during sales conversations
- Campaign attribution and marketing ROI tracking
- Follow up sequences for unclosed leads
- Cross selling and repeat customer strategies
These operational disciplines are often missing in founder operated businesses, creating major opportunities for experienced operators and investors.
## How Investors Can Start Buying Small Businesses
For listeners interested in buying small businesses themselves, Anthony explains that there are now more financing tools available than ever before. SBA lending programs can allow investors to acquire cash flowing companies with relatively low upfront capital.
He outlines how investors can structure acquisitions using:
1. SBA financing
2. Seller carryback notes
3. Earn out agreements
4. Operational improvements to increase EBITDA
5. Future exits at larger valuation multiples
Anthony also explains the importance of integration versus simple aggregation when pursuing roll up strategies. True value creation comes from integrating systems, leadership, operations, and processes across acquired businesses rather than simply combining revenue.
## About Anthony Perera
Anthony Perera is a Florida based entrepreneur, investor, and founder of Exuma Capital. Over the course of his career, he has built, scaled, and exited multiple companies across industries including HVAC, inspections, hospitality, technology, and consumer brands. He is widely known for scaling Air Pros into a national HVAC company with more than 1,000 employees and hundreds of millions in annual revenue. Today, he focuses on acquiring and scaling service based businesses through operational improvements, technology implementation, and strategic growth initiatives.
If you want to hear the full conversation and detailed insights, watch the podcast video or read the complete transcript below.
## FAQ About Buying Small Businesses
**What is buying small businesses?**
Buying small businesses is the process of acquiring an existing company that already has customers, revenue, employees, and operational systems in place. Investors and entrepreneurs purchase these businesses to generate cash flow, scale operations, improve profitability, and eventually sell the company for a higher valuation. Many buyers focus on service based industries such as HVAC, roofing, plumbing, healthcare, and other recession resistant sectors.
**Why is buying small businesses becoming more popular?**
Buying small businesses has become increasingly popular because millions of baby boomer owned businesses are expected to change ownership over the next decade. Many owners are retiring without succession plans, creating opportunities for investors to acquire profitable companies with established customer bases and recurring revenue. Compared to starting a business from scratch, acquisitions can provide immediate income and operational infrastructure.
**What types of businesses are best for acquisition?**
Many investors prefer businesses with predictable cash flow, recurring customers, and strong local demand. Service based companies like HVAC, roofing, plumbing, pest control, landscaping, and healthcare related businesses are often attractive because they provide essential services that remain in demand regardless of economic conditions. Businesses with outdated systems or underdeveloped marketing strategies may also offer significant upside potential.
**How do investors finance buying small businesses?**
Investors commonly use SBA loans, seller financing, private investors, or traditional bank financing to acquire small businesses. SBA loans are especially popular because they allow qualified buyers to purchase businesses with relatively low down payments while securing long term financing. Seller carryback financing is also common, where the business owner finances a portion of the purchase price.
**What is EBITDA in buying small businesses?**
EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is one of the most important metrics used to evaluate a business during an acquisition. Buyers use EBITDA to measure profitability and determine valuation multiples. Businesses with higher EBITDA and stronger operational systems typically command larger sale prices.
**How do investors increase the value of a small business after acquisition?**
Investors often increase business value by implementing better systems, improving marketing, streamlining operations, tracking KPIs, upgrading technology, and strengthening sales processes. Many acquisitions involve businesses that have been owner operated for decades without modern automation or professional management structures. Operational improvements can significantly increase profitability and overall company valuation.
**What role does AI play in buying small businesses?**
Artificial intelligence is becoming an important tool for business acquisitions and operations. Investors use AI to improve customer service, automate marketing, analyze business performance, monitor sales calls, and streamline administrative tasks. AI can help small businesses become more efficient while reducing operational costs and improving customer experiences.
**What are roll ups in buying small businesses?**
A roll up strategy involves acquiring multiple businesses within the same industry and combining them into one larger organization. Investors pursue roll ups to create operational efficiencies, improve market share, and achieve higher valuation multiples. Successful roll ups usually require strong integration of systems, leadership, branding, and operations.
**Is buying small businesses similar to real estate investing?**
Buying small businesses shares many similarities with real estate investing because both strategies focus on acquiring cash flowing assets and increasing value over time. Just like value add multifamily investing, business acquisitions often involve improving operations, increasing revenue, and creating stronger long term equity positions before refinancing or selling the asset.
**What should first time buyers look for when buying small businesses?**
First time buyers should focus on businesses with stable cash flow, simple operations, strong customer retention, and industries they understand or can learn quickly. It is also important to evaluate the company’s financial records, leadership team, operational systems, and growth opportunities. Many successful buyers start with smaller acquisitions and scale into larger opportunities over time.
01:20:07:26 – 01:20:34:16
Rod Khleif
Welcome to lifetime cash flow through real estate investing. I’m Rod Khleif and I am thrilled you’re here. This is going to be a different type of interview today. So I’m interviewing Anthony Pereira. And Anthony is a serial entrepreneur, buying all sorts of service related businesses and other businesses and, basically, I don’t even know where to start as far as the background here, because there’s so much that this guy has done.
01:20:34:18 – 01:20:50:19
Rod Khleif
So Anthony, I’m going to let you tell your story because it’s it’s, you know, I could sit here and read this bio for about 30 minutes, about all the businesses you’ve purchased and, and, you know, where you came from. But, I think you do a better job of it. So welcome to the show, brother Tom.
01:20:50:19 – 01:20:52:21
Rod Khleif
Tell us who you are and where you came from.
01:20:52:23 – 01:21:16:07
Anthony Perera
Yeah, man. Thanks for having us. Anthony Pereira South for, native, actually, second generation, Florida native. So that’s pretty rare. Today’s world. But, yeah, give my background serial entrepreneur. Got my start at 19. Was my first company called Mud Life. So it was a magazine brand. Think off road, mud truck, swamp buggies, ATVs, four wheelers.
01:21:16:09 – 01:21:38:07
Anthony Perera
Was, trying to pursue a military career. Went to, Citadel for a year. Applied to West Point, got my nomination, didn’t get accepted, but, left. Went back to went back to Florida and started my life. And so it was a magazine for trucking and off road. I said before, we grew that from hawking like a hot dog vendor at events to being sold about 16,000 retail stores across the country.
01:21:38:10 – 01:22:00:24
Anthony Perera
Had zero background in magazine publishing or even how to take a photo, grew that, alongside of a, online, retail merchandise business, big events business sold that to a big publishing firm in 2011. Thought it’d be cool at 22 or 23 years old to get in the bar restaurant world. I mean, who wouldn’t want to own a bar in their hometown at 22 years old?
01:22:00:24 – 01:22:21:15
Anthony Perera
Right? And then, so did that for a while. Had a couple of exits in that, in that business. And then in 2017, my father was working for me, as a construction manager, building out bars all over the country. And, he goes, hey, I want to open an Hvac business. And I said, Bob, I don’t know the first thing about air conditioning, but I’d love to get you off my payroll.
01:22:21:15 – 01:22:55:26
Anthony Perera
So let’s go figure this out. And so, we launched our business back in 2017 called Air Pros. One truck, one technician. We grew that business to over 1000 employees and about $250 million revenue. Exited that business multiple times. We launched our family office in 22 called Exuma Capital. And now our thesis is we back, great entrepreneurs, great businesses, really around kind of the, you know, businesses that are where ownership wants to either exit because of retiring, or businesses that have value when they scale.
01:22:55:29 – 01:23:18:11
Anthony Perera
And today Exuma owns, I think it’s 7 or 8 now portfolio companies, we have some commercial real estate. And we’re actively investing and buying businesses in various industries. Outside of that. Right. We, I founded a technology company back in 2021 called inspected.com. That business today is the largest, private provider inspector in the state of Florida.
01:23:18:14 – 01:23:38:05
Anthony Perera
We sold that to Bay Hawk, capital up in Boston, last year. Great partners. But that’s kind of our old thesis, right? As we look for companies that we can help add value to, grow and scale and very similar to commercial real estate, these businesses are great cash flowing assets. Right. And so, kind of how we, how we, look at companies.
01:23:38:07 – 01:23:51:01
Rod Khleif
Wow. A very, very, very impressive brother. Now, now, one thing that that, that that triggered a thought. You said you exited, your air pro’s multiple times. Can you explain what you mean by that?
01:23:51:04 – 01:23:51:14
Anthony Perera
Yeah.
01:23:51:19 – 01:23:55:09
Rod Khleif
So typically an exit is a one time event. That’s why that threw me off.
01:23:55:11 – 01:24:03:03
Anthony Perera
Yeah, well, if you roll equity, our first exit for us was we, we did a, we did a, a debt recapitalization, the business of which we took some shifts.
01:24:03:03 – 01:24:23:03
Rod Khleif
Oh, okay, now I understand. Okay, so I got it, got it, got it. Okay. I just didn’t know where you’re going with that. Okay, so these are these are liquidation events basically what is is it’s exit liquidation event. Got it. Okay. So, you know, you’re in Hvac, roofing. You work?
01:24:23:05 – 01:24:24:08
Anthony Perera
Yep.
01:24:24:10 – 01:24:51:23
Rod Khleif
Inspections, coffee houses. Okay. All right. Hold up. Yeah. So, so so let’s let’s talk about what you look for, because we were talking before we started recording. There’s, you know, 10,000 people a day turning 65 in this country, the baby boomers. And that’s going to continue for literally decades. So one of the reasons I’m getting into senior housing, we’ve got six senior housing facilities under contract in Texas because it’s a tidal wave of of silver hair.
01:24:52:00 – 01:25:15:22
Rod Khleif
And so, you know, that’s that’s got legs. And so does this, you know, buying businesses from these retirees and the people that want to sell that don’t have a, a child to pass it on to, and so what sorts of things, I think before we start recording, you said that your, your, sweet spot is an EBITDA of 2 to 5 million annually.
01:25:15:25 – 01:25:31:06
Rod Khleif
That’s that’s the that’s the financial markers you look for. What sorts of, verticals are you most interested in? Because, you know, you can’t you can’t be looking at everything. You know, it’s easier to shoot with a rifle than a shotgun. Sorry about the analogy, but yeah.
01:25:31:09 – 01:25:50:24
Anthony Perera
For sure. No, no, a great, great question. You know, kind of our whole thesis now is we built a we call private equity starter kits. Right. So there’s two kind of trains of thoughts. One, we we’re big believers that you build real wealth when you exit companies. Right? You make you make a living or you make, you know, great cash flow and you own them, but you can build well, real wealth creation really happens on the exits.
01:25:50:24 – 01:26:17:05
Anthony Perera
And so our kind of train of thought is we look for companies that are 2 to 5, we’ll go as high as ten of you. But kind of, you know, in that 20 to 40 to $50 million of revenue. And our goal is to grow them to, you know, 100 million bucks, 15 to 20 of EBITDA and professionalize these companies, all these all these baby boom businesses, our lifestyle companies right there, companies where, you know, Bob and Betty have run this company for, you know, 30, 40 years.
01:26:17:06 – 01:26:43:11
Anthony Perera
It pays their lifestyle. Maybe they have a boat or a second home somewhere, and now they’re retiring in a run. Or they want to, you know, monetize that asset. And they don’t have a lot of professional organization that some of these companies that, you know, our objective is to sell our businesses that that we need to have when we sell these companies, right, whether that be automation through CRM, whether it be, you know, great leadership teams, whether that be, you know, marketing strategies and, and, and also other thing, KPIs to track.
01:26:43:11 – 01:27:10:16
Anthony Perera
And so that’s kind of been what we look for in companies. And from an industry perspective, you know, you say, you know, shotgun not rifle, rifle, not shotgun. It’s but, you know, we’re industry agnostic. Really, really. Right now we have, automotive dealerships. We’re looking at acquiring under under loi, in the Midwest. Right. And so, similar situation, ownership there was, you know, been at it for 30 or 35 years and, and, and in great value we can find.
01:27:10:16 – 01:27:29:15
Anthony Perera
And that asset, comes with real estate. But, you know, we look we like companies where, you know, I can’t really affect the outcome, right? I don’t think I the next 20 years is going to jump on a roof and do your roof. I could be wrong. I mean, I have seen the movie Terminator right now. You know, Skynet may be coming.
01:27:29:15 – 01:27:52:26
Anthony Perera
Who knows? But, you know, I don’t think AI is going to change or change your AC filter or change your AC system, or fix your plumbing or pave your road. I mean, I think it’s going to help automate those businesses but not actually change them. And so that’s kind of really our thesis is where, where can we find and add value in companies and to is I going to make a giant move in that industry.
01:27:52:29 – 01:28:23:14
Rod Khleif
Yeah. Yeah. And and I will tell you that’s on everybody’s lips right now is, is is, you know, job loss from AI industries that are completely shifting. I mean, I feel sorry for these kids that are getting into legal accounting. It, even medical. You know, I just I literally was just watching a video on TikTok where, you know, my, my ex-wife did eyelash extensions, and it showed this robot doing, like, millimeter eyelashes, putting eyelashes on somebody’s eyelid.
01:28:23:17 – 01:28:46:15
Rod Khleif
And I’m like, Holy crap. The level of detail required for that is, is just extraordinary. So, you know, I think it’s it’s it’s, pretty prudent to be looking at that as you’re exploring business opportunities. Now. Yeah. I mean, you’re basically doing what these, Silicon Valley venture, you know, venture, not venture capitalists. Is that what they’re called?
01:28:46:22 – 01:29:06:24
Rod Khleif
Where they go in private equity? Yeah, they’ll go in. They’ll find a they’ll find a, you know, a brilliant, software, idea. And they’ll bring in the sea level team. They’ll bring in the CEO, the CFO. They establish the KPIs they put in, you know, systems and automation, because every business is nothing but people in systems.
01:29:06:24 – 01:29:17:26
Rod Khleif
Right. And so you you look at that. And so when you look at a business, are you looking for a business that hasn’t maximized those things? Is that is that what you look for.
01:29:17:29 – 01:29:36:22
Anthony Perera
Great. Great example. Yeah. So so we bought a company I give you another quick example. We’ve got a business down here. Big roofing business in South Florida 30 years old. Great. Great company, great reviews. They were dispatching on pen and paper, right. Wow. 35, $40 million a year. Their technicians were coming in and grabbing post-it notes every day.
01:29:36:22 – 01:29:53:11
Anthony Perera
Wow. Going so worth trying to listen. And we look at a hundred businesses a month. Right. And to your point, like our sweet spot is private equity really doesn’t like doing the work that we do as operators. We buy these companies that are 2 to 10 of EBITDA, 2 to 5, whatever you want to call it. Right?
01:29:53:11 – 01:30:08:13
Anthony Perera
They’re not they can’t write checks typically that small write. Think about it. So you go you raise $1 billion fund as a PE shop. Right. And you want to do ten deals in that and that and that fund. Right. 10 to 12 deals, probably the average in that size fund. You’re not writing a check for 10 million bucks of equity.
01:30:08:13 – 01:30:31:14
Anthony Perera
You’re not writing a check 15. You got to deploy 50, 75, $60 million every transaction to really make sense for that size of capital. And so we’re doing is we’re kind of creating that, that, that entry point where, where we professionalize these smaller companies, these these, you know, Bob and Betty retiring after owning it for 45 years, and taking them and getting them ready for private equity.
01:30:31:19 – 01:30:32:22
Anthony Perera
That’s kind of our goal. Right.
01:30:32:29 – 01:30:50:24
Rod Khleif
So one business at a time because, I mean, I’ve got students, that, that are doing roll ups, for example. Right. Paving companies of medical offices. The guy there was one other one as well. So you’re not doing roll ups. You’re basically taking one business maximizing that and selling it to private equity or defense.
01:30:50:24 – 01:31:10:12
Anthony Perera
Right. Every business is different. But we do we do do M&A. So we do. We do we will buy companies we do organically grow. You know, rolling up isn’t like our whole thesis, but adding value and creating, you know, taking that company from 5 to 10 million bucks to kind of our sweet spot of 20 to 25 is kind of our target.
01:31:10:15 – 01:31:18:16
Anthony Perera
And in doing that, you’re adding, you know, all these systems to it, tracking the KPIs, you know, putting in your professional management team.
01:31:18:19 – 01:31:38:17
Rod Khleif
What? So talk about your team for a minute. I’m just curious, you know what what comprises your team. You’ve I’m sure you’ve got people, you know, in your acquisition side looking at businesses, doing your preliminary analysis. They bring it to you if it warrants your look or you’re, you know, maybe a higher level, look, but then what else comprises your team?
01:31:38:23 – 01:31:39:01
Rod Khleif
Yeah.
01:31:39:06 – 01:32:11:15
Anthony Perera
Great question. So, so here at Exuma, which is really our family office, although I say we act more like traditional private equity and do a normal family office, we don’t make many passive investments. You know, we have, nine full time operating partners who all have specific strengths in different, industries. Right. So VP of marketing, VP of, you know, like operations, data analytics, BI you know, fleet facilities management risk that those teams when we once we acquire the company, we’re sure they’re helping out doing diligence.
01:32:11:18 – 01:32:31:23
Anthony Perera
Once we have, we acquire a launch, a new platform. They kind of help with the with the, experimentation, implementation, change management, all that good stuff. And then on the Exuma side, we have a separate team that does all the M&A activity, looking at deals, scouring through, you know, inbound leads, outbound leads, that kind of stuff, looking for opportunities for us.
01:32:31:23 – 01:32:47:11
Anthony Perera
And our our objective here is to have, you know, 4 to 6 platform based businesses at any given time and have 1 to 2 transactions a year. And that’s what we’re doing here as our business, our business, quite literally is buying and scaling companies and selling them.
01:32:47:13 – 01:32:54:09
Rod Khleif
Gotcha. Yeah. No, that’s that’s love it. So,
01:32:54:11 – 01:33:09:27
Rod Khleif
Do you in your hunt for businesses, are you. I’m sure you’re dealing, of course, with business brokers because they have the that they get. They hear about them first. But are you actually doing any outbound, acquisition strategies direct to business owners?
01:33:09:29 – 01:33:27:28
Anthony Perera
For sure, 100%. So, you know, we we we we use funny enough, we use AI a lot of times to help identify, ownership of these businesses. Where they at where, you know, email, contact, whatever it is, we do outreach. I will say we’ve kind of carved a name for ourself in the market for what we do.
01:33:28:01 – 01:33:43:16
Anthony Perera
And so we a lot of inbound leads now at this point where brokers are bringing us deals, whether that be a buy side broker or sell side broker. But you know, anybody looking to, to get into this type of work, I mean, you have some great resources out there. There’s plenty of websites that have businesses for sale.
01:33:43:18 – 01:33:52:06
Anthony Perera
I’m sure you guys have used them before, but, great place to look in those marketplaces for, for opportunities for sure.
01:33:52:09 – 01:34:13:28
Rod Khleif
So you purchase it, you put in all of these systems KPIs, you automate it. Are you, you know, do you find businesses that aren’t maximizing social media, for example, or, or, you know, like you mentioned, using paper for for orders? Holy crap. You know, or I didn’t.
01:34:14:00 – 01:34:18:08
Anthony Perera
Know that was a, that was a $40 million a year business dispatching on pen and paper.
01:34:18:10 – 01:34:36:21
Rod Khleif
Unbelievable. Right. And I’ve seen it, you know, I was I bought a I was going to buy a large mobile home park and, and the it was handwritten checks and the checks where the checks were. The checks carbon onto, you know, paper behind it. And that’s their reconciling system is. Yeah. I mean, holy crap.
01:34:36:28 – 01:34:38:01
Anthony Perera
Get the carbon copy.
01:34:38:04 – 01:35:01:13
Rod Khleif
Exactly, exactly. So so what are you doing? So I got it. Bring in CRM stub, establish KPIs, which are metrics, guys. Key performance indicators. You know, take a look at the leadership, take a look at. I’m certain you’re looking at, at marketing. You’re looking at the sales process. What are the conversions look like? You’re evaluating all of those things.
01:35:01:16 – 01:35:24:17
Rod Khleif
How are you implementing AI, if at all, yet? Because I know I’m implementing it right now in my business. My daughter does my SEO. She’s brilliant and we don’t need her anymore. So I’m helping her start another business because I, I it does it better than she does. And and my social media, guy, you know, basically we’re implementing open claw and it’s basically taking over 95% of his workload.
01:35:24:20 – 01:35:29:20
Rod Khleif
He’s much more effective at this point. What are you doing in that realm, if anything?
01:35:29:23 – 01:35:43:06
Anthony Perera
So I want to touch another point you mentioned earlier on social media, right. Like. Right. Well, two things. One, I fear for I feel for I feel bad for all the marketing agencies out there that exist. Oh yeah. Because a year from now, I mean, they’re jobs gone, but they’re gone.
01:35:43:06 – 01:35:43:20
Rod Khleif
Yeah.
01:35:43:23 – 01:36:08:12
Anthony Perera
One one quick. We have two companies we invested in. One is a product brand called our 30, which launched a product called Space Camp Wellness, which is a lip balm product now being sold in target. Right. Oh, that whole business model they have is they actually marry influencers with products and in the market. So it’s a massive power for anybody today who is not using social media to to help scale and grow your business.
01:36:08:12 – 01:36:26:07
Anthony Perera
It’s 100% the way to go. And I’ll give you a quick example on that. I bought this coffee business here in South Florida called Ella Coffeehouse, had one location. It ran for ten years. I bought it at a pure just. My wife loved this place and every Saturday I have to go get her omelet, baguette and a hazelnut coffee.
01:36:26:09 – 01:36:43:06
Anthony Perera
It’s annoy the crap out of me because I go there on Saturday and it’d be a lie at the door, and they wouldn’t take phone orders on the weekends. And so I happened to meet the owner at an event one day. My wife goes, hey, that guy owns Ella. Go talk to him. I don’t do work. I was like, man, you have to figure out how to fix this problem on Saturdays because it really annoys me.
01:36:43:08 – 01:37:04:03
Anthony Perera
You order anyway, so you want to sell me the business, right? So right when I bought that company, I was doing ten grand a week. It was tiny. And all we did is implement a social media strategy using local influencers. Micro influencers in the market, foodies, whatever it is, paying them a couple hundred bucks, go out and promote, you know, our product that company does now, that one location now does $35,000 a week.
01:37:04:03 – 01:37:28:22
Anthony Perera
And so no, nothing a year and a half. So I mean the power of reach through social media, we are firm believers on. But you know, back to your question. I hey, I can be using anything these days. I mean, from, from from automating outbound marketing strategies to, to, you know, tracking KPIs and building automation tools around, you know, how your sales process and customer journey funnels are going.
01:37:28:28 – 01:37:40:19
Anthony Perera
I mean, it’s such a powerful device. So we, we, we try to do as much as we can early on in our acquisition lifecycle, to have the advantage because first mover advantage is a real thing. I mean, it truly is.
01:37:40:22 – 01:38:00:28
Rod Khleif
Oh, yeah. I mean, we’re we’re right now what we’re doing with open claws and the 1% to 1%, candidly, and one of the businesses I’m thinking about having my daughter get involved in fairly seriously is I implementation for businesses because, you know, it’s it’s Greek to a lot of businesses. And this is the opportunities are incredible. Do you does everybody on your team utilize it.
01:38:00:28 – 01:38:08:25
Rod Khleif
Or do you have one person that specializes in implementing, how is that structured in your organization? Because it’s so brand new. You probably it’s.
01:38:08:25 – 01:38:28:10
Anthony Perera
Such a funny, funny conversation because like we have guys obviously the younger, you know, the associates and younger guys absolutely love it. Right. You got to kind of scale them back sometimes. I don’t know if I’m getting an email from them or from I, you know, it’s pretty funny. But you know, now and we have certain people on our team who who’s responsible for business intelligence and automation tools and that kind of stuff.
01:38:28:12 – 01:38:38:26
Anthony Perera
But every one of my team members now using AI to some, some degree, whether it be create a spreadsheet, to to display at a at level ten meeting or big believers in EOS.
01:38:38:29 – 01:38:41:28
Rod Khleif
Know me to track and Jenna Wickman. Yeah, that.
01:38:41:29 – 01:38:56:27
Anthony Perera
Great author, great book. All of our companies do all tens every week. So, you know, we which is funny, the automation tools that I see on these l10n meetings. So like I said, every one of them are, are pretty, pretty remarkable. What’s happening?
01:38:56:29 – 01:39:26:08
Rod Khleif
Yeah, yeah, yeah. So, so the the you really your, your business model is 1 or 2 transactions a year, buy or sell. Is that. That’s it. And you just maximize these businesses. What a fun frickin thing to be doing, buddy, I I’m a little jealous, candidly, because I love, I love, I love, I love it. So, so if someone like me is very interested in what you’re doing, I mean, if there were two of me right now, one would definitely be buying businesses.
01:39:26:08 – 01:39:51:05
Rod Khleif
And I mean, I’m, you know, in real estate right now, but I love entrepreneurship and buying businesses. I personally built 29, 33, 30 businesses so far in my lifetime. And, so I love entrepreneurship. But if someone’s listening and they’re, like, intrigued by what you’re doing, how could they begin to get started, possibly, you know, emulating some of the stuff you’re doing?
01:39:51:05 – 01:39:55:05
Rod Khleif
I mean, obviously they’re not going to get to your skill very quickly, but, yeah.
01:39:55:07 – 01:40:13:03
Anthony Perera
Yeah. Listen, I mean, good great. Great question. I mean, it’s there’s ways to do what we do on a smaller scale. We’re we’re playing on the middle scale and even smaller. You can buy companies all day long. And it’s so many great programs out there for this. I mean, SBA and local regional banks like, you know, they’ll loan you money.
01:40:13:03 – 01:40:31:03
Anthony Perera
But I think SBA has got a program. We can get the 5 million bucks. And and don’t you think it’s 10% equity like it’s crazy right. And you could buy a company that’s doing a million, a $2 million a year in EBITDA. And if you structure the deal, right, let’s say you buy a let’s say your first I want to start off with the company is doing a million bucks a year, and that company wants to trade for 5 or 6 times.
01:40:31:03 – 01:40:49:24
Anthony Perera
Right. So they want 6 million bucks. Go the SBA, you get you get a SBA loan for up to 5 million of that. Have the owner either take a hold back note or an out payment for the other million dollars. Now, your $500,000 just bought you $1 million of cash flow. We got a covered interest in debt. But I mean, you’re literally making your money back in year one.
01:40:49:26 – 01:41:03:19
Anthony Perera
You do that at scale. And that company you bought for five times, right? You get you get from 1 million to $5 million. Now you’re trading that same business for eight, nine times. So you’re creating that arbitrage expansion. And so there’s so much to do know.
01:41:03:21 – 01:41:17:27
Rod Khleif
Let me let me stop you for one second. I just want to make sure everybody got what you just said. So basically basically the, the multiple of annual earnings increases the bigger the company gets.
01:41:17:29 – 01:41:19:13
Anthony Perera
Tradition. So that’s correct.
01:41:19:13 – 01:41:22:20
Rod Khleif
Okay. Okay. Okay. So so no no no no.
01:41:22:20 – 01:41:24:03
Anthony Perera
Every industry is the same size.
01:41:24:06 – 01:41:39:19
Rod Khleif
All right. Got it, got it, got it. But but but that’s that’s the model which is kind of what they do with the roll ups as well. Is they’ll put 5 or 6 of these together and the, the multiple is higher than what they paid. And so that’s the arbitrage you’re talking about for sure.
01:41:39:19 – 01:41:57:16
Anthony Perera
The thing to be careful with on roll ups is there’s two types of roll up providers out there. Right. Or guys okay. You have aggregators and integrators. Right okay. So anybody can go out there and aggregate EBITDA and revenue. You can go buy, you know, small businesses all in the same kind of industry and put it together and say, okay, we’re one company, we’re a roll up.
01:41:57:18 – 01:42:08:04
Anthony Perera
But how do you actually integrated the business? And to get the, the, the, the arbitrage on the EBITDA expansion, you really have to integrate them. Are they on the same CRM? Are they on the same.
01:42:08:04 – 01:42:08:27
Rod Khleif
You got.
01:42:08:27 – 01:42:27:23
Anthony Perera
It. Are they getting the same, you know, insurance and benefits packages like that is true integration. And so that’s where value creation really happens. Much like in real estate man you’re in real estate by an asset. You wait for it depreciate. You can refinance yourself out of it. Increased rents drive value very similar such situation. It is operating companies right.
01:42:27:23 – 01:42:35:23
Anthony Perera
And so what’s the what. We’re big believers in real estate too. We own commercial properties. But you know, we love the, the the small business game a lot.
01:42:35:28 – 01:43:00:27
Rod Khleif
Yeah. Yeah. So do I. Honestly I, I’m really intrigued. And so, so let’s, let’s drill down on a couple of components of a business. When you, when you identify a business I mean obviously you see a business that’s still on paper. That’s a no brainer. You implement some industry industry specific software. I know the roofing business, you know, some of the some of the, manufacturers have fantastic software for a roofing business.
01:43:00:27 – 01:43:24:11
Rod Khleif
When my son’s in it, my son is is in the roofing business. So I know that business a little bit and but, you know, talk about sales and marketing because I think it was, Peter Gruber said that every business is nothing but innovation and marketing. So talk about, you know, when you see a business, how do you dissect what they’re doing from a marketing standpoint initially?
01:43:24:14 – 01:43:32:15
Rod Khleif
And, and maybe some of the improvements you’ve made and or seen that need to be made? The start with marketing. Let’s talk about sales after that.
01:43:32:17 – 01:43:50:16
Anthony Perera
Yeah. So marketing marketing to me is it’s truly a function of just performance. Right. So, you know, today’s sales usually dictate tomorrow’s marketing dollars. You know what I mean? Right. But a lot, a lot of times, a lot of companies fail, from a marketing perspective, is having visibility to what they’re actually doing in marketing. Step one.
01:43:50:19 – 01:44:07:09
Anthony Perera
Like, am I tracking my CPM? Do I have good lead versions? You know, and then two is my customer journey. Once I actually get the customer, what is that cycle like? I challenge anybody who runs a company to go and actually go through your own customer journey and see what that’s like. And I guarantee you’d be shocked, right?
01:44:07:09 – 01:44:07:24
Anthony Perera
A lot of people,
01:44:07:27 – 01:44:10:05
Rod Khleif
Disappointed, very disappointed, pointed.
01:44:10:07 – 01:44:33:09
Anthony Perera
Shocked, whatever it is, because you put yourself in that shoe right when you after you make the first phone call, after you submit a request for a call, whatever it may be, what happens next? Right? If somebody’s calling immediately when they answer the phone, what do they say? Right? That whole customer journey is so crucial in converting those marketing leads that a lot of people who are at this level of business don’t have that sophistication.
01:44:33:12 – 01:44:37:28
Anthony Perera
So the first thing we do with our companies is, okay, what is that customer journey? How do we differentiate?
01:44:37:28 – 01:44:42:20
Rod Khleif
And you flowchart it. I guess you just you literally look at every touchpoint.
01:44:42:22 – 01:45:01:01
Anthony Perera
Yeah, they all know. So what happens if they don’t close you close. If they don’t close, what’s the follow up sequence like are we outbound to them again? Are they getting a message if they do close on one product, how are we marketing our next product to them, keeping them informed? If they bought the whole suite of products, how do we keep them happy and get them to refer another client to us?
01:45:01:07 – 01:45:12:21
Anthony Perera
Like there’s so many ways to literally it works so well if we just sit down, go through your own customer journey as an operator, as a business, and then flowchart how you would want to be sold on something, right? Yeah, I love it.
01:45:12:21 – 01:45:27:29
Rod Khleif
And there’s only three ways to increase revenue one, you get more customers. Two, you increase the the frequency of sales are three you you have, you know, you sell more products to your existing customers. That’s it. Correct. Right? Correct. Yeah.
01:45:28:01 – 01:45:45:06
Anthony Perera
And then it’s the sales cycle. It’s just, you know, I’m a big believer. Oh wait. Time price becomes a problem is absent value. That’s it’s an old saying in the sales world right. Like and so a lot of people are afraid to to be the most expensive guy in town. But it’s okay to be the most expensive guy in town if you’re creating value for the customer.
01:45:45:08 – 01:46:05:06
Anthony Perera
Customers will always tell you how they want to be sold, no matter what. They will tell you how they want to be sold. You just have to listen. And most people in sales who are good understand listening is actually the most important step, right? Not a guy. So it’s funny. I was on a call this morning. I still get into the weeds of all of our companies and I’m on this call talking with what do we have a technology business called Fleet Out.
01:46:05:12 – 01:46:23:21
Anthony Perera
What’s the TMS provider? We’re talking about? Objection. Handling all your products more expensive or, you know, it’s a big shift for us. And we’re having this conversation and and what what with our team kind of sometimes fails to recognize is the customer is already telling you how they want to be sold. They already have their pain points. They’re wearing them.
01:46:23:21 – 01:46:44:10
Anthony Perera
They’re talking about them. You have to get them to say yes to that. Then price. Is it a problem at that point because you’ve created value. And so we’re big believers in sales training, obviously marketing, efficiencies, making sure you’re tracking your KPIs, making sure you have campaign attribution. What that means is if you’re putting a dollar in marketing and someone’s going to call that number, make sure you’re tracking that, right.
01:46:44:10 – 01:46:44:26
Anthony Perera
Yeah.
01:46:44:29 – 01:47:12:24
Rod Khleif
Specifically where the leads coming from. Right. Because and then you, you know, you double down and triple down quadruple down on what’s working. You know, instead of wasting money in an area that’s not producing any results. And that’s why those metrics are so frickin important, especially in marketing. So okay. And do you what’s what businesses are you involved with that actually have sales teams?
01:47:12:27 – 01:47:20:10
Anthony Perera
I think most of our companies, you know, have some form of a sales function. Right? Okay. Exercise. I mean, we have we have Hvac businesses still.
01:47:20:10 – 01:47:35:21
Rod Khleif
We have so, so stay there for a second. So on your Hvac business, is there a sales room, is there a is there an actual room? Is it done virtually. Is it done with I how how does that sales process look like in your big Hvac company?
01:47:35:23 – 01:47:38:01
Anthony Perera
The answer is yes. It all fronts. Really?
01:47:38:01 – 01:47:38:28
Rod Khleif
Oh, wow.
01:47:39:00 – 01:47:57:19
Anthony Perera
There is, there is, we use AI tools to to monitor conversations when our, when our reps are in a home to make sure that we are talking about the right things, we’re adding the value. We’re following our our process. There’s outbound sales efforts to rehash calls that haven’t closed. If Miss Smith was thinking about buying it, why didn’t she buy with us?
01:47:57:26 – 01:48:17:23
Anthony Perera
Is it a pricing problem? Is there a was my technician not correct in that job site or that home? Their sales reps actually go into the homes, actually go visit the customer. Do you get an inbound lead for an estimate? Right. You have to present to that customer optionality how many options they create. So there’s a whole sales function that goes on behind the scenes.
01:48:17:25 – 01:48:21:11
Anthony Perera
And most every company has a, some sort of sales function right now.
01:48:21:11 – 01:48:24:10
Rod Khleif
Okay. I just, drilling down a little bit.
01:48:24:13 – 01:48:25:03
Anthony Perera
Yeah, yeah. For sure.
01:48:25:03 – 01:48:47:25
Rod Khleif
Well, listen, I, I know we could talk about this for hours, but I want to value your time. It’s been a fascinating conversation for me. I’ll just be candid. Very impressed with what you’re accomplished, accomplishing, and, you know, and, guys, you know, I think this is an incredible opportunity to right now that, that he just outlined to to by businesses.
01:48:47:28 – 01:49:00:23
Rod Khleif
So, Anthony, I very much appreciate your time, and I’m very impressed with the fact that you didn’t have a an upsell of any sort. You just wanted to add value that that says a lot about who you are as a person. And I’m very grateful for the value you’ve added to my my listeners brother.
01:49:00:25 – 01:49:03:14
Anthony Perera
Thanks, man. I appreciate you having us. It was a great, great time.
01:49:03:16 – 01:49:05:27
Rod Khleif
Yeah. Likewise. All right. But thanks.
01:49:06:00 – 01:49:06:14
Anthony Perera
Thanks, man.
01:49:06:15 – 01:49:07:05
Rod Khleif
Thank you for.
**Podcast Categories:** Podcasts
---
### [He Bought A Building For $5.7M And Forced The Value To $10.5M With One Letter](https://rodkhleif.com/podcasts/multifamily-real-estate-development-with-edward-song/)
**Published:** May 15, 2026
**Author:** Bryan Hoover
**Excerpt:** He Bought A Building For $5.7M And Forced The Value To $10.5M With One Letter
**Content:**
## How Edward Song Built a Multifamily Real Estate Development Business
In this episode of Own Your Power, Edward Song shares how he transitioned from investment banking and education into multifamily real estate development and commercial investing. His journey highlights how entrepreneurial thinking, operational efficiency, and strategic partnerships can create major opportunities in today’s real estate market.
Edward discusses how his early background in finance and management consulting helped him understand business fundamentals, while his experience in construction gave him a direct path into real estate development. Over time, he combined those skill sets to build a vertically integrated real estate operation focused primarily on multifamily properties throughout New Jersey and the surrounding tri state area.
## The Power of Value Add Commercial Real Estate
One of the biggest lessons from the conversation is how value add opportunities can dramatically increase property value when operators understand their market deeply. Edward explains his first major commercial real estate acquisition, a 25,000 square foot property in New Brunswick, New Jersey occupied by a long term government tenant.
The investment group acquired the property for approximately $5.7 million in cash and identified an overlooked opportunity: the tenant’s lease rates had not been adjusted to market rents for more than a decade. After renegotiating the lease, the property’s net operating income increased significantly, pushing the building’s estimated value to over $10 million within months of acquisition.
This example demonstrates a core principle in multifamily real estate development and commercial investing: increasing NOI creates substantial equity growth, especially when investors acquire under managed or underperforming assets.
## Why Vertical Integration Matters in Multifamily Real Estate Development
Edward emphasizes that one of the keys to long term success in multifamily real estate development is vertical integration. Instead of relying heavily on third party vendors, his team controls multiple parts of the investment and development process internally.
Their operation includes:
- Construction management
- Asset management
- Property management
- Architectural partnerships
- Development oversight
By keeping these systems in house, Edward believes they can reduce costs, improve execution speed, and better manage risk for investors. This approach also gives the company more flexibility when evaluating new acquisitions or ground up development opportunities.
Rod Khleif points out during the conversation that many of the most successful real estate operators in the country share two traits: they stay geographically focused and vertically integrated. Edward’s strategy reflects both of those principles.
## Building Multifamily Projects in New Jersey
Another major topic discussed is the opportunity within New Jersey multifamily development. While some investors avoid the Northeast because of regulation and political complexity, Edward believes local expertise creates a competitive advantage.
His company currently owns and operates multiple multifamily assets in the New Brunswick and Somerset markets, including a 77 unit property with commercial space and a 94 unit development project. Because the portfolio is concentrated geographically, the company benefits from operational efficiencies and stronger market knowledge.
Edward also shares details about a much larger mixed use development project currently in the planning stages. The proposed project could exceed 600 units and include retail and office components. To execute a project of that scale, his team partnered with a larger institutional level developer experienced in high rise construction and entitlement processes.
The discussion offers valuable insight into how experienced operators scale from smaller multifamily projects into larger institutional caliber developments.
## Affordable Housing and Long Term Market Demand
Edward also discusses his growing interest in affordable housing development opportunities throughout New Jersey. Rising housing costs and limited supply continue to create demand for workforce and affordable housing across many major markets.
He explains that his team is actively exploring ways to combine their construction expertise, development experience, and operational systems to help address the housing shortage while still creating strong investment opportunities. For investors looking ahead to future real estate trends, affordable housing remains an increasingly important sector within multifamily real estate development.
## About Edward Song
Edward Song is a multifamily investor, developer, and entrepreneur based in New Jersey. Before entering real estate full time, he worked in investment banking, education, and management consulting. He also founded Five Points Learning, an educational company serving students and families throughout New York City.
Today, Edward focuses on multifamily real estate development, commercial acquisitions, and vertically integrated operations across New Jersey and the surrounding East Coast markets. His portfolio includes multifamily communities, mixed use developments, and large scale entitlement projects.
If you want to hear the full conversation and detailed insights, watch the podcast video or read the complete transcript below.
## FAQ About Multifamily Real Estate Development
**What is multifamily real estate development?**
Multifamily real estate development is the process of building, renovating, or repositioning residential properties that contain multiple housing units. These projects can include apartment communities, mixed use developments, workforce housing, and luxury rental properties. Investors and developers generate returns through rental income, property appreciation, and increased asset value created during development or renovation.
**Why is multifamily real estate development attractive to investors?**
Multifamily real estate development attracts investors because it offers the potential for strong cash flow, long term appreciation, and scalable income. Demand for rental housing continues to grow in many markets due to rising home prices, population growth, and affordability challenges. Multifamily properties also provide operational efficiencies since multiple units are managed within one asset.
**What is a value add multifamily real estate development strategy?**
A value add multifamily real estate development strategy focuses on improving a property’s performance through renovations, operational upgrades, lease restructuring, or repositioning. Investors aim to increase net operating income by improving the property and raising rents to market levels. As NOI increases, the overall value of the property can rise significantly.
**How does vertical integration help multifamily real estate developers?**
Vertical integration allows multifamily real estate developers to control multiple aspects of a project internally, including construction, property management, asset management, and development oversight. This approach can reduce costs, improve communication, increase efficiency, and help developers manage risk more effectively. Many experienced operators use vertical integration to scale their portfolios and improve project execution.
**What markets are best for multifamily real estate development?**
The best markets for multifamily real estate development are typically areas with strong population growth, job creation, limited housing supply, and increasing rental demand. Investors often look for regions with expanding economies, favorable demographics, and infrastructure improvements. Local market knowledge is critical because regulations, zoning, and construction costs can vary significantly by location.
**What is the difference between multifamily investing and multifamily development?**
Multifamily investing usually involves acquiring existing apartment properties that already generate income, while multifamily development focuses on building new projects or substantially redeveloping properties. Development projects generally carry higher risk but can also offer greater returns through forced appreciation and equity creation.
**How do developers finance multifamily real estate development projects?**
Developers typically finance multifamily real estate development projects using a combination of debt and equity. Equity may come from private investors, syndications, family offices, or institutional partners, while debt financing often comes from banks, agency lenders, or construction lenders. Larger projects may also involve joint venture partnerships with experienced developers or private equity firms.
**Why is affordable housing important in multifamily real estate development?**
Affordable housing has become a major focus in multifamily real estate development because many markets face significant housing shortages and rising rental costs. Developers who focus on workforce and affordable housing can help meet community demand while benefiting from long term occupancy stability and government supported incentives in certain markets.
**What are the biggest risks in multifamily real estate development?**
Some of the biggest risks in multifamily real estate development include rising construction costs, interest rate fluctuations, zoning delays, financing challenges, and market shifts. Successful developers reduce these risks by conducting thorough market research, building strong operational teams, and maintaining conservative financial assumptions.
**How can someone get started in multifamily real estate development?**
Many investors begin by learning underwriting, market analysis, and property operations before partnering with experienced operators on smaller projects. Networking, mentorship, and education are essential for understanding financing, construction, entitlements, and asset management. Some investors start with smaller multifamily acquisitions before transitioning into larger development opportunities.
00:00:28:23 – 00:00:47:11
Rod Khleif
Welcome back to Multifamily Rockstars. As you guys know, this is where we dive deep into our guests deals and give you practical and actionable tips so you can actually go out and do your first deal. Today I’ve got Warrior Edward song on and he has done some big things and I’m really glad to have him on Edward, welcome.
00:00:47:13 – 00:00:51:07
Edward Song
Oh thank you, I appreciate it. Excited to be on super.
00:00:51:07 – 00:01:04:12
Rod Khleif
So why don’t you give us a little background on, you know, where you came from. What was your you know, what what field you were in before you got into real estate and, why real estate and kind of bring us current, if you would.
00:01:04:14 – 00:01:28:02
Edward Song
Yeah, sure. Absolutely. So, I started my professional career in finance, actually, and so I was an investment banking in San Francisco during the.com bubble in 2000. And so kind of got to see that craziness. And, I left that in about 2002 and, moved back to the East Coast, where I went, where I grew up.
00:01:28:02 – 00:01:42:00
Edward Song
And, actually took a change in careers and went into education, was looking for something more fulfilling, from finance and so, you know, not a lot of people do that. But for me, that’s kind of what I was looking for at that. The big.
00:01:42:00 – 00:01:43:00
Rod Khleif
Pay cut.
00:01:43:02 – 00:02:03:03
Edward Song
Yeah. Massive. And so, but yeah, so I ended up actually working for a subsidiary of Kaplan and ran a couple of their programs and got to see, you know, how to run a business, kind of the way they do it. And had a chance to work with a lot of students and families. And, you know, it was really fulfilling work.
00:02:03:03 – 00:02:22:14
Edward Song
And then I eventually went and got my masters, in education. And, it was kind of like my late 20s where I decided I would give business a try again and went into management consulting and ended up at Deloitte, for a few years. And around that time I realized that I’m not really a big corporate business guy.
00:02:22:20 – 00:02:45:21
Edward Song
And, I’ve always wanted to start my own business. My family are all entrepreneurs. My father had a large, manufacturing business, where he manufactured clothes, all throughout Asia and had offices all around the world. My sister runs a human rights nonprofit, called in North Korea. She’s been doing it for close to 20 years.
00:02:45:23 – 00:02:56:03
Edward Song
My brother has a startup, called health ECS. And so their work, he’s working on trying to solve certain health related problems. And so I think it’s just in our DNA. Right.
00:02:56:04 – 00:03:01:05
Rod Khleif
Wow. Yes. Sorry. I gotta stop you for a second. Your sister has a nonprofit in North Korea.
00:03:01:07 – 00:03:23:23
Edward Song
No. So it’s called Liberty in North Korea. And what they do is they have at one time they used to rescue, and resettle, refugees who escaped from North Korea. And so they provide, education, and career and language type training. And so they have rescued, I think it’s over a thousand people, over the last 20 years.
00:03:23:23 – 00:03:44:06
Edward Song
And it’s really inspiring. And it’s one of the biggest, it’s one of, the nonprofits that I donate the most to, one is my sister. But also, I’m compelled by the mission. And my, great. My grandmother is actually from North Korea. And so we do have a personal connection there. And so there’s a whole. I could talk about that for hours.
00:03:44:08 – 00:03:50:15
Rod Khleif
Well, I was just fascinated when you said North Korea. I’m like, what? Are you kidding? Wow. Okay. Very cool, very cool.
00:03:50:20 – 00:04:09:18
Edward Song
Yeah. So I had left a lot. I was looking for something more. I always knew I wanted to start my own business. And so, and I had this idea that I wanted to continue to, you know, make a positive difference in the community that I was in. And so I started Five Points Learning, which is based out of Brooklyn.
00:04:09:20 – 00:04:32:14
Edward Song
And we started to work with a lot of different, families and students within Brooklyn. We started to work with the Department of Education. We work with nonprofits that serve low income communities. We work with charter schools, private schools, public schools, you name it. Right. And so 17 years later, I still own it today. I’ve got a manager that manages the program, and I check in with him.
00:04:32:14 – 00:04:47:24
Edward Song
We discuss different, you know, situations or problems that we solve together. But yeah, I mean, it’s been exciting to have impacted thousands and thousands of kids in New York City and help them reach their academic goals. And, you know, getting closer to their dreams. Right?
00:04:47:24 – 00:04:52:08
Rod Khleif
Oh, that’s beautiful work, brother, as I commend you. That is absolutely beautiful work.
00:04:52:10 – 00:04:53:10
Edward Song
I appreciate that. Yeah.
00:04:53:10 – 00:04:55:13
Rod Khleif
So why real estate?
00:04:55:15 – 00:05:15:03
Edward Song
Yeah. So I mean, basically then, you know, I had ended up moving to new Jersey after I had my three kids and, got into construction, through a friend of mine and, you know, really went deep into it and, you know, loved every part of it. And, you know, we were building houses, you know, we’re doing commercial projects.
00:05:15:03 – 00:05:34:05
Edward Song
We’re doing all kinds of, you know, even looking at multifamily things. And so, it kind of is a natural progression then to understanding like the real estate development side. Right? And so, at that time, I kind of felt like it was, you know, kind of untouchable. Like, I see all these buildings, I see these developers.
00:05:34:05 – 00:05:55:21
Edward Song
It’s like the secret sauce. How do I access that secret knowledge? And, I was fortunate that I ran into somebody who, was a developer and kind of took me under his wing and, and kind of showed me the ropes. And that was my first introduction to real estate development. And as I, you know, got into real estate development, I just wanted to learn more.
00:05:56:01 – 00:06:20:19
Edward Song
And that’s when I started to follow, actually your podcast. And so, you know, I would drive around to all these different projects, I’d have your podcast on in the car and, you know, through the podcast, I just learned so much. And what I loved about it was just the energy you had with your guests. But there was one particular episode where you had a guest that was talking about, a situation that when kind of bad, it went south.
00:06:20:19 – 00:06:36:15
Edward Song
And, what impressed me was, you know, the, the guest had said that, you know, this this partner of his had done something shady, and you got really upset. He said, oh, was he a warrior? Or if he’s a warrior, I’m going to kick him out like, oh. And I was like, wow, rod really got upset.
00:06:36:15 – 00:06:58:03
Edward Song
Like, that’s crazy. But it showed me how you really protected the community. You cared about finding the right people to join and people of high character, people who, you know, really care about supporting the community, contributing to community. And so that kind of gave me the confidence to then reach out. And so I reached out literally the next day, had a conversation and joined pretty much.
00:06:58:03 – 00:06:58:14
Edward Song
Right.
00:06:58:14 – 00:07:27:06
Rod Khleif
Wow, wow. I didn’t know that. That’s really cool. I that’s really I’m really glad that you said that. All that because, yeah. I mean, listen, you know, and not to derail the conversation, but, we take making the world better very seriously in the warrior program. I mean, you know, we have our Hall of Fame awards, and I remember having that and, and every single warrior that we that we gave the award to have done, I don’t know, 1040 or 50 of them at this point.
00:07:27:08 – 00:07:46:05
Rod Khleif
Did something philanthropic as this like crazy. I couldn’t believe it. And it just it was just a, just a common denominator in these warriors that we selected. We didn’t know it, you know, while we were selecting them, but we selected them because they did add value to the community. They were responsive and answered questions for people and help people.
00:07:46:05 – 00:08:02:23
Rod Khleif
And and, you know, it’s just it was pretty astounding to see that. But, no, thank you for sharing that. So. Well, let’s get let’s get into a deal. Okay. So, yeah, when I, when you, we had you do some notes, you talked about your first commercial real estate deal. Can you tell us about that one?
00:08:03:00 – 00:08:24:22
Edward Song
Yeah. So this was my first deal. You know, I was involved with, capital raising, and, it was a commercial project, in, New Brunswick, new Jersey. It’s a 25,000 square foot space, and there’s, a county tenant that’s in there. And so, the tenant had been in there for, I mean, over 20 years.
00:08:24:24 – 00:08:25:16
Edward Song
And you say.
00:08:25:16 – 00:08:28:17
Rod Khleif
County tenant, so, so governmental tendu tenant.
00:08:28:23 – 00:08:30:23
Edward Song
Right. A government tenant. That’s right. Gotcha.
00:08:30:24 – 00:08:32:01
Rod Khleif
Okay.
00:08:32:03 – 00:08:58:06
Edward Song
And so they had been in that building for over 20 years, and, they hadn’t really had, any lease, increases, in quite some time in over ten years. And so, when we came, to the property through our broker, we were able to see where there was an opportunity to, possibly renegotiate the lease, and add some value to the building for our investors.
00:08:58:08 – 00:09:21:17
Edward Song
And so that’s basically what we did is after we had closed, we sent a letter to the county notifying them that we were going to, raise their rents up to market rates. And after some negotiations, we were able to do that. And so we had bought that property for around 5.7 million in cash. And, after we renegotiate renegotiated, we were able to increase our NOI.
00:09:21:17 – 00:09:28:01
Edward Song
And based on the cap rate there, the value of the building is now around ten, $10.5 million. And.
00:09:28:01 – 00:09:32:02
Rod Khleif
This was this was over what period of time? I mean, like, when did you buy it?
00:09:32:04 – 00:09:52:09
Edward Song
So we actually closed, at the end of 2024. And when the lease, it took about six months or so to sign the lease. And so we were going to refi out, our proceeds. But, we were kind of waiting for interest rates to drop to see if we could maybe do a little bit more.
00:09:52:11 – 00:10:15:21
Edward Song
And, we’re kind of still in that holding pattern right now. We don’t really have a lot of urgency for pulling the money out. And so as it is, that cash flows really well. And so, and also there’s some other opportunities for that project that we’re exploring. And so, but yeah, I mean, in general, you know, we predominantly develop in new Jersey and so.
00:10:15:23 – 00:10:28:01
Rod Khleif
But this wasn’t a this wasn’t a development project. This was a project. Right. And, and and you paid cash. So you raised that much cash to go do this deal. Was it a syndication?
00:10:28:03 – 00:10:45:00
Edward Song
It was a joint venture. It was a syndication. Yes. Okay. We had one we had one investor that provided a large portion of it. Then, my family, myself and I, my wife and I, we invested in that one to, we also brought in a few other, investors as well.
00:10:45:02 – 00:11:01:02
Rod Khleif
Perfect, perfect, perfect. So, so you got the rents up and you basically doubled the value. That’s that’s fantastic. So what’s next? Are you going to are you going to, be developing or looking for more assets like this one? What what’s what’s, anything on the radar?
00:11:01:04 – 00:11:24:05
Edward Song
Yeah, I think we’re always looking for value add opportunities and so, you know, one of the things that we have focused on is getting vertically integrated. And so I’ve actually partnered with, a warrior, who was an architect. And so, we have worked together to try to bring some synergies together in our two businesses. And because I have the construction business.
00:11:24:05 – 00:11:39:24
Edward Song
Right. That’s something that we’re able to take care of. We’ve got asset management and property management, also in-house. And so for us, we’re just trying to control as much as we can within the process, so that we don’t have to depend as much on third parties.
00:11:40:01 – 00:11:42:10
Rod Khleif
Geographically specific in new Jersey, then.
00:11:42:12 – 00:12:02:08
Edward Song
Yeah, new Jersey. We also look into Pennsylvania. Okay, kind of the surrounding tri state area. And so I know a lot of times people are a little bit afraid of, of that, of that area. But, for us, we understand the market really well. We have a lot of experience in it, and we’ve got a lot of, efficiencies already in place.
00:12:02:10 – 00:12:06:08
Edward Song
And so we feel like that helps mitigate our risk and our investors risk as well.
00:12:06:08 – 00:12:22:10
Rod Khleif
So, so, so is the plan is the plan to, to build more or buy more or the answer is yes in both cases. What what is what’s what’s the because I mean with an architect I’m thinking construction, you know, that you’re going to build. And I assume you’re a GC. Are you a general contractor then personally.
00:12:22:12 – 00:12:48:20
Edward Song
I mean, my partner is the general contractor. Okay. You got a lot of business side. And so, but yeah, he’s the technical guy. He knows all the code, all that stuff. Okay. But, yeah, I mean, we will do ground up construction. We’re always looking for opportunities. We have our, you know, build cost, optimize. And so we’re able to build that out, you know, a price that’s lower than maybe other developers, who have to party that out.
00:12:48:22 – 00:13:01:00
Edward Song
And then, like I said, we’re opportunistic. So if there are other commercial opportunities or value add opportunities and then we’re going to explore it. Right. And so, anything related to multifamily predominantly.
00:13:01:02 – 00:13:21:21
Rod Khleif
Okay. Okay. That was my question. Yeah. If there’s going to be a multifamily focus or, you know, we’ve got warriors that are doing an industrial flex space very successfully. I’m sure you know that, you know, we’ve they’ve even built student housing, some development there. So, but you’re going to focus on primarily some multifamily, then multifamily.
00:13:21:21 – 00:13:50:22
Edward Song
And I mean, we’ve explored like looking into, affordable housing because it’s such a big issue in new Jersey. So there’s some opportunities that we’ve seen and we’re still kind of in the early stages. And I’m still looking to connect with people who have experience in that space, actually in new Jersey. And so, so, you know, that’s kind of the next path, I think, for us to take to try to solve that problem and, bring our synergies to that, that that’s love it.
00:13:50:22 – 00:14:15:15
Rod Khleif
Well, I mean, you’re putting all the pieces together and that that I will tell you. And I’ve said this publicly before, the most successful operators I see are the ones that are geographically specific, like you are and vertically integrate. Those are the most successful operators. I see across the country every single time. Yeah, because you get your eyes on it, you know you’re there, you can kick it, touch it and keep an eye on it where, you know, if you’re out of state, it’s, it’s a it’s a little more challenging.
00:14:15:15 – 00:14:34:17
Rod Khleif
Can you do it? Yes. I’ve got assets in seven states, but it’s not ideal. Ideal would be geographically specific. So I love I love the idea and I don’t love the politics up there. But you know that that’s that’s that’s on you. But but anyway. But I know you can make money and you can make a lot of money, as evidenced by this deal you just mentioned.
00:14:34:23 – 00:15:00:22
Rod Khleif
So, so are you actively looking for land or, you know, what’s, what’s talk a little bit about about what you’re putting your sites into to try to identify opportunities. If you would talk a little bit about, you know, what you might be looking at, to maximize, you know, your reach and, and kick, as many, you know, have as many as, as much stuff come across your desk as possible, I guess, is what I’m asking.
00:15:00:24 – 00:15:20:18
Edward Song
Yeah. I mean, right now we are even we are geographically focused predominantly on new Jersey, the East Coast. But we’ve been more targeted towards this New Brunswick, and Somerset area. And so we have a lot of properties that are there. We’re able to, have a lot of operational efficiency with, just property management because everything is within.
00:15:20:20 – 00:15:20:24
Edward Song
Oh.
00:15:20:24 – 00:15:22:20
Rod Khleif
You already own some properties there.
00:15:22:22 – 00:15:24:13
Edward Song
Yes. And so we do have a.
00:15:24:15 – 00:15:27:03
Rod Khleif
Talk about your portfolio. Yeah. What do you have?
00:15:27:07 – 00:15:49:05
Edward Song
Oh, we have, a couple of different multifamily, properties there. Okay. We acquired, a property in 2025 that was 77 units with four commercial. We’ve also acquired, sorry. We have built, and code a property in New Brunswick which has 94 units.
00:15:49:07 – 00:15:51:15
Rod Khleif
Congratulations. That’s fantastic. Good for.
00:15:51:15 – 00:16:14:17
Edward Song
Us. And so, that was kind of. I came in on the tail end of that. That was my partner, who was kind or involved with that project. And so, we’ve got a few other projects that we’re in the process of getting entitled. And so and that’s kind of what we focused on last year was, we did try to purchase a few multifamily deals.
00:16:14:19 – 00:16:40:03
Edward Song
But we ended up walking away just because it didn’t end up making sense. Rather walk away than get into a bad deal. And so, but we also have a project that we’re looking at where we acquired some land. And we’ve got some, you know, bigger set, sights on this one. We do have a JV partner for this one because this one, we’re planning to go vertical.
00:16:40:05 – 00:16:43:08
Edward Song
And so, by zoning.
00:16:43:10 – 00:16:46:13
Rod Khleif
A little more complex, you know, elevators and all of that.
00:16:46:13 – 00:17:01:02
Edward Song
Right? It is. And so, bye bye, bye bye zoning. We are allowed to go up to 15 storeys on one, property and the other one is up to 22. And so we don’t really have that capability. We’re mostly mid-rise. Right.
00:17:01:02 – 00:17:06:21
Rod Khleif
Yeah. Your GC probably has no experience with that. And that is very, you know, it’s a lot more complex than. Yes.
00:17:06:21 – 00:17:31:11
Edward Song
You know, and so we have found a JV partner. It’s a larger, well-established, developer in new Jersey that has done these bigger projects. And so they’re going to go through the process of getting the project entitled and managing the construction. And so and this one would be, we think, over 600 units. Right? Wow, wow. We’ll have some retail that’ll have some office space as well.
00:17:31:11 – 00:17:33:03
Edward Song
And so, but
00:17:33:05 – 00:17:41:02
Rod Khleif
That’s a, that’s a monster. That’s a monster. So, so, you know, what’s the plan for the equity on that deal? You know, what’s the plan for the capital?
00:17:41:04 – 00:18:01:02
Edward Song
Yeah. So there’s, you know, I think for a project of that size, we’ll probably have to look towards like, institutional and private equity. Yeah. And being on the East Coast, we’re pretty close to Wall Street in the financial centers. Right. You know last year we did meet with some private equity with some family offices. And we continue to expand our network in that way.
00:18:01:02 – 00:18:10:14
Edward Song
And so, so yeah, I mean, it’s still early stages, right? I’m sure. Oh, sure. Or may not work out. Right. But, but it’s still exciting, right?
00:18:10:15 – 00:18:16:07
Rod Khleif
Oh that’s exciting man I love it. No, that’s that’s that’s that’s big big big. You know what stuff. You know.
00:18:16:07 – 00:18:17:11
Edward Song
So that’s awesome.
00:18:17:13 – 00:18:30:03
Rod Khleif
Yeah. Love it. So so yeah. No, I’m really impressed. I had no idea you had this much stuff going on. Yeah. You know, and, has the warrior experience been good for you? I mean, has so far.
00:18:30:09 – 00:18:52:03
Edward Song
Absolutely. I mean, warrior program. Fantastic. The people I’ve met. Just being in a community with like minded folks who are interested in real estate to especially multifamily. And, you know, when I’ve had certain problems, I can reach out to the network and get some advice or you know, people are so willing to help out. And it’s truly an incredible community you’ve put together.
00:18:52:03 – 00:18:54:05
Rod Khleif
And I really appreciate them.
00:18:54:05 – 00:18:54:15
Edward Song
For it.
00:18:54:15 – 00:19:12:15
Rod Khleif
So yeah, I appreciate that. By the way, if you’re interested in applying to the warrior program, text the word crush to 72345. That’s how you apply. And we look you over, you look us over. And if it’s a fit, you’re off to the races and and I’ll brag. I don’t know if you know this, Edward, but our program results at this point.
00:19:12:15 – 00:19:29:10
Rod Khleif
We believe. I believe we’re about to, at about 300,000 units. We’re counting, and we’re in, like, 270 some. And I know we’re missing a ton. We’re actually just sent an email out to everybody to see to get a more accurate count. But you know that that is more than everybody else that teaches this combined. So really proud of that, honestly.
00:19:29:10 – 00:19:45:03
Rod Khleif
But, Edward, I really appreciate you coming on. And I’m very impressed with what you’ve got going already. And, just excited to see if that, if that monster comes out of the ground. Wouldn’t that be something? Holy cow. But, it’s a it’s a pleasure, my friend. Thanks. Thanks for coming.
00:19:45:03 – 00:19:46:18
Edward Song
On. Right, I appreciate it.
00:19:46:20 – 00:19:47:23
Rod Khleif
All right. Take care.
00:19:48:03 – 00:19:49:02
Edward Song
Have a great day. Years.
**Podcast Categories:** Multifamily Rock Stars, Podcasts
---
### [How To Legally Pay Less Tax As A Real Estate Investor In 2026](https://rodkhleif.com/podcasts/real-estate-tax-planning-strategies-with-jamelle-nelson/)
**Published:** May 11, 2026
**Author:** Bryan Hoover
**Excerpt:** How To Legally Pay Less Tax As A Real Estate Investor In 2026
**Content:**
## Real Estate Tax Planning Strategies with Jamelle Nelson
In this episode of Lifetime Cash Flow Through Real Estate Investing, Rod Khleif sits down with CPA and entrepreneur Jamelle Nelson to discuss advanced real estate tax planning strategies for investors, business owners, and high income earners. Jamelle explains why many real estate investors fail to maximize tax advantages simply because they are reactive instead of proactive with their financial planning. From cost segregation and bonus depreciation to IRS negotiations and retirement plan structuring, this conversation delivers valuable insight for anyone serious about preserving wealth and reducing tax liability.
Jamelle shares how his experience working with major organizations like CBRE shaped his understanding of real estate accounting, REIT structures, investor exits, and tax mitigation strategies. Today, his firm specializes in helping real estate investors create long term tax strategies that align with their business goals instead of scrambling at year end to reduce tax exposure.
## Why Proactive Real Estate Tax Planning Matters
One of the biggest themes throughout the conversation is the importance of proactive tax planning. Jamelle explains that many CPAs focus only on filing tax returns and reporting past activity, while sophisticated investors need forward looking strategies that align with future acquisitions, dispositions, and business growth.
For real estate investors, tax planning should begin long before the end of the year. Jamelle emphasizes that investors need to evaluate:
- Their current income structure
- Whether they qualify for Real Estate Professional Status
- Their long term hold strategy
- Future exit plans
- The impact of depreciation recapture
- How business entities and family payroll structures are organized
Instead of making rushed financial decisions in December, Jamelle encourages investors to develop a year round strategy that integrates real estate investing with wealth preservation and estate planning objectives.
## Understanding Real Estate Professional Status
A major educational point in the episode revolves around Real Estate Professional Status, one of the most discussed real estate tax planning strategies available to investors.
Jamelle explains that qualifying for this designation can allow investors to offset active income with real estate losses, but many investors misunderstand the IRS requirements. To qualify, an investor generally must spend more than 50% of their working time in real estate related activities and satisfy the 750 hour participation requirement.
This becomes challenging for high income professionals with demanding W-2 careers because the IRS closely examines whether real estate truly represents their primary business activity. Jamelle also discusses how married couples may structure participation differently when one spouse is more active in real estate operations.
The discussion highlights how critical proper documentation and strategic planning are when pursuing these tax advantages.
## Cost Segregation and Depreciation Recapture Risks
Cost segregation studies and bonus depreciation have become popular real estate tax planning strategies in recent years, especially among multifamily syndicators and passive investors. However, Jamelle warns that many investors focus only on immediate tax savings without fully understanding the long term consequences.
He explains that accelerated depreciation can create significant tax liabilities later through depreciation recapture when properties are sold, refinanced, or foreclosed upon. In today’s challenging commercial real estate environment, many investors are now facing difficult situations involving distressed assets and unexpected tax exposure.
Jamelle stresses the importance of building tax strategies around the investor’s full business plan rather than chasing short term deductions without considering future outcomes.
## Advanced Tax Reduction Strategies for Investors
Beyond the commonly discussed real estate tax tools, Jamelle shares several lesser known wealth building and tax mitigation approaches that sophisticated investors often overlook.
Some of the strategies discussed include:
- Structuring employee retirement and pension plans
- Hiring family members through legitimate payroll structures
- Creating charitable giving strategies
- Establishing nonprofit organizations connected to philanthropic goals
- Utilizing business entities strategically for long term planning
- Coordinating tax strategies with overall investment objectives
Jamelle explains that proactive tax planning is not simply about reducing taxes today. The real goal is creating systems that help investors preserve capital, build wealth efficiently, and avoid costly mistakes later.
## Navigating IRS Tax Resolution and Negotiations
Another important part of the conversation focuses on tax resolution services and how investors can address serious IRS problems before they escalate further.
Jamelle explains that many investors accumulate substantial IRS debt due to capital gains, failed investments, depreciation recapture, or poor bookkeeping systems. His firm works with clients facing tax liabilities ranging from simple payment plans to multi million dollar IRS disputes.
He discusses how tax professionals can negotiate installment agreements, evaluate eligibility for Offers in Compromise, and help clients avoid liens or enforcement actions. Jamelle also emphasizes that resolving IRS debt requires more than negotiation. Investors must fix the underlying systems and financial habits that created the problem in the first place.
For real estate investors operating large portfolios or syndications, these conversations become increasingly important in uncertain market conditions.
## About Jamelle Nelson
Jamelle Nelson is the CEO and Managing Director of Nelson & Associates, a boutique CPA firm serving clients across the United States. His firm specializes in accounting, tax planning, tax strategy, and IRS tax resolution for high income earners, business owners, and real estate investors. Before launching his own firm, Jamelle worked at KPMG and later at CBRE, where he developed extensive expertise in commercial real estate accounting and investment structures. Growing up in Compton, California, Jamelle credits strong mentorship, education, and family values for shaping both his entrepreneurial journey and professional success.
If you want to hear the full conversation and detailed insights, watch the podcast video or read the complete transcript below.
## FAQ About Real Estate Tax Planning Strategies
**What are real estate tax planning strategies?**
Real estate tax planning strategies are methods investors use to legally reduce taxable income, preserve wealth, and improve overall investment returns. These strategies can include cost segregation studies, bonus depreciation, 1031 exchanges, retirement plan contributions, entity structuring, and Real Estate Professional Status qualification. Effective tax planning helps investors maximize cash flow while preparing for future acquisitions, refinances, or property sales.
**Why are real estate tax planning strategies important for investors?**
Real estate tax planning strategies are important because taxes can significantly impact investment profits and long term wealth creation. Proactive planning allows investors to minimize tax liabilities, improve cash flow, and avoid unexpected tax consequences such as depreciation recapture. Investors who plan ahead often have more flexibility and stronger financial positioning during market shifts.
**What is Real Estate Professional Status?**
Real Estate Professional Status is an IRS designation that allows qualifying taxpayers to use real estate losses to offset active income. To qualify, investors generally must spend more than 50% of their working time in real estate activities and complete at least 750 hours annually in qualified real estate participation. This strategy is commonly used by high income earners seeking larger tax deductions.
**How does cost segregation help reduce taxes?**
Cost segregation accelerates depreciation by separating building components into shorter depreciation schedules. Instead of depreciating an entire property over 27.5 or 39 years, investors can depreciate certain components over 5, 7, or 15 years. This creates larger upfront deductions and can substantially reduce taxable income in the early years of ownership.
**What is bonus depreciation in real estate investing?**
Bonus depreciation allows investors to immediately deduct a large percentage of qualifying property improvements and assets placed into service. When combined with cost segregation studies, bonus depreciation can create significant paper losses that help offset taxable income. Many multifamily investors use this strategy to improve after tax returns and increase available capital for reinvestment.
**What is depreciation recapture?**
Depreciation recapture occurs when an investor sells a property after taking depreciation deductions over time. The IRS may require part of those deductions to be taxed upon sale. Investors should understand depreciation recapture before using aggressive depreciation strategies because it can create substantial tax liabilities if not properly planned for.
**Can real estate investors reduce taxes with retirement plans?**
Yes, retirement plans can be powerful real estate tax planning strategies. Investors may use SEP IRAs, Solo 401(k)s, defined benefit plans, or pension structures to reduce taxable income while building long term retirement wealth. Advanced retirement planning strategies can create substantial tax savings for business owners and real estate professionals.
**How can family payroll strategies help reduce taxes?**
Some investors legally reduce taxes by hiring family members within their business operations. Wages paid to family members may become deductible business expenses while shifting income into lower tax brackets. Proper documentation, legitimate job responsibilities, and compliance with IRS guidelines are essential when using this strategy.
**What is a 1031 exchange?**
A 1031 exchange allows investors to defer capital gains taxes by reinvesting proceeds from a property sale into another qualifying investment property. This strategy helps investors continue growing their portfolio without immediately paying taxes on gains. Many experienced investors use 1031 exchanges to scale into larger multifamily or commercial assets.
**Why should investors work with a real estate focused CPA?**
A real estate focused CPA understands the unique tax rules, deductions, and investment structures involved in real estate investing. Many general CPAs primarily focus on tax filing rather than proactive planning. Investors often benefit from working with specialists who understand multifamily investing, syndications, depreciation strategies, and long term wealth planning.
**When should investors start tax planning?**
Investors should start tax planning long before the end of the year. The most effective real estate tax planning strategies are implemented proactively throughout the year rather than reactively during tax season. Ongoing planning allows investors to make better financial decisions and avoid costly surprises later.
01:20:07:26 – 01:20:28:29
Rod Khleif
Welcome back to lifetime cash flow to real estate investing. I’m Rod Khleif and I’m thrilled you’re here. And I know you’re going to get tremendous value from the gentleman I’m interviewing today. His name is Jamal Nelson. And Janell is the CEO and founder of Nelson Associates. They’re a CPA firm. And the reason I wanted him on the show is they don’t just, you know, most CPAs look in the rearview mirror to figure out your tax situation.
01:20:29:01 – 01:20:44:02
Rod Khleif
And good ones look forward. They’re proactive and they plan for what’s coming up. And I haven’t had that in my life. Candidly. So I this may be a little selfish. I wanted him on the show for me, if nothing else. So welcome to the show, brother.
01:20:44:04 – 01:20:46:26
Jamelle Nelson
Hey, thanks for having me here. Excited to be here.
01:20:46:28 – 01:21:02:20
Rod Khleif
Okay. Well, you’re I’m excited to have you here. So why don’t you give us a little background on who you are? You know, maybe the company, you know, high level, and then, let’s drill down on some strategies and, you know, some of the things you’re doing to help your clients. I know you’ve got very large clients.
01:21:02:20 – 01:21:18:01
Rod Khleif
Occidental petroleum, these are NBC universal. I mean, you’ve got some big clients CBRE, Westfield, the mall ownership company. You’ve got some big clients here. So let’s talk about who you are, where you came from, and and how you might help some of my listeners.
01:21:18:04 – 01:21:50:08
Jamelle Nelson
Absolutely. So, Jamal Nelson, CPA and managing director of Nelson and Associates, we are a boutique, full service CPA firm based out of the Los Angeles area. And I tell people we have, local presence but national touch. So we are pretty much all 50 states. And, it’s not just myself. We are a family business. So I was fortunate enough to actually recruit my wife away from her company to come join us in-house to lead our operations, activities and strategy.
01:21:50:09 – 01:22:15:11
Jamelle Nelson
So, very happy to say that, we are a family business. But how I got started in accounting. It’s a pretty interesting story. I grew up in the inner city south, the LA area of Los Angeles, specifically Compton, California. And so, growing up in the 90s was a pretty rough time. It was a rough, stage and era, being a young male growing up.
01:22:15:14 – 01:22:45:21
Jamelle Nelson
And not only did my mom have the responsibility to kind of steer me in the right direction, but I had a twin brother. So growing up with the twin brother, things were very, competitive, straight for, my mom had great structure and intention for us. So she surrounded us with, great mentors, coaches, and one of my, mentors and coaches, actually, for, some, talent and promise, for us, me and my brother.
01:22:45:21 – 01:23:06:13
Jamelle Nelson
And he actually, convinced my mom to enroll us into a accounting and finance program at the University of Southern California as a junior in high school. And that was the first experience and exposure of anything accounting or finance related that I learned. And it was at that point that I realized, hey, I actually want to be a CPA when I grew up.
01:23:06:15 – 01:23:24:21
Jamelle Nelson
So fast forward, attended USC, graduated. And what you do when you graduate with an accounting degree, from a school like USC is you go work for one of the big for firms. So KPMG was that firm that I went to go work for. Great exposure, great experience. But I quickly found out, hey, I don’t want to do this partner track.
01:23:24:23 – 01:23:57:26
Jamelle Nelson
I don’t want to do this particular career path. And from there, that is when I actually, teamed up and joined CB Richard Ellis, so I CBRE, that is where I really honed in and learned about the real estate landscape. Not only from a general aspect of, operating real estate assets and investments, but really also from the accounting tax strategy standpoint, and from that experience, I got headhunted from there and joined another reputable, firm, called CiMB Group.
01:23:57:28 – 01:24:20:23
Jamelle Nelson
And it was with that firm where I really understood and learned how investors work with REIT’s and how, they raise capital and how they actually plan and strategize for their exits. So with all of those experiences that ultimately led me to found Nelson and Associates, eventually I got to the point where I said, hey, I actually am a true entrepreneur at heart.
01:24:20:26 – 01:24:40:10
Jamelle Nelson
I had some great experiences, but ultimately decided to, take a risk on myself. And this is right before the time where I got married and had kids. And one of the regrets that I wish I would not have did was wait too long. But I actually started the business when I did. And long story short, it kind of, spun off.
01:24:40:12 – 01:24:59:26
Jamelle Nelson
And with the firm, our strategy and focus is really working with, high income earners, growing businesses, real estate investors, and really helping them implement the strategy from accounting, tax planning, and even tax resolution. So that’s kind of, where we are and kind of who we are.
01:24:59:28 – 01:25:19:04
Rod Khleif
Wow. Compton. Holy cow. I’m in Compton in the 90s. Good lord. I mean, it’s, you know, it was CPA or gang, I would guess, you know, your mom, your mom must be a tough woman. Very impressively. Did your brother okay? Did he did he end up on the right side of things?
01:25:19:08 – 01:25:38:08
Jamelle Nelson
Okay, so he actually is, we are very similar in our own right, but different at the same time. So we both detained at USC, graduated USC right out of school. I went to go work for KPMG, and he decided he wanted to continue his schooling. So he actually went on, and, attained his doctorate in psychology.
01:25:38:08 – 01:25:49:29
Jamelle Nelson
So he’s a practicing psychologist right now. But it was because of the structure and the competitiveness where I pretty much was, was going in the right direction. But.
01:25:49:29 – 01:26:00:04
Rod Khleif
It sounds like he was, too. Yeah, it sounds like he was too. That’s a that’s that’s that’s wonderful. So, so before we get dig deep, KPMG, is that the one that got in trouble? Is that. Yeah.
01:26:00:04 – 01:26:03:07
Jamelle Nelson
Truth be told, all of these firms get in trouble. Yeah.
01:26:03:10 – 01:26:12:24
Rod Khleif
Yeah, but there’s one that I’m in, like, huge trouble. I, I it was, it was it co-occurring? Is that KPMG. What does that stand for though?
01:26:12:24 – 01:26:23:05
Jamelle Nelson
Kirkland. I forget their initials, but they’re German. Okay. Founders. But ultimately, a lot of the big four firms, there’s some scandals, there’s some exposure, there’s some.
01:26:23:12 – 01:26:27:17
Rod Khleif
In Russian, you know, Enron, stuff like that. Yeah. Well.
01:26:27:20 – 01:26:29:22
Jamelle Nelson
You’re thinking serious or interesting. Yeah.
01:26:29:22 – 01:26:33:24
Rod Khleif
That’s what that’s what I was thinking of. Yeah, yeah, yeah. I you interesting.
01:26:33:24 – 01:26:42:23
Jamelle Nelson
Was the auditing firm for that company. And eventually that firm kind of spun off in a lot of those, like, taxing employees kind of emerged in with the other firms.
01:26:42:26 – 01:26:59:13
Rod Khleif
Well, it’s, but, you know, the conversation, but, you know, it’s, you know, that is the best path that one you took, you know, go and work for a big four firm, and then you work for a real estate group. I mean, huge real estate group. So that’s fantastic. Last question before we dig deep, how’s what’s it like to work with your wife?
01:26:59:13 – 01:27:13:19
Rod Khleif
Because, you know, I get that a lot with my students. And, you know, I if I had worked with my wife, we wouldn’t have last as long as we did. It would have ended much more quickly. But, you know, how do you how do you manage that?
01:27:13:22 – 01:27:35:15
Jamelle Nelson
So before I started that process, I was fortunate to have a bunch of mentors and different business owner buddies and friends that have done the same. And I looked at their businesses, and I also looked at how their lives went. And I ultimately wanted to end like that for myself. So one of the first things I did before she came on board was I went to do them and I said, hey, what are the to do?
01:27:35:20 – 01:27:47:05
Jamelle Nelson
Or the not to do? What are the top three things you would recommend? And they gave me some pretty consistent, advice. And ultimately that’s kind of what I went with. And I’ll kind of share a couple of those points.
01:27:47:05 – 01:27:48:07
Rod Khleif
So please, please, please.
01:27:48:07 – 01:28:16:00
Jamelle Nelson
One of the things was before you hire your wife, make sure that you have a dedicated role, list of assignments and objective for her so that when she starts, she understands what the role is. And it is not just you hiring her on payroll and salary, but she actually has a function to contribute to the company. Number two, keep the business at the workplace and keep the family and the household at the house and don’t mix the two.
01:28:16:00 – 01:28:33:03
Jamelle Nelson
And if you do make it, try to maintain it and kind of keep it at a minimum. So whatever we have at work, we try to keep at work and whatever we have at home, we keep at home. And that’s the biggest pieces. Yeah. The last piece is really, kind of keeping our priorities straight. So we have three kids, three small kids.
01:28:33:03 – 01:28:43:10
Jamelle Nelson
So we we definitely have to juggle a lot with the business, with their personal, with their social activities. So really keeping the main thing, the main thing, which is God family and then business.
01:28:43:13 – 01:29:02:08
Rod Khleif
Love it, love it, love it, love it. Yeah. And I instill that on my students as well, because my biggest regret in life was coming home to our, you know, the mansion I had on the beach, playing with my kids, but not being there mentally, you know, not being so focused on success that I missed, you know, I wasn’t present, I missed, you know, my kids love me and told me I was a great dad, but I didn’t live up to my own expectations.
01:29:02:08 – 01:29:21:14
Rod Khleif
So I’m really glad you shared that. God family business, that’s the way to do it. So, CPA, tax mitigation strategies, talk about some of the tax mitigation strategies that you employ. And then let’s then then we’ll talk about tax planning.
01:29:21:16 – 01:29:48:20
Jamelle Nelson
Absolutely. So as I mentioned, we do a lot of work with real estate investors, companies, businesses and one of the misconceptions that a lot of these individuals have when I first meet with them in, talking with them is that they think just because they’re involved within the real estate game or industry, that they’re automatically going to be able to take advantage of, tax strategies and tax losses.
01:29:48:23 – 01:30:11:09
Jamelle Nelson
And that’s true to a certain extent. But ultimately, it doesn’t just automatically happen. You ultimately need to be planning and strategic and structured with being able to maximize on those. So number one, it’s really understanding at what aspect am I involved in the real estate space and how does it impact me on a business side as well as the personal side.
01:30:11:12 – 01:30:30:27
Jamelle Nelson
So one of the things that we look at is we look at the full picture of the portfolio itself. We look at, hey, what is your involvement within the real estate space? Are you an owner operator? Are you a GP? Are you a passive investor? Do you have a W-2 job on the, main front? But then you’re doing the real estate on the side.
01:30:30:27 – 01:30:50:02
Jamelle Nelson
So we’re looking at all these different aspects and components to really understand, okay, based on your profile, this is how the real estate, opportunity can help you with regards to your strategy. And then once we establish that as a baseline and then there’s different, opportunities and such.
01:30:50:04 – 01:31:01:16
Rod Khleif
Let me stop you there. If I may I may stop you there if I may. So so, you know, I mean, obviously the ultimate is to have that real estate professional designation. How many hours is that a year. What does that can you give us some detail on that.
01:31:01:18 – 01:31:34:02
Jamelle Nelson
Yeah. So for the real estate professionals that is this is a title that is governed by IRS tax code, where they say, hey, if you are considered a real estate professional status, you can actually take your losses and actually offset that against your other activity that rolls up to your tax return. So for this to actually qualify, you have to do this as a primary source of activity, meaning 50% or more of your efforts need to be in the real estate space or profession.
01:31:34:04 – 01:31:56:03
Jamelle Nelson
So that’s number one. And if you are someone that has a full time job elsewhere, that is not in the practice of real estate business, and you’re saying this is what I do 50% or more of the time you’re going to exclude yourself and, not qualify for that designation? There’s another opportunity to where you can, satisfy the 750 hour rule.
01:31:56:06 – 01:32:15:15
Jamelle Nelson
But that doesn’t even matter if you don’t meet the first rule, which is the 50% or more. So where we see a lot of clients be excluded from, satisfying, that is, if they have another job or if they have a W-2 per se, and it is not anything related to the real estate business or space, they are going to be out.
01:32:15:17 – 01:32:30:29
Jamelle Nelson
But one caveat is that if they have a spouse and if their spouse isn’t working or doesn’t have that 50% situation working on their side, we can kind of use the two together. If you have a married filing joint situation.
01:32:31:01 – 01:32:46:13
Rod Khleif
Oh okay. Okay. All right. Well that’s helpful for sure. So if you got a W-2, it’s not happening unless you bring a spouse into the picture, is what you’re saying. They’re not they’re not going to believe that you’re that you’re working another eight hours at night on the real estate thing or an 8.5 hours. Exactly.
01:32:46:15 – 01:32:48:12
Jamelle Nelson
Exactly, exactly. Yeah.
01:32:48:12 – 01:33:04:22
Rod Khleif
Okay. So so, besides that, you were. I interrupted your midstream there so you’d look at that, I assume. What are some other things that you might look at when you’re, you know, interviewing a prospective client as to how to best help and serve them.
01:33:04:25 – 01:33:25:05
Jamelle Nelson
Yeah. So there’s a few things we’re looking at. We’re looking at, hey, what is your immediate short term goal? Why are we having a conversation? Why are you meeting with the CPA to do tax planning and tax strategy? Number two, we’re going to look at okay, now that we got your, immediate short term, game plan, what’s the mid term and what’s the long term.
01:33:25:07 – 01:33:50:13
Jamelle Nelson
And once we gather these aspects, we’re now able to really recommend and suggest and propose the direction of okay, you probably should be talking tax planning, tax strategy. Because ultimately a lot of beginners and newbies in the real estate space, when they are looking at their real estate, helping them with their taxes, they’re just looking at today and, not necessarily down the line three years, five years down the line.
01:33:50:16 – 01:34:12:27
Jamelle Nelson
So for a lot of them, they’re coming to us asking for cost segregation studies and bonus depreciation. And that can help out for the time being. But what’s going to happen two years, three years, four years down the line when you get ready to flip that property or sell that property. Now there’s this concept called depreciation recapture, where we now got to bring in that depreciation that you benefited from on the back end.
01:34:12:29 – 01:34:29:25
Jamelle Nelson
So if we understand kind of what your game plan is from a holistic perspective, it’s a good opportunity for us to kind of guide you in the right direction with regards to, hey, you actually should execute on this particular strategy today versus later.
01:34:29:27 – 01:34:53:09
Rod Khleif
So, you know, in that scenario that you just painted, you know, which can be very sobering, particularly in the current real estate environment where, you know, there’s a lot of distressed properties, could even be going back to the bank. And my SEC attorney told me he had six properties, so six apartment assets, new clients that were in foreclosure in one day.
01:34:53:11 – 01:35:15:23
Rod Khleif
You know, so a lot of a lot of distress right now. And, you know, when that happens, you you’re contending with that depreciation recapture as well. Yes, absolutely. Absolutely. So so you mentioned that you also do tax resolution. I’m guessing what you’re talking about is someone that’s facing a bill like that and the IRS has got them in their sights.
01:35:15:26 – 01:35:20:26
Rod Khleif
You you come in and help negotiate. Is that is that what you mean by tax resolution?
01:35:20:28 – 01:35:33:00
Jamelle Nelson
Absolutely. So tax resolution is a practice that is pretty much a big focus of what we do now. And so ironically, when we started this practice, it wasn’t even a thought. It wasn’t.
01:35:33:00 – 01:35:33:21
Rod Khleif
Writing.
01:35:33:23 – 01:35:57:15
Jamelle Nelson
But as we started to work with our clients, a lot of them started to get letters from the IRS and they started to get threatening and nasty letters saying they’re going to put a lead on their assets, they’re going to seize their bank accounts, etc. so at a certain point, we were passing off that business, but it got to a point where I started to research and say, hey, I need to really understand this side of the business so that I can help our clients.
01:35:57:17 – 01:36:27:19
Jamelle Nelson
And lo and behold, after the IRS, made some changes, which ultimately started with them, announcing big hiring and massive increase in workflow to scare the American taxpayers. And then subsequently from that mass layoffs. So now it created a huge, confusion to the American people, but ultimately, the letters continued to come. Threatening, letters started to come to the taxpayers.
01:36:27:19 – 01:36:54:01
Jamelle Nelson
And that’s eventually when we started to see a change in our practice in terms of needing to actually provide a resource and explain, the tax resolution. So what tax resolution is, is iris serious issues that the taxpayer pretty much cannot resolve on their own. It’s as if they are hiring us as their CPA or lawyer to represent them with the IRS or state and help negotiate their balances.
01:36:54:04 – 01:37:22:07
Jamelle Nelson
And for the clients that we’re seeing and taking on, these are clients that are in the high five, six figures. And a lot of times when I tell, peers that we have clients with million dollar, $2 million debt, they just cannot comprehend it. But what happens is, especially when you’re dealing in the real estate space, it is not impossible to, incur and accrue that much debt when you’re dealing with flipping, assets and having capital gains and really not understanding how those numbers.
01:37:22:07 – 01:37:35:08
Rod Khleif
You mean IRS debt? You mean IRS debt is when you use the IRS debt is the debt figure. So do you do you bring in, just do you bring in a tax attorney to assist you with in this scenario?
01:37:35:11 – 01:37:56:25
Jamelle Nelson
So 99% of the work we can handle in-house without a tax lawyer can do it as a CPA. So what the IRS does is they allow a CPA, a lawyer or an enrolled agent to actually professionally represent their clients. And one of the first things we do is we get a POI on file, and now we’re able to assess now power of attorney.
01:37:56:27 – 01:38:16:26
Jamelle Nelson
Correct. Now, if it requires us to actually take this to the IRS courts and actually represent the client against the IRS in front of a judge, this is now where we bring again, a lawyer, and we have different, lawyers in our network that can ultimately represent the client in that case. But we typically try not to go that far.
01:38:16:28 – 01:38:17:27
Jamelle Nelson
01:38:17:29 – 01:38:28:21
Rod Khleif
Just out of curiosity, how long have you been doing this and what sort of results have you seen? I guess, you know, I know you can’t speak specifically, but maybe globally. What sort of things do you see?
01:38:28:23 – 01:38:53:26
Jamelle Nelson
Yeah. So we’ve been doing this particular practice for about five years, okay. With this practice, when we first started, it was mostly the, outsourced accounting, tax planning, tax strategy. And then it evolved to the tax resolution. So the types of clients we see, we see individual basic, W-2 workers that ultimately are probably making a W-2 paycheck.
01:38:53:26 – 01:39:18:19
Jamelle Nelson
But then they got caught up. Life happened thicknesses, a couple of years past they haven’t found. We’re working with small clients like that all the way up to the, larger organization that say, hey, we actually have a fund of, real estate investments in property. And one of our projects is now going to be able to, close the deal because we have this lean, and this lean has a pretty substantial size.
01:39:18:22 – 01:39:40:12
Jamelle Nelson
So with these clients, ultimately, we’re negotiating their balances. And not only are we trying to negotiate their balance, but we’re trying to get them on the right track so that they don’t repeat the process. And what we find is that a lot of times we can help the client resolve the situation, but they’re going to go back to the same situation if they don’t really understand why they got in this situation in the first place.
01:39:40:15 – 01:39:44:04
Jamelle Nelson
And this is where the systems and the processes and really.
01:39:44:04 – 01:40:01:12
Rod Khleif
I appreciate all that. I appreciate all that. But back to my question, because, you know, I deal with a lot of investors and I know there are a lot of investors in trouble right now, in fact, big names that have their own jets. Okay, I know them personally, and they have foreclosures and they’re going to have that depreciation recapture.
01:40:01:12 – 01:40:19:02
Rod Khleif
And they they could get, you know, if they haven’t purchased anything that year or this year, you know, they’re going to have a hit. Because they have nothing to write off against. So have you encountered that where they have a big balance from something like that? And then back to my question, what sorts of discounts do you do?
01:40:19:02 – 01:40:23:27
Rod Khleif
You see, I’m just out of curiosity. This is maybe probably more for me than anybody. Just curious.
01:40:23:27 – 01:40:37:08
Jamelle Nelson
Yeah. So when we’re talking about the depreciation recapture and that kind of coming back into the mix, let’s say for instance, that depreciation capture is coming back because that property is now going to have a a sale per se.
01:40:37:09 – 01:40:40:08
Rod Khleif
So sale or foreclosure or foreclosure closure.
01:40:40:10 – 01:41:02:01
Jamelle Nelson
So now we’re now we’re factoring in basis and capital gains. So if this is a situation where that is now reported to the IRS that now have to get reported on the individual taxpayer’s tax return, and if they are in a situation where it shows a capital gain, which ultimately is going to result in income tax, now the IRS is holding their hand now saying, hey, I need you to pay us this money.
01:41:02:01 – 01:41:28:02
Jamelle Nelson
Right? And if this is the situation where the taxpayer do not have the funds, now they’re in a situation where they need to negotiate whether or not they need to establish a payment plan or prove that they cannot, meet the payments. And this is where your tax resolution negotiation is now going to come in. And unfortunately, everyone is not going to qualify for a common term called the offering compromise, which most people are familiar with.
01:41:28:04 – 01:41:51:10
Jamelle Nelson
Everyone doesn’t qualify for that. But if you do qualify, which is a process, we take our clients through, we identify what their qualifying, opportunities are and then whatever is the best case situation, a scenario that is what we go with and is typically going to be negotiating a favorable installment agreement or payment plan or pursuing the offering compromise.
01:41:51:13 – 01:42:00:15
Rod Khleif
Okay, okay. Well, I still didn’t get the answer my question, but I I’m looking for a percentage. I’m just I mean, is it I’m sorry. Yeah.
01:42:00:17 – 01:42:02:16
Jamelle Nelson
You mean like the percentage of clients or the people that’s.
01:42:02:20 – 01:42:13:05
Rod Khleif
Let’s say let’s say they all they owe $1 million. 000. Okay. What what what could you know what how successful have you been in mitigating that down into one level? That’s what I’m asking. I got you.
01:42:13:08 – 01:42:41:11
Jamelle Nelson
I got you, so I use the client. That is, let’s use $1 million, for example. This is a real case. This client had $1 million situation where he and his wife had a business together, and they unfortunately got divorced. But five years later, the IRS eventually catches up to them and says, you all this million dollars. So based on some of the rules and statute of limitations, we were able to actually negotiate this client bill all the way down to less than $100,000.
01:42:41:13 – 01:43:02:08
Jamelle Nelson
Now he’s on the hook for less than $100,000. But that remaining portion we were able to negotiate and waive, we have other clients that have similar situations, but the dollar amounts may vary. But ultimately, depending on the timing, the timeline, the nature of their current income situation is going to dictate how much they can afford to pay.
01:43:02:08 – 01:43:05:27
Jamelle Nelson
This is pretty much what the client is going to work with. That’s on established.
01:43:05:27 – 01:43:06:29
Rod Khleif
Gotcha, gotcha.
01:43:06:29 – 01:43:07:23
Jamelle Nelson
Case.
01:43:07:26 – 01:43:32:07
Rod Khleif
Sorry. Listen, guys, those of you listening, you’re probably like, oh, come on, let’s get on with some more stuff. I just, I know I have, you know, the potentially I don’t think I have I may have one student that fits this bill, but I, there’s a lot of people that are facing this right now that took that did the cost segregation, that did the bonus depreciation in 22 and 23 or 21, 22 and 23 that, you know, and these, these, these properties have gone tits up.
01:43:32:07 – 01:43:52:01
Rod Khleif
And so they need help. And that’s why, you know hopefully if you’re listening hopefully that’s benefited you in that case. And you know Jamal and his team can help you with something like that. So back to you know tax mitigation strategies. Do you have any outside the box ones? I mean, we know about cost, SEG. We know about bonus depreciation.
01:43:52:01 – 01:44:07:04
Rod Khleif
We know about 1031 exchanges. But, you know, how about you know, some off the shelf, some different stuff, like, you know, these health plans that you can set up for yourself or do you do any of that sort of thing? And if you do, can you can you elaborate on some of that?
01:44:07:07 – 01:44:32:14
Jamelle Nelson
Yeah. So for the primary ones that you mentioned, those are pretty much what the clients are coming to us for. They, they don’t know specifically the term or the specific strategy, but they just know, hey, this is real estate related. So one caveat that I will say is for your listeners, we do get a lot of real estate investors that eventually come our way, but previously they were working with another CPA or someone else.
01:44:32:14 – 01:44:56:00
Jamelle Nelson
And one caveat that I do want to make sure I highlight is that when you’re working in the real estate space and you’re looking for a real estate specific guidance and strategy, it’s important to be working with a real estate specialists. And unfortunately, not all CPAs are versed with the real estate lingo, language terminology and or, tactics.
01:44:56:02 – 01:45:21:17
Jamelle Nelson
So to to your point, most of the time folks are coming to us and they know they’re in the real estate industry or space. So they’re looking at the courses, they’re looking at the real estate professional, short term rentals, etcetera. So when it comes to outside of the box, one of the, things that I highly recommend that people do is have proactive conversations with a tax plan.
01:45:21:19 – 01:45:40:23
Jamelle Nelson
And with the tax planning strategy, this is where you meet with the professional, and this is where you start to uncover all these different tactics and strategies per se. So obviously we know what the main words are going to be. But what happens if you have a portfolio or a business and you have employees, are you taking advantage of a, employee retirement plan?
01:45:40:23 – 01:46:09:18
Jamelle Nelson
And I’m not talking about just a simple set or a 401 K or anything like that. I’m talking about. Do you actually have something structured and set up where you can, actually establish a pension account for your, your business and you as the owner, you and your family can benefit directly. What does it look like if you start to hire your your children and not just your children bikes, your family members, your your spouses, your, brothers, your sisters, what I find is a lot of,
01:46:09:20 – 01:46:15:02
Rod Khleif
That’s where I was going with this, by the way. That’s where I was going with this. I wanted them to hear it from you, not from me. Good. Yeah.
01:46:15:05 – 01:46:45:06
Jamelle Nelson
What I find is a lot of clients that are doing well, they’re doing really well on paper. And I think at the end of the year they’re trying to offload a bunch of cash, purchase a bunch of assets, just to kind of reduce their tax bill. But what if you had proactive conversations throughout the year and you actually gained plant, and instead of you, loaning out money that probably won’t get paid back from your family members, what if you actually buy, put them on some type of a payroll, or put them on some compensation where the business can actually benefit by identifying it as a deduction and such.
01:46:45:06 – 01:47:10:28
Jamelle Nelson
So, we look at these different alternatives and different, strategies. But health insurance is definitely, form retirement plans is a big one that we tap into, charitable contributions. We have a lot of clients that ultimately establish separate nonprofit entities that they’re affiliated with or have, a genuine, connection to, we’re able to utilize those organizations to assist them.
01:47:10:28 – 01:47:22:01
Jamelle Nelson
So, it’s not necessarily just about, 1031 exchanges in the call space, but we look at using those to help with the overall goal and objective.
01:47:22:03 – 01:47:36:01
Rod Khleif
Which. So that’s that’s what I was going to say. Yeah, that’s where I was going with this because so many CPAs don’t do that. You know, it’s all look in the rearview mirror and deal with what you’ve got. And then then you’ve got that freaking fire drill at the end of the year because there was no pro activeness, which is candidly my situation right now.
01:47:36:01 – 01:47:59:00
Rod Khleif
I’m with a firm right now that it’s it’s never proactive. And it’s it’s frickin frustrating. So you know, this again, this is self-serving as it relates to me as well because this is very intelligent, proactive planning to do that on a tax basis, not just go out there and find properties and go buy them. Actually, you know, think about these things that that cost your money or save your money.
01:47:59:02 – 01:48:08:11
Rod Khleif
But, well, listen, Jamal, I really appreciate you coming on the show. I know you’ve added value. How can people get Ahold of you? What’s your website?
01:48:08:13 – 01:48:26:19
Jamelle Nelson
Absolutely. So our website is Jay Nelson group.com. And on our website they can find our services as well as schedule free consultation. We’re also on Facebook Jamal Nelson Dash, CPA, Instagram Jamal Underscore Nelson LinkedIn Jamal Nelson, CPA.
01:48:26:21 – 01:48:33:06
Rod Khleif
Perfect, perfect. Well, thank you, I appreciate it. And I appreciate you coming on the show.
01:48:33:09 – 01:48:34:27
Jamelle Nelson
Awesome. Thank you so much. Appreciate the time.
01:48:34:27 – 01:48:35:24
Rod Khleif
Thank you for listening.
**Podcast Categories:** Podcasts
---
### [How To Replace Your Income With Real Estate In 2026 Even With No Experience](https://rodkhleif.com/podcasts/senior-housing-investing-with-debora-randall/)
**Published:** May 8, 2026
**Author:** Bryan Hoover
**Excerpt:** How To Replace Your Income With Real Estate In 2026 Even With No Experience
**Content:**
## Why Senior Housing Investing Is Gaining Momentum
Senior housing investing continues to attract wealthy professionals, entrepreneurs, and multifamily investors searching for recession resistant opportunities backed by powerful demographic trends. In this episode of the Lifetime Cash Flow Through Real Estate podcast, Debora Randall shares how she transitioned from international economic development work in Africa into the senior housing space and why she believes this asset class offers both financial upside and meaningful social impact.
Debora explains that the growing demand for assisted living and memory care facilities is creating long term opportunities for investors who understand operations, demographics, and resident care. With the aging population rapidly increasing and new development costs rising dramatically, many operators are focusing on acquiring and repositioning existing facilities rather than building from the ground up. The conversation highlights why experienced investors are paying close attention to occupancy trends, tertiary markets, and operational execution in senior housing investing.
## Debora Randall’s Path Into Real Estate Investing
Before entering real estate, Debora Randall spent more than two decades working in Africa as an agricultural economist focused on scaling businesses that create sustainable economic growth. Her experience helping companies adapt and survive through changing economic conditions shaped the way she approaches investing today. She shares how global economic shifts, foreign aid reductions, and the rise of AI reinforced the importance of building passive income streams and diversifying beyond traditional employment.
Debora discusses how joining Rod Khleif’s Warrior program gave her the framework, relationships, and confidence to pursue real estate investing seriously. Rather than chasing quick wins, she focused on finding an asset class aligned with her values. Senior housing investing stood out because it combines business fundamentals with the ability to improve the quality of life for elderly residents and their families.
## Key Lessons About Senior Housing Investing
One of the biggest takeaways from the conversation is the importance of operations in senior housing. Unlike traditional multifamily properties, senior housing facilities require exceptional management, strong staffing, and systems designed around resident care. Debora emphasizes that even the best underwriting and business plans can fail without proper execution.
The discussion also covers several important trends shaping the industry:
- The shortage of senior housing beds is expected to grow significantly as the population ages.
- Memory care facilities remain in particularly high demand because of rising Alzheimer’s and dementia cases.
- Tertiary markets can outperform larger primary markets due to limited competition and higher occupancy stability.
- Existing facilities may offer better investment opportunities than new construction because development costs continue to rise.
- Financing can be challenging when occupancy is low, making creative financing structures and strong banking relationships essential.
Rod and Debora also discuss the operational differences between independent living, assisted living, and memory care communities. They explain how thoughtful facility layouts, resident engagement, and community integration can improve both resident outcomes and business performance.
## Why Tertiary Markets Matter in Senior Housing
An especially valuable part of the episode focuses on tertiary market opportunities. Debora explains that many smaller markets benefit from limited new supply because construction costs make it difficult for large developers to enter those areas profitably. As a result, well operated facilities in smaller communities can maintain strong occupancy and become essential local resources.
She also shares an example of a facility positioned as a community senior center, creating familiarity and trust long before residents require full time care. This type of community integration not only supports occupancy growth but also strengthens the long term value of the asset.
## The Human Side of Senior Housing Investing
Throughout the episode, Debora Randall reinforces the idea that senior housing investing is ultimately a people centered business. Success depends not only on financial analysis but also on compassion, operational integrity, and a commitment to resident well being. Rod echoes this perspective by emphasizing the importance of genuinely caring about the elderly population being served.
For investors looking to diversify beyond traditional multifamily assets, the conversation offers a practical look at why senior housing investing is becoming one of the most closely watched real estate sectors in 2025. From demographic demand to operational challenges and market selection, the episode provides valuable insights for anyone evaluating opportunities in assisted living or memory care.
## About Debora Randall
Debora Randall is an agricultural economist and real estate investor with more than 20 years of experience helping businesses scale sustainably across Africa. Originally from Canada, she built a career focused on economic development and impact driven business growth before transitioning into senior housing investing in the United States. Her approach combines operational discipline, mission driven investing, and a focus on creating long term value through senior care real estate.
You can find Debora’s guide on 7 Questions every Investor Should Ask here: https://beyondboundsproperties.com/investorguide
If you want to hear the full conversation and detailed insights, watch the podcast video or read the complete transcript below.
Senior Housing Investing FAQ
What is senior housing investing?
Senior housing investing is a real estate investment strategy focused on properties designed for older adults, including independent living, assisted living, and memory care communities. Investors generate income through resident fees, long term occupancy, and property appreciation while meeting the growing demand created by an aging population. Many investors are attracted to senior housing because of its strong demographic trends and the opportunity to combine financial returns with impact driven investing.
**Why is senior housing investing becoming more popular?**
Senior housing investing has gained popularity because the number of Americans over the age of 80 continues to rise rapidly while the supply of quality senior housing remains limited in many markets. Investors see the sector as a long term growth opportunity supported by demographic demand rather than short term market cycles. The need for assisted living and memory care services is also increasing due to longer life expectancy and rising rates of Alzheimer’s and dementia related conditions.
**What are the different types of senior housing properties?**
Senior housing properties generally fall into three main categories: independent living, assisted living, and memory care. Independent living communities are designed for active seniors who require minimal support, while assisted living provides help with daily activities such as medication management and meals. Memory care facilities offer specialized services and secure environments for residents with cognitive conditions such as Alzheimer’s disease or dementia.
**How does senior housing investing differ from multifamily investing?**
Senior housing investing differs from traditional multifamily investing because operations and resident care play a much larger role in the success of the property. In addition to managing the real estate itself, operators must oversee staffing, healthcare coordination, resident engagement, and regulatory compliance. Revenue is often tied directly to the quality of care and services provided, making experienced management teams essential.
**Is senior housing investing recession resistant?**
Many investors consider senior housing investing to be more recession resistant than other real estate asset classes because demand is often driven by healthcare and aging needs rather than discretionary spending. Families still require quality care solutions for aging relatives regardless of broader economic conditions. While occupancy and operational performance can fluctuate, the long term demographic outlook continues to support demand growth.
**What makes memory care facilities attractive to investors?**
Memory care facilities are attractive because demand for specialized dementia and Alzheimer’s care continues to rise across the United States. These properties often generate higher revenue per resident due to the level of care and staffing required. Investors also see memory care as an underserved segment of the senior housing market with strong long term growth potential.
**Why are tertiary markets important in senior housing investing?**
Tertiary markets can offer strong opportunities because many smaller communities have limited senior housing supply and less competition from large institutional operators. High construction costs often discourage new development in these areas, which can help existing facilities maintain stable occupancy. Investors who understand local demographics and community needs may find strong cash flow opportunities in well operated tertiary market properties.
**What should investors look for in a senior housing investment?**
Investors should evaluate several factors, including occupancy trends, local demographics, management experience, staffing quality, and the condition of the facility. Market demand, competition, licensing requirements, and operational efficiency are also critical. Because senior housing is highly operationally intensive, partnering with experienced operators is often one of the most important components of a successful investment.
**What are the risks of senior housing investing?**
Like any real estate investment, senior housing investing carries risks that include rising labor costs, regulatory changes, staffing shortages, and fluctuating occupancy levels. Financing can also become challenging for underperforming facilities. Investors must carefully analyze both the real estate fundamentals and the operational capabilities of the management team before investing.
**How can someone get started in senior housing investing?**
Many investors begin by educating themselves on the operational side of the industry and networking with experienced operators. Some choose to invest passively through syndications or partnerships before acquiring properties directly. Understanding demographics, healthcare trends, financing structures, and local market demand is essential for building a successful senior housing investing strategy.
00:00:28:24 – 00:00:50:23
Rod Khleif
Welcome back to multifamily Rock stars. So these are the episodes where we deep dive on our guest deals and, you know, try to give you practical and actionable items for getting started doing your first deal, especially if you’re brand new. So I’m really excited about our guest today is wonderful human being named Debora Randall. And she, joined the warrior program a couple of years ago.
00:00:50:23 – 00:01:07:00
Rod Khleif
And I’m going to steal her thunder for a second, but, didn’t join it to find romance, but has found romance inside the warrior program, which is just really cool, because I love the guy she’s dating. And, I think you might be our first romance story in that. Deborah, welcome to the show.
00:01:07:02 – 00:01:09:04
Debora Randall
Thank you. Yeah.
00:01:09:06 – 00:01:27:19
Rod Khleif
At least I’m not aware of any other warriors, dating. But, you know, it’s just, it’s just, it really a treat. So, listen, welcome. We’re gonna have a lot of fun today, guys. We’re going to talk about senior housing, which she is in. I’m in. I’m actually raising money for six facilities tonight. Actually, I don’t know when this is going to air, but,
00:01:27:21 – 00:01:43:06
Rod Khleif
Yeah. So I love that asset class. But why don’t you give us a little background, Deborah? Because you have a very unique, unusual, I would say even background, prior to real estate. So if you would, kind of kind of do that and then bring us current to real estate.
00:01:43:08 – 00:02:12:19
Debora Randall
Okay, great. So, I’m Canadian, grew up there and then always wanted to move to Africa and work in Africa. So I moved there in 2004. So almost 22 years ago now. And I’m an agricultural economist. So basically work with businesses to scale them up into economies so that it actually benefits people. So, you know, that whole thing of, you know, don’t give a man a fish, teach a manifest, teach a man to fish.
00:02:12:21 – 00:02:29:13
Debora Randall
Yeah. But if you teach a man to fish and he can’t buy a rod or a reel, you know, and he can’t sell his fish, his income isn’t going to go higher. So we work with the businesses around that fisherman in order to actually increase his income.
00:02:29:13 – 00:02:31:06
Rod Khleif
So that’s beautiful work.
00:02:31:08 – 00:02:32:10
Debora Randall
Whatever. Yeah, right.
00:02:32:13 – 00:02:51:11
Rod Khleif
That’s beautiful work. And yeah, just as an aside, you know, I’ve been threatening to do this for years. You know, I’ve done a lot through my, charity and as far as feeding, you know, giving the fish and backpacks and teddy bears and stuff. But I’ve always wanted to build schools, however, with the caveat that they’re self-sustaining.
00:02:51:13 – 00:03:08:17
Rod Khleif
Like, I have to buy enough land for an agriculture infrastructure or put in an IT infrastructure, maybe an AI at this point. Infrastructure. But but have the schools not just support the school, but the whole community. And that’s I’ve been threatening to do that for a long time. It’s about time I got off my ass and actually took a step in that direction.
00:03:08:17 – 00:03:25:12
Rod Khleif
But that’s something I’d love to do. It’s one of my vision boards. But anyway, so why real estate? So? So what? By the way, you’re a single mom with two teenage girls. You got it. You you’re you’re brave. You know, you’ve got courage for sure. Go to Africa. Holy cow. But, why real estate?
00:03:25:14 – 00:03:48:13
Debora Randall
Well, one of the things that I learned in my work with businesses, you know, like businesses over there, they don’t, you know, like during Covid, for instance, there’s no bailouts, right? So what you learn when you work with businesses, you adapt or die. Basically, if you don’t adapt and pivot, you’re not gonna your business fails. Right. And so that was a huge lesson I learned.
00:03:48:13 – 00:04:08:12
Debora Randall
So as I’m kind of working, I have a company based in Kenya do a lot of consulting. I go into businesses, help them out, make them better, help them get that impact. But I also had, you know, have to survive, right. And for my girls of myself. So I started thinking, I’m still kind of on that left side of the cash flow quadrant.
00:04:08:12 – 00:04:28:19
Debora Randall
I’m still trading money, my time for money. I need to think outside that box. I wanted to get more passive income. And also, one of the things about that I saw in Africa is most Africans have a they call it a side hustle. I love that, right? They’re always doing something that’s not never one job. They got some real estate here.
00:04:28:19 – 00:04:45:21
Debora Randall
They got a shop here. They’ve always got something because you can’t rely on the job you’re in. It just kind of buffers you. Right. So I started looking at that and I was like, okay, I need to create a side hustle for myself. I need to adapt myself. So I joined the warrior program two years ago, always wanted to get into real estate.
00:04:46:01 – 00:05:13:00
Debora Randall
And I was like, I need to be thinking about that other side more passive income, you know, creating income for myself, not relying. And then what happened is, you know, a year ago, the U.S cut all the foreign aid. So I lost a big chunk of my income, the UK government, which is another bucket of money that, you know, I get money from my business, gets money from is about to cut and is cutting now.
00:05:13:00 – 00:05:40:15
Debora Randall
So my income is drying up. But I’m ready. I pivoted before and I think that’s the key thing. You know, our economies are totally changing. Like I is going to be taking jobs away. We’ve been hearing that and there’s a pivot that’s happening and we all have to be learning from you know what I learned over there and pivot before that happens, whether that’s passive income investing in real estate, whatever, like think.
00:05:40:17 – 00:05:41:09
Debora Randall
You know, I’ve.
00:05:41:09 – 00:05:59:02
Rod Khleif
Been screaming that from the rooftops. You know, if you’re if you’re in a job that’s going to get affected by yeah, you better be starting that side hustle. You know, if, you know, there’s 8000 people believe turning 65 in this country, I’m sorry, turning 80 in this country every single day, 8000 people turning 80, 10,000 people are turning 65.
00:05:59:04 – 00:06:15:11
Rod Khleif
Out of those, 10,000 are turning 65. Many have jobs. I’m sorry, I’m sorry. Businesses, many of businesses, there’s opportunity to buy businesses. You know, we’re in the senior housing space because of those 8000 are turning 80 every day. There’s a huge shortage of beds. I mean, it’s it’s I don’t I’m not sure we’re going to be able to keep up with it.
00:06:15:13 – 00:06:34:14
Rod Khleif
I think, you know, you’re in your assisted living facility right now and in Dallas. Right. And I’m, I’m buying six of them in Dallas, San Antonio, in Houston, literally. Right now. And, you know, there’s talk that there could be a waiting list for these things because there’s such a huge shortage of beds and, you know, and they’re expensive to build.
00:06:34:14 – 00:06:51:14
Rod Khleif
It’s about 250,000 a unit to build them. You know, I’m I’m excited because we’re paying 40 a unit for this, six pack that we’re buying and really exciting. But, you know, so have you done have you just done senior housing in the warrior program? I’m sorry, I didn’t already know, but. Yeah, just it’s just been senior.
00:06:51:14 – 00:06:52:06
Rod Khleif
Okay.
00:06:52:08 – 00:07:11:06
Debora Randall
So one of the things like I, I love, I think I love living with, like, making decisions from my heart to write, like, yeah, all about business. But I want business with heart. And that’s what I that’s actually one of the reasons I joined the warrior program, because Roger’s very much like that. And you draw in people like that.
00:07:11:06 – 00:07:33:19
Debora Randall
So I really get to work with people like that and partner with people like that. Right. But I believe business can be a force for good. And that’s what I saw in my experience in Africa. And I when I joined the warrior program and wanted to get into real estate, I wanted to do that here as well. And senior housing was like the perfect, you know, marriage between that profit.
00:07:33:19 – 00:07:33:24
Debora Randall
I love.
00:07:33:24 – 00:07:52:15
Rod Khleif
It, I love it, I love the elderly too. I mean, you know, and you know, it’s what’s funny is I actually you don’t you may not know this. I actually got my administrator assisted living facility administrator’s license in Florida in 2007. Because I love the elderly. I got the domain name affordable senior housing.com. I was going to do it.
00:07:52:15 – 00:08:05:09
Rod Khleif
And then of course, the shoe dropped in oh eight and I got my ass handed to me, so I had to back off of it. But I’ve been I’ve been threatening to do this for a long time. So it’s kind of exciting that I’m finally doing it. And I believe you need to love the elderly to do this.
00:08:05:11 – 00:08:19:21
Rod Khleif
But, you know, you mentioned something about the warrior program, and I just got to hammer hammer that home. What you just said. Because, you know, I don’t know if you’ve ever been to one of my actual live events where where I’ve got, you know, a thousand people in the room, you know, and I do. I do my Hall of Fame reward.
00:08:19:21 – 00:08:37:18
Rod Khleif
So, you know, we do a slide for each person that we’re recognizing. That’s a warrior. Not so much on how much success they have in buying units, but really how much they contribute to the community, how much they give back. And I did a slide for each one. I started to see a pattern. Every single one of them does something to make the world a better place.
00:08:37:23 – 00:08:54:20
Rod Khleif
You know, human trafficking, veterans, homelessness, veterans, suicide building schools in India, building schools in Latin America. I mean, just on and on. I looked at the thousand people in the crowd, and I pointed and I said, that’s what we call a frickin clue. By the way, if you are interested in applying to my warrior program, I’m going to brag for a minute.
00:08:54:20 – 00:09:14:13
Rod Khleif
I believe my students, my warriors, now own about 300,000 units under my tutelage. We’re counting over 275 and we’re missing 275,000. We’re missing a ton tons of senior housing. You know, I saw Deborah at the senior housing conference in Nashville. Were you and Austin two at that one? Two. Yeah. So it’s I in both of them. That’s right.
00:09:14:13 – 00:09:32:22
Rod Khleif
So you know, probably ten warriors, they’re doing senior housing, tons of student housing, self-storage, mobile home parks, industrial, flex space, all of it. And so if you’re interested in applying to my warrior program, text the word crush to seven, two, three, four, or five. That’s how you apply your text crush to seven, two, three, four, or five.
00:09:32:22 – 00:09:35:12
Rod Khleif
I’d get in trouble if I didn’t say that anyway.
00:09:35:14 – 00:09:53:07
Debora Randall
So can I add to that? So just my own value. Like to be in a room with people and you connect with them and inspires you, but also you go out and partner with them, but you know, you got to choose wisely. You always say, right, you know, you want to date before you get married, right? You try, you connect.
00:09:53:07 – 00:10:02:07
Debora Randall
You want people with the same heart, the same vision as you, but they’re there. And I have found beautiful people that I love partnering with there. So it’s exciting.
00:10:02:07 – 00:10:20:07
Rod Khleif
It’s it’s it’s extraordinary. I don’t know how it all fell together like that. I get goosebumps when I think about it. And, you know, we do warrior Only events. We’ve got one coming up at the end of May here in Sarasota to be hundreds of warriors here. And that’s just, you know, because we’ve discovered that our most successful warriors, by far, the ones that were the most connected in that group.
00:10:20:07 – 00:10:43:14
Rod Khleif
So we do things to help facilitate those connections. And out of those 300,000 units, I’m pretty sure about 94. I’m not pretty sure I’m positive 95% of them were done between warriors because we we we studied it. So yeah, it’s it’s it’s really cool. So listen, regardless of whether you’re interested in the warrior program or not, get around people that are doing this, get around people that want more out of life because a rising tide lifts all ships.
00:10:43:14 – 00:10:58:08
Rod Khleif
You want to be in a room where people think what you think is hard is easy. Okay, so you know, most people default to a peer group they went to school with, or they work with. No. Get around people that are doing what you want to do and success is inevitable. That’s just how it works. You agree with me?
00:10:58:10 – 00:11:21:18
Debora Randall
Yeah, absolutely. Yeah. Yeah. I mean, you know, it’s you know, don’t they say that you are the some of the five people around you? But the thing is you got to focus. You got to know what you want. Right. And every person is unique in this world, right. And has their different thing that gets them excited. Right? Whether for you, it’s bringing people together and inspiring them or building schools.
00:11:21:18 – 00:11:43:20
Debora Randall
Like for me, you know, you know, it was living in Africa and working with businesses to impact, you know, thousands of people in like, I don’t know, ten different countries across the that continent. Right. So and then now it’s senior housing. So whatever kind of gets you excited, I really believe that we’re each kind of designed to do something purposeful in this world.
00:11:43:20 – 00:11:46:13
Debora Randall
It’s not just about stuff, it’s right.
00:11:46:13 – 00:12:03:08
Rod Khleif
Well, for those for those that are listening, they’re like, Will you please get on with the real estate stuff? Let’s let’s humor them for a minute. Talk about what you’ve done in the senior housing space. Talk about of a facility or a purchase that you made or a portfolio or whatever. So please take it away. What what’s what’s your most recent acquisition?
00:12:03:08 – 00:12:04:15
Rod Khleif
Let’s put it that way.
00:12:04:17 – 00:12:25:13
Debora Randall
So I’m I’m actually in the facility now. It’s a 50 unit just north of Dallas tertiary market. Right. So this is this whole middle market play that we’re seeing in senior housing. So you got kind of these a class kind of like multifamily A-Class. And then you’ve got kind of your C class, which is more than Medicaid I guess.
00:12:25:13 – 00:12:48:09
Debora Randall
And then you’ve got this middle market. And I think the stats I was reading yesterday are saying that by 2035, there’ll be 16 million Americans in that middle market who can’t afford the higher end stuff and who actually don’t qualify for the Medicaid. So you’ve got that gap. And that’s where it gets exciting, right? Because and that’s kind of what your facilities are doing.
00:12:48:09 – 00:13:10:06
Debora Randall
That’s what this facility is doing. Right. And you know, you there’s a woman here. She’s hilarious. Right. So this is an these are buildings. This is a building built in 1996, never been refreshed. So she tells me this woman lived, you know, live in two doors down here. You know, this building was built in 96. My grandma came here in 1998.
00:13:10:07 – 00:13:14:05
Debora Randall
She looks down on her feet and says, it’s the same carpet.
00:13:14:07 – 00:13:15:07
Rod Khleif
Oh well.
00:13:15:09 – 00:13:29:20
Debora Randall
It’s no, it’s it’s older. It’s it’s not kind of got that modern look and were refreshing because it’s not so old. You don’t have to put so much in, you know, 20,000 a unit. Ten, 15.
00:13:29:23 – 00:13:44:15
Rod Khleif
You don’t have to do that. No. You put in flooring, you maybe, maybe change some of the fixtures you paint, you dress it up and and you modernize it. So so when did you when did you guys close on it? It just recently. Or is this. Yeah.
00:13:44:15 – 00:13:58:17
Debora Randall
February, early February. But and so but because we when you can buy these things at a low enough price, then you don’t have to overcharge. So you’re actually providing that middle market but still making money doing it. Right. So that just.
00:13:58:17 – 00:14:24:16
Rod Khleif
It just so you guys know the bottom would be the Medicaid where it’s government funded. And I’ve been in those facilities. I honestly I’ve not seen one. I’ve like to use this. They smell like urine. I mean they’re they’re it’s not great. And you know, it’s like a, like a D class apartment complex sometimes, I mean, and so, you know, and then the middle market, what she’s talking about is private pay, but it’s not 10,000 a month or 12,000 a month.
00:14:24:16 – 00:14:43:12
Rod Khleif
It’s it’s about half of that. And, you know, and the good thing about, one of the good things about this asset class is, you know, these people have money. They they have a home, they can sell their home, or they can do a reverse mortgage on their home to help pay for their, you know, their care when they need the help.
00:14:43:14 – 00:15:03:00
Rod Khleif
And so, and, and again, I believe you need to love the elderly to do this business because, you know, I, I really believe that strongly. And I happen to and I can tell you do as well, just based on talking with just what I know about you actually. But so you know but but but the this they call it the silver tsunami.
00:15:03:00 – 00:15:25:07
Rod Khleif
It’s a tidal wave of people getting old and and and to I will tell you the I don’t know the stats off the top of my head. I’m actually presenting them tonight. I wish I had the slides so I could say this, but to to keep up with the demand, they literally have to double the production or maybe even quadruple the production of the biggest year production they’ve ever had consistently every single year.
00:15:25:12 – 00:15:46:11
Rod Khleif
And so and then the other issue there is the is the pricing because because they cost 250,000 about a unit to build one of these things, I had somebody call me wanting me to help raise money for a facility they’re building in Orlando, and it was 350,000 a unit. I’m like, are you crazy? And we’re, you know, in my case, we’re paying 40.
00:15:46:11 – 00:15:56:01
Rod Khleif
But so so your game plan with your facility is to freshen it up, maybe get the how was the occupancy when you bought it?
00:15:56:03 – 00:15:58:04
Debora Randall
38%. Wow.
00:15:58:04 – 00:15:59:13
Rod Khleif
Very low. Okay.
00:15:59:13 – 00:16:03:03
Debora Randall
So you’ve got to get financing. So financing was.
00:16:03:05 – 00:16:21:23
Rod Khleif
Oh I’m sure. Yeah. Do you banks don’t like it when you’re less than 50% occupied. Banks don’t like that. And so yeah, we had some struggles to this, this this, package was 62% occupied. But we’ve now up to 70. So while we were under contract to jump to, which is really exciting, but but we we’re the same issues.
00:16:21:23 – 00:16:23:10
Rod Khleif
Getting the financing was a challenge.
00:16:23:10 – 00:16:48:03
Debora Randall
Yeah, yeah. So we did some creative financing the bank. It was local bank. But the bank wanted us to pay for the building. Okay. And then they would pay the down payment and then closing costs because it mitigated their risk. And then what they did is then they had a like a another the loan for cash back. So then we’re drawing down on the loan.
00:16:48:03 – 00:17:05:07
Debora Randall
So it that it was less risky for them because they’re like we’re going to if we if you were reverse that and they bought the building and we paid the closing costs, then what happens if we never renovated the building? They’re left with a non rent renovated building. So that was kind of an interesting find.
00:17:05:08 – 00:17:21:13
Rod Khleif
Okay I’m sorry I, I’m sorry I didn’t quite track that. He’s that’s I’ve never heard of that scenario before. So they had you by the building they loaned you. Just on the building. However the when you say when you say, the CapEx, you’re talking about.
00:17:21:15 – 00:17:22:17
Debora Randall
The renovation.
00:17:22:19 – 00:17:26:23
Rod Khleif
The renovation costs and they financed that separately.
00:17:27:00 – 00:17:44:17
Debora Randall
Was that so? Tiredly. So they paid the closing costs on the building. We paid for the building. They paid the closing costs and the down payment, which was smaller. So their risk was smaller. And then they’re paying now the all of the, the renovation costs. So then so.
00:17:44:18 – 00:17:47:10
Rod Khleif
When you say they’re paying it they find they.
00:17:47:13 – 00:17:48:07
Debora Randall
Financing.
00:17:48:07 – 00:18:04:20
Rod Khleif
It. Yeah. Financing it. Right. Okay. That’s I think that’s what threw me off okay. So they’re financing it separately. And then I’m sure you’ll have drawers and everything else so they can stay on top of it to make sure it actually happens. Got it. Now now I got it. So. Well what’s awesome is you’re able to finance those costs which is not common.
00:18:05:00 – 00:18:10:05
Rod Khleif
So that’s that’s really good. How much money did you what was the purchase price and how much did you have to race.
00:18:10:07 – 00:18:17:14
Debora Randall
So 1.85 was the purchase price. Wow. And so we bought it at 37 a unit.
00:18:17:16 – 00:18:21:13
Rod Khleif
And then that’s fantastic girl. That’s fantastic. Wow.
00:18:21:15 – 00:18:32:16
Debora Randall
And then we’re converting like 25% to memory care because there’s such a huge demand for memory care there. Like a memory care facility here is full. And this. Yeah.
00:18:32:16 – 00:18:51:10
Rod Khleif
Let me let me elaborate on that. So guys the natural progression in senior housing is you got independent living okay. Where they get some help and they’ve got people around them. And you know in some cases they provide meals things like that. Then you’ve got assisted living where they need help okay. They need help with, you know, basic functions.
00:18:51:10 – 00:19:08:06
Rod Khleif
And there are different levels of assisted living as well, as sometimes as well. And then you’ve got memory care, which of course, you understand with Alzheimer’s is horrible disease. And so, you know, obviously the memory care requires a lot more attention. And so it’s it’s more, you know, it’s more money. It can be, you know, an a middle market.
00:19:08:06 – 00:19:34:02
Rod Khleif
I would say 8000 is probably an average, cost for, for memory care. Yeah. And, and, you know, and there’s a huge need there sadly, as well. And so, you know, it’s, it’s that’s, that’s great that you’re doing that and, and there’s some nuances to memory care. You know, you have to there has to be some, the way the facility is laid out is relevant because typically it has to be what they call a runway where, where they can, you know, they can just walk one direction and not end up hitting a wall.
00:19:34:02 – 00:19:52:22
Rod Khleif
They can just continue to walk. And so that’s a piece. But, wow. Well, good for you. That sounds like a hell of a deal. You guys got, which is fantastic. And, and so, you’re actively looking for more, Oh. Talk about the operations. Like, what did you what are you doing as far as the operations?
00:19:52:22 – 00:19:57:02
Rod Khleif
Did you partner with an operator or are you going to operate yourself? What’s the plan there?
00:19:57:04 – 00:20:18:21
Debora Randall
So one of the things that I learned actually, in my work in Africa is you can have the smoking best business model. You can, underwrite it like to the nth degree. And you’re like, yeah, this thing is going to make money. And then you drop, you know, a business takes it and they screw it up. They have poor management, or they don’t take care of their staff or whatever.
00:20:18:21 – 00:20:30:04
Debora Randall
Right. And then you’re like, Holy crap, this thing doesn’t work. Well, no, it doesn’t work. It just wasn’t implement. It wasn’t executed well. So execution is so key in these things, right?
00:20:30:06 – 00:20:49:14
Rod Khleif
It’s the whole enchilada. Honestly. You can have a great facility ran into the ground with the wrong management company. And that’s goes goes for multifamily or senior housing. I’m suing, a multifamily property management company, which is really sad because I know the owners, they were in my mastermind, and I, I, they shit the beds. I mean, I have no choice.
00:20:49:14 – 00:21:09:00
Rod Khleif
I would be doing a disservice to my investors if I didn’t do that. And it was such a case that the guy, the attorney took it out of contingency. So, I mean, you you encounter that, but it’s the same thing in senior housing. You have operators that are basically management companies. And, you know, if they don’t, you know, and they don’t take care of their employees, they don’t have a great culture.
00:21:09:00 – 00:21:21:22
Rod Khleif
They don’t, you know, validate and praise and encourage their employees because they’re low, very often lower paid than you might think and their caregivers. And so, you know, that culture and these things matter. So so what did you guys decide.
00:21:21:24 – 00:21:43:20
Debora Randall
So we we partner with operators but we let them very carefully. And actually I created a little guide for people. If anyone’s interested in senior living we can we’ll drop the URL in seven. Because typically when you’re investing in multifamily you’re vetting the sponsor. Right. So with senior housing you vet the sponsor, but then you also need to vet the operator.
00:21:43:20 – 00:21:53:23
Debora Randall
And and what are the right questions to ask? And what are the answers that are going to make you pause if they give you the wrong answer? So I’ve got this little guide that we can send out some.
00:21:53:23 – 00:22:02:15
Rod Khleif
Fantastic. Sure. Sounds good. Yeah. Just let me know on that. So, so what’s next? You’re actively looking for more facilities?
00:22:02:17 – 00:22:18:03
Debora Randall
Yeah, yeah. So we’re getting, you know, obviously we’re here, we’re supporting the team here. And yeah, we’ve got another one. We’re about to get under contract in Iowa. It’s typically not an area where typically more focused on the southeast, but seniors are everywhere. Right.
00:22:18:03 – 00:22:31:10
Rod Khleif
And and they don’t like to move away from the kids. And so, you know, that’s that’s a real factor. I’ve got one in Pittsburgh, for God’s sakes. I would have never bought something in Pittsburgh. But the demographics are great for senior housing. And so I’ve got a a 50 unit there.
00:22:31:10 – 00:22:53:23
Debora Randall
So okay. And so this is like a 46 unit. And you know what thing I love about this property. So it’s a smaller town outside a major area. So tertiary markets are not bad. Like typically you know it depends on your business model. Right. But actually some of the stats that I was seeing that just came out, you know, the tertiary occupancy is higher than primary market occupancy.
00:22:54:03 – 00:22:54:23
Rod Khleif
That’s interesting.
00:22:55:02 – 00:23:03:15
Debora Randall
Yeah 90 points. It’s almost the same but it’s better 90.4%. Primary market occupancy on average 89%.
00:23:03:15 – 00:23:06:02
Rod Khleif
Interesting. Wow. Yeah that’s interesting I did not I mean you have.
00:23:06:02 – 00:23:18:23
Debora Randall
Less supply you because you can’t have like you were saying, you can’t have a guy come in or a group come in and build at 250,000 unit, because you can’t charge 8000 a month in some smaller market. So you’re, you’re.
00:23:19:00 – 00:23:24:18
Rod Khleif
You’ve got a barrier to entry. You’ve got a barrier to entry basically. Yeah. No, that’s a very valid point. That’s a very valid point.
00:23:24:22 – 00:23:41:16
Debora Randall
So we like tertiary markets. But obviously you have to dig deep. Like do you have enough. Is there enough income in that market. Like do seniors have enough income, etc.. You have to understand the supply and demand. So you don’t just randomly choose a market. You dig deep. But the thing I love about this building, which is really cool.
00:23:41:16 – 00:23:49:20
Debora Randall
So they have they have positioned themselves with the city as the senior center. Okay. So I.
00:23:49:20 – 00:24:18:01
Rod Khleif
Love that. Love that. So so they’re familiar with the facility. They can you can have adult daycare which is it. Which is a thing okay. Where you know, the kids will drop off mom because moms you know, doesn’t want to be her home. She can go and meet friends and, you know, do bingo and whatever. And and then it’s not foreign when she really needs to just move in because that’s a battle very often, you know, when there’s a battle with my mom, you know,
00:24:18:03 – 00:24:19:21
Rod Khleif
Oh, that’s. No, that’s brilliant, I love that.
00:24:19:21 – 00:24:21:01
Debora Randall
Yeah, I love that.
00:24:21:03 – 00:24:24:24
Rod Khleif
They use their, their dining room or their community room and do activities and whatnot.
00:24:24:24 – 00:24:27:17
Debora Randall
And you’re making money that gets another. You can charge.
00:24:27:17 – 00:24:29:12
Rod Khleif
A little bit for that. Sure, sure.
00:24:29:14 – 00:24:33:00
Debora Randall
And then but it also it creates that kind of normalizing.
00:24:33:00 – 00:24:39:22
Rod Khleif
It’s it’s it’s a feeder. It’s a feeder for that. Yeah. It’s a feeder for that facility I love it if you’ve got the room for it. That’s a no brainer, right?
00:24:39:24 – 00:24:56:02
Debora Randall
I love that about that. So that’s another one. And then we’ve got quite a healthy pipeline. You know I think the interesting thing is we’re sort of in that market that 50 to 100, 120 that a lot of people don’t hit, you know, you’re the same. Oh sure. And yeah. And so there’s there’s still stuff you can get on auction.
00:24:56:04 – 00:25:18:14
Debora Randall
You can still get kind of the stuff that Freddie and Fannie have been holding, apparently, that they’re kind of waiting. Now the market’s improving. They’re waiting to release that. But I actually just there’s a report that just came out actually from NEC, which does all the senior housing stuff. Errantly in 2025, prices jumped 43% last year, like the price to purchase.
00:25:18:16 – 00:25:22:13
Debora Randall
So we are on the upswing like things went down.
00:25:22:15 – 00:25:23:21
Rod Khleif
It’s a hockey stick.
00:25:23:23 – 00:25:29:05
Debora Randall
Yeah. Now we’re starting on the upswing. So the time is now 100% right.
00:25:29:06 – 00:25:51:11
Rod Khleif
No no kidding. So you know a lot of facilities got destroyed by Covid. Obviously it was horrific. You know the deaths that happened because of Covid and and so you know, you’re still seeing empty facilities, 38% occupied facilities. And that’s, that’s typically still the lingering effects of Covid in many cases. You know, and so, you know, it is on the upswing.
00:25:51:11 – 00:26:08:12
Rod Khleif
And there’s a there’s a window of opportunity right now to get these, you know, smaller facilities, you know, that the big boys aren’t interested in I mean, the ones we’re buying we’re buying from Brookdale. It’s the largest operator in the world, and they just don’t want to mess with these smaller facilities. They’re building these A-Class facilities. That’s their market.
00:26:08:16 – 00:26:29:02
Rod Khleif
They they don’t do well with the small stuff anymore. So, you know, there’s a lot of opportunity, still a lot of opportunity in multifamily as well. I mean, there’s, there’s, I mean, you know, our our syndication attorney, Merrill, he told me he had six apartment complex foreclosure clients come to him in one day. I mean, yeah, there’s a lot, a lot of distress in the market.
00:26:29:04 – 00:26:46:19
Rod Khleif
Yeah. And with crisis comes opportunity. So there’s that, too. Well, listen, Deborah, I really appreciate you coming on the show. This has been a treat to see you. You know, say hi to, you know, who for me. And, and, you know, keep, keep it going. And, you know, we’ll see about getting you back on in about a year.
00:26:46:19 – 00:26:52:19
Rod Khleif
And I’m just going to be dying to see how many thousands of, senior housing units you’re in at that point. So. Yeah.
00:26:52:19 – 00:27:13:22
Debora Randall
Awesome. And thank you, Ron, for all you do for your love and your heart to all of us and and just everyone out there like the your desire to share kind of creates opportunities for everyone, right. And then that kind of just grows and spills over into so many people’s lives. And that’s, Yeah, we we appreciate that so much.
00:27:13:23 – 00:27:19:01
Rod Khleif
Very, very kind of you. Thank you. Well, listen, you take care, and, we’ll talk soon, okay?
00:27:19:02 – 00:27:19:21
Debora Randall
Thank you.
00:27:19:23 – 00:27:20:18
Rod Khleif
All right. See you.
**Podcast Categories:** Multifamily Rock Stars, Podcasts
---
### [How He Found a Real Estate Niche With Zero Competition (Literally)](https://rodkhleif.com/podcasts/healthcare-site-selection-strategy-with-austin-hair/)
**Published:** May 4, 2026
**Author:** Bryan Hoover
**Excerpt:** How He Found a Real Estate Niche With Zero Competition (Literally)
**Content:**
### How Austin Hair Built a Niche in Healthcare Real Estate Site Selection Strategy
In this episode of *Lifetime Cash Flow Through Real Estate Investing*, Austin Hair breaks down a powerful and often overlooked niche: healthcare real estate site selection strategy. His journey from professional athlete to real estate entrepreneur highlights how identifying underserved niches and leveraging data can unlock significant opportunities in today’s market.
Austin started in real estate through house hacking, inspired by *Rich Dad Poor Dad*, and quickly learned how strategic property use could generate income and financial freedom. Over time, he transitioned into a specialized role helping healthcare operators find and secure optimal locations, ultimately building a scalable and highly profitable business model.
### Why Healthcare Real Estate Is a “Blue Ocean”
One of the biggest takeaways is why healthcare real estate remains a strong opportunity for investors. Austin explains that healthcare tenants such as dental practices, urgent care centers, and veterinary clinics are:
- Recession resistant
- Pandemic resistant
- High-credit tenants with stable income
- Long-term occupants with strong lease security
This makes them ideal for investors seeking predictable cash flow and lower risk compared to other commercial asset classes like office or traditional retail.
Additionally, many healthcare operators are restricted from owning real estate due to private equity structures, which creates a unique opportunity for investors to step in as landlords and developers.
### The Core of a Healthcare Real Estate Site Selection Strategy
Austin emphasizes that successful site selection is driven by data, not assumptions. His process involves layering multiple data points to identify the best possible locations. Key factors include:
- High visibility locations (main intersections, strong signage)
- Proximity to major retail anchors like grocery stores
- Traffic patterns and consumer behavior
- Demographic alignment with target patients
- Competitive mapping to avoid oversaturated areas
One of the most valuable insights he shares is using grocery store data to track where ideal customers already shop, then positioning healthcare services nearby to capture that traffic.
### Single Tenant vs. Multi-Tenant Strategy
Rising costs in land, labor, and construction have made single-tenant developments harder to pencil. As a result, Austin and his team are increasingly shifting toward multi-tenant developments.
This strategy allows investors to:
- Offset costs with higher-paying retail tenants
- Reduce rent burden on healthcare operators
- Increase overall project viability and returns
While multi-tenant deals introduce more complexity and leasing risk, they can significantly improve profitability when executed correctly.
### Short-Term Rentals and Event-Based Income Strategy
Beyond healthcare real estate, Austin also dives into his short-term rental strategy, particularly focusing on high-end, experience-driven properties. He explains that the short-term rental market has evolved into three phases:
1. Basic listings with minimal effort
2. Clean, hotel-like experiences
3. Unique, destination-style properties
Today, success requires creating highly differentiated, “Instagrammable” experiences. His properties feature luxury amenities, themed designs, and large group accommodations.
One standout strategy is combining short-term rentals with event hosting, such as weddings. By layering event fees on top of nightly rental income, investors can dramatically increase revenue per property. Many existing event venues fail to capture this upside because they don’t offer overnight stays.
### Why This Strategy Still Has Opportunity
Austin believes both healthcare real estate and event-based short-term rentals remain underutilized niches. In healthcare, barriers like data analysis and relationships keep many investors out. In short-term rentals, the shift toward hospitality and experience has eliminated less serious operators, creating space for those willing to build a real business.
He also points out that rising interest rates have created temporary friction, but for investors who can make deals work today, future refinancing opportunities could significantly boost returns.
### About Austin Hair
Austin Hair is a real estate entrepreneur specializing in healthcare real estate site selection and development. He works with healthcare operators across the country to identify, secure, and develop high-performing locations. In addition, he actively invests in short-term rentals with a focus on unique, experience-driven properties that maximize cash flow through both lodging and event-based income.
If you want to hear the full conversation and detailed insights, watch the podcast video or read the complete transcript below.
## **Healthcare Real Estate Site Selection Strategy FAQ**
**What is a healthcare real estate site selection strategy?**
A healthcare real estate site selection strategy is a data driven approach to identifying the best locations for medical, dental, and healthcare facilities. It focuses on analyzing demographics, traffic patterns, competition, and consumer behavior to position healthcare providers in high demand areas. The goal is to maximize patient access, increase revenue potential, and create long term value for both operators and real estate investors.
**Why is healthcare real estate site selection important for investors?**
Healthcare real estate site selection is critical because the success of a medical tenant is heavily dependent on location. A well selected site can lead to higher patient volume, stronger tenant performance, and more stable rental income. For investors, this translates into lower vacancy risk, consistent cash flow, and a more valuable asset over time.
**What factors are considered in a healthcare real estate site selection strategy?**
Key factors include population density, income levels, age demographics, traffic counts, visibility, and proximity to retail anchors like grocery stores. Investors and operators also evaluate competition in the area and ensure there is unmet demand. Accessibility, parking availability, and local zoning regulations are also essential components of the decision making process.
**How does data improve healthcare real estate site selection?**
Data allows investors to make informed decisions rather than relying on assumptions. By analyzing where target patients live, shop, and travel, investors can identify optimal locations with strong demand and limited competition. Layering multiple data sources such as demographic reports and retail traffic patterns helps pinpoint high performing sites with greater accuracy.
**What types of healthcare tenants benefit most from strong site selection?**
Tenants such as dental practices, urgent care centers, veterinary clinics, and outpatient medical services benefit the most from strong site selection. These businesses rely on convenience, visibility, and accessibility to attract patients. A well positioned location can significantly impact their growth and long term success.
**Is healthcare real estate site selection different from other commercial real estate strategies?**
Yes, healthcare real estate site selection differs because it prioritizes patient behavior and accessibility over traditional retail metrics alone. While retail focuses heavily on consumer spending, healthcare also considers medical demand, insurance coverage areas, and population health trends. This makes the strategy more specialized and often more resilient during economic downturns.
**What are the benefits of investing in healthcare real estate with a strong site selection strategy?**
Investors benefit from stable, long term tenants, predictable income, and reduced sensitivity to economic cycles. Healthcare tenants often sign longer leases and provide essential services, which helps maintain occupancy even during downturns. A strong site selection strategy enhances these advantages by ensuring the property is positioned for sustained demand.
**How do retail anchors impact healthcare real estate site selection?**
Retail anchors like grocery stores attract consistent daily traffic, which healthcare providers can leverage for visibility and convenience. Locating near these anchors increases exposure to potential patients and reinforces the property as a central hub in the community. This strategy helps drive higher patient volume and improves tenant performance.
**What role does competition play in healthcare real estate site selection?**
Competition analysis is a key part of site selection because oversaturated markets can limit patient growth. Investors aim to identify areas where demand exceeds supply, creating an opportunity for new healthcare providers to thrive. Mapping competitors alongside population data helps reveal gaps in the market.
**Can healthcare real estate site selection strategy increase property value?**
Yes, a strong healthcare real estate site selection strategy can significantly increase property value. When a property is located in a high demand area with a successful healthcare tenant, it becomes more attractive to buyers and lenders. This can lead to higher valuations, better financing terms, and improved long term returns for investors.
01:20:07:26 – 01:20:25:04
Rod Khleif
Welcome to another edition of Lifetime Cash Flow through Real Estate Investing. I’m Rod Khleif and I am thrilled that you’re here and we are changing it up again today. So we’ve got a very cool guy here today. His name’s Austin here. And what he does now is site selection for health care groups. And he does short term rentals.
01:20:25:04 – 01:20:42:21
Rod Khleif
And we’re going to dig into site selection a little bit also into the star space. But what’s cool is was a professional wake boarder. And most recently he was an American Ninja Warrior finalist. Him and his wife, she was born as well. And she’s going to be on this year as well. And now he’s, become a capitalist instead of having fun.
01:20:42:21 – 01:20:43:24
Rod Khleif
Right. Welcome to the show, bro.
01:20:43:28 – 01:20:45:03
Austin Hair
Yeah, man, I appreciate that.
01:20:45:04 – 01:20:59:12
Rod Khleif
Yeah. So. So, why don’t you do a much better job of talking about who you are than I just did? And, you know, kind of let us know why you’ve done some of the things you’ve done, and, and, and then bring us current.
01:20:59:16 – 01:21:23:15
Austin Hair
Yeah, sure. I feel like I’ve had, like, you know, my version 1.0, 2.0, 3.0 because it’s been like kind of drastic career changes, but there’s a lot of overlap. So I’ll kind of give some context around it might help. So started out wakeboarding when I was really young around like 12 years old. And just focus on that, you know, like wanted to go pro like that was I mean, I still wanted to do good in school and I did college, but like my primary focus was definitely wakeboarding.
01:21:23:18 – 01:21:31:21
Austin Hair
And so as I was getting older, I just kind of saw like, you know, like in your career, athletic wise, you kind of go like this and then your income kind of starts to do this.
01:21:31:23 – 01:21:32:28
Rod Khleif
Go up and then you go down.
01:21:32:29 – 01:21:49:19
Austin Hair
Yeah, business. You can kind of keep doing this and this and that keeps going up. Yeah. So because I had a passion for fitness like I, you know I had to stay fit and healthy to do this. I opened up some gyms in Orlando. Oh cool. Yeah. And so well actually if I back up a second when I was wakeboarding, I got into real estate by reading Rich dad, Poor Dad, of course.
01:21:49:19 – 01:22:06:03
Austin Hair
And yep. And found out about house hacking. So, you know, I was a single young guy, brought in other roommates to live with me and, essentially pay my rent. That allowed me save enough money to buy a house. And then I was kind of doing the same thing. Like I had a house where, you know, I’d run out all the other rooms, like there was a guest house on the property.
01:22:06:03 – 01:22:22:05
Austin Hair
That sort of thing was like a house on the lake with a great view. Wake words would come in and pay to live there and and stuff like that. And so that kind of like helped me get out of the rat race. So was doing that, that was like obviously very passive. And then as I started to see the light at the end of the tunnel with the wakeboarding, I started to open up some fitness centers.
01:22:22:05 – 01:22:24:22
Rod Khleif
Besides try to see the you start to see the end of the tunnel.
01:22:24:22 – 01:22:31:18
Austin Hair
Yeah. Gosh. Right. Yeah. The end of the tunnel. Yeah. Yeah. It was, it was, it was I was getting old. Yeah.
01:22:31:18 – 01:22:36:13
Rod Khleif
It’s like all athletes, you know, I have that window of opportunity. Yeah. Anyway, continue.
01:22:36:13 – 01:22:51:03
Austin Hair
Yeah. So, you know, I, I saw it as a platform, I, I tried it like, which did help me get into real estate. And then it also did help me get into, opening up the fitness centers. And so that I was essentially going around opening what you would call de novo and health care, which just means like a startup, like, you know, you have acquisitions and you have to novos.
01:22:51:06 – 01:23:05:23
Austin Hair
And so I had done a couple of locations, and then that’s when I met my partner and we started looking for the fourth one and where I was going to go open it. And so in my head, I had this idea of like, okay, you know, I want to go to Winter Park. That’s like the cool, sexy area.
01:23:05:23 – 01:23:24:16
Austin Hair
I got to be there, but I want to go in Orlando. Yeah. And I want to stay away from Kissimmee because those demographics are garbage. Or so I thought. So we ran an analysis. My partner went like a couple layers deep with all of the, demographics and stuff like that. And what we found was actually Winter Park is super saturated, rents are really high and there’s a ton of competition.
01:23:24:18 – 01:23:25:25
Austin Hair
And Kissimmee was wide open.
01:23:25:28 – 01:23:26:10
Rod Khleif
Interest.
01:23:26:10 – 01:23:43:20
Austin Hair
And I had no idea because, you know, I learned that you can’t make good decisions without good data. Correct. So, that was really insightful. I actually luckily ended up selling the gyms right before Covid, so I sold them in 2019. Dodge that bullet. Yeah. And then my my partner invited me to start working with him full time on the real estate side.
01:23:43:20 – 01:23:49:28
Austin Hair
So a lot of like, you know, we’ll invest in properties, for the groups. But that’s, I would say sorry.
01:23:49:28 – 01:23:50:08
Rod Khleif
For what.
01:23:50:08 – 01:23:51:14
Austin Hair
Groups? Health care groups.
01:23:51:14 – 01:23:56:21
Rod Khleif
Gotcha. Okay. Yep. So we’re going to dig into all that. But I don’t understand your do Novo. What is that? De.
01:23:56:21 – 01:24:14:13
Austin Hair
Novo. It’s Latin for of nothing. From nothing. So, like, you can either. Like, if you have. I have an LLC that I have say I have 1 or 2 dental practices. Okay. I can either acquire other dental practice or I can start one de novo from, from scratch. Okay, okay. Got just a startup. Startup might be a better word.
01:24:14:13 – 01:24:30:16
Rod Khleif
Not know that lingo. Okay. Yeah. It’s like I learned more on these interviews than than I teach. All right. Good. All right. So so you’re now in the health care practice finding site locations for health care. Talk about talk about how that started and what you’ve done so far in that space.
01:24:30:22 – 01:24:50:24
Austin Hair
Yeah. So, you know, my partner had been doing that for about 14 years. And the urgent care space. Well, 12 well, I guess maybe ten years when we started working together. Now, now it’s been we’ve been together 14 years working together. And so yeah, he was just up in Ohio working with the group, and they decided to go health care focused because it was a little bit of a blue ocean.
01:24:50:24 – 01:24:51:24
Austin Hair
And it’s still kind of it’s.
01:24:51:24 – 01:24:52:21
Rod Khleif
Urgent care is.
01:24:52:21 – 01:24:53:24
Austin Hair
Yeah, yeah, yeah.
01:24:53:26 – 01:24:54:17
Rod Khleif
So I’ve been up all.
01:24:54:17 – 01:25:16:19
Austin Hair
Over the place. Yep. Urgent care is and it’s a lot of the same strategies, whether it’s urgent care or dental or that or derm or behavioral health. You know, you’re kind of looking for the corner of Maine and Maine, right, where you have great street signage and good visibility, high traffic. And then you want to kind of be close to you, maybe like a Publix or a grocery or anything like that, because you’re kind of piggybacking off of.
01:25:16:19 – 01:25:17:07
Rod Khleif
Their traffic.
01:25:17:07 – 01:25:23:19
Austin Hair
Off of their traffic. Exactly. So, you know, used to be medical was like recessed a couple roads back.
01:25:23:21 – 01:25:24:13
Rod Khleif
You had to find it.
01:25:24:13 – 01:25:25:18
Austin Hair
Got it. Yeah, exactly. Now they.
01:25:25:18 – 01:25:25:27
Rod Khleif
Want more.
01:25:25:27 – 01:25:31:26
Austin Hair
Visibility. Now they want more visibility. So we call it we call it med tail medical retail. Okay. But that’s the that’s the niche that we’re in now.
01:25:32:00 – 01:25:59:21
Rod Khleif
Well you know, I know and you know, I’ve been around this space, real estate space my whole life. And I know that, you know, very often, you know, a highly profitable practice, medical, dental, whatever it is, will want their own space. They want their own location. And, you know, if you can provide that site selection and so on and so forth, you know, you’ve got a locked in tenant, the financing is a slam dunk, you know, because you’ve already got the tenant.
01:25:59:21 – 01:26:07:18
Rod Khleif
And if especially if it’s a, you know, a medical practice that’s profitable, you know, then then it’s very salable. Would you as an exercise.
01:26:07:18 – 01:26:27:23
Austin Hair
Yeah. Yeah, 100%. Yeah. So it’s kind of funny, because with medical, there just hasn’t been a lot of distress. Right. So like health care in general, it’s pandemic resistant, recession resistant, inflation resistant. Right. And so you got a lot of these guys that have been paying their rents. Right. And so sellers who want to list it are like, well, I can get my price or I can hold it right.
01:26:27:23 – 01:26:34:22
Austin Hair
And so what that means it’s a very, very secure asset. Right. So you’re not going to be getting a lot of these like really distressed. They’ll come up.
01:26:34:22 – 01:26:40:22
Rod Khleif
It’s hard to find buildings you can buy. Yeah. Well you got to do the do own de novo piece is what you’re saying.
01:26:40:22 – 01:27:09:17
Austin Hair
Yeah yeah yeah. So there’s a because if you’re a private equity group, there’s a high probability that your backers and your, your LPN like your documents, your investor documents dictate that you only invest in certain this specific asset class. Right. And they prohibit you from investing in the real estate. So also like when it comes down to spreadsheet math, truthfully you’re probably gonna make more money operating a healthcare business, growing that, acquiring other building, starting I mean other than buying real estate, then buying real estate, right.
01:27:09:17 – 01:27:22:16
Austin Hair
Just spreadsheet math. So that kind of leaves a vacancy. So that’s what we do. Like our goal is to buy all the real estate. But I would say we probably to do about five deals for every one opportunity that we get to buy. So it’s just like, a numbers game. Okay.
01:27:22:16 – 01:27:27:02
Rod Khleif
Now I’m confused. Okay. You have to do five deals for you or you want to buy your own practice.
01:27:27:07 – 01:27:44:03
Austin Hair
No no no. Yeah. So it is confusing. So you got the operations right, which I realized like in general might be big group RPG group. They’re buying operations. Then you got the real estate and they’re two different buckets. But when it comes to real estate there’s there’s a lot of times where we just broker meaning we help them find a place to where they going to rent from the landlord.
01:27:44:05 – 01:27:55:03
Austin Hair
That’s probably 80, 90% of the time. But every one out of 5 or 1 out of ten times, there’s nothing available for them to lease. And and again, these guys have a specific,
01:27:55:05 – 01:27:59:29
Rod Khleif
So you direction about the operators like these urgent care operators, they are looking for sites.
01:27:59:29 – 01:28:00:26
Austin Hair
They can’t buy the real estate.
01:28:00:26 – 01:28:03:00
Rod Khleif
Sometimes they can’t. Interesting. Okay.
01:28:03:00 – 01:28:04:06
Austin Hair
Sometimes every group is different.
01:28:04:06 – 01:28:11:18
Rod Khleif
Yeah. Some of them do. I mean, you know, McDonald’s became wealthy buying the land. But yeah, some of them don’t want to screw with the land. Yeah. And that’s where you come.
01:28:11:18 – 01:28:14:01
Austin Hair
In and we’ll buy it on there and we’ll buy it. Well Lisa by.
01:28:14:01 – 01:28:29:25
Rod Khleif
Then. Lisa. Correct. Oh gosh, that’s the end goal. I was wondering what the where the profit was if it was a buy and sell or buy and lease. So to buy and lease binaries. Yeah okay. Yep. Is there is there a market that you’re targeting for these. Whatever. So you’re doing what other types of verticals are you doing.
01:28:29:25 – 01:28:39:29
Rod Khleif
You’re doing urgent care. Who are your clients that that you’re looking for. Yeah. And I think you mentioned before we started recording some of this you’re even willing to do on spec. So speak to that whole mix for me.
01:28:40:02 – 01:28:54:17
Austin Hair
Yeah. So I’ll answer both those questions. In order. Urgent care, right is one dental is actually a big one. So dental so with urgent care is they get hospital backed and then they kind of bring your all the real estate in-house. There’s a lot of red tape and it can take years and years and years. So that’s good until it’s not.
01:28:54:17 – 01:29:12:06
Austin Hair
But there’s still some opportunity but dental you know like they’re backed or they’re backed by a large group. But it’s not like a hospital backing. Right. So there’s more flexibility in terms of who they work with I see. And you know, they can bring on outside vendors like us. So we like dental a lot. Vet is like kind of similar to dental.
01:29:12:09 – 01:29:24:17
Austin Hair
You know, again, it’s like you’ve got these health care that they have good credit. They have good financials. Right. They’re looking for good visibility. And as a result, it’s a very, very, very stable and safe tenant. You know, it’s one of the central tenets of banks.
01:29:24:17 – 01:29:47:21
Rod Khleif
Very, very comfortable. Yeah. Especially with what’s happening economically right now with some of the other asset classes. We won’t even talk about office right now. Yeah. So your clients are the ultimate whatever it is lessees or you know, people that piece from you, and in these different disciplines. Yeah. I vet thousands of dollars with vets as well.
01:29:47:23 – 01:29:48:24
Austin Hair
That’s you dog.
01:29:48:24 – 01:30:06:02
Rod Khleif
Guy. My, my, my ex is very much so. I, but, you know, I yes, I like dogs, but not as much as she does, but, but. Yeah, so, so, you know, and then and then, of course, dental, I mean, that’s hugely profitable. If you Google highest margin businesses. Dental is right at the top.
01:30:06:03 – 01:30:20:28
Austin Hair
Yeah. And that’s one thing that’s kind of interesting too, is it’s both considered I’ve heard people classify it as a growth sector because so many boomers are retiring and needing extra health care. And then, you know, it’s also safety because like, it’s health care, right? Like you have to go. It’s not like a, like a luxury spending item.
01:30:20:28 – 01:30:32:02
Austin Hair
You have to go there. So that’s why we like it. And, and then you don’t answer your question about the multi-tenant thing. You know, most people prefer to go in and just, like, buy, build a single building for their tenant.
01:30:32:03 – 01:30:32:28
Rod Khleif
Their own practice.
01:30:32:28 – 01:30:55:24
Austin Hair
Yeah. Or it could be, if you’re a developer, you would, even if you have a client in tow, like, right. Like you’re a developer, you’ve got a PE backed dental group. They want to do a new dyno or new start up. You want to build in one single standalone location, right? Because that’s the safest, right? The problem is like we’re talking about earlier, you know cost of land is up, cost of capital is up, cost of labor is up, cost of supplies are up.
01:30:55:24 – 01:31:14:03
Austin Hair
And so to build a single freestanding tenant, I mean, the rents are just insane right now. And a lot of these guys can’t make it pencil a lot of the a lot of the health care tenants. Interesting. So we’re doing multi-tenant, which is like more risk on our part, but it helps us. What we do is like we’ll bring in a retail tenant to pay a retail rate, and then we can kind of bring down the rent of the health care operator a little bit to help offset those costs.
01:31:14:03 – 01:31:24:14
Rod Khleif
And so you might have a you might have a mixed use where you’ve got some retail with the with the practice inside of that retail, see above it, behind it, next to it, whatever. Okay.
01:31:24:14 – 01:31:37:13
Austin Hair
Yeah. There’s an I can I can tell you a funny story about that if you want. So one of the first deals that we did, we found a, we had a health care group, urgent care group that gave us an assignment, which is where they tell us how we want to go here. But, we found out with Bank of America building that was vacant.
01:31:37:16 – 01:31:53:14
Austin Hair
Got it for a pretty good, cost. Our base business cost was low. We started. It was. They only needed half. So we started looking for another half to occupy the space. And Starbucks came along. They wanted to do it, so we signed a lease with them. Great. The urgent care actually backed out of the deal completely.
01:31:53:14 – 01:31:54:02
Rod Khleif
They didn’t want to staff.
01:31:54:02 – 01:32:08:26
Austin Hair
They didn’t even they well, they just it wasn’t because of that. It was because like I said, there’s a lot of red tape, a lot of moving parts with their hospital back. Gotcha. Decision makers. And so we ended up getting a 90 unit, physical therapist to come in and take their spot. Wow. So it ended up working out great.
01:32:08:26 – 01:32:20:25
Austin Hair
I mean, we had some stuff go really wrong. Like, we had to invest 300 grand into the parking lot that we had no idea we were going to have to do. Right. Like, so that is a huge hit to the bottom line. But it was still profitable because the principles are there. Like there’s a lot of flexibility in there.
01:32:20:25 – 01:32:24:09
Austin Hair
So it was you know what I mean. It was like a testament to the strategy.
01:32:24:09 – 01:32:49:08
Rod Khleif
So what he’s talking about here, guys, you know when you’ve got a single tenant situation, it’s very safe. If it’s a high caliber, well-financed, tenured, profitable tenant. I mean, it’s, you know, a lot a lot of people do this in the in the, drugstore space, like CVS and Walgreens and these single tenants, where, where they very seldom own the land, but they’re on prime location, and it’s very safe.
01:32:49:10 – 01:33:07:17
Rod Khleif
Asset. But, you know, if if with cost of everything going up, what he’s talking about here is you basically build a much larger building or buy a larger building and, and you have, you know, you have other tenants, which is definitely more risky because you got to lease the space. You talked about that Bank of America building.
01:33:07:17 – 01:33:22:18
Rod Khleif
Now, I’m guessing that retrofitting health care into a bank building is a big deal, because you got a ton of plumbing, a lot more plumbing, electrical. You know, if you’ve got imaging equipment, whatever. Speak to that a little bit. How do you how do you get around all that?
01:33:22:22 – 01:33:34:25
Austin Hair
Yeah. So there is a distinction between when you start, the building process and then when you hand it off to the operator. And so we build out to kind of what’s called gray shell. So yes, the gray.
01:33:34:25 – 01:33:38:23
Rod Khleif
Shell has no plumbing at all. I mean, it’s maybe, maybe some stubbins or or.
01:33:38:29 – 01:33:53:06
Austin Hair
Yeah, you’re right. Sometimes vanilla shell. Right. So it’ll be like everybody. It’ll be unfinished. And so they that’s usually factored under their build out. Right. And even with Starbucks is kind of the same thing. I mean they have so much equipment. Right, right. But they’re bringing in a lot of their own equipment and they’re paying for that build out.
01:33:53:06 – 01:33:57:15
Austin Hair
Now of course tie is negotiable. Usually that’s factored in to whatever.
01:33:57:23 – 01:33:59:20
Rod Khleif
Improvements is tea by the way. Okay.
01:33:59:21 – 01:34:11:09
Austin Hair
Yep. Yeah. So we’ll we’ll essentially what what happens with tenant improvements is they might say hey I need an extra hundred grant joiner grant to build this space out. Like I don’t have the cash right now. So it’s like, okay, we’ll give you that in.
01:34:11:10 – 01:34:12:01
Rod Khleif
But but the price.
01:34:12:01 – 01:34:19:28
Austin Hair
Is getting an improvement. But the price going up goes up to account for that. Yeah. So it’s just a it’s just it’s an off balance sheet loan. You know what I mean. For the for the groups.
01:34:19:28 – 01:34:37:25
Rod Khleif
So you’re you’re out there finding sites for whatever works at this point. So let’s talk about site selection for. Yeah okay. You talked about demographics and there’s some great websites by the way guys if you haven’t heard me talk about this, one of my bootcamps are some great websites to study demographics. There’s city hyphen Datacom is a good one.
01:34:37:27 – 01:34:54:04
Rod Khleif
Best places dot net is a good one. Data USA dot I always a good one. Census.gov is a good one. But you know when you’re, you know, we’re buying a multifamily asset. Of course we want to know what the median income is. We want to know what the you know, the make up of the demographic there is.
01:34:54:04 – 01:35:08:12
Rod Khleif
We want to know, you know, median home price in our case, and make sure the median income, for example, is three times what the rent would be at our highest number. So these are all the things you do when you’re doing your research. So talk a little bit about what you do in your site selection.
01:35:08:14 – 01:35:21:27
Rod Khleif
I’m sure it’s silo specific in some regard right. As it relates to who the end user might be. Or you do you do you look at sites for more than one type of end user or are they pretty much individual?
01:35:21:27 – 01:35:42:22
Austin Hair
We’re kind of pivoting, to where we are. We will be looking for holes like, well, where identifying land that there is not. We’ll identify retail tenants, both health care and regular retail and then say, okay, there’s a there’s a gap here. But traditionally, yes, it’s been specific for that group. So what that means is like I’ll meet a group or they’ll say, hey, we want to open up a location over here.
01:35:42:25 – 01:35:47:06
Austin Hair
Then we begin our process. You know, they might say, I want to go to the northeast corner of Houston, right? Or I want to go.
01:35:47:10 – 01:35:48:11
Rod Khleif
So you’re nationwide?
01:35:48:12 – 01:35:49:04
Austin Hair
Yeah. We’re nationwide.
01:35:49:04 – 01:35:52:20
Rod Khleif
Okay. Gosh, I forgot to ask. I we passed, but yeah.
01:35:52:20 – 01:36:13:08
Austin Hair
Yeah. Right. Right now we’re doing the yeah we’re doing deals in Texas and Oregon and wow. Maine. Yeah. All over. So okay. But what the process then becomes is actually the grocery stores have a lot of the best data. So we have different subscription services that we pay for. We’ll go through and we’ll do the analysis. And so the idea is like, hey, we’re going to go through and say, where are your ideal patients already going?
01:36:13:08 – 01:36:26:07
Austin Hair
Right? So we pull all grocery store anchor data and then we say, okay, now where is your existing competition? We essentially put those on two different maps. We layer them over each other. All right. Now we’ve got the most ideal patients right here. Right. And the least amount of competition right here. Right. So that’s what.
01:36:26:07 – 01:36:43:19
Rod Khleif
So what’s different between what he’s talking about and what I did. The websites I just gave you is we’re talking retail right now. We’re talking which they’re looking at traffic count. They’re looking at, you know, different things than we would look at in the multifamily space. But they’re relevant, frankly. I mean, if you get a a nice multifamily asset on busy street, you’ll kill it.
01:36:43:19 – 01:37:05:07
Rod Khleif
But that’s typically not one of the biggest things you look for. Like, like, which is critical for you and, and you’re and of course grocery, you know, when you see a and that’s why when and let me digress for just a second from my peeps here for a second. Austin. So so, you know, when we look at an asset, you know, I want to see a bunch of national retailers around it because like you said, they do their freaking homework, right?
01:37:05:14 – 01:37:29:27
Rod Khleif
You know, so I don’t want to see Bob’s Burgers and Sushi. I want to see the Walmart’s the home Depots, the Lowe’s, and of course, you know, nice big anchor, Publix, Publix, on all that. So, that makes a lot of sense. So I imagine so. So you compile. I didn’t, it’s been a while since I’ve even looked at retail, but I imagine that, parking is an issue is what it is.
01:37:29:27 – 01:37:31:18
Rod Khleif
Look at parking. So speak to that a little bit.
01:37:31:18 – 01:37:52:26
Austin Hair
So that’s totally tenant dependent. But yeah, it’s a big it’s a big issue because in general, like health care doesn’t need as much as like your traditional retailers like, you know, Starbucks and coffee shops and restaurants like that, but they do need enough parking because they’ve got quite a bit staff on hand at all time. And so, yeah, usually they’ll just tell us, hey, I need 17 spots or I need 20 sponsor or whatever, 12 spots.
01:37:52:26 – 01:37:57:27
Austin Hair
Right. And so once they give us that number, then we can kind of start to be more granular.
01:37:58:00 – 01:38:15:13
Rod Khleif
But if you’re multi-tenant, that comes into play as well. Yeah. So you make it, you’re taking it, you’re doing some some guesswork and and making sure you’ve got enough have you ever, done a compilation where you’ve compiled pieces next to each other? I mean, I see, I know it’s a very long term place. Sometimes there’s a corner.
01:38:15:16 – 01:38:34:00
Rod Khleif
Oh my God, it’s the best freaking corner. And probably the state in Sarasota here at Clark Road in 41. Oh my God, it’s primo location. It’s the bridge on the on the CSS Turkey. But I think they’ve been working it for a long time. So are you doing any of that or you just looking for sites as sites you can move right on.
01:38:34:02 – 01:38:35:29
Austin Hair
So are you are you.
01:38:36:02 – 01:38:36:20
Rod Khleif
Saying is take.
01:38:36:20 – 01:38:38:00
Austin Hair
Combining multiple acreage or.
01:38:38:02 – 01:38:50:14
Rod Khleif
Multiple multiple lot multiple multiple pieces of property, you know, and you know, that that can be incredibly lucrative if you put a couple together and you’ve got then you’ve got the the space requirements that you need for something. Yeah.
01:38:50:15 – 01:39:09:26
Austin Hair
No, absolutely. That’s a strategy, you know, especially when we’re looking at multi-tenant developments. I mean, because it really depends on the, the environmental studies that come back. Because if you like, as a rule of thumb, you can kind of get about 10,000ft² of retail space on about an acre. You know, maybe it’s eight, but if you need like a retention pond or something like that, that number starts to shrink.
01:39:09:28 – 01:39:24:12
Austin Hair
And so if you’re looking at doing like, you know, you can you guys can edit this out. But one of the deals that we’re looking at that we’re doing right now is, essentially it’s in Oregon. And so the legislation is terrible, right? Like it’s so hard to get anything approved.
01:39:24:12 – 01:39:26:06
Rod Khleif
To go down that rabbit hole if you’d like.
01:39:26:08 – 01:39:44:22
Austin Hair
Okay. Well, so we had to submit a two. We’re working with a dental, tenant, pediatric tenant. They want 5000ft². So we got an acre. But they want the city wants 200 pages of documentation submitted to their report. And so it’s insane. We’re having to spend so much money out of pocket before we even close. And,
01:39:44:24 – 01:39:58:07
Austin Hair
And so. But because it’s so hard to get approval there, like, that’s also the opportunity. And so we’re, we’re actually are barring extra acres in that area like, like looking at, acquiring the project, the property next door. But we’re going to do that multi-tenant.
01:39:58:10 – 01:39:59:09
Rod Khleif
Phase two or.
01:39:59:13 – 01:40:24:14
Austin Hair
Yeah. So like yeah, phase one, we get the tenant in there. Well it’s kind of it’s kind of simultaneous. It’s a little bit split prong. So it’s like as soon as we get somebody, you know we’ll develop for them. We’re actually we’re in the process of combing through other tenants, to be their neighbor tenant. But it could be it could be a standalone or it could be part of it because it’s like once you start kind of combing, you know, doing a horizontal cost, like it’s not that much more whether you do 5 or 10,000ft², like, so you might as well just maximize money.
01:40:24:14 – 01:40:25:17
Rod Khleif
You’re spending the money anyway.
01:40:25:17 – 01:40:26:18
Austin Hair
Yeah.
01:40:26:20 – 01:40:39:19
Rod Khleif
You know, one thing you just said I want to flag, like when you know, when. And I tell this in my bootcamps around multifamily when it’s hard to get information or get something done, get excited because everyone else quits. Right. Would you agree with that?
01:40:39:19 – 01:40:41:17
Austin Hair
Yeah. That’s that’s what it seems like for sure. No.
01:40:41:17 – 01:41:05:07
Rod Khleif
No question. I mean like like we’ll find a multifamily deal and there’s no information and and I found one in Tampa once and there was nothing online. It was like and thousands of people had looked at it was on Loop Net, which is the big listing site for, for, you know, for commercial real estate and and, and it was these 90 year old owners that, that I plugged in and it was a screaming deal because.
01:41:05:09 – 01:41:05:29
Austin Hair
They weren’t marketing.
01:41:05:29 – 01:41:29:16
Rod Khleif
It. Exactly. Everybody else gave up, you know, because so, you know, if you’re if you’re in this business and you see it’s hard to get information, get excited, okay? Because that’s, when sometimes you’ll find some of the best deals. So you’re doing dental, you’re doing, medical, you’re doing, vet. Are there any other verticals that, that you haven’t mentioned yet that you might consider doing?
01:41:29:18 – 01:41:35:04
Austin Hair
So yeah. Well, there’s dental, vet, urgent care. Urgent care. Yeah. Anything? Yeah.
01:41:35:06 – 01:41:37:10
Rod Khleif
Retail price centers, you know.
01:41:37:10 – 01:41:57:26
Austin Hair
Would that be we try and say, like, sub 10,000ft². So I don’t know exactly how big those are. Probably, I will say the least favorite is like hospital back to. Oh, yeah. So a lot of those are hospital backs. But that being said, you know, we’re definitely I mean, by the nature of it, we’ve just built relationships with other retailers around the country because somebody’s got feel.
01:41:57:27 – 01:41:58:17
Austin Hair
Yeah, there’s you gotta do.
01:41:58:18 – 01:42:02:04
Rod Khleif
You go to ICS. We do. Yeah, yeah, yeah, I went there. It was like intimidating.
01:42:02:04 – 01:42:03:07
Austin Hair
And many of.
01:42:03:10 – 01:42:09:10
Rod Khleif
The people that I went, I was very interested in retail a lifetime ago like nine, ten years ago. So I went and I was in.
01:42:09:10 – 01:42:13:02
Austin Hair
Retail live is in Orlando. Oh is it in March okay, okay.
01:42:13:05 – 01:42:21:18
Rod Khleif
Yeah. I, you know, I’ve kind of stayed away from retail. I was I was worried about the whole Amazon dynamic or the online buying dynamic, you know if I.
01:42:21:18 – 01:42:22:23
Austin Hair
Want it was online.
01:42:22:23 – 01:42:31:03
Rod Khleif
And buy it. But but it did the whole demographic shifting though. It’s you know, it’s fitness centers, it’s restaurants. It’s things that that aren’t impacted by.
01:42:31:03 – 01:42:45:15
Austin Hair
Well yeah. It’s funny. It’s like I mean I was wrong about so many things about the result of all the lockdowns. Right? And, I don’t even want to say Covid anymore. It wasn’t really Covid as much. It was the lockdowns. Yeah. So I just got the lockdowns. But, you know, one of the things was, oh, retail’s dead right.
01:42:45:15 – 01:42:56:08
Austin Hair
That’s it. Everybody was saying and then like you look into it and it’s like actually e-commerce and dropshipping requires more real estate square footage than retail because like it’s it’s different.
01:42:56:11 – 01:42:59:00
Rod Khleif
It is. But they require the square footage. Yeah. They need and so.
01:42:59:00 – 01:43:11:10
Austin Hair
We we saw warehouses, industrial space taking over malls that were traditionally retail because it was actually cheaper because malls were kind of going on the down and retail was one on the up and was like cheaper. Like there’s a deal in Orlando where they I think was like a Kohl’s or a Sears, like Amazon took it over as their industrial center.
01:43:11:10 – 01:43:23:06
Austin Hair
So that was just a prediction that was wrong. But yeah, I mean, and then also retail didn’t really end up dying because people as soon as they could go out, they wanted to, you know. Sure. And I was listening to one of your other podcasts talking about they want an experience, right.
01:43:23:11 – 01:43:41:22
Rod Khleif
Like that. I was just going to bring that up. I remember that from a previous interview recently where where, you know, it’s it’s like like here we’ve got the universal, UTC, it’s called, University Town Center, and it’s so frickin beautiful there. And Christmas time we got all these restaurants and shops is like this giant area that you enjoy going to.
01:43:41:22 – 01:43:43:14
Rod Khleif
So that’s not going anywhere.
01:43:43:15 – 01:43:54:24
Austin Hair
No. Exactly. So and health care, you know, like we’re, we’re a long ways away from like putting up your robotic arms in your house and like, having your surgeon come in and I take over like I’m not. No. That’s you know.
01:43:54:24 – 01:44:14:27
Rod Khleif
No, no, definitely. Health care is not going anywhere, especially with 80 million baby boomers getting old. There’s yeah, it’s not going away. But, so love, love the site selection conversation. And it’s fascinating to me and it’s, really I’m really enjoying, you know, triggering parts of my memory I haven’t thought about in a long time. But let’s talk about short term rental a little bit.
01:44:14:27 – 01:44:19:06
Rod Khleif
So talk talk about what you’re doing there because, I mean, I know we’re completely shifting gears, but you know.
01:44:19:13 – 01:44:34:25
Austin Hair
Yeah. So I short term rental is another space that I’m really excited about. I got into that, like through the Rich app that house hacking thing. Like essentially I moved out, all right, but I bought another place. I was doing that. And then I was traveling a lot for wakeboarding, and I was like, my. I had a duplex living in a duplex.
01:44:34:25 – 01:44:36:11
Austin Hair
I was like, this place just kind of sits.
01:44:36:13 – 01:44:37:03
Rod Khleif
Abandoned.
01:44:37:06 – 01:44:52:18
Austin Hair
In Orlando. Yeah. When I lived in Orlando, I was like, this place just kind of sits abandoned every single week. And when I go out of town for a competition, I would start on Airbnb and sure enough, booked every weekend. It booked and booked in book. And so essentially, I ended up kicking out all the long term tenants that I had, because I had the first house that I bought and I was living in a duplex, renting out downstairs.
01:44:52:18 – 01:45:05:28
Austin Hair
A long term tenants ended up, converting, fixing them up, that sort of thing. And the other thing that I was nice about, short term rentals was like my house stayed a lot nicer because I didn’t have these long term people that were there for six months or a year where I couldn’t see what was going on. And then it’s trashed.
01:45:05:28 – 01:45:22:15
Austin Hair
And like, I got maids coming in every 3 to 4 days to to keep it nice. So I like to have my property saved a lot more well maintained. And then of course, cash flow was crazy. Crazy. Better now, of course. Crazy amount of work. It’s a it’s a business. The hospitality business. Right. But, if you do it right, it can.
01:45:22:15 – 01:45:35:24
Austin Hair
It can be really well. So like, I think Trump has a saying like there’s always an opportunity, there’s always a market for the best. Right. And so we always we try to make ours like luxury like, you know, have on the lake with pools, hot tubs, bocce ball courts, putting greens like everything like that, even like saunas and stuff.
01:45:35:26 – 01:45:48:05
Austin Hair
Well, and so then we’ve recently acquired a place that was like, oh, this is on like three acres. You know, it’s nice and private. This would be a great space to host events. And sure enough, people love it. And so I really like the event space right now.
01:45:48:07 – 01:45:51:24
Rod Khleif
So, so so we’re talking short term rental for event space.
01:45:51:24 – 01:45:53:07
Austin Hair
Well okay. It’s both.
01:45:53:07 – 01:45:53:17
Rod Khleif
Okay.
01:45:53:17 – 01:46:12:11
Austin Hair
So what we do is we have our minimum nightly, stay, which could be 4 to 1 night depending on how far out you are. Okay. And then you charge an event for on top of that okay. So if you have it which means it’s like usually we’re underwriting these properties to make sure the cash flow would just be the short term rental overnight like nightly rates.
01:46:12:13 – 01:46:16:18
Austin Hair
And then whatever we get as events fees is just gravy on top of that. So it creates really nice profits.
01:46:16:18 – 01:46:23:15
Rod Khleif
So give you an example of do you have an asset already that you’re doing. You talk describe to describe the asset.
01:46:23:18 – 01:46:51:14
Austin Hair
So this was a unique home. It was actually built in 1924. It was about 5000ft². So can sleep 20 people. So on three acres on a small little lake. And there’s a really nice pool deck area, stuff like that, and plenty of outdoor space and parking and that sort of thing. And so, you know, we’ll just like, I think if on average, maybe we can get a thousand bucks a night for that place, and then maybe you charge anywhere between 2 to 5000 for events on top of that.
01:46:51:16 – 01:47:09:10
Austin Hair
So, you know, you have 150 person event. That would be 7500 bucks for a weekend. Wow. So we’re looking we have another property under contract, out in Ohio, but it’s a lot. This one is 12,000ft² on 18 acres. So you can do some more people there. But the same sort of thing is, you know, you you fit as many people as you can overnight.
01:47:09:10 – 01:47:30:24
Austin Hair
You have your overnight rates, and then whatever the event is, you just add on top of that. So you might have a two night minimum and then plus the event fee. And so with events it’s nice. But like the thing is what I realized is I was going around looking at these things like I do, I kind of stumbled into this, it’s like a lot of these wedding venue event space people like don’t do any overnight stays, right?
01:47:30:26 – 01:47:46:15
Austin Hair
So they’ve got these assets a lot of times around their houses, you know, they’ve got these assets that like they’re charging the event fee and then everybody packs up and leaves. Right. And so it’s like nobody else can stay there. So you’re missing out on all this opportunity for the revenue. So our our thought was like let’s look at these houses maybe.
01:47:46:15 – 01:47:49:25
Austin Hair
And then there’s a lot of mom and pops that are just like you mentioned earlier, like.
01:47:49:28 – 01:47:59:21
Rod Khleif
Yeah, I’ve got a buddy that owns a farm up in Tampa that, he built it on a lake, and he built a barn into this big Barney has weddings, and they’re people freaking love it. He’s got a zoo there with animals.
01:47:59:21 – 01:48:00:17
Austin Hair
Oh. That’s cool. Yeah.
01:48:00:18 – 01:48:17:29
Rod Khleif
No, he’s a cool guy. He he he does this. I love him because he does this thing for orphans where he’ll bring or, not on friends. I’m sorry. Yeah. Orphans, kids that don’t have a family. And and he’ll bring. And parents, people will come in and adopt these kids. It’s beautiful. Beautiful. But anyway, I digress.
01:48:17:29 – 01:48:18:16
Austin Hair
It’s nice though.
01:48:18:19 – 01:48:33:24
Rod Khleif
Yeah, it’s really cool. Really cool. And he does things for the military as well. Was good guy. He’s a good friend. But anyway, so so, now I love that idea. And so where do you market for the event piece? I understand Airbnb for that piece, but how do you market for the event?
01:48:34:00 – 01:48:49:27
Austin Hair
Yeah. So, there’s like wedding wire and the not, you know, we just have listings on there. Yep. You can do SEO. We haven’t done that at this location because we’re trying not to piss the neighbors off too much. So we’re just doing, like, one of it a month right now. Oh, gotcha. But at the new one, yeah, we’ll do more.
01:48:49:27 – 01:49:02:05
Austin Hair
And then, honestly, Vrbo, Verbio and Airbnb, like, we have pictures of our weddings. Oh, like, and we have, you know, the reviews that they’ve said and we said like, hey, message us, reach out for details. We say in the listing. And that’s been a great place to get inquiries.
01:49:02:07 – 01:49:18:20
Rod Khleif
Yeah. Something you just said I want to flag, okay. Because he had a real problem with his neighbors there. I mean, had it went all the way up the wire to County and everything else and thank God he was doing, you know, adoption stuff. He was doing military and military for for wounded wet veterans and doing all kinds of things.
01:49:18:20 – 01:49:25:05
Rod Khleif
And, you know, they didn’t stand a chance against all of that. But, I could see that being a potential issue with neighbors and.
01:49:25:07 – 01:49:49:26
Austin Hair
Oh, yeah, yeah, yeah, it is an interesting thing in the short term rentals. I mean, the zoning is very important. So if you I believe it’s like seven acres, you can then get the agricultural zoning, but it’s also dependent on where exactly the, the house or the property is located. Sure. But yeah, I mean, look, if you’re just if you just found a random spot of land and a house and it’s, it’s got a bunch of acres, but it’s got a bunch of neighbors.
01:49:49:27 – 01:50:02:28
Austin Hair
Right. And you’re kind of close. Like the further you get outside of the city, the less of a big deal it gets, right? But, yeah. You know, there, if you’re not zoned for it, they can shut you down for sure. So you want to make sure that you got your proper, proper zoning in place. And that’s a whole, whole other issue.
01:50:02:28 – 01:50:10:07
Austin Hair
But, you can get special event permits, but you got to pull those individually. That’s a real pain. Yeah. Good luck doing more than five a year, you know.
01:50:10:12 – 01:50:11:06
Rod Khleif
Right.
01:50:11:08 – 01:50:14:05
Austin Hair
And then you the other option is you can change your zoning.
01:50:14:07 – 01:50:16:18
Rod Khleif
Yeah, but like zoning variance. But that’s.
01:50:16:21 – 01:50:17:07
Austin Hair
Really hard.
01:50:17:12 – 01:50:22:09
Rod Khleif
And the neighbors are going to be there screaming. Yes. Don’t want your shit in the backyard. Right. Okay.
01:50:22:12 – 01:50:29:10
Austin Hair
Yeah. So you want to make sure there’s a it’s already operating doing events or be it’s on and off. It’s on in like an agricultural zoned agricultural.
01:50:29:10 – 01:50:32:19
Rod Khleif
So then you can get a permit. You can get you can do it on that. Okay.
01:50:32:22 – 01:50:41:26
Austin Hair
And you start to get you started. Let the city know. But it’s allowed. It’s not it’s not even allowed on residential, you know residential. You’re not allowed. If it’s residential would you just have to check your individual and property.
01:50:41:29 – 01:50:51:02
Rod Khleif
Interesting. Interesting. So what’s next. You got you got your site selection. You’re doing you’re doing that which sounds like a lot of fun. You’re doing some some of this Airbnb event space. What’s.
01:50:51:05 – 01:50:55:29
Austin Hair
Well yeah. So I mean to harp on the Airbnb thing, you know, I, I really love it. I have a passion for it.
01:50:56:01 – 01:51:02:12
Rod Khleif
You know, one thing I’m sorry to interrupt. One thing is, is I’ve heard that it’s hurting right now. Airbnb has been hurting. Is that accurate?
01:51:02:15 – 01:51:06:12
Austin Hair
We did not get we’ve had we’ve continued to grow.
01:51:06:14 – 01:51:16:21
Rod Khleif
Because you’re you’re you’re you get you described your properties which are unique. You got saunas, you got all sorts of cool shit there, which I’ve seen. Well, they’ll have a whole row of game machines.
01:51:16:22 – 01:51:17:13
Austin Hair
It’s expensive.
01:51:17:13 – 01:51:17:27
Rod Khleif
Yeah, it’s.
01:51:17:27 – 01:51:19:04
Austin Hair
Expensive, but that’s what you have to do.
01:51:19:05 – 01:51:26:06
Rod Khleif
If you got the best, you’ll. You’ll always be good. Like, you know, you can have the crappiest food, but if you’re on a waterfront location, you’ll kill every time, right? Yeah.
01:51:26:07 – 01:51:53:02
Austin Hair
Okay. So that’s more competitive for yourself. Yeah, it’s more competitive. And so I think what happened was you just got a lot of people that got in the game because they thought they were going to get passive income, but like, no, it’s the hospitality business. Yeah. And so and I, I was guilty of it too because I was running the gyms, I was wakeboarding, you know, I had this Airbnb in the background and, but there’s been three iterations of Airbnb and expectations for the customer when it was like you had stage one, which is just like, build it and they’ll come just throw it up.
01:51:53:02 – 01:52:07:19
Austin Hair
Like leave your clothes in the closet. It doesn’t matter. Then you had to say she was like, oh, like, we actually have to make this, like kind of like a hotel, like, presentable for the guests. And then now we’re on stage three, which is like, good luck if you’re cookie cutter and it’s clean and you got all your sheets and beddings and, like, working furniture.
01:52:07:19 – 01:52:19:12
Austin Hair
No, you need to be unique. You need to make it Instagrammable. You need to have a minute. These you need to make it a destination in in of itself. Yeah. And so I think that everybody who got in thinking it was passive is getting crushed. Yeah. And then you had a pivot. Like I had to put a lot more time.
01:52:19:12 – 01:52:33:12
Austin Hair
I mean luckily I, I sold my gyms, you know, and I had more time to go and do this thing. But yeah, it was like a lot of intentionality behind that is I mean, I’ve learned so much about design. Yeah. Like painting murals on the walls. We did a historic theme at our at our, wedding venue because it was built in 1924.
01:52:33:12 – 01:52:33:27
Rod Khleif
Yeah. It’s cool.
01:52:33:27 – 01:52:39:04
Austin Hair
So seven bedrooms, each bedroom is a different decade. You know, we have, like, different stories of, like, from those decades and different.
01:52:39:09 – 01:52:40:14
Rod Khleif
It makes a big difference. Yeah.
01:52:40:14 – 01:52:50:00
Austin Hair
And people, people really like that you know. And so I that’s the thing is just making yourself unique. And so it is hard right. Like you can make money but you gotta put a lot of effort. You just you have to run the business as a business. Is it.
01:52:50:00 – 01:52:50:21
Rod Khleif
Worth it.
01:52:50:23 – 01:52:51:18
Austin Hair
To me? Oh yeah.
01:52:51:18 – 01:52:58:08
Rod Khleif
It’s worth it. Of course it is. Nothing. Nothing that’s worth it. Anything is going to be easy. But is it worth it? You. Yeah, I can believe it’s worth it.
01:52:58:08 – 01:53:16:27
Austin Hair
I mean, those, like, cookie cutter, you know, condo units where it’s like A21 maybe, right? By universal where you can just go get em anywhere. Yeah, I see those having a hard time because, like, you know, labor costs are high. Like, your, your machine like appliances and that and your margins are so much lower on those, like, one thing going wrong can like totally cut into your margins for a whole month.
01:53:17:00 – 01:53:19:25
Austin Hair
So those are the types of deals that I think are getting really hammered.
01:53:19:28 – 01:53:38:13
Rod Khleif
My brother’s got some cabins up in the Blue Ridge Mountains and they’ve slowed down a little bit. My, my ex, my best friend Tiffy, is has been looking into mid term rentals where you’re renting the nurses and residence and things like that for hospitals and, teachers, so on and so forth, which is interesting. And she’s been playing around with that.
01:53:38:13 – 01:53:40:12
Rod Khleif
So yeah, it’s cool on her a little bit with that.
01:53:40:12 – 01:53:59:23
Austin Hair
Yeah. You know, and like, I think I know you guys like to talk macro sometimes on here. That’s always a factor because it was like since 2008, everybody’s kind of had to shifted to be a macro economist because we’ve seen it just so volatile all the time. So it’s like trying to predict like, I mean, people have been saying that real estate going to crash for cash in season 16.
01:53:59:23 – 01:54:00:27
Austin Hair
I first started hearing about it.
01:54:00:27 – 01:54:05:15
Rod Khleif
Oh yeah, I said when it when Covid hit, I did a YouTube video says the coming crash.
01:54:05:15 – 01:54:06:22
Austin Hair
Yeah, I thought so too.
01:54:06:22 – 01:54:12:19
Rod Khleif
I got so much freaking hate. It was a highest watched video I’ve ever done because, you know, negative shit sells. Yeah. But, yeah.
01:54:12:23 – 01:54:29:01
Austin Hair
Well, that’s the thing. And it’s like, so my thesis right now is like, if we haven’t seen a correction with residential real estate because interest rates are like, we know they’re the highest that they are going to be right now. They’re only going to either stay flat or come down from here. Right. And like I do think that it is taking longer than anybody expected.
01:54:29:05 – 01:54:33:15
Austin Hair
Yeah. But if housing price hasn’t significantly corrected now, what makes you think it’s going to correct.
01:54:33:18 – 01:54:36:20
Rod Khleif
When I don’t think it’s going to correct, it’s going to go up. It’s going to explode.
01:54:36:20 – 01:54:37:05
Austin Hair
That’s what I think.
01:54:37:08 – 01:54:52:04
Rod Khleif
When rates go down, it’s going to explode because there’s huge pent up demand. You know, there’s all these people that own a house at 3% interest. They want they want to do a bigger house, but they they don’t want to pay 7% interest on their new place. Yeah, exactly. If the rates come down, watch out man. It’s going to go crazy.
01:54:52:06 – 01:55:10:24
Austin Hair
Yeah. And it kind of rates so that the interest rates really obviously affects both our development projects and our and my short term rental projects. But it’s like the same thing. You know if we get so we’re we’re trying to acquire properties now residential because we think that once interest rates drop the value will go up. So that’s one way to offset refi residential easily.
01:55:10:24 – 01:55:14:19
Rod Khleif
Yeah. Not like commercial where you’ve got heavy heavy prepayment penalties and things. Yeah.
01:55:14:19 – 01:55:31:17
Austin Hair
Yep. It’s one way to offset the you know, if you do have a little bit of a slowdown in the revenue, at least if the building is appreciating that can help a lot. And then also with development deals, like if it underwrites right now, which it has to to get financing right, with the interest rates being as high as they have in decades, then, you.
01:55:31:17 – 01:55:32:24
Rod Khleif
Know, it’s a home run when they come back.
01:55:32:24 – 01:55:45:08
Austin Hair
Yeah, exactly. Because when when interest rates come down, a you can refinance, get your capital back but be you might even still have the same monthly payment, you know, with rates down. So you might still be collecting the same cash flow. But now you’ve got almost all your investment back, right?
01:55:45:08 – 01:55:55:29
Rod Khleif
Yeah. No, that’s that’s, that’s that’s good. So you really love this event space business. You really think that there’s some real opportunity there? Why do you think you know. Why do you why why are you loving it? Why are you excited about it?
01:55:56:01 – 01:56:12:00
Austin Hair
Well, it started when me, my wife got married and we said, in this beautiful place in, Cleveland, North Carolina, right outside of Charlotte. Okay. And, you know, just seeing, like, wow, they charge a lot of money. There’s there’s a lot of money to be made having here. And so it’s been on the back of my mind for a long time.
01:56:12:02 – 01:56:23:12
Austin Hair
And then actually diving into it, it’s like, oh yeah, there is a good amount of money to be made. And now it’s a lot of work, because if you got to maintain your property for a short term rental, multiplied or triple the amount of work that you need to maintain it for a wedding, right? So you got to have.
01:56:23:12 – 01:56:26:10
Rod Khleif
Flat space that doesn’t get muddy means you’ve got.
01:56:26:12 – 01:56:27:08
Austin Hair
The landscaping.
01:56:27:14 – 01:56:28:23
Rod Khleif
The landscaping, all.
01:56:28:24 – 01:56:51:00
Austin Hair
All that stuff. Yeah. But you know, with all the circles that I travel like, you know, I do like different, capital raising groups and networking events and all that sort of thing, and nobody’s just talking about it. And so there’s not like groups chasing or there’s not private equity chasing it. And so for some reason it’s just like to me seems like a big blue ocean where you can go acquire like a mom and pop their maybe they’re running a business out of there.
01:56:51:02 – 01:57:07:20
Austin Hair
They live in the unit, so they’re not renting out. That’s a huge amount of revenue that they’re missing out on because not doing overnight stays. They haven’t figured out how to optimize their pricing for the events, get a loan for the overnight rentals. And so I think, you know, there’s a market in like every metro to go out and like find these spaces where you can theme them out.
01:57:07:23 – 01:57:10:25
Austin Hair
You know, you do something really cool, really creative, like, I’m from.
01:57:10:26 – 01:57:16:08
Rod Khleif
That’s a good idea to go in and think of a theme, that’s a really good idea.
01:57:16:08 – 01:57:19:05
Austin Hair
And, and that draws people, right? Not everybody. But you draw yours, man.
01:57:19:05 – 01:57:34:21
Rod Khleif
If it’s cool, they want to see it, man. You see these Airbnbs and, you know, a tree house and a plane they’ve converted and all this crazy shit and, and and they’re I’m sure they’re full all the time just because people want to have a story to tell, you know. So and of course, you know, weddings are a big deal.
01:57:34:24 – 01:57:40:28
Rod Khleif
You know, I’ve watched that. What is that, a movie where the bride is like, Dracula, but, bride, something.
01:57:40:28 – 01:57:42:00
Austin Hair
That Brazil or.
01:57:42:00 – 01:57:59:12
Rod Khleif
Brasilia or something like that. Yeah, yeah. But anyway, yeah. So, you know, that wedding’s got to be. I mean, we got married on the top of a cliff in Puerto Rico, 600ft cliff, which was spectacular. Wow. And it would cost a freaking fortune, I can tell you that at this hotel, but, Yeah. No, I think that’s an actually an excellent idea.
01:57:59:12 – 01:58:07:08
Rod Khleif
Where you where you go and see what the competition is, what’s what’s available. You know, what don’t they have, you know, lakefront, whatever it is.
01:58:07:10 – 01:58:24:16
Austin Hair
Yeah. And this particular one that we’re doing in Ohio, you know, I spent hours on the phone. They had an existing wedding caterer planner that was like managing some of their weddings. And I and I spent hours on the phone with them just vetting the information, the area, all that kind of stuff. And and the takeaway was like, man, we need we’re we’re booked all the time with all the places we have.
01:58:24:16 – 01:58:33:13
Austin Hair
Like we need more spaces here. Wow. And they’re like, you know, do this. If you do the things you want to do, fix it up. We’ll give you some tips of what we we think we’ll have you guys booked out like year round I.
01:58:33:13 – 01:58:44:10
Rod Khleif
Wonder I wonder if you should check, you know, age demographics. Yeah. I’ve had Harry dent on the show, and he that’s he’s an economist. That’s been doom and gloom and forever. But. Yeah. Right. Eventually. Just think I will be.
01:58:44:13 – 01:58:46:10
Austin Hair
So what do you think’s going to happen in real estate then.
01:58:46:10 – 01:58:58:00
Rod Khleif
Because I, I believe that we’re headed for a well, I know we’re headed for a crash in the office space environment. Office environment I mean some there’s some cities that are at 50% occupied. You mean you can’t I mean, those are those are going back to but well that will that.
01:58:58:00 – 01:58:58:24
Austin Hair
Affect the residential.
01:58:59:01 – 01:59:17:12
Rod Khleif
And multifamily because there’s a lot of Bridget coming to us, a lot of debt coming doing. There’s operators in trouble. They have to sell a refinance. Sales are way down. Refinancing is almost impossible with rate caps that you have to pay for to, to to get short term rates and adjustable. You know, you got these guys with adjustable rate mortgages that are dying.
01:59:17:12 – 01:59:28:01
Rod Khleif
So there’s a lot of upset in the marketplace where we’re finding deals already. Do I think it’s going to impact residential? No I don’t I think it’s I don’t know either. I think the crash is going to be commercial. I don’t believe it’s going to be residential.
01:59:28:01 – 01:59:34:14
Austin Hair
And then even with commercial, it’s so segmented. Right. Like we talked about how retail was hurt, but industrial took it over.
01:59:34:14 – 01:59:51:17
Rod Khleif
Right? Right, right. Yeah. I mean, retail, is just shifting. I mean, there’s a mall here that’s going to be a different use for sure. It’s it’s practically empty. They’ve built a Costco on the back of it. But, you know, it’s just shifting. But, but no, I think there’s a lot of debt coming due. It’s held by small and regional banks.
01:59:51:17 – 02:00:15:14
Rod Khleif
And I think we’re going to see some some bank failures and some stuff happening this year. And then I will tell you, there’s a you know, I was just reading something today. I mean, there are, a lot of countries in trouble right now, including China, including, you know, there’s recessions that are that are happening in Japan and other places that, you know, that it’s, you know, we are pretty connected economically with other countries at this point, Europe.
02:00:15:14 – 02:00:30:14
Rod Khleif
And so, you know, I think I think it’s likely we’re going to have a recession, how bad it’s going to be. Who knows. But I know there’s going to be opportunity. I get excited, okay? I was hiding under a rock. The last time this happened and it was residentially driven, you know, but this one will not be residentially driven, I think.
02:00:30:15 – 02:00:45:22
Rod Khleif
I think, you know, there’s a huge pent up demand for housing, that there’s a shortage of housing. So I think residential is going to be fine. But but there are companies laying off already. There’s a lot of layoffs that aren’t making the news. And these interest rates are killing a lot of different things. And so it’s gonna be interesting.
02:00:45:27 – 02:00:50:17
Austin Hair
Yeah. So getting all these spillover, like contagion from office.
02:00:50:20 – 02:01:07:15
Rod Khleif
Any other in your health care thing, I think you’re great there, for sure, but I think, you know, it could impact travel. It could impact you be it could impact how much money people want to spend on a wedding. I mean, you know, if there’s if there’s unemployment and things like that, that that impacts everything. So, it’ll be interesting to see I.
02:01:07:15 – 02:01:18:25
Rod Khleif
I’m wrong all the time. Yeah, I know you want me to go home, too, so, you know, I’m happy to admit it, but, that’ll be interesting to see how it all shakes out. I think there’s going to be incredible opportunity. And, you know.
02:01:18:27 – 02:01:20:21
Austin Hair
So are you buying anything right now? Oh, yeah.
02:01:20:21 – 02:01:41:13
Rod Khleif
I got a screaming deal under contract right now. Apartment complex in San Antonio, a mile away from another one that we own. And, you know, the one next door sold in 2022 for 137,000 a door. Same year. Everything ours. We’re buying for 100,000 a door. Wow. Give me an idea. It’s huge. Like a 40% discount. I mean, it’s incredible.
02:01:41:19 – 02:01:59:28
Rod Khleif
Incredible deal. Very excited about it, by the way, if you’re an accredited investor, text the word partner to 72345 and check it out. It’s or go to crazy capital.com. There’s a webinar there you can watch. In fact a great idea to watch it anyway, even if you’re not accredited. See how we present a deal on what we look for?
02:01:59:28 – 02:02:11:17
Rod Khleif
It’s very educational as well. But, well, Austin, I appreciate you coming down here, brother. I know you got caught up in Orlando traffic, but, you made it. And, appreciate you coming all the way over here. And there’s been a lot of fun talking to you, bud.
02:02:11:18 – 02:02:16:19
Austin Hair
It was absolutely. Yeah, it was my pleasure. Had did not account for the holiday. Yeah. Traffic. So I appreciate your patience with me.
02:02:16:19 – 02:02:24:09
Rod Khleif
No worries, no worries. Well, it’s a pleasure to meet you, bud. Likewise. Thanks. Thank you for listening to the lifetime cash flow Through Real Estate Investing podcast.
**Podcast Categories:** Podcasts
---
### [His First Multifamily Deal Was 197 Units At $21 Million](https://rodkhleif.com/podcasts/his-first-multifamily-deal-was-197-units-at-21-million/)
**Published:** May 1, 2026
**Author:** Bryan Hoover
**Excerpt:** His First Multifamily Deal Was 197 Units At $21 Million
**Content:**
## How Matthew Weaver Executes a Value-Add Multifamily Investment Strategy
In this episode of *Own Your Power*, Matthew Weaver breaks down how a disciplined, relationship-driven approach can unlock powerful opportunities in today’s multifamily market. With a background in global finance and large-scale project management, Matthew transitioned into real estate with a clear focus on applying analytical rigor and strategic execution to value-add multifamily deals. His journey highlights how both experienced professionals and newer investors can succeed by leveraging the right systems, partnerships, and mindset.
## From Global Finance to Multifamily Real Estate
Matthew Weaver brings a unique perspective shaped by decades in finance, including involvement in one of the largest IPOs in history. After years overseas managing large portfolios, he pivoted into real estate during the COVID era, initially starting with single-family investments before quickly scaling into multifamily. His transition underscores a key principle: transferable skills like financial analysis, risk management, and relationship building are powerful advantages in real estate investing.
## Inside a 197-Unit Value-Add Deal
One of the standout examples of Matthew Weaver’s value-add multifamily investment strategy is his recent 197-unit acquisition in Tennessee. Purchased for just over $21 million, the deal stood out due to strong in-place occupancy, minimal required capital expenditures, and immediate upside through operational improvements.
Key elements of the deal included:
- Conservative rent growth projections of 3–5% annually
- Immediate equity through buying below market value
- Low CapEx due to prior owner improvements
- Strong positive leverage with favorable agency debt
Rather than relying on aggressive assumptions, the strategy focused on steady performance and operational efficiency, a critical approach in today’s market environment.
## Driving NOI Through Operational Upside
A major component of Matthew Weaver’s value-add multifamily investment strategy is increasing net operating income through practical, tenant-friendly enhancements rather than excessive rent hikes. These include:
- Reserved parking programs that significantly boost property value
- Concierge trash services for added income and convenience
- Bulk internet and cable agreements to create additional revenue streams
- Strategic amenity upgrades like dog parks, outdoor spaces, and community areas
These improvements not only increase revenue but also enhance tenant satisfaction, helping maintain high occupancy and long-term stability.
## The Power of Relationships in Multifamily Investing
While underwriting and analytics are essential, Matthew Weaver emphasizes that relationships are equally critical. From brokers to lenders to sellers, trust and credibility often determine who gets access to the best deals. His ability to communicate his experience and execute reliably helped secure opportunities that might not be available to less established investors.
This relationship-first mindset also extends to residents. By prioritizing safety upgrades, community-building amenities, and thoughtful tenant policies, his approach balances profitability with long-term sustainability.
## Risk Mitigation Through Conservative Underwriting
One of the most valuable takeaways from this conversation is the importance of realistic underwriting. Rather than chasing overly optimistic projections, Matthew Weaver focuses on:
- Validating rent growth assumptions against market data
- Stress-testing deal performance under different scenarios
- Prioritizing deals with multiple paths to success
- Avoiding reliance on aggressive appreciation assumptions
This disciplined approach reduces downside risk while still allowing for meaningful upside.
## About Matthew Weaver
Matthew Weaver is a multifamily real estate investor with a background in global finance and large-scale project management. After a successful international career, he transitioned into real estate investing, where he now focuses on acquiring and operating value-add multifamily properties. Known for his analytical approach and strong relationship-building skills, he continues to scale his portfolio while helping create stable, community-focused housing.
If you want to hear the full conversation and detailed insights, watch the podcast video or read the complete transcript below.
## **Value-add Multifamily Investment Strategy FAQ**
**What is a value-add multifamily investment strategy?**
A value-add multifamily investment strategy focuses on acquiring apartment properties with untapped potential and increasing their value through operational improvements, renovations, and better management. Investors aim to boost net operating income by enhancing the property and optimizing expenses, which ultimately increases the asset’s overall valuation.
**Why is a value-add multifamily investment strategy popular among investors?**
This strategy is popular because it offers a balance between risk and reward. Investors can generate higher returns than stabilized assets while avoiding the extreme uncertainty of ground-up development. It also allows for more control over performance since improvements directly impact income and value.
**How do investors identify value-add multifamily opportunities?**
Investors typically look for properties with below-market rents, poor management, deferred maintenance, or underutilized amenities. Strong opportunities often exist where simple operational changes or modest upgrades can significantly increase income without requiring excessive capital.
**What are common ways to increase value in a multifamily property?**
Investors increase value by raising rents to market levels, improving property management, adding revenue streams like reserved parking or bulk services, and enhancing amenities such as fitness areas, outdoor spaces, or security features. Reducing unnecessary expenses also plays a key role in improving profitability.
**What are the risks of a value-add multifamily investment strategy?**
The main risks include overestimating rent growth, underestimating renovation costs, and facing unexpected market changes. Poor execution can also impact returns, especially if occupancy drops during renovations. Conservative underwriting and strong asset management are essential to mitigating these risks.
**How much capital is typically required for value-add multifamily investing?**
The capital required varies depending on the size of the property and the scope of improvements. Investors must account for the purchase price, renovation costs, operating reserves, and potential short-term income disruption. Many deals are structured through syndications, allowing investors to pool capital.
**How long does it take to execute a value-add multifamily strategy?**
Most value-add multifamily projects are executed over a three to seven year period. The first phase typically focuses on renovations and operational improvements, followed by a stabilization period where income increases and the property reaches its full potential.
**What role does property management play in value-add multifamily investing?**
Property management is critical to success. Effective management ensures high occupancy, tenant satisfaction, and efficient operations. A strong management team can identify additional income opportunities, control expenses, and execute the business plan effectively.
**How does a value-add multifamily investment strategy increase property value?**
Property value in multifamily real estate is largely based on net operating income. By increasing income and controlling expenses, investors can significantly raise the property’s valuation. Even small increases in income can lead to large gains in value due to capitalization rates.
**Is a value-add multifamily investment strategy suitable for beginners?**
It can be suitable for beginners if they partner with experienced operators or invest as limited partners in syndications. While the strategy offers strong upside, it requires knowledge of underwriting, asset management, and market analysis to execute successfully.
*Disclaimer: This summary was written with the help of AI and reviewed by Rod’s Team.*
00:00:28:23 – 00:00:49:04
Rod Khleif
Welcome back to Multifamily Rockstars. As you guys know, this is where we interview guests that are really crushing it in this business, and we actually go deeper on their deals. So today I’ve got Matthew Weaver and Matthew’s a warrior. He reminded me that we met at an event in Orlando. It seems like a lifetime ago. And, so we’re going to have a lot of fun today.
00:00:49:05 – 00:00:50:18
Rod Khleif
Welcome to the show, Matthew.
00:00:50:20 – 00:00:53:07
Matt Weaver
Thanks, Rhonda. Really appreciate it. Look forward to today.
00:00:53:09 – 00:01:09:03
Rod Khleif
Yeah. So why don’t you talk a little bit about your background? You know, I read it here, but I think you can do a much better job of just kind of outlining where you came from. I know you’ve got some interesting stories around your travels and and, but, yeah. So let’s talk about where you came from.
00:01:09:03 – 00:01:12:21
Rod Khleif
Not just not just in business, but geographically.
00:01:12:21 – 00:01:32:13
Matt Weaver
Let’s talk. Okay. All right. Yeah. And, so I’m actually, fifth generation Californian. My family goes all the way back to the gold rush and prior and so forth. And I, have traveled, you know, quite a bit ended up my wife is from England. And so when people ask, where are you from? It’s always, well, that’s kind of complicated.
00:01:32:13 – 00:01:54:24
Matt Weaver
So we were in, lived in France for a number of years, raised our kids there very young age and then spent about 15 years in Saudi Arabia and, have traveled from there. And they know the culture well. I understand the current situation very well. And that kind of thing. So we’ve we’ve had an interesting life.
00:01:54:24 – 00:02:03:10
Matt Weaver
My wife was in Dubai before it became the Las Vegas you see today. So, we’ve been around the Middle East a long time.
00:02:03:12 – 00:02:22:12
Rod Khleif
Wow, that I didn’t know. That’s interesting. You know, I lived in Israel for a while when I was a kid. I spoke Hebrew in Arabic when I was six years old. Forgot it all, unfortunately, when I immigrated. But, so how about on a business at the at the level of business. So talk about your background there, where you came from and, you know, maybe money joined the program, etc..
00:02:22:13 – 00:02:46:01
Matt Weaver
Yeah, yeah, I joined. So my background is finance. I’ve owned other my, my own businesses with partners and so forth. One of them was we had an investor group and bought boutique hotels. My wife spent 20 years with Intercontinental around the world. She speaks French, German, thus my kids do as well. They’re all multilingual.
00:02:46:03 – 00:03:04:05
Matt Weaver
And, so, we would buy these hotels and turn them around and so forth. I call my daughter, who’s our second born, my lucky charm, because my wife said, you know what? I want to be home with the kids. We sold the hotels and 2008 hit, and so we were already outsold, done.
00:03:04:06 – 00:03:04:18
Rod Khleif
At the time.
00:03:04:18 – 00:03:29:17
Matt Weaver
And it was very good time. I’d like to say there was tea leaves, but it was just pure good timing of my daughter. There, I traveled overseas, I worked, for Saudi Aramco. I’ve done other things in the Middle East as well. But my portfolio was on the, the, the IPO team for Saudi Aramco, largest IPO in the history of the world.
00:03:29:17 – 00:03:50:08
Matt Weaver
I had a $200 billion plus project portfolio. So I’ve been around finance and contract and all of that. And when Covid hit, I got tired of not being able to see my kids because the whole world shut down as ridiculously as we are now. So I came home and said, I’m starting real estate and started off with the single family.
00:03:50:10 – 00:04:04:01
Matt Weaver
After about eight months came across Warriors and it didn’t take long to figure out to join. And that was really the the start of my entire multifamily career was right there with with the warrior Group.
00:04:04:03 – 00:04:21:21
Rod Khleif
Well, so let me ask you this. What sort of listeners do you think would relate to you? I mean, certainly analytical, although you you’re a great communicator. I mean, most finance people are a little more, you know, a little more introverted, a little more analytical. I can see that’s actually not the case with you. But, you know, who do you think would relate to you?
00:04:21:23 – 00:04:38:17
Matt Weaver
I kind of got two groups. The first one is, and because I’ve met, you know, I’ve, I’ve been around a lot of young people and Boy Scouts, you know, just all sorts of stuff. And it’s the ones that are, oh, should I, should I try something, do it. Well, I make a mistake. I’m like, yeah, you will make a mistake.
00:04:38:17 – 00:05:07:18
Matt Weaver
And that’s how you learn. But you’re so young you can change. I changed from different businesses to to being overseas and back again in my lifetime, and all of them being successful because I took what I learned and moved it to the next. So it’s letting that young person, should I try real estate? Absolutely. With your runway and, you know, in front of you you will be Uber successful and you can learn from the right people, like your group, like warriors.
00:05:07:20 – 00:05:25:15
Matt Weaver
The second one is probably the one that’s a little close for the years of my age that I have a lot of experience, I have a lot of talents, have a lot of knowledge and wonder, oh, I don’t want to mess things up, but I want to make more money. All that experience has come to play, and I’ve had a lot to learn in real estate.
00:05:25:15 – 00:05:47:17
Matt Weaver
Didn’t come in knowing it. I mean, my I had experience from the title escrow. My mom had a five county escrow title in escrow company, but that was it. And so both groups, the younger one. Should I try absolutely older? When I say now I want to do another career jump in and there’s as you’ve taught, ways to mitigate the risk.
00:05:47:19 – 00:05:49:17
Matt Weaver
And it’s a it’s a team sport.
00:05:49:19 – 00:05:58:09
Rod Khleif
Of course it is. Yeah. And you know I’m going to tell you I is changing landscape as well. There’s going to be a lot of a lot of people that need should be looking at something as a side hustle.
00:05:58:11 – 00:05:59:01
Matt Weaver
Yeah. Absolutely.
00:05:59:01 – 00:06:15:21
Rod Khleif
So well, you know everybody you said it’s a team sport. And as a team sport, you want to bring your superpower to the game, you know, and there’s lots of different hats you can wear in this business. What would you say is your superpower? I mean, obviously you’re analytical if you’ve got a finance background. If you were involved in that IPO, Holy crap.
00:06:15:21 – 00:06:23:03
Rod Khleif
I had no idea. That’s that’s that’s some that’s some big numbers. That’s a lot of zeros. So talk about talk about your superpower.
00:06:23:05 – 00:06:45:24
Matt Weaver
The analytical part for the finance for sure. Understanding willingness to jump into the numbers and understand the rate and having a background that helps me do that. The second one is, is building relationships, as we know. So when I’ve had no deals other than single family, to be able to say, you know, what have you done lately that a broker wants to hear?
00:06:46:01 – 00:07:13:10
Matt Weaver
I’ve been able to develop that relationship and say, here’s my background, here’s how I’m going at it. And then they say, you know what? We’re still going to talk with you. We’re going to we’re going to bring you those good deals, and build the relationship with finance. And when you do meet potentially that owner direct and not with a broker building that relationship with that person, as you and I know there’s a lot of baby boom, we’re selling a lot of properties and they want to know who’s buying.
00:07:13:12 – 00:07:20:17
Matt Weaver
You got to develop that relationship. And so I think those are both my superpowers, because it ends up helping with negotiations as well.
00:07:20:18 – 00:07:39:02
Rod Khleif
Yes. Very unusual. Very unusual for you to have both those skill sets. I’m going to tell you, and, and that’s obviously speaks to your success. So let’s get into the deal. What was what was the first multifamily deal you did after, you know, joining the program and or, you know, irrespective of the program, what’s the first, you know, multifamily deal you did?
00:07:39:04 – 00:07:41:05
Rod Khleif
Can you talk about this first?
00:07:41:05 – 00:07:46:07
Matt Weaver
The one that we’re talking about is the 197 unit, in Tennessee.
00:07:46:09 – 00:07:47:11
Rod Khleif
Where it’s see.
00:07:47:13 – 00:08:01:05
Matt Weaver
It’s in Bristol, Tennessee. One property, where the racetrack for NASCAR that most people know. Right. And also in, Kingsport about 20 minutes away. So it was a package those.
00:08:01:05 – 00:08:02:17
Rod Khleif
Two deals together.
00:08:02:19 – 00:08:17:10
Matt Weaver
Package the two deals. They were the same seller, bottom as a package. And, it’s one of those unicorn deals, you know, it’s value add. We get 6 or 8 out of 100 that we underwrite actually work. And this is kind of a 1 or 2 deal.
00:08:17:12 – 00:08:20:08
Rod Khleif
When was this? When was this deal? What year?
00:08:20:10 – 00:08:26:20
Matt Weaver
That’s. We closed it, just April 15th of this year. Oh, we started working on it last year.
00:08:26:22 – 00:08:29:02
Rod Khleif
Oh, wow. Okay, so this is very new. Okay.
00:08:29:02 – 00:08:36:05
Matt Weaver
Yeah, yeah. We just we just, we started working on it in October. September, October took a while. Wow.
00:08:36:07 – 00:08:42:06
Rod Khleif
Congratulations. So. So what was the purchase price? What was the debt and what was the raise?
00:08:42:08 – 00:08:53:22
Matt Weaver
And so we had a purchase price at 21,125,000. Okay. Our raise was 6.4 million. That was, that was a challenge. We got her down. But that’s a big.
00:08:53:22 – 00:08:57:02
Rod Khleif
Specialty right now. It’s tough to raise money right now, but you got is.
00:08:57:04 – 00:09:27:07
Matt Weaver
And we we we clawed at it. The debts around 16 million and so forth. We have agency debt. Three point Sarah, 5.65. So we brought in a cap rate our with the final NOI for 2025. We actually bought it about at 8.1 cap. So we have over 240 basis points of positive leverage. We underwrote it at 88%, occupancy.
00:09:27:09 – 00:09:31:21
Matt Weaver
And we’re sitting today going in at 95, 96.
00:09:31:23 – 00:09:34:21
Rod Khleif
Well, it means that major rents are low too. Good for.
00:09:34:21 – 00:09:47:14
Matt Weaver
You. Yeah. So we’ve moved we’ve moved rents up a bit. But we’re, you know, and we don’t have a huge CapEx on it. I mean we looked at deals that are 3 million in CapEx. This one’s about 700,000.
00:09:47:16 – 00:09:58:10
Rod Khleif
Wow. So so why was this such a great deal. Why do you think you got such a great deal on it. What was the situation with the seller and or the was it market conditions? Was a debt coming. Do what do you think you got such a great deal.
00:09:58:15 – 00:10:22:12
Matt Weaver
In this particular case? The it was just timing with the seller say the truth because they’re, they’re a very capable, operator. They spend about $2 million on it before we bought it. So that’s why our CapEx is so low. We’re doing a lot of amenity and safety and that type of thing. But the units for the most part, like out of the 190, 790 are all redone.
00:10:22:14 – 00:10:51:02
Matt Weaver
But just to tell you the truth, it was it was just the right timing. With the lender, we were able to perform the the broker. In this case, it helped us had done business with us before, and I think it was just the combination, the relationships as we talked about earlier. Because as we got close to closing day, they flat out said if if this didn’t go through, we would have put it back on the market at 25 million.
00:10:51:04 – 00:10:58:02
Matt Weaver
Because they kind of she’s a little mom, dang it, we sold it that number. But, you know, we really bought it.
00:10:58:02 – 00:11:03:23
Rod Khleif
So you bought it at 21, a little over 21. And she would have listed at 25. So that makes you feel good okay.
00:11:03:23 – 00:11:09:23
Matt Weaver
You know why? For 2025 at a seven cap was was 24 750.
00:11:10:00 – 00:11:26:14
Rod Khleif
Wow. Fantastic. That that’s a seven cap as well. Fantastic. Yeah. So, what sort of rent increases are you anticipating? What are you what are you thinking? I mean, because obviously with that kind of occupancy, you know, you probably can’t push the rents. So what do you think.
00:11:26:16 – 00:11:37:05
Matt Weaver
Overall, the way that that we’re approaching this is not any crazy increases. So we’re going to have about 4 or 5% in the first year. And then a steady three after that.
00:11:37:11 – 00:11:40:23
Rod Khleif
Okay. That’s very that’s right. That’s very conservative very modest okay. Good.
00:11:41:04 – 00:11:55:14
Matt Weaver
And then we’re going to you also with the other income. We talk about like 2 billion. So we like to go in and seal and strike the parking lot. That way we can number it appropriately so we can have reserved parking places. Yep.
00:11:55:14 – 00:11:56:18
Rod Khleif
There you go.
00:11:56:20 – 00:12:06:03
Matt Weaver
Also, concierge trash, right? I mean, we have all the dumpsters. Will we’ll pretty them up because they’re kind of strewn around. And I guess also that happens.
00:12:06:03 – 00:12:22:21
Rod Khleif
The enclosures usually look like crap. You just got to clean all that stuff up, right? By the way, back to your, painting numbers in the parking spaces. I want to just give an example of the power of that. So, you know, we have a 296 unit asset in San Antonio. I talk about this, and and, we numbered the parking spaces.
00:12:22:21 – 00:12:37:13
Rod Khleif
We didn’t even pay for it. We had a tow company pay for it to have the towing contract. And, you know, we said first come, first serve, where, you know, it’s 25 bucks a month, you get a spot right in front of your unit. 100 people took it at that time. That property, the property’s like that when we’re trading at a four cap.
00:12:37:13 – 00:12:56:24
Rod Khleif
Believe it or not, that was a $750,000 increase in value for paint we didn’t even pay for. So yeah, these little things can make a huge difference. And by the way, if you’re listening, you’re like rod can’t do math. Let me give you the math real quick. So it’s 25 times 100 okay. That’s 2500 a month and you got to annualize it.
00:12:56:24 – 00:13:09:04
Rod Khleif
That’s 30,000. Now if you don’t think I’m telling the truth, divide 30,000 by 4%. See what you get. Exactly. Okay. Anyway. 750 so you’re doing concierge trash and you make a little bump on that to correct.
00:13:09:06 – 00:13:13:16
Matt Weaver
Exactly, exactly. And then the bulk Wi-Fi and the bulk cable.
00:13:13:18 – 00:13:27:22
Rod Khleif
That can be very profitable, but you got to get everybody to do it. And so as they renew leases, you got to make sure that’s part of the part of the deal. And anybody new coming in has to accept it. But it’s typically less than they pay on their own anyway. So it’s kind of a no brainer.
00:13:27:24 – 00:13:33:10
Rod Khleif
Right. And you get it. You get a spiff on it. You know, you nicely. Absolutely right to the bottom line.
00:13:33:12 – 00:13:50:22
Matt Weaver
Very well. And people, you know, they don’t want their rent to go up so much, but they’ll pay for the amenities. And so we get to the bottom line one way or another. We keep happy tenants and we keep the occupancy high, especially right now as things are just a little bit different out there. They’re focusing more on operations and occupancy I love it.
00:13:50:22 – 00:13:54:19
Rod Khleif
So talk about what you’re doing for security. But that’s a big one for me.
00:13:54:21 – 00:14:16:09
Matt Weaver
Security very question. So a lot of it is is bright because it doesn’t have any of that right now, in spite of being Tennessee. And the main door to the buildings don’t even have lots. There’s a starter electronic locks. Okay. LED lighting will light it up, but make sure it doesn’t, you know, shine into someone’s unit. But really light up the property that way.
00:14:16:11 – 00:14:29:23
Matt Weaver
Parking lot. And then the cameras that are actually going to be monitored and have so that we can react to it, if necessary, and have the tenants know that they have some protection there. So it really is such a big that.
00:14:30:00 – 00:14:41:02
Rod Khleif
Such a big deal. I love hearing that we do that at every one of our assets. So talk about any other amenities that that you’re you plan to do, these assets to just dress it up.
00:14:41:04 – 00:14:57:13
Matt Weaver
The, the in both cases, the properties are large parcels. Right? We’re talking multiple, multiple acres. There’s a lot of forest. There’s a lot of greenery. And so, like, the dog run is at one end of the property. Well, that means you’ve got about a four acre walk if you’re at the other end. And thus.
00:14:57:13 – 00:14:57:20
Rod Khleif
00:14:57:24 – 00:15:17:19
Matt Weaver
And we did our due diligence, there was lots of signs that said, please pick up after your dog, but they were only at the other end of the property. So we’ll add more dog runs that are closer to each building. There’s also a lot more gazebos and areas to barbecue with the barbecues as well. That’s kind of twofold.
00:15:17:21 – 00:15:42:04
Matt Weaver
A people want to be able to entertain, not just have a place they live where they hang their key and go back to work. That’s where they live, that’s where they bring friends. So having plenty of of the gazebo and the and the barbecues satisfies that amenity, but it also the small barbecues that are parked against the building right now that that could be a, a fire issue will go away because we’ll supply them.
00:15:42:04 – 00:15:49:09
Matt Weaver
And so it helps us on both sides. Yeah. We provide that. We get rid of those independent barbecues. Maybe someone puts one hot.
00:15:49:11 – 00:16:08:22
Rod Khleif
God forbid we had a fire burn down 20 units at my Nashville asset right down the road from you there. So you know, that’s a that’s a real that’s a and thank God nobody died. But, so, you know, I saw something in your notes here regarding, the some elderly tenants and even some, some ex-military. Can you speak to that?
00:16:08:22 – 00:16:10:24
Rod Khleif
Because I just love seeing that.
00:16:11:01 – 00:16:34:05
Matt Weaver
So as a as I stated prior, we’re very much about community, and, and building up that it’s not just a place that you have a key to a room kind of thing. And we, we when we did our due diligence, we found that we have a number of 85 year old, Vietnam vets and one lady has been in her unit for 28.5 years at the time.
00:16:34:05 – 00:16:35:11
Rod Khleif
Wow, wow.
00:16:35:11 – 00:16:44:06
Matt Weaver
And so, you know, rents have to go, equitably or, you know, the laws are for, you know, we’re not we.
00:16:44:06 – 00:16:51:10
Rod Khleif
Are we are we have we’re philanthropic at heart. But then again, we also, you know, altruistic. But, you know, this is a business. Yeah.
00:16:51:12 – 00:17:14:00
Matt Weaver
So we we arrange in properties that we’ll find a charity, a church, and we’ll make sure that, the that as the pricing creates challenges, a vet, or someone who’s been in the unit for 29 years, 28 years, that will make sure that they find a way to make up the difference because we would never want them put out, no matter what.
00:17:14:01 – 00:17:31:03
Rod Khleif
I love that, buddy. I can’t tell you how much I love that I really do. So you join the warrior group. I know you’ve you’ve you’ve done other deals besides this one. This is just the latest. You’ve done smaller stuff. You think you sit around a couple hundred units. And when we were offline, you know what? What value, if any of you got in from the warrior program?
00:17:31:05 – 00:17:43:21
Matt Weaver
You’re tremendous amount of value. I’ve met a number of people, and you found out very quickly. Hey, find something that you’re, I don’t want to say specialist, but you really understand and.
00:17:43:24 – 00:17:45:14
Rod Khleif
Enjoy or enjoy or.
00:17:45:20 – 00:18:09:18
Matt Weaver
Or enjoy or enjoy through. Absolutely. You know, some people it’s it’s investor relations. And so once you get down the line, that’s where they kicked in. But it was understanding the underwriting and using the, the MFA from Craig and understanding what that is. It’s an extensive setup. He has made it, I mean, but what it does for you.
00:18:09:22 – 00:18:28:10
Matt Weaver
But you got to practice at it. You got to go through and you’ve got to get reps. And that was where I could really understand the numbers and make sure from people who said, hey, don’t get too easy. Read on. Oh yeah, we can do these big increases, which is not our my nature anyway, but making sure that you’re a realist about what can you do to perform.
00:18:28:10 – 00:18:39:15
Matt Weaver
And when it says, yeah, they’re only doing 700,000 and NOI, but you can get 900, can you? Is it really realistic or should you make sure that you’re looking at all aspects of the finances?
00:18:39:17 – 00:18:58:03
Rod Khleif
So what he’s talking about guys, is you get DLA evaluate or software as a warrior and and and it’s very, very helpful. It comes with the program, by the way, if you’re interested in applying to our warrior program, I, I’m fairly certain at this point our warriors on about 300,000 units under my tutelage, something I’m incredibly proud of.
00:18:58:03 – 00:19:23:07
Rod Khleif
We’re counting and we’re like 275,000 or missing a ton of them, like this one. I don’t even think we have this one in our system. And so this is an example. So if you’re interested in applying text the word crush to 72345. That’s how you apply. You text crush to 72345. And they’re not just doing multifamily either. I’ve got tons of people doing senior housing, student housing, self-storage, mobile home parks, industrial, flex, you name it.
00:19:23:09 – 00:19:31:15
Rod Khleif
It’s just an incredible environment. So, so listening, are you okay with listeners reaching out to you? Matt, if if they have.
00:19:31:17 – 00:19:32:23
Matt Weaver
Okay, absolutely.
00:19:33:00 – 00:19:55:10
Rod Khleif
I see your email here. Matt. At a gentle Argent. Argent I’m sorry. Matt. Argent real estate.com Matt w state.com. Love it. Well listen Matt I really appreciate you coming on. It’s a pleasure to see you again I know forgiveness you know these Orlando events. There’s a thousand people and you mentioned that our little conversation I’m I’m grateful for that.
00:19:55:10 – 00:20:10:05
Rod Khleif
But I, I forgot what I had for breakfast. But, you know, it’s it’s it’s great to see you and, Yeah. Really. Congratulations on that deal. Sounds like an absolute frickin home run. And, you know, only only more to come, right?
00:20:10:07 – 00:20:18:22
Matt Weaver
Absolutely. Already searching out the next ones. And, you know, you got to capitalize on that. Well, well, you got this win. You know the brackets right now. This is the broker.
00:20:18:24 – 00:20:28:10
Rod Khleif
And the broker. See you’re serious. You’re going to be at the top of their list right now. You can actually close. That’s when the floodgates open. So yeah yeah that’s a very very very good point. Well it’s such.
00:20:28:10 – 00:20:35:10
Matt Weaver
A great team that we work so well together which is also invaluable. So yeah we are all moving fast and furious.
00:20:35:15 – 00:20:39:11
Rod Khleif
I love it, love it, love it. All right. You be well, buddy. Thanks so much. You too.
00:20:39:12 – 00:20:40:06
Matt Weaver
Take care.
00:20:40:08 – 00:20:40:19
Rod Khleif
Take care.
**Podcast Categories:** Multifamily Rock Stars, Podcasts
---
### [We Looked at 210 Deals Last Year and Only Bought 8 - Here’s What We Found](https://rodkhleif.com/podcasts/real-estate-buy-side-advisory-strategy-aubrey-linville-nick-gonzalez/)
**Published:** April 27, 2026
**Author:** Bryan Hoover
**Excerpt:** We Looked at 210 Deals Last Year and Only Bought 8 - Here’s What We Found
**Content:**
### What Is a Real Estate Buy Side Advisory Strategy?
A real estate buy side advisory strategy is an approach where investors proactively source, negotiate, and acquire assets or businesses on behalf of a buyer, rather than waiting for listed deals. In this conversation, Aubrey Linville and Nick Gonzalez break down how this strategy helped them scale acquisitions across multiple industries, including automotive, childcare, and health and wellness. Instead of relying solely on traditional brokerage listings, they built systems to directly approach owners, uncover off-market opportunities, and structure deals that include both real estate and operating businesses.
This strategy becomes especially powerful in competitive markets where traditional deals no longer pencil. By controlling the sourcing process, investors gain a significant edge, allowing them to find value where others are not looking.
### From Foreclosures to Scalable Deal Flow
Both Aubrey Linville and Nick Gonzalez started their careers during the chaos of the Great Financial Crisis, using adversity as an opportunity to build deep experience. Aubrey began by buying and flipping single-family homes before transitioning into commercial brokerage and eventually founding his firm. Nick entered real estate at a time when most were exiting, aggressively acquiring rental properties and building a strong foundation in distressed assets.
Their early exposure to distressed markets shaped their mindset. They learned to think contrarian, act decisively, and focus on long-term scalability rather than short-term wins. This foundation ultimately led them to develop a buy side advisory model that allows them to consistently generate deal flow across cycles.
### How Buy Side Advisory Creates a Competitive Advantage
One of the most valuable insights from the discussion is how buy side advisory flips the traditional deal model. Instead of waiting for opportunities, their team actively creates them. This includes:
- Direct outreach to business owners to uncover acquisition opportunities
- Structuring deals that combine operating businesses with real estate
- Scaling acquisitions for large operators looking to expand rapidly
This approach enabled them to help a client grow from just a handful of locations to hundreds, demonstrating the power of consistent, proactive sourcing. It also highlights a key shift in today’s market: the best deals are rarely found on listing platforms.
### Partnership Strategy and Long-Term Success
A major theme throughout the conversation is the importance of partnerships in scaling real estate businesses. Aubrey and Nick emphasize that successful partnerships are built on trust, integrity, and complementary skill sets. One partner focuses heavily on analytics and underwriting, while the other excels in relationship building and intuition.
They also share a practical framework for evaluating partners:
- Look for alignment in values and long-term goals
- Ensure both parties can handle conflict without ego
- Prioritize trust and accountability over technical skill alone
Their experience reinforces that real estate is ultimately a people business, and the quality of relationships often determines the outcome more than the deal itself.
### Lessons from Failure and Deal Selection
Another key takeaway is their disciplined approach to deal selection. Despite underwriting hundreds of opportunities, they only close on a small percentage. This level of selectivity protects capital and ensures they focus on high-quality investments.
They also highlight an often-overlooked metric: return on time. Some deals may appear profitable on paper but require excessive time, energy, and stress. In many cases, walking away early or exiting quickly is the better decision, even if it means taking a small loss.
### Why Geography and Focus Matter
As their portfolio has grown, Aubrey Linville and Nick Gonzalez have become more intentional about geographic concentration. While they initially pursued opportunities across various markets, they now focus on building density within specific regions. This allows them to improve operational efficiency, leverage local expertise, and create economies of scale.
Their strategy reflects a broader trend among successful operators: start opportunistically, then refine and concentrate as you scale.
### Leveraging Systems and Technology for Growth
The conversation also touches on the importance of systems and technology in scaling a real estate business. From CRM platforms to operational frameworks like EOS, they emphasize creating structure within the organization. By reducing friction and optimizing workflows, they are able to move faster and handle more volume without sacrificing quality.
Small improvements in efficiency, compounded over time, create a significant competitive advantage. This mirrors the broader principle that consistent incremental gains lead to exponential results.
### Guest Bio: Aubrey Linville & Nick Gonzalez
Aubrey Linville and Nick Gonzalez are partners at Linville Team Partners, a commercial real estate firm specializing in brokerage, investment, and buy side advisory services. With backgrounds in distressed assets and commercial brokerage, they have built a diversified platform that spans multiple asset classes and industries. Their expertise includes syndication, M&A advisory, and scaling acquisition strategies for large operators across the United States.
## **Real Estate Buy Side Advisory Strategy FAQ**
**What is a real estate buy side advisory strategy?**
A real estate buy side advisory strategy is a proactive approach where investors or advisors identify, source, and negotiate property or business acquisitions on behalf of a buyer. Instead of waiting for publicly listed deals, this strategy focuses on uncovering off market opportunities, building direct relationships with owners, and structuring transactions that create long term value. It is commonly used by experienced investors to gain a competitive edge in tight markets.
**How does a real estate buy side advisory strategy work?**
This strategy works by actively searching for opportunities that are not widely marketed. Advisors conduct outreach to property owners, analyze potential deals, and negotiate terms that align with the buyer’s investment goals. It often involves combining market research, relationship building, and financial analysis to identify undervalued assets or businesses that include real estate.
**Why is a real estate buy side advisory strategy effective in today’s market?**
In competitive real estate markets, many of the best deals are never publicly listed. A buy side advisory strategy allows investors to bypass crowded marketplaces and access exclusive opportunities. This approach also gives buyers more control over deal flow, pricing, and negotiation, making it easier to find investments that meet specific return criteria.
**Who should use a real estate buy side advisory strategy?**
This strategy is ideal for experienced investors, syndicators, and operators looking to scale their portfolios. It is especially valuable for those who want to acquire multiple assets, expand into new markets, or gain access to deals that are not available through traditional brokerage channels.
**What types of assets can be acquired using a buy side advisory strategy?**
A real estate buy side advisory strategy can be applied to a wide range of assets, including multifamily properties, retail centers, industrial buildings, office spaces, and even operating businesses that include real estate. It is also commonly used in niche sectors like healthcare, childcare, and automotive service businesses.
**What are the benefits of a real estate buy side advisory strategy?**
The main benefits include access to off market deals, reduced competition, improved pricing, and greater control over the acquisition process. Investors can also build stronger relationships with sellers, which can lead to repeat opportunities and long term deal flow.
**How is buy side advisory different from traditional real estate brokerage?**
Traditional brokerage focuses on representing sellers and marketing properties to the public, while buy side advisory represents the buyer’s interests. The advisor’s role is to find and secure the best possible deals for the buyer, often through direct outreach and creative deal structuring rather than relying on listings.
**What skills are needed to execute a buy side advisory strategy successfully?**
Successful execution requires strong negotiation skills, financial analysis, market knowledge, and relationship building. Investors must also be disciplined in underwriting deals and patient in sourcing opportunities, as the best deals often take time to uncover and close.
**How can beginners start using a real estate buy side advisory strategy?**
Beginners can start by building relationships with brokers, investors, and property owners while learning how to analyze deals. Partnering with experienced operators and focusing on a specific market or asset class can also help accelerate learning and improve results. Over time, consistent outreach and networking can lead to a steady pipeline of opportunities.
**What are common mistakes to avoid with a buy side advisory strategy?**
Common mistakes include being too narrow in investment criteria, failing to build strong relationships, and lacking proper financial analysis. Another mistake is expecting immediate results, as this strategy requires persistence and consistency. Investors should also avoid overextending themselves and focus on deals where they have a clear competitive advantage.
*Disclaimer: This summary was written with the help of AI and reviewed by Rod’s Team.*
01:20:07:26 – 01:20:27:26
Rod Khleif
Welcome back to lifetime cash flow to real estate investing. I’m Rod Cleef and I’m thrilled you’re here. And we’ve got kind of a unique interview today with two gentlemen. That, are with, the company is Linfield team partners, and we’ve got our Aubrey Linville and Nick Gonzalez, and they’re from Charlotte. Is that right?
01:20:27:28 – 01:20:28:24
Nick Gonzalez
Our north of Charlotte.
01:20:29:00 – 01:20:29:16
Rod Khleif
North Quincy.
01:20:29:17 – 01:20:30:12
Nick Gonzalez
Salem, North Carolina.
01:20:30:12 – 01:20:48:23
Rod Khleif
Okay, okay. And they’re in multiple asset classes. They’ve got they’ve got their own brokers that they’ve had for years, 20 year career. They’re both Kim’s, which I will tell you is saying something. My brother’s a Kim and I decided I thought I would try and do it. I made it through one class. I’m like, nope, this is not me.
01:20:48:24 – 01:21:01:21
Rod Khleif
I mean, do you guys love numbers? You have to love numbers to be a Kim. And I’m the mouthpiece. I am not the numbers person, but, you know, congratulations on that because that is an impressive designation. Like I say, my brother is. Is that as well? So welcome.
01:21:01:23 – 01:21:03:19
Nick Gonzalez
Thank you, thank you. Appreciate you having us.
01:21:03:21 – 01:21:18:15
Rod Khleif
So why don’t one of you, you guys take turns and just. You maybe give me a much better background than I just did? Talk about, you know, where you came from. And why this business and, you know, kind of to fill in the fill on the pieces.
01:21:18:17 – 01:21:20:16
Nick Gonzalez
I’ll let Aubrey take. I’ll take the first thing.
01:21:20:22 – 01:21:38:13
Aubrey Linville
I’ll take the first one. I grew up in a very entrepreneurial family. My father was in the Putt-Putt golf and games business. Putt putt. Putt putt. Oh, wow. East of the Mississippi was kind of his his playground. And, location was always the most important part. He was in it for the real estate more than operating it.
01:21:38:13 – 01:21:43:27
Rod Khleif
Just like storage. Yeah. You buy, you buy, you have something that makes money, and then you do it for the real estate.
01:21:43:27 – 01:22:03:09
Aubrey Linville
Yeah. So he was very passionate about family entertainment, but he was really, much more passionate about real estate. So what we talked about around the dinner table was typically real estate. So it’s always been a part of my life and a part of the fabric of my family. And, graduated from college, started a couple small businesses, just hustling, rubbing two nickels together, trying to make a quarter.
01:22:03:12 – 01:22:18:11
Aubrey Linville
And, found myself in my mid 20s, I had exited a business, had a little bit of money, not much trying to figure out what was next for me and to keep from getting a real job. I started buying foreclosures at the courthouse, for $33,000. Single family house.
01:22:18:11 – 01:22:19:21
Rod Khleif
Where and when?
01:22:19:23 – 01:22:25:18
Aubrey Linville
This would have been in 2004. Okay, where? So I’ll I’ll give you the evolution of that in a quick way in Winston-Salem.
01:22:25:18 – 01:22:26:19
Rod Khleif
North, this wasn’t the same place.
01:22:26:19 – 01:22:40:18
Aubrey Linville
Okay. So, sort of flipping houses, you know, buying a house for 30, put in 20 in it, trying to get it, 20,000 net out of it at the end of the day. And that worked really well until the GFC came. And then going through the GFC at 41 houses, I was.
01:22:40:24 – 01:22:42:03
Rod Khleif
What do you what was the GFC.
01:22:42:03 – 01:22:43:03
Aubrey Linville
Great financial crisis.
01:22:43:03 – 01:22:45:17
Rod Khleif
Oh okay. Yeah I, I’m well I know that one.
01:22:45:17 – 01:22:46:08
Aubrey Linville
Well yeah.
01:22:46:08 – 01:22:56:15
Rod Khleif
The you know my recent depression. Yeah. No. Yeah I lost 50 million in that GFC. I’ve never heard it called that before but yeah that was, that was my I had 800 houses. Yeah. Crashed and burned anyway.
01:22:56:15 – 01:23:17:28
Aubrey Linville
So 41 houses, mid mid 20s, two kids at home. Wow. Trying to figure out what the hell I’m going to do. And fortunately, I was offered a job to get into commercial real estate brokerage. And, I saw it as an opportunity to to pivot my career, do something that was, you know, I really enjoyed the thrill of the hunt more than fixing the house up and flipping it.
01:23:18:00 – 01:23:31:04
Aubrey Linville
Dove in feet first. Started a little special asset service division of a brokerage after three and a half years there. Cut out with, gentleman by the name of Coleman team, which is where the name level team partners came from. Gotcha. No longer business.
01:23:31:08 – 01:23:33:16
Rod Khleif
I’m sorry. Let me stop you for as a special asset.
01:23:33:17 – 01:23:46:24
Aubrey Linville
What special asset services division? So, basically, we were, the guy that offered me a job at this brokerage shop, and I went to all the local and regional banks that the foreclosures were coming in so fast, they didn’t have the staff.
01:23:46:25 – 01:23:47:06
Rod Khleif
Right.
01:23:47:11 – 01:23:52:18
Aubrey Linville
To, to execute on, on these properties that were coming in. So they needed us to go out and give them an opinion.
01:23:52:20 – 01:23:55:11
Rod Khleif
To rise them. They had to do all these things and remember.
01:23:55:11 – 01:24:08:12
Aubrey Linville
Yeah, yeah, they they were trying to figure out what the hell they had. Right. What are they going to do with it if they do foreclose on it, take title back. So we help them figure that out. And it turned out to be that that was what was transacting during the financial crisis. That was about it.
01:24:08:16 – 01:24:09:21
Rod Khleif
That was all that was transacted. Yeah.
01:24:09:21 – 01:24:34:09
Aubrey Linville
So we went from zero to hero pretty quick. Cool. And after three and a half, four years struck out and started level team partners, which is which is where we are now. Nick is my business partner, and friend. And we’ve just having a great time doing what we’re doing. That’s that’s the history of it. I think, we both love to surround ourselves with young, energetic people that love the hustle and love to have a material impact on whatever it is that they’re doing.
01:24:34:09 – 01:24:40:12
Aubrey Linville
And for us, it’s, you know, buying, syndicating deals and running our brokerage shop in our M&A business.
01:24:40:15 – 01:24:48:01
Rod Khleif
So you’ve got, you’ve got, 38 agents, as it were, brokers, salespeople. We have 30.
01:24:48:04 – 01:25:04:07
Aubrey Linville
Call it mid 30s people in our company. All of those are brokers. Got you. So, we our business has three different divisions, and one of those is a brokerage shop. And the closer you get to our home town, the more revenue that comes from that brokerage operation. But we are operating all over the country.
01:25:04:09 – 01:25:28:06
Rod Khleif
And and you’ve got to fund syndicating deals. Like you told me before we started recording. You’ve done, recently, you’ve done, some office, more single tenant, but or 1 or 2 tenant office stuff because I raised my eyebrows when you said office and you clarified, retail and some industrial. Yeah. Right. Okay. And, and then you also describe that M&A, piece that you’re doing, which is really cool.
01:25:28:07 – 01:25:47:03
Aubrey Linville
It’s unique. So, we, we, we fell into this doing work for a client of our Stricklin brothers, ten Minute Oil change. When we got engaged with them, they hired us to help them do site selection work. And, it was becoming more and more of a seller’s market, becoming more and more of a contractor’s market. And it was getting hard for deals to pencil.
01:25:47:03 – 01:26:05:10
Aubrey Linville
So we started picking up the phone and like I said, there are ten minute oil change shop. And so we started calling. I’m going to make a name up Billy Bob’s oil change and Timbuctoo. And convincing them that we had a real buyer in our pocket. They wanted to buy their business and it almost always came with real estate.
01:26:05:10 – 01:26:23:04
Aubrey Linville
So we found we had the skill set, obviously in the real estate. But we also had the skill set to help them acquire the business. And so we did that at scale. We started with about seven locations with them. They’re eclipsing 300 locations now. Wow. And we’re doing that in, several other.
01:26:23:07 – 01:26:25:20
Rod Khleif
And you’re calling this buyer advisory. Yeah.
01:26:25:20 – 01:26:26:07
Aubrey Linville
Buy side.
01:26:26:07 – 01:26:32:00
Rod Khleif
Advisory. Right. Yeah. For it. And and it’s automotive child care.
01:26:32:00 – 01:26:34:26
Aubrey Linville
Child care. And we’re just getting into the health and wellness business.
01:26:34:27 – 01:26:55:04
Rod Khleif
That’s super exciting. Yeah. You know, I and I think that opportunity is going to do nothing but go go crazy. There’s 10,000 people a day turning 65 in this country. And a lot of them own businesses, a lot of them auto repair shops, health and wellness businesses, you know, and and the like. And, you know, I expressed to you before we started recording that’s an interest of mine is to buy these businesses as well.
01:26:55:04 – 01:27:00:18
Rod Khleif
So, fascinating. And Nick, anything to add, as far as background before we.
01:27:00:18 – 01:27:28:09
Nick Gonzalez
Yeah, sure. Aubrey and I have somewhat similar stories. I’ve worked I’ve worked every job you can imagine since 14. Hustled every, so I could ever think of, paid most of college through online poker. And poker. Yeah. Yeah. I, I met my wife when I was in my third year of college and realized that long distance wasn’t going to work, so I kept thinking to myself, like, okay, well, what can I do to make money?
01:27:28:11 – 01:27:45:08
Nick Gonzalez
While, you know, she’s still in college? She was in her first year. And I’ve always gravitated towards sales, but it was like, well, I’m not going to sell knife sets to make $30. I’m not going to sell cars to make $300. What can I sell? And so I got my start in residential. I did residential real estate for two years.
01:27:45:16 – 01:27:46:05
Rod Khleif
Selling real.
01:27:46:05 – 01:27:54:12
Nick Gonzalez
Estate, selling real estate, all foreclosures. Selling. When was this? This was. I got my license end of 2009. Wow. So the.
01:27:54:12 – 01:27:54:20
Rod Khleif
Very.
01:27:54:20 – 01:27:55:15
Nick Gonzalez
Brave. Yeah.
01:27:55:15 – 01:27:56:18
Rod Khleif
To get into the business.
01:27:56:20 – 01:28:10:27
Nick Gonzalez
Everybody was running out of a burning building, and I was the only person that was like, oh, let me get my licenses. There were 30 people in my licensing class, and there hadn’t been a class for four months. Like it was. Yeah, yeah. But, so I figured, you know, if everyone’s getting out, now’s a good time to get in.
01:28:10:29 – 01:28:22:03
Nick Gonzalez
And it was a great time to learn because it was almost like, it’s like you’re walking out into the battlefield. Like asking the soldiers who are like. Like what happened? Like, where did the gunfire come from? Like, what did the enemy look like? Like you learn.
01:28:22:03 – 01:28:29:06
Rod Khleif
So nobody knew what the enemy was, but, you know, it was like a light switch went off. I mean, it was the craziest thing I’ve ever seen or experienced, but.
01:28:29:08 – 01:28:48:06
Nick Gonzalez
I was able to learn so much so quickly. And every single commission check I made, I went out and bought a house at the courthouse. Nice. So if I got a 15 hour commission check, I go out and buy a $1,500 round house. I got a $15,000 commission check on my $15,000 round house. But yeah, I was able to get, 28 rent houses in my first two years.
01:28:48:06 – 01:28:56:02
Nick Gonzalez
Well, got into multifamily, started realizing I was doing more commercial than I was doing residential.
01:28:56:04 – 01:28:57:11
Rod Khleif
And more zeros.
01:28:57:14 – 01:29:13:13
Nick Gonzalez
And more zeros, and Aubrey and I connected, I think in like 2012, really, really hit it off. And by 2013, I was full time commercial, working with him at limited time partners. And eventually we would become, you know, the two owners of the brokerage.
01:29:13:15 – 01:29:14:15
Rod Khleif
01:29:14:18 – 01:29:21:01
Nick Gonzalez
But yeah, it was, it was a fun start, like learning by doing. Yeah. Because.
01:29:21:04 – 01:29:31:05
Rod Khleif
Perfect timing for you, brother. Yeah. I was like, I was, I was on the battlefield world. Knives all over me, hiding under a rock. But, you know, shit happens.
01:29:31:08 – 01:29:41:12
Nick Gonzalez
It’s all well, and I don’t know, again, like it. I think one thing that’s helped me has always been to, like, try to go contrarian, or try to, like.
01:29:41:14 – 01:29:49:09
Rod Khleif
Be fearful when others are greedy and greedy when others are fearful. And there’s a lot of fear right now. There was ever a time to be greedy. It’s right freakin now. I keep screaming that from the rooftops.
01:29:49:09 – 01:29:58:00
Nick Gonzalez
Yeah, yeah. So, but that was a great way to get started. A great way to build up a really strong foundation. And, you know, a great way to meet my. Yeah, future business.
01:29:58:05 – 01:30:19:26
Rod Khleif
Let’s talk about that for a minute. So you guys have been partners for a long time in this business is a team business. This is not you’re not going to go out there and buy apartment complexes by yourself. It it happens, but it’s extremely rare. So, you know, how did the partnership develop. What do you look for. You know, maybe you give some advice for what to look for in a prospective partner.
01:30:19:29 – 01:30:36:25
Rod Khleif
And how to, you know, because I’ve, I’ve got one right now I’m going to mediation on. Okay. And I teach this stuff and I know better, but I, you know, it’s it’s it’s, unfortunate, situation. But, you know, I’ve had I’ve had great partnerships and I’ve had some that are not so great. So how did you guys make it work?
01:30:36:25 – 01:30:40:24
Rod Khleif
And maybe you can advise some of the people listening on how they can make it work.
01:30:40:26 – 01:31:04:13
Aubrey Linville
Yeah. I’ll hit this one quick. Let Nick fill in. I think my superpower is, being able to surround myself. Great people. And I think that comes to business partnerships, friends, LPs, you know, anybody. And I think I think the more people you surround yourself with a great piece of advice I heard from Coleman team his dad had given him was, you’re the average of your five closest friends?
01:31:04:16 – 01:31:12:18
Rod Khleif
No question. Show me or show me your five closest friends. I’ll show you who you are in every aspect of your relationships, your health, your happiness, your relationships, and definitely your finances.
01:31:12:18 – 01:31:20:25
Aubrey Linville
Yeah. And or, you know, you’re as happy as your unhappiest child. You’re right. Good as your your worst five investors. I mean, you know, it it comes down to all these different things. You can look at.
01:31:20:25 – 01:31:21:15
Rod Khleif
Proximity.
01:31:21:21 – 01:31:29:02
Aubrey Linville
At the end of the day, things aren’t ever going to go perfect. Sounds like you have some, battle stories.
01:31:29:02 – 01:31:29:28
Rod Khleif
And I do.
01:31:30:01 – 01:31:50:02
Aubrey Linville
The people that you appreciate going to war with are the ones that, that have integrity, that have integrity, great, great ethics and that trust you implicitly. It’s got to go both ways. And I think that’s that’s really where, Nick and I have such a special partnership, but but also everybody in our business. Yeah.
01:31:50:04 – 01:31:51:09
Rod Khleif
So how do you identify those.
01:31:51:10 – 01:31:54:15
Aubrey Linville
Partners on a capital table? Yeah, but we’re partners in some way.
01:31:54:19 – 01:32:17:27
Rod Khleif
How do you identify these qualities? You do your own. I mean, you’re obviously very analytical. If you’re camco, you do you do some some serious due diligence? Yeah. I’ve got a great partner now, Sam. We trust each other completely. But, yeah, you know, again, I teach this stuff, and I, I, by the way, if you’re listening at my link tree, I’ve got a book about the questions you should ask before you get into a partnership.
01:32:17:29 – 01:32:27:08
Rod Khleif
And it’s a great resource because, you know, you get caught up in the emotions. Sometimes you move a little too quickly, but maybe you can elaborate on anything else in that regard. You know.
01:32:27:11 – 01:32:45:26
Aubrey Linville
This business has to be analytical, right? You got it. You got to be able to put most things in a spreadsheet. But I think that’s really where Nick’s skill set lies. He can rip through it through an Excel spreadsheet or, okay, you know, Yardi or Argus model, rather, I can rip through a personality assessment. Okay. You know, and that’s the magic that’s happened.
01:32:45:26 – 01:32:46:25
Aubrey Linville
Oh, that’s that’s beautiful.
01:32:47:00 – 01:32:49:13
Rod Khleif
That’s that’s a that’s yin and yang right there. Yeah. You know, I.
01:32:49:13 – 01:33:01:18
Aubrey Linville
Think my, my wife would tell you, I trust too soon. I like to trust, verify. And she likes to verify. And then trust him. But I like you know, I think if you if you find somebody that is a good gut check. Yeah. And you feel like you have similar interests.
01:33:01:18 – 01:33:22:14
Rod Khleif
Let me elaborate on what you just said. Yeah. You know, your brain is so freaking powerful. If something doesn’t feel right, trust it. Yeah. Because, you know, you can pick up on these micro nuances that you’re consciously not aware of, but it just doesn’t feel right. There’s a book about this called blink, where an art expert can look at a painting that looks real, but they know it’s a fake.
01:33:22:14 – 01:33:35:08
Rod Khleif
They just don’t know why. They know it’s a fake. Same thing with people. And women are better at this. They’ve got intuition. But, guy, you know, and and and I every time I’ve ignored it, I’ve had my ass handed to me every single time.
01:33:35:11 – 01:33:56:17
Nick Gonzalez
So there’s, What made it click for me was, Adam Grant’s book, Give and Take. So, like, you’re either a giver, immature or a taker. And givers are, like, the top 20%, and the bottom 20% of achievers because they give first. And so they’re really susceptible to getting taken advantage of and like, getting like steamrolled.
01:33:56:17 – 01:34:01:06
Rod Khleif
Wow. Or that book, what’s it called again? Because I’m definitely on the top 20% on.
01:34:01:06 – 01:34:01:18
Nick Gonzalez
That give and.
01:34:01:18 – 01:34:02:18
Rod Khleif
Take, give and take.
01:34:02:19 – 01:34:21:21
Nick Gonzalez
Okay. So again, givers are the top performers and the bottom achievers. And then you have matchers where everything is quid pro quo. And then you have takers which like it’s pretty self-explanatory. And I think like one of the golden rules that Aubrey and I have is if we can have a disagreement about something, I’m sure whoever.
01:34:21:25 – 01:34:22:25
Rod Khleif
And you will.
01:34:22:28 – 01:34:23:21
Nick Gonzalez
And you will, and.
01:34:23:22 – 01:34:24:05
Aubrey Linville
We have.
01:34:24:06 – 01:34:24:17
Rod Khleif
And you.
01:34:24:17 – 01:34:46:05
Nick Gonzalez
Have and we have. But whoever feels whoever feels the strongest about it wins. But you can’t always win, right? So like, we both have full veto, but you but you can’t veto all the time. Right. And so you have to have like an egoless partnership where like you’re willing to concede because you know, the other person is going to do it if they feel strongly enough about it too.
01:34:46:05 – 01:35:06:13
Nick Gonzalez
So like all the partnerships I’ve ever had that haven’t worked out, including ones that I’m in now, it’s where you have, like the immovable, inflexible, unreasonable person. And sometimes that’s you. Like, sometimes that’s you and you don’t know. I mean, I don’t think it’s me currently, right. But like, if you’re, if you have a string of bad partnerships, like at some point you need to ask yourself, like, yeah.
01:35:06:13 – 01:35:07:10
Rod Khleif
Who’s the common denominator?
01:35:07:10 – 01:35:22:00
Nick Gonzalez
Is someone in this me or am I just seeking out the wrong kinds of people for the wrong reasons? Right. Because something like something always goes wrong. Something’s gonna go wrong eventually. But if you’re with someone who, you know, has your back.
01:35:22:03 – 01:35:22:13
Rod Khleif
So.
01:35:22:16 – 01:35:24:12
Nick Gonzalez
In the long run, it’ll it’ll work out so.
01:35:24:12 – 01:35:44:23
Rod Khleif
Important. You know, when I, when I do my bootcamps, I have panelists that are my students that come on and answer questions. And the question I always ask is, talk about a seminar. You know, I call my failure seminars. I was a $50 million seminar. It was an expensive freakin seminar. But, you know, you learn more from those than I think you do from successes and and and we all have, I know you guys have plenty of battle.
01:35:44:23 – 01:35:54:12
Rod Khleif
In fact, you know what? Let’s go there. Talk about a seminar. Talk about a time you got your ass handed to, and maybe one with a lesson. If possible. Because we’ve got we’ve got a menu of them to choose from.
01:35:54:15 – 01:35:58:10
Nick Gonzalez
Yeah, I’ll. I don’t want to give you, like, a cop out answer, but I.
01:35:58:12 – 01:35:59:26
Rod Khleif
Come on now. All right.
01:35:59:28 – 01:36:17:11
Nick Gonzalez
There’s a real there’s a more there’s a point to it. Okay. I would say my biggest failures haven’t been the ones that have cost like the most necessarily financial dollars. It’s been where I’ve had the worst, either the worst return on time or the worst return on involvement. Oh, that’s the good is if you can get out of a deal, if you can pay.
01:36:17:11 – 01:36:38:05
Nick Gonzalez
If so, back to partners. If you have a problematic partner and you can pay somebody out to get out and make them go away quickly, that’s always the right choice. Great. My biggest failures have been ones where something has been long and drawn out, or where my return on time, and I’ve had real estate deals I’ve done where I’m like, man, my return on time on this was $3 an hour is terrible.
01:36:38:07 – 01:36:47:28
Nick Gonzalez
I would have rather lost money, but get out quick then have a really horrible, a great answer. So I think like knowing when to just chop, you know, cut, cut bait.
01:36:47:28 – 01:36:49:21
Rod Khleif
Yeah. Know when to cut bait. Yeah. No.
01:36:49:21 – 01:36:50:06
Nick Gonzalez
No one. That’s a.
01:36:50:06 – 01:37:02:21
Rod Khleif
Great answer. And that’s a, that’s a challenge sometimes, you know, you’ve got so much time invested, you’re like oh but but very often that’s, that’s the get off quick right choice. Yeah. Yeah a great answer okay. You what have you got?
01:37:02:24 – 01:37:03:22
Aubrey Linville
I got plenty of battle scars.
01:37:03:27 – 01:37:06:14
Rod Khleif
We all me that’s why that’s the point. But I would.
01:37:06:14 – 01:37:12:13
Aubrey Linville
Say, you know, when you’re young, you’re naive, which is also a superpower because you don’t.
01:37:12:13 – 01:37:13:28
Rod Khleif
Know what’s around. You don’t know what you don’t know.
01:37:14:01 – 01:37:34:11
Aubrey Linville
Well, when you’re young, you probably you think you can do more and you know more than you actually do. So there’s a couple projects that we bit off that were bigger than we could chew. We bought an office building in, Central business district in Winston-Salem, 8.7 acres, 18 high end of the highest end condos. Didn’t make any money on it.
01:37:34:11 – 01:37:50:29
Aubrey Linville
Lost a little bit, but the the the the lessons we learned there were really valuable. Sure. But at the cost of a couple of years of our life and all this gray hair on my head. So. Yeah, I would say just it’s just one of those things that you have to figure out sometimes the hard way when you’re young and.
01:37:50:29 – 01:38:09:13
Rod Khleif
What doesn’t kill you makes you stronger. I mean, you know, I wouldn’t be here today if I hadn’t lost 50 million bucks. And I’m losing money right now with this nefarious ex-partner. He. He moved money and did all sorts of shit. But, you know, you learn from it. You know, you just grow, you move past it, and, you know, you still have a roof over your head.
01:38:09:13 – 01:38:14:00
Rod Khleif
You still, you know, you can see I’m doing okay here, but it it it’s painful.
01:38:14:07 – 01:38:17:01
Nick Gonzalez
The key is like, you better learn from it if you don’t.
01:38:17:06 – 01:38:18:16
Rod Khleif
That’s why I call seminars.
01:38:18:16 – 01:38:34:24
Nick Gonzalez
Yeah. You’ll be on the same place in five years or ten years or 15 years. Yeah. So I think that’s like when you’re when you’re an active broker, that’s one of the really valuable things being in brokerage is you get all these free learning opportunities from hearing like, oh, you see them. Yeah. Like you you hear all these stories from your clients.
01:38:34:24 – 01:38:46:05
Nick Gonzalez
You want to be the best advisory clients, that you can be. But you also see repeating patterns where it’s like, okay, like this isn’t somebody who necessarily learned from they did the last time they made this exact same mistake.
01:38:46:05 – 01:39:19:22
Rod Khleif
They weren’t conservative. They were aggressive. They did. They wanted to buy no matter what. You know, you I’m sure you’ve seen that time and time again. So, talk about, let’s talk about some strategies around working with brokers, because I get a lot of newbies that say, oh, the broker won’t give me the time of day, or they’re asking me for proof of funds, you know, which is a screening mechanism most of the time, you know, can you speak to how you know, prospective operators, which have a lot of them listening, would approach you and be taken seriously?
01:39:19:24 – 01:39:36:03
Nick Gonzalez
Absolutely. So I, brokerage is still a very big part of my day to day. I’m a top three broker in my market and have been for each of the last 6 or 7 years. And so I’m, I am the receiving end of a lot.
01:39:36:03 – 01:39:37:06
Rod Khleif
Of.
01:39:37:08 – 01:39:49:01
Nick Gonzalez
Different inquiries of people who are in different stages of their investing careers. Right? So like wannabe operators, operators who have one, two, three, four, multifamily assets currently, is that your.
01:39:49:01 – 01:39:50:13
Rod Khleif
Primary focus is multifamily?
01:39:50:18 – 01:39:53:18
Nick Gonzalez
Multifamily probably makes up 20% of my book right now. And what what’s.
01:39:53:18 – 01:39:54:26
Rod Khleif
The rest of it?
01:39:54:28 – 01:39:57:27
Nick Gonzalez
Just investment sales of every other sort.
01:39:58:00 – 01:39:59:12
Rod Khleif
Okay. Every asset class.
01:39:59:12 – 01:40:19:10
Nick Gonzalez
Yeah. Every other asset. If there’s yield to it. Okay. Is is what my client book gravitated towards. Okay. But I will say, like, early on in my career, somebody said something to the effect of like, I’ve never met a rich guy who didn’t appreciate, like, a free breakfast or something along those lines. It’s. I’m sure it’s quoted somewhere.
01:40:19:13 – 01:40:43:10
Nick Gonzalez
Or like he didn’t appreciate a free coffee. And I’ll say, like, the more brokers are used to getting these calls and I get them every single day where my desk, phone or ring, I’ll pick up and it’s like, hey, my name is, you know, John Smith. I’m looking for 16 to 64 units. They have to be C, and I have to be able to take them to B or B plus, and I only need to be in these like it’s like they’re ordering off like a Chinese menu.
01:40:43:12 – 01:40:57:09
Nick Gonzalez
It’s like man, like I can’t. First of all, I don’t know who you are, right? Why? I mean, I want to be a good broker, but like, we have there’s no connection whatsoever. And I know the second I hang up, you’re going to call the broker one office over, right? And give him the same exact spiel.
01:40:57:12 – 01:41:02:05
Nick Gonzalez
Right? So, like, it’s hard. You know, brokers have to be selective with their times, too.
01:41:02:07 – 01:41:04:19
Rod Khleif
And you don’t get paid unless something happens.
01:41:04:21 – 01:41:18:14
Nick Gonzalez
So it means a lot if you can make it find, like the top three brokers in your market right, and see which one’s going to be receptive and be okay with the fact that, like, maybe 1 or 2 of them aren’t going to be receptive to meeting with you, but tell them, hey, let me buy you breakfast. Yeah.
01:41:18:15 – 01:41:28:03
Nick Gonzalez
Hey, let me buy you coffee. Make a personal connection with them. Yeah. And I would say the number one mistake I find is people give themselves way too narrow of a box. Like telling a broker.
01:41:28:03 – 01:41:31:06
Rod Khleif
Hey, you mean on investment criteria or whatever specific?
01:41:31:06 – 01:41:36:29
Nick Gonzalez
Yeah. So, hey, I’m open to purchasing, multifamily in this part of Florida. Okay, great.
01:41:37:01 – 01:41:38:13
Rod Khleif
So keep it. Keep it more general.
01:41:38:13 – 01:41:43:05
Nick Gonzalez
Yeah. But when you tell me I need 464, it has to be this way.
01:41:43:05 – 01:41:44:27
Rod Khleif
Gotta be painted ready. Yeah. Okay.
01:41:45:02 – 01:41:49:04
Nick Gonzalez
That’s like, what am I supposed to do? That’s, you know, you just made it 100 times harder.
01:41:49:04 – 01:42:04:11
Rod Khleif
Got it. Let me let me add something. You know, when I teach this, I tell people, you know, you can buy out of state. You know, it’s done and very successfully. And ultimately, you’ve got to go there and meet with them. The broker needs to meet you. They need to. They need you need to break bread with them.
01:42:04:11 – 01:42:09:21
Rod Khleif
They need to see your real, see your passion, see your integrity. That’s what makes all the difference in the world. So we’re saying the same thing.
01:42:09:21 – 01:42:13:11
Nick Gonzalez
Yeah, yeah. Cold calling is great to start the relationship.
01:42:13:11 – 01:42:17:11
Rod Khleif
But but but but you know let them know you’re going to be there and meet with them. Absolutely. Okay.
01:42:17:15 – 01:42:29:25
Aubrey Linville
I’ll also add, you know if you’re a beginner investor, right. Have your approval letter in hand. You know, because because a lot of we get a lot of calls and, you know, some wouldn’t.
01:42:29:25 – 01:42:33:20
Rod Khleif
Really have an approval letter on a, on a commercial or maybe, maybe it’s.
01:42:33:20 – 01:42:39:28
Aubrey Linville
Maybe it’s, pieces of a balance sheet or something that you could show just to show a little bit of horsepower.
01:42:40:00 – 01:42:41:10
Nick Gonzalez
Website resume or.
01:42:41:14 – 01:42:57:19
Rod Khleif
Something. Yeah. What my students do is they lean on each other, you know, like they’ll say, hey, if I bring you a deal and, you know, I use your resume so they’ll use the word and they’ll say, you know, we own 500 doors in Winston-Salem or Charlotte or wherever. And then, you know, obviously, you’re take they’re taking a little more seriously when they’ve closed on deals.
01:42:57:19 – 01:42:58:28
Nick Gonzalez
And have an email signature.
01:42:58:28 – 01:42:59:27
Rod Khleif
And you know, exactly.
01:42:59:27 – 01:43:07:27
Nick Gonzalez
I get inquiries all the time. And if there’s no email signature, I’m like, I have no, I don’t know what company or with some generic email. I have no idea if you’re a real.
01:43:07:29 – 01:43:18:10
Rod Khleif
And teach people you got a brand yourself, you know, you’ve got to legitimize yourself. I’d say hang your shingle in the back in the day. Used to cut a shingle and paint your name on it. Right. That’s that’s what I tell them to do. But yeah.
01:43:18:17 – 01:43:37:01
Aubrey Linville
But there’s also something to it coming to the call, holding a broker, knowing, you know, how much horsepower you have. Yeah. And just heating that on the first call. Sure. Somebody calls you and there, you know, you spend 30 minutes on the phone, you found out they’ve got $50,000 to invest, right? You know, you’re not going to get a lot of brokers excited about going to find you a deal.
01:43:37:02 – 01:43:39:01
Aubrey Linville
Like, yeah, even if you got to fluff it a little bit.
01:43:39:02 – 01:43:39:20
Rod Khleif
No, no.
01:43:39:20 – 01:43:41:04
Aubrey Linville
Say we as in yeah.
01:43:41:04 – 01:44:03:12
Rod Khleif
No. And that’s you know, I mean I mentioned you know my my students I believe we believe on about 300,000 doors. We’re counting. We’re at 270,000. We know we’re missing a ton and they’ve raised over $1 billion, but they’ve done it amongst each other. Yeah. So there’s there’s power in that team, you know, getting around people that are doing it and, and, you know, do it, do a couple with somebody else.
01:44:03:12 – 01:44:09:20
Rod Khleif
And then then, you know, you’re off to the races, you’ve got something on your resume and, and can speak more intelligently and so on. And so forth.
01:44:09:28 – 01:44:28:16
Nick Gonzalez
I’m going to go back to something you brought up earlier real quick too, that I think is really important for people who are starting out. You want to grow your network, you want to build your network, but go where? Like go where you’re in the bottom 20% of the achievers in the room. Like when I started out, I go to all of these, like Reia meetups.
01:44:28:16 – 01:44:34:25
Rod Khleif
Yeah, yeah, that’s a that’s what they were called back in the day. They’re they’re meetup groups now, but they’re called they were real estate investor association meetings.
01:44:34:27 – 01:44:46:06
Nick Gonzalez
I would go to these meetings and there would be 20 people in the room, and none of them had ever done a deal before. So like it was like it was it was great to go participate in that. But I was like, well, what am I? What am I getting out of this? Because everyone else here is new too.
01:44:46:08 – 01:44:50:08
Nick Gonzalez
So like jump in the deep end in a pool that’s got, you know, like.
01:44:50:10 – 01:44:52:11
Rod Khleif
Where you want people to think what you think is hard is easy.
01:44:52:11 – 01:44:53:00
Nick Gonzalez
Yeah, exactly.
01:44:53:00 – 01:45:07:02
Rod Khleif
You know, I started I started a mastermind years ago called the Multifamily Boardroom. I kind of let it go a couple of years ago because it was like herding cats, but there’s about 40 or 50 billion in assets in there. And I did it because I wanted to be around people that I that what I thought was hard was easy.
01:45:07:05 – 01:45:07:27
Rod Khleif
And, and.
01:45:08:00 – 01:45:17:03
Nick Gonzalez
We did the exact same thing in brokerage. We got successful brokers in the southeast, right. We said, hey, no territoriality, we’ll all sign Sears and let’s just compare notes on stuff that’s worked.
01:45:17:03 – 01:45:19:20
Rod Khleif
Well. You learn so much on you. Yeah. How to market.
01:45:19:20 – 01:45:23:05
Nick Gonzalez
I would pay thousands of dollars and we just did it to do it. Yeah, yeah.
01:45:23:08 – 01:45:46:18
Rod Khleif
Yeah. No, I think I’m going to do another meeting just because of where the market is at right now. And I think we’d all learn from it. So I’ve been thinking about I’ve been threatening that for about a month or two. But now let’s talk about geography, because I was mentioning, we talked about this specifically that, you know, when I took over this shit show that my ex partner created, we had assets about 2300 units in seven states.
01:45:46:21 – 01:46:06:03
Rod Khleif
And it was it was a mess. You know, he it was it was very difficult to manage. And he had taken over the management. I that’s a long story. I, I won’t bore you with but I stepped in to do the asset management and I came to the realization that most successful operators are geographically specific. Would you agree with that?
01:46:06:05 – 01:46:06:26
Nick Gonzalez
Yeah.
01:46:06:29 – 01:46:09:17
Aubrey Linville
Yeah. We may have slightly, differing views on it.
01:46:09:17 – 01:46:22:29
Rod Khleif
Okay. Well, no, I’d I’d love to hear it. Yeah. So that’s what I saw. Like the multifamily operators that were killing it were vertically integrated. They had their own construction company, their own property management. And they were, you know, more geographically specific.
01:46:23:05 – 01:46:35:23
Aubrey Linville
So most of our assets are net leased, maybe not absolute net okay. Net leased. And when we when we started our fund and before our fund, Nic and I had both been syndicating deals on our own four years ago, we said, you know what? What are we doing? Let’s bring this under the level.
01:46:35:23 – 01:46:37:26
Rod Khleif
Yeah. Same here. I’ve got a fund to. So it’s much easier.
01:46:37:26 – 01:46:56:01
Aubrey Linville
Let’s institutionalize it. Let’s create a fund. And so we looked for the right deals. So the right story of the right deal where we knew we could add value and we knew we could raise the capital in places that geographically felt like they were growing markets, you know, touching anything that was down on the vine. And now we’re at a point, okay, we’ve got a portfolio now.
01:46:56:01 – 01:47:09:24
Aubrey Linville
Now we need to densify these areas. So we started saying, yeah, we want to be within kind of three states a quick flight I’m a pilot. So so where we can get us within like an hour and a half to hour flight. Gotcha. And now that we have that, like, let’s fill in.
01:47:09:24 – 01:47:17:09
Rod Khleif
No, no, that makes complete sense. No, no, we’re on the same page here. But you got to start somewhere, obviously. But no, I we’re on the same page for sure.
01:47:17:11 – 01:47:41:16
Nick Gonzalez
It’s about margin to. So like to your point being geographically spread out like on a lot of these deals, you’re going to make the same dollar, you’re going to make the same gross dollar amount. So like, what’s the point of going to a state you’ve never like. You bring no value to no expertise to right when you can work 10 or 20% harder and maybe buy an asset that’s in a market where you have some competitive edge, you haven’t got.
01:47:41:22 – 01:47:45:19
Rod Khleif
Armies of scale. You’ve got you’ve got other assets there. Yeah, that’s that’s a no brainer.
01:47:45:19 – 01:47:59:24
Nick Gonzalez
So yeah, I mean I think the the groups that stick within again, not just geographically but who are also like efficient and like systems and processes driven operators. Yeah. I like geographic geography is very important.
01:47:59:25 – 01:48:20:15
Rod Khleif
Yeah, yeah. Well, in Europe, experiences, you know, I know you come to the realization that every business is nothing but people and systems. We talked about bringing in the people. What, you know, do you have any tools or resources that you use on the system side that you like any.
01:48:20:15 – 01:48:45:20
Aubrey Linville
And yeah, I mean, we we’ve been through a total transformation on our, what we would call our tech stack, which feels like a big word for a company that Nick and I own. But we we kind of had it. We were using Excel, we were using Yardi, ArcGIS, Salesforce, you know, all these different random pieces of technology. And last year we made the largest investment we’ve ever made in anything other than a piece of real estate in a tech platform that’s built on Salesforce.
01:48:45:22 – 01:48:51:02
Rod Khleif
That it’s built on, Salesforce built on. So interesting. So. So somebody built it on Salesforce and you invested in it.
01:48:51:09 – 01:48:54:05
Aubrey Linville
That’s it. Yeah. For our business specifically.
01:48:54:07 – 01:48:55:17
Rod Khleif
Okay. Which one?
01:48:55:20 – 01:48:56:09
Aubrey Linville
All three.
01:48:56:11 – 01:48:56:23
Rod Khleif
Oh no.
01:48:56:23 – 01:48:58:28
Aubrey Linville
Kidding. Yeah. So everything everything lives there.
01:48:58:28 – 01:49:19:13
Rod Khleif
Interesting. Yeah. You know, I got to tell you, I don’t want to pee on your parade, but we just did open claw, and my guy that handles all my marketing said it’s it. Once it’s set up, it literally will do 95% of his job. And and we and and this is where I don’t want to pee on your parade.
01:49:19:13 – 01:49:35:20
Rod Khleif
But I offered to buy a CRM from one of my students who built it for my students. He wanted 100 grand. I got it built for ten grand. Yeah, well, with AI and so, you know, I don’t know if you could have saved some money, I guess is my point. Sorry to throw you under the bus.
01:49:35:20 – 01:49:40:07
Aubrey Linville
Well, it’s a lot more than just CRM. Is it? Yeah. I mean, it’s the backbone of our entire business, so.
01:49:40:08 – 01:49:41:25
Rod Khleif
Yeah. No, but you know.
01:49:41:28 – 01:49:42:20
Aubrey Linville
That runs through it.
01:49:42:21 – 01:49:54:20
Rod Khleif
Yeah. I mean, there’s a lot to it, but you know, like like what we’re seeing it can do is extraordinary. Yeah I mean I just blows my mind.
01:49:54:23 – 01:49:58:10
Aubrey Linville
Yeah. It’s built into our system. So you didn’t build our system. But it is.
01:49:58:10 – 01:50:25:02
Rod Khleif
It’s built into it. Okay. Yeah. Okay. Yeah. I you know, I tell people, you know, I’m literally laying off my daughter. She does our SEO, she’s brilliant. And I’m helping her start another company. But but it’ll do everything she does better. Yeah. You know, our, our social posts, better. And, you know, it’s sending me articles every day to, to do, you know, green screens and social posts on and things of that nature.
01:50:25:02 – 01:50:39:01
Rod Khleif
No, it’s it’s extraordinary. What, you know, I was mentioning I, you know, I was thinking about the other businesses and how I used it to identify the sort of partner I would want for that, you know, for that endeavor. And it just blew my mind.
01:50:39:01 – 01:50:46:24
Nick Gonzalez
So sometimes the littlest things like I. This isn’t a plug. Yeah, but I started using, superhuman instead of outlook.
01:50:46:26 – 01:50:49:09
Rod Khleif
And I don’t even know what that is.
01:50:49:12 – 01:51:10:15
Nick Gonzalez
I didn’t either, okay. But it was on some podcast somewhere, and I was like, oh, I’ll check this out. And, don’t quote me on this, but I think it’s like $30 a month is what I pay, okay? And it’s I mean, if it was $500 a month, I would pay it. So all it is, is a very simple skin for outlook, but it has all these shortcuts like you basically do like a one hour training.
01:51:10:16 – 01:51:31:16
Nick Gonzalez
Okay. And by the time you’re done with it, I mean, I go through my emails three times as fast now. Wow. It’ll it’ll auto draft, responses that then like, I can put in my own voice. It’s not like people aren’t getting emails from like, this is clearly like some chat, right? But it sets all kinds of reminders, like it’s it’s the littlest.
01:51:31:18 – 01:51:48:06
Nick Gonzalez
I mean, honestly, stupidest little thing, but it’s not it’s not rocket science, but the amount of money and time it’s giving me back. And there’s so many little things like that that you can optimize like, I have an executive assistant. I tell her, like, hey, like challenge everything, like, where is there friction? And every single day. And then let’s like, solve that.
01:51:48:06 – 01:52:03:12
Nick Gonzalez
Because if we can solve one of those every 3 or 4 months, like you’re going to be, oh, it’s the same thing with like, your health and wellness. Like you can tweak one thing about your intake or your workouts. And in 3 or 4 months you’ll be like, wow, that was a great I mean, it was the smallest little unnoticeable detail.
01:52:03:17 – 01:52:04:14
Nick Gonzalez
Did anybody know.
01:52:04:17 – 01:52:21:01
Rod Khleif
There’s a book called The Slight Edge? Yeah. About those little decisions you make every day or that tragic your life up or down. It’s the same dynamic, you know, and those, those little decisions, they’re not a big deal here. But you take them out five years. They’re a big frickin shift. Yeah. Let’s talk about your M&A thing a little more because it’s so cool.
01:52:21:04 – 01:52:31:04
Rod Khleif
So if someone wants to buy an automotive business, they reach out to you and, and, and you help them find it, identify it, buy it. All the above.
01:52:31:08 – 01:52:36:00
Aubrey Linville
Yeah. So we don’t really do any one off. Okay. Acquisitions. So if, if you know, you.
01:52:36:00 – 01:52:37:16
Rod Khleif
Want somebody you can buy a handful of them.
01:52:37:16 – 01:52:41:17
Aubrey Linville
Yeah. We’re typically working with large operators. Okay. That.
01:52:41:20 – 01:52:42:17
Rod Khleif
They want to expand.
01:52:42:17 – 01:52:53:25
Aubrey Linville
So like the largest child care operators in the world are like so okay I say we’re looking to grow Ebit by X amount in the southeast in the next 12 weeks. We help them execute on that.
01:52:53:25 – 01:52:55:03
Rod Khleif
Oh got it okay.
01:52:55:04 – 01:52:56:15
Aubrey Linville
Okay a lot of a lot of manual.
01:52:56:15 – 01:53:01:22
Rod Khleif
Work. Well I’m massively disappointed because I thought, you know, you could help me with something that maybe we can. All right.
01:53:01:22 – 01:53:02:28
Aubrey Linville
We’ll talk about that at all. Right.
01:53:02:28 – 01:53:06:23
Rod Khleif
All right. Fair enough. But that’s that’s that’s really cool. Okay.
01:53:06:26 – 01:53:23:29
Aubrey Linville
It’s a really interesting business. Like I said it, to you earlier to seller’s market, contractors market all. It’s just really hard to make deals pencil smart. Nobody’s building a lot of new multifamily. I mean, it’s just the land is expensive. It’s cost a lot to build it. And people can only afford to pay so much to occupy a unit.
01:53:24:03 – 01:53:29:02
Aubrey Linville
Right. You’re better off, a lot of times. Not all the time, but a lot of, you know, you’re better off buying by existing.
01:53:29:05 – 01:53:29:17
Rod Khleif
Yeah, yeah.
01:53:29:25 – 01:53:49:12
Aubrey Linville
You can buy it based on, what? You know, specifically, a lot of the assets that we’re buying. We’re buying. Someone signed a lease ten years ago, and they’re in year eight or in year nine. That high likelihood that they’re they’re sticky tenant. They’re going to stick around, but they’re paying on what it cost to build the building ten years ago and what the you know, the landlord, right.
01:53:49:14 – 01:53:58:15
Aubrey Linville
Demanded his yield to be at that time. Right. The buying a business is very, very similar, you know, and a lot of times, if you can buy the real estate along with it, you can help capitalize that.
01:53:58:18 – 01:53:59:21
Rod Khleif
Sure. Oh. Good point.
01:53:59:21 – 01:54:00:13
Aubrey Linville
Opening company.
01:54:00:13 – 01:54:19:26
Rod Khleif
Sure. Yeah. You know, I’ve got a six pack of assisted living facilities under contract right now for 40,000 a unit in Texas. You can’t build one for less than 250,000 units. I got approached by by an operator that’s trying to raise money for one in Orlando. That’s 350,000 a unit, and we’re paying 40. And these are nice buildings.
01:54:19:29 – 01:54:23:00
Rod Khleif
So, just to elaborate on your point.
01:54:23:03 – 01:54:33:05
Aubrey Linville
You hit the nail on the head, right? Yeah. And then what’s going to happen over time is, they’re people are going to have to pay more money to, to stay in that same $40,000 unit. They only everybody kind.
01:54:33:05 – 01:54:49:23
Rod Khleif
Of there’s such a huge shortage of beds. And I mean, I’m seeing articles where, where there may be a lottery system to get into assisted living facility, you know, because there’s going to be there’s going to be no availability. I mean, what is it? 7 or 8000 people a day are turning 80 in this country?
01:54:49:26 – 01:55:03:18
Rod Khleif
Yeah. So it’s, it’s exciting, honestly. But I yeah, I think you have to love the elderly to get into that business, which I do. So what’s what’s next for you guys?
01:55:03:21 – 01:55:04:29
Aubrey Linville
You want to take that?
01:55:05:01 – 01:55:09:22
Rod Khleif
Continue continue doing what you’re doing. You’re going to introduce anything else?
01:55:09:25 – 01:55:37:11
Nick Gonzalez
Yeah. We, It’s been really enjoyable growing our brokerage footprint. It’s been really enjoyable growing the team, growing kind of our reach on the M&A side. And really just making very good investments in this market. We, you know, last year we underwrote or I underwrote, we underwrote last year we underwrote 210 deals, and we closed on eight.
01:55:37:14 – 01:55:44:07
Rod Khleif
So that’s actually not a bad number. I remember looking at 300 to find one. Yeah. So that’s that’s much better. It used to be.
01:55:44:07 – 01:56:07:04
Nick Gonzalez
Yeah. So you know again, like, that’s that’s a really enjoyable aspect of what we’re growing that we want to continue to grow. Because again you know, we’re invested alongside, our partners in that. And you know, if you have between between between the properties that are listed, the brokers that you know, you have access to from day to day because you’ve spent years building relationships.
01:56:07:04 – 01:56:21:14
Nick Gonzalez
And when I say you know, we I mean, you two and everybody, and then, you know, trying to find off market opportunities like, I’m not going to lie, I mean, I’ve been doing this for 16 years now, and like, you still get that rush when you find that and you for all deal junkies.
01:56:21:15 – 01:56:22:21
Rod Khleif
When you find that unicorn.
01:56:22:22 – 01:56:34:07
Nick Gonzalez
You’re not in this business if you’re not really like a deal junkie at heart because, like, there’s no greater feeling than finding something that works really, really well and there’s no greater feeling than a win win. Like, I want to make money. You make money, everybody, and you buying.
01:56:34:09 – 01:56:39:01
Rod Khleif
Brokers cold calling people. So you got an opportunity to cherry pick as well.
01:56:39:04 – 01:56:40:11
Nick Gonzalez
So finding finding there’s.
01:56:40:13 – 01:56:41:07
Rod Khleif
Something you want to buy.
01:56:41:12 – 01:57:01:02
Nick Gonzalez
Finding more great deals and and setting up situations where it’s truly a win win for everybody involved. That’s what we’re trying to scale and keep growing. Of course brokerage is great. Growing the brokerage team is great. But yeah, really finding these great win win investment opportunities is, really rewarding. And that’s really what we’re focused on.
01:57:01:03 – 01:57:02:03
Rod Khleif
Yeah. Same.
01:57:02:05 – 01:57:22:06
Aubrey Linville
Also I’ll add, you know, this fund is two years old for us. And so it’s been, everybody running a million miles an hour to get to where we are now. We’ve been successful where we’ve raised all the capital we need for all these great deals that we found. Now we’re hiring an acquisition manager or his only job is going to be to help us densify our portfolio.
01:57:22:07 – 01:57:23:07
Rod Khleif
Help you dense.
01:57:23:07 – 01:57:26:13
Aubrey Linville
Densify just find more assets close to the assets that we already own.
01:57:26:14 – 01:57:29:01
Rod Khleif
So we somebody specifically to hunt deals.
01:57:29:02 – 01:57:35:10
Aubrey Linville
That’s it. Yeah, we we have very little in our hometown. So there’s there’s almost zero comps.
01:57:35:10 – 01:57:36:17
Rod Khleif
You’ve got a nice hometown in you.
01:57:36:19 – 01:57:36:27
Aubrey Linville
Yeah.
01:57:36:28 – 01:57:39:07
Rod Khleif
Great hometowns, great great great demographics.
01:57:39:10 – 01:57:49:04
Aubrey Linville
Yeah. We’ve but we’ve found really, really good assets to acquire and other towns that have great demographics. Also where some of our brokerage clients just aren’t operating, they’re not thinking about these these towns that we’re buying.
01:57:49:05 – 01:57:51:06
Rod Khleif
More tertiary markets or no.
01:57:51:06 – 01:58:09:22
Aubrey Linville
That Greenville, South Carolina, Spartanburg, South Carolina, you know, in South Carolina. Yep. Myrtle Beach, Myrtle beach. Yep. Okay. And so as we’re growing this business, we’re getting more focused on, everybody dialing in on what their roles and responsibilities are within the fund versus all of us kind of. Oh, sure. Doing everything and that’s.
01:58:09:22 – 01:58:11:18
Rod Khleif
That’s, that’s that’s part of the evolution.
01:58:11:18 – 01:58:12:18
Aubrey Linville
Yeah. When I think about what your.
01:58:12:18 – 01:58:13:06
Rod Khleif
Business.
01:58:13:06 – 01:58:13:21
Aubrey Linville
That’s it.
01:58:13:24 – 01:58:19:20
Rod Khleif
You know, do you incorporate any operating like we, we use iOS entrepreneur’s operating system. You’re familiar with.
01:58:19:20 – 01:58:20:22
Aubrey Linville
That we run on EOS.
01:58:20:26 – 01:58:26:22
Rod Khleif
You do the same thing. Yeah. It’s a great, great model. If 90 day goals, and rocks, they call them. But their goals.
01:58:26:25 – 01:58:31:06
Aubrey Linville
Material and personal business. Yeah, right. We were leading by committee three years ago.
01:58:31:07 – 01:58:31:22
Rod Khleif
Oh, God.
01:58:31:23 – 01:58:46:21
Aubrey Linville
You know, every week we’re getting together, we’re talking about, you know, I don’t know, the $100 that we spend on it, right? Right. And now, you know, everybody has clear division responsibilities. We know what everybody’s working on and what we’re working towards and what the vision of the company is and all that and that that really is, put us in.
01:58:46:24 – 01:59:05:20
Rod Khleif
A game changer in it. Yeah, yeah, I have, I, they should pay me money because I talk about it regularly on the show. And in fact, I had, Albert Barris in the book traction. They talk about the McKinley Corporation. He’s a billionaire, and I. Hey, he was my first interview on the podcast, and he’s in the he’s in he’s in the book.
01:59:05:20 – 01:59:22:27
Rod Khleif
And I’m an hour in and I looked down and I forgot to hit record. I was frickin mortified. He’s. I’ll just tell you a funny story. As an aside, so I had I was going to have him speak to my mastermind, and my assistant called his assistant Nina and said, hey, yeah, we’re going to fly Albert down first class.
01:59:22:27 – 01:59:28:28
Rod Khleif
We’re going to put him up at the Ritz Carlton. And she’s like, no, no fly zone. Shut down. It’s all good. Now you’re a pilot too. Yes.
01:59:28:28 – 01:59:31:14
Aubrey Linville
Yeah, but not in a jet. Not a small single engine plane.
01:59:31:14 – 01:59:32:27
Rod Khleif
Okay. Did you fly down here today?
01:59:32:27 – 01:59:46:12
Aubrey Linville
We did. Yeah. We sure that’s cool. Yeah. It’s it’s it’s a little cheat code. You know, we flew into, the Atlanta motor Speedway to look at a deal that was kind of in rural cool outside of Atlanta. Cool pop down here, and we’ll be home tomorrow before lunch. Love it. That helps. That helps with the fund. Really?
01:59:46:12 – 01:59:51:22
Rod Khleif
Oh, sure. Oh, yeah. These other area that my my partner is a pilot too. And it’s, it’s it’s a game changer. Yeah.
01:59:51:24 – 02:00:16:06
Nick Gonzalez
Well you brought up you know I so if I could just say one thing real quick. So EOS has been great but also to, to your credit and for your listeners like we’ve both we’ve both participated in masterminds and in coaching. I’ve, I’ve, paid for coaching for nine years now. And I would say that’s also a really important thing for all the listeners out there who are either getting in.
02:00:16:06 – 02:00:28:00
Nick Gonzalez
Yeah, or who have plateaued, like finding a really great, program, a great coach, like a great, finding like your tribe. Right. Is so important, and it’s worth its weight in gold. So, again, like, I know.
02:00:28:01 – 02:00:38:24
Rod Khleif
Yeah, it’s been a game changer for my students. I mean, honestly, it’s it’s more about the group than it is about me. And, and I have two coaches right now. I’ve got a relationship coach. I’ve got a health coach. So I’m, I’m.
02:00:39:01 – 02:00:39:24
Nick Gonzalez
So valuable.
02:00:39:28 – 02:00:54:21
Rod Khleif
I, I eat my own cooking. Well, listen, I appreciate you guys coming down. It’s been a very much a pleasure to meet you. And, congratulations on all your success. And. Yeah, let’s let’s circle back in a year or two and see how much, things have improved.
02:00:54:25 – 02:00:55:15
Nick Gonzalez
I love it. Great.
02:00:55:15 – 02:00:57:22
Rod Khleif
All right. Pleasure. Thanks, guys. Thank you for.
02:00:57:22 – 02:01:05:11
**Podcast Categories:** Podcasts
---
### [He Left Mexico With $0… Now Owns 141 Multifamily Units](https://rodkhleif.com/podcasts/he-left-mexico-with-0-now-owns-141-multifamily-units/)
**Published:** April 24, 2026
**Author:** Bryan Hoover
**Excerpt:** He Left Mexico With $0… Now Owns 141 Multifamily Units
**Content:**
### How Victor Gomez Built a Multifamily Real Estate Long Term Wealth Strategy
In this episode of Own Your Power, Victor Gomez breaks down how he transitioned from flipping over 300 single-family homes to building a scalable multifamily real estate long term wealth strategy. His journey started in corporate banking in Mexico before he took a major leap, leaving his career behind to pursue opportunity in the United States. Through construction, brokerage, and property management, he built a foundation that eventually allowed him to scale into multifamily investing.
Victor Gomez emphasizes that while flipping houses can generate short-term cash, it does not create lasting wealth. His biggest realization came during the pandemic when he recognized that holding assets long term, rather than selling them, is the true path to financial freedom and legacy building. This mindset shift became the cornerstone of his multifamily real estate long term wealth strategy.
### The Power of Holding Real Estate for Long Term Wealth
One of the most valuable lessons Victor Gomez shares is the importance of keeping assets instead of selling them. After flipping hundreds of properties, he realized that he had given up massive long-term upside. This insight led him to pivot into acquiring and holding multifamily properties while also launching a property management company to support that strategy.
Key takeaways from his long-term wealth approach include:
- Focus on acquiring assets that produce consistent cash flow
- Build infrastructure, like property management, to support scaling
- Think in terms of legacy and generational wealth, not quick profits
This shift in thinking is what separates transactional investors from those building true wealth through multifamily real estate.
### Leveraging Experience to Scale Faster
Victor Gomez did not start from scratch when entering multifamily. His background in construction, flipping, and property management gave him a significant advantage. He applied his knowledge of renovations, underwriting, and operations to larger assets, allowing him to contribute value immediately in partnerships.
He explains that multifamily investing is similar to single-family investing, just at a larger scale. By bringing his “small deal” experience into “big deal” environments, he accelerated his growth and became a valuable partner in both joint ventures and syndications.
### Why Due Diligence Is Critical in Multifamily Deals
A major point Victor Gomez highlights is the importance of deep due diligence. One of the most common and costly mistakes investors make is cutting corners on inspections. Skipping detailed inspections may save money upfront, but it often leads to expensive surprises later.
He stresses the need to thoroughly inspect:
- Plumbing and sewer systems
- Roofing and structural components
- Electrical systems and hidden deficiencies
This level of diligence protects investors and ensures that deals perform as expected over the long term.
### Taking Action and Finding the Right Mentorship
Victor Gomez makes it clear that knowledge alone is not enough. Many aspiring investors consume content, read books, and attend seminars, but never take action. According to him, success comes from execution and surrounding yourself with the right people.
He credits mentorship as a key factor in accelerating his growth, helping him avoid costly mistakes and scale faster. His advice is simple but powerful: stop overthinking and start doing. Taking consistent action is what ultimately builds momentum in multifamily investing.
### Building a Family-Driven Real Estate Business
Another unique aspect of Victor Gomez’s journey is how he built a family-run operation. Each family member plays a role based on their strengths, from administration and bookkeeping to construction oversight and daily operations. This structure has allowed them to scale efficiently while maintaining strong alignment and trust.
By combining family values with business strategy, Victor has created a system that supports both growth and long-term stability.
### Guest Bio: Victor Gomez
Victor Gomez is a real estate investor, broker, and entrepreneur with a background in corporate banking. After moving to the United States, he founded a construction company and flipped over 300 single-family homes. He now manages over 260 units through his property management company and has scaled into multifamily investing with over 140 units through syndications and joint ventures. His focus is on building long-term wealth through strategic acquisitions and partnerships.
If you want to hear the full conversation and detailed insights, watch the podcast video or read the complete transcript below.
## **Multifamily Real Estate Long Term Wealth Strategy FAQ**
**What is a multifamily real estate long term wealth strategy?**
A multifamily real estate long term wealth strategy focuses on acquiring and holding apartment properties over time to generate consistent cash flow, appreciation, and equity growth. Instead of flipping properties for quick profits, investors prioritize stable income and compounding returns that build lasting financial security and generational wealth.
**Why is multifamily real estate ideal for long term wealth?**
Multifamily real estate allows investors to scale faster because multiple units exist under one property. This creates diversified income streams, reduces vacancy risk, and provides stronger financing options compared to single-family homes. Over time, rent growth and property appreciation significantly increase overall net worth.
**How does holding property long term build more wealth than flipping?**
Holding property long term allows investors to benefit from appreciation, loan paydown, and increasing rental income. Flipping generates short-term gains, but it resets the wealth-building cycle with each sale. Long-term ownership compounds returns, turning one asset into sustained income and equity growth over years or decades.
**What are the key components of a successful multifamily real estate long term wealth strategy?**
A successful strategy includes acquiring cash-flowing properties, maintaining strong property management, controlling expenses, and increasing rents strategically. Investors also focus on financing terms, market selection, and operational efficiency to maximize long-term performance.
**How important is property management in long term multifamily investing?**
Property management is critical because it directly impacts tenant retention, maintenance costs, and overall profitability. Effective management ensures consistent cash flow, preserves the asset’s value, and supports long-term appreciation, making it a core pillar of any multifamily real estate long term wealth strategy.
**What role does due diligence play in long term wealth building?**
Due diligence protects investors from costly surprises by uncovering hidden issues before acquisition. Thorough inspections of structural elements, plumbing, electrical systems, and financials help ensure the property performs as expected, which is essential for long-term success.
**Can beginners implement a multifamily real estate long term wealth strategy?**
Yes, beginners can start by partnering with experienced investors, joining syndications, or working with mentors. Learning how to analyze deals and taking consistent action are key steps. Many successful investors begin small and scale into larger multifamily assets over time.
**How do you scale a multifamily real estate portfolio over time?**
Scaling involves reinvesting cash flow, leveraging equity from existing properties, and forming strategic partnerships. Investors often move from smaller properties to larger apartment communities, increasing unit count and income potential while maintaining operational efficiency.
**What mindset is required to succeed in multifamily real estate long term investing?**
A long-term mindset focused on patience, discipline, and consistent action is essential. Investors must think beyond quick wins and prioritize sustainable growth, resilience during market cycles, and a commitment to continuous learning and improvement.
**What are the biggest mistakes to avoid in a multifamily real estate long term wealth strategy?**
Common mistakes include selling properties too early, underestimating expenses, skipping thorough due diligence, and failing to build the right team. Avoiding these pitfalls helps investors protect their assets and maximize long-term returns.
*Disclaimer: This summary was written with the help of AI and reviewed by Rod’s Team.*
“Rod”,”00:00:00:00″,”00:00:20:11″,”Welcome back to multifamily rock star. So as you guys know, this is where we interview people that are just crushing it in this business. And we show you the inside scoop as to how multifamily investors are creating massive success in their businesses and of course, in their lives as well. And as always, I’ve got my co-host is the director of our massive action team for my Warrior group, Mark Nagy on Hey, Mark.”
“Mark”,”00:00:20:11″,”00:00:28:21″,”A-Rod, happy to be back at it again. I know it took a couple of weeks off here just because you had a thousand people at your three day boot camp recently, which was awesome.”
“Rod”,”00:00:28:22″,”00:00:51:12″,”Yeah, I’m still recovering, actually. I think I’m about 90%, but I’m but I’m still recovering. So we’ve got a great guest today. His name is Victor Gomez. And Victor, actually has a lot of background in construction. He has a construction company and he he moved here from Mexico and he has a property management company. He manages doors 260 doors for four other people.”
“Rod”,”00:00:51:12″,”00:01:03:06″,”And then since he’s been a warrior, he’s gotten into 141 units, 130 as a as a syndication and 11 in a joint venture. So very excited to have him on. Victor, welcome to the show, my friend.”
“Victor”,”00:01:03:07″,”00:01:07:02″,”Hello. Drug. Hello, Mark. Thanks so much for having me. He’s such an honor to be here.”
“Rod”,”00:01:07:03″,”00:01:26:23″,”Thank you. Thank you. So why not? You know, I know that English isn’t your first language, so we’ll. We’ll get through it. That’s okay. Thank you. And just, you know, that’s just in my opinion, that’s just an additional testament to your determination and drive to make this happen. So, you know, there’s no reason that that’s the reason you’re successful, because you don’t let anything stop you.”
“Rod”,”00:01:27:03″,”00:01:38:12″,”But why don’t you take a minute and give us a little better background on who you are and and, you know, maybe why you join the Warrior program. Why you why real estate? Yeah. So just take it away, my friend.”
“Victor”,”00:01:38:13″,”00:02:01:16″,”Thanks so much. So I started my career in corporate banking. I used to work for American banks back in Mexico. I always wanted to come to the US, you know, to leave here at that. But when I joined the banks, there was a financial crisis. So I took you know, I wanted to come here. But my bosses that they want they wanted to send me here.”
“Victor”,”00:02:01:16″,”00:02:25:13″,”But no matter how hard I tried, they were saying, like, we are fighting the people. So we cannot send you to the. So I just quit my job. I started a construction company. I came here, you know, like that back then. My friends, they were saying, like I was crazy to leave a permanent job. Right. But, you know, you just roll up your sleeves and go out there and pursue your dream.”
“Victor”,”00:02:25:15″,”00:02:36:12″,”And I started I became a broker as well, doing real estate. I start to I have flip over 300 single family houses. So far. Wow.”
“Rod”,”00:02:36:18″,”00:02:56:14″,”So you got your broker’s license, You flipped over 300 houses. You left a great job in Mexico City, too, to just come blindly, come to the United States to chase your dream. That is frickin beautiful, brother. I mean, I mean, that’s that’s. That’s the ultimate immigration story, if you ask me. So that’s beautiful. And then you started your property management company as well.”
“Rod”,”00:02:56:14″,”00:02:56:22″,”Yes.”
“Victor”,”00:02:57:01″,”00:03:20:14″,”Yeah. Actually, it was during the pandemic that, you know, I had I became too comfortable probably I would say it was for me, it’s really easy to get deals, you know, wholesalers or people trying to find me always because I am a go getter. I always get like a lot of deals and they call me. They started to, you know, we were locked down.”
“Victor”,”00:03:20:18″,”00:03:56:15″,”We couldn’t do a lot of things. So that’s when I started listening to your podcast, which is, you know, to drill when all, all what you can get. And that’s why I decided to go and you out of your mentorship and which that’s bring me to a scale I’m you’re coaching gave me so much confidence in myself then now I can take more customers more more with more Clyde, more friends to to join me, to partner, to show them what I’m really doing, how good I am at doing what I’m doing.”
“Victor”,”00:03:56:15″,”00:04:15:15″,”So so definitely that’s that’s one of the best things that I have done in order to scale up my business. Before I was lead my family. And now we have over 20 something partners. And, you know, it’s this is really what gets me the most. Your coach that brought me here now.”
“Rod”,”00:04:15:16″,”00:04:36:02″,”Thank you. Now, I know you know, you did a syndication and you also did a joint venture, which are two completely different things. So those are you listening. A joint venture is when everybody that’s in it’s in the deal is actively involved in the deal. They’re all doing work on the deal. Now, syndication is when, you know, you take money from somebody and they’re not involved.”
“Rod”,”00:04:36:02″,”00:04:45:01″,”You have to do a syndication, not a big deal. You just hire an attorney and you do it. But that I know you did both of those with warriors, right? The JV and the syndication, is that correct?”
“Victor”,”00:04:45:05″,”00:05:03:18″,”Yeah, it was. It was a such a great experience to just get them. I used to have I used to be doing this what you know, and single family, which is one by one, but never managed a property that big, you know, all is kind of the same, but you know, so go big, go home, as you say.”
“Victor”,”00:05:03:20″,”00:05:12:00″,”So it’s getting bigger and you know that the the knowledge you get, it’s it’s quite awesome when you join a syndication for.”
“Rod”,”00:05:12:02″,”00:05:13:08″,”Yeah sure. Sure.”
“Mark”,”00:05:13:13″,”00:05:26:02″,”How does you leverage your background? You said you came from construction as well as property management company. How did you use that experience and then roll that over into now being a multifamily investor or have you used that at all?”
“Victor”,”00:05:26:02″,”00:05:49:13″,”Yeah, definitely. I think I have a lot of input, you know, for on the single family space where I’m, you know, what I have been, I’ve been doing everything right since, since trying to get the deals, do the, the due diligence, I mean the deal of the writing, trying to get the lenders in place. You know, the management of the company did a renovation.”
“Victor”,”00:05:49:15″,”00:06:22:19″,”So now bringing this is is a little pie to the to the you know, to be cake because, you know, it’s like I said, it’s completely it’s kind of the same. But in a bigger way. So so I have been bringing all this probably not a small knowledge that I have which have held my my, my words, my, my partners to to, you know, to to leverage what they know and help us, you know, create a better relations or better, you know, content trying to manage better the properties.”
“Rod”,”00:06:22:20″,”00:06:46:03″,”Sure, sure, sure. You know, as part of this journey of yours, I mean, you’ve you’ve you’ve done some major things. You immigrated. You didn’t have anything when you got here. You just built built yourself out of nothing here. And as part of the progress into multifamily, were there any aha moments, any moments where you’re like, okay, now I get it, You know, you did 300 flips.”
“Rod”,”00:06:46:05″,”00:07:00:10″,”I’m guessing at some point you’re like, okay, I’m only as good as the last flip, so maybe I should look at something else. Maybe that was one. But I don’t want to put words in your mouth, but any, any moments that were like, we call them epiphanies where you’re like, okay, now I get it kind of a moment.”
“Rod”,”00:07:00:10″,”00:07:03:00″,”If you have anything comes to mind when I ask that.”
“Victor”,”00:07:03:02″,”00:07:26:19″,”Yeah. KING When I was doing COVID, I began to read some of the books that you are sending us to listen books. And and one of the biggest changes to to our family, actually, because we all my family work together here with us, with me, it’s now we are not selling the properties. Now we are keeping all the properties.”
“Victor”,”00:07:26:19″,”00:07:47:02″,”I understand where the west long term wealth you know, what is the legacy that we want to leave. I like I said, I regret so much about, you know, selling all these properties now, now, that’s why we started again with the property management company, because now we manage the property to get, you know, get to the long term.”
“Victor”,”00:07:47:02″,”00:07:54:06″,”Well, I strongly believe in that. And, and and again that’s what is has been that’s huge. Our business. Yeah.”
“Rod”,”00:07:54:08″,”00:08:10:06″,”Yeah that’s huge. I will tell you I’ve regret just about every property I’ve ever seen There’s a couple, there’s a couple dogs like Shreveport and stuff that I Memphis stuff that I sold. But other than that I regret every one. You know, my first interview was with a billionaire named Albert Barras, and he said something that really stuck with me.”
“Rod”,”00:08:10:06″,”00:08:28:09″,”And he said, you know, I’m a real estate buyer, not a seller. And, you know, and I appreciate you acknowledging the books that I said, you know, my love language is gifts. There’s a book called The Five Love Languages My Love. And I got to have the author on my show. But my love language is gifts. So, you know, as you know, my warriors get lots of books from me, but thank you.”
“Rod”,”00:08:28:09″,”00:08:28:17″,”Yeah.”
“Mark”,”00:08:28:17″,”00:08:39:08″,”What are some of the, you know, coming from that property management background? What what are some of the biggest mistakes or the most costly mistakes that you see happen on the property management side of these deals?”
“Victor”,”00:08:39:10″,”00:08:43:05″,”The biggest mistake is not doing the correct inspection, that’s for sure.”
“Mark”,”00:08:43:06″,”00:08:44:01″,”Inspections?”
“Victor”,”00:08:44:01″,”00:08:44:21″,”Yeah. Inspection.”
“Rod”,”00:08:44:21″,”00:08:49:03″,”Yeah. The due diligence he’s talking about in initial initial inspections, right?”
“Victor”,”00:08:49:03″,”00:09:11:12″,”Correct. Exactly. Sometimes you want to everybody wants to say, right. So everybody at the beginning wants to not perform any specific inspection like, you know, like plumbing deep or roof in deep. And people think sometimes that you can save some money by not doing some kind of inspections. But then in the long run, you can regret about what is coming out there, you know, because my arms.”
“Rod”,”00:09:11:16″,”00:09:11:20″,”Are.”
“Victor”,”00:09:11:20″,”00:09:15:03″,”Good outside, but inside is not like that.”
“Rod”,”00:09:15:05″,”00:09:34:00″,”When you don’t dig deep, you don’t find stuff. You know, I tell the story of my asset in San Antonio, 296 units, and I and I always bring an inspector and I’ve inspected thousands of properties, probably tens of thousands, actually. And so I’m pretty good at it. But I always bring somebody else. And I brought a general contractor and he saw something that I didn’t see.”
“Rod”,”00:09:34:05″,”00:09:53:10″,”And you had to stand just perfectly at a wall to see that the wall was bulging at the top. And so there was some structural damage. And we got a six figure settlement from the seller because I brought this guy for a couple ago for a thousand, probably less than a thousand to come inspect. And and we made, you know, six figures in a concession to get that stuff fixed.”
“Rod”,”00:09:53:10″,”00:10:09:21″,”So yeah no you in and you know you just you can’t see what’s in the sewer lines. If there’s trees you better scope the sewer lines. You know, if it’s an older property, you better make sure it’s not aluminum wiring. And if it is, it better have pigtails and so on and so forth. Some of the PVC is, is substandard as well.”
“Rod”,”00:10:09:23″,”00:10:27:01″,”So. So let me ask you this. You know, we get a lot of people that haven’t taken action on their dreams yet. They know they want this, this they know they want to do something. And and they they can see that there are deals coming. And I can tell you they’re coming. We’ve got Eloisa on for deals right now by the way, in Lower Guys is a letter of intent.”
“Rod”,”00:10:27:05″,”00:10:43:18″,”You do that before you sign a contract because you always have, you know, always use an attorney for contracts. And contracts cost money, right? So you do what’s called a letter of intent to let the seller or the broker know of your intent to want to buy it. You work out the major deal points and then you do a then you do a contract.”
“Rod”,”00:10:43:23″,”00:11:00:08″,”But but the you know, we get a lot of listeners that that know they need to do something. Haven’t taken action yet. But you know what words of wisdom would you share with somebody like an aspiring real estate commercial real estate investor, somebody that knows they should do something, maybe want to do this? What would you say to them?”
“Victor”,”00:11:00:08″,”00:11:03:02″,”Well, first of all. Or junior programs or mentor.”
“Rod”,”00:11:03:08″,”00:11:06:23″,”Well, okay, I wasn’t I wasn’t I wasn’t reaching for that. But thank you.”
“Victor”,”00:11:07:02″,”00:11:22:19″,”You have to be action. Take care. You have to to really want and pursue that dream I have. So, you know, I know some people that they will probably read thousand books, but they’re never apply what they read. Yeah.”
“Rod”,”00:11:22:20″,”00:11:23:14″,”They don’t do it.”
“Victor”,”00:11:23:14″,”00:11:45:08″,”Yeah, they don’t do it. So you have to have the guts to do it to not to take the action right in, in for example, you have to get a mentor, you have to get always at people that has the knowledge to show you the way, the correct way. I know people that they do it by themselves. There are some really smart people that they can do it by themselves.”
“Victor”,”00:11:45:08″,”00:11:54:07″,”It doesn’t it doesn’t say that it’s, you know, you got to do it, but it’s easier if you get a mentor like to teach you that the correct way to do it.”
“Rod”,”00:11:54:07″,”00:11:55:16″,”And it’s faster.”
“Victor”,”00:11:55:18″,”00:11:56:23″,”Faster and.”
“Rod”,”00:11:57:00″,”00:11:57:17″,”It’s faster.”
“Victor”,”00:11:57:18″,”00:12:00:04″,”Yeah, a little less costly, I will say.”
“Rod”,”00:12:00:06″,”00:12:27:19″,”That’s exactly less less seminars, as we call it. You know, Victor, like you said, it is primarily or a lot of it’s mindset. You know, it’s it’s not just about the knowledge, it’s about mindset. And, you know, like at my bootcamp, I had 1000 people there and we spend a lot of time on goals and and why those goals are a must and, and all sorts of other mindset exercises that we did because 80 to 90% of your success in anything is the mindset to actually take action with what you learned.”
“Rod”,”00:12:27:20″,”00:12:47:12″,”You know, that’s why I am my warriors are somewhere between 170 and 180,000 units that they own. It’s just mind blowing to me because I’ve only been teaching a little over five years and it’s because they actually take action with what they learn. And by the way, if you’re interested in the Warrior program, text the word crush 272, three, four or five so we can help you frickin crush it in this business.”
“Rod”,”00:12:47:15″,”00:13:07:13″,”And if there was ever a time to get in this business, it is right freakin now. So again, text crush 272, three, four, five. And. And you look us over, we’ll look you over. We don’t take everybody but, you know, we’d love to have you consider it And I will tell you, even if we don’t you know, if it’s not a fit, you’ll leave that call better than when you started it.”
“Rod”,”00:13:07:15″,”00:13:23:14″,”So the next question I want to ask you is, you know, you talk about how your family is part of your team. And I know family is, I think, probably more important for, you know, the Latino community than anybody else out there. I’ve seen it, you know, time and time again. It’s a beautiful thing. But you’ve got your family there.”
“Rod”,”00:13:23:14″,”00:13:32:03″,”So talk a little bit about the dynamics of that and who, you know, maybe who does what and how you’ve how you’ve managed that.”
“Victor”,”00:13:32:03″,”00:13:47:22″,”We came here with our investors visa, everybody, although all of us invested in the construction business and the more English fluent, if I can say that. Yeah.”
“Rod”,”00:13:48:00″,”00:13:49:12″,”That’s true. Sure, sure.”
“Victor”,”00:13:49:14″,”00:14:19:06″,”So I’m one of the workers trying to get the deals and speak with the investor relationship now, you know, bringing all my friends, we just bonded with friends with a wonderful that did we prefer to have a lot of quality investors and to have a quality right So that’s what I’m doing my my my my wife, my sister and my sister in law, they are terrific on the administration and the bookkeeping on the mine as well.”
“Victor”,”00:14:19:07″,”00:14:39:21″,”So they held hands with all that. My brother and my brother in law, they are the boots on the ground. So they are, you know, reviewing all the properties where they’re the management that we had to, you know, the renovation, the pyramids, everything that they today. So, yeah, that’s nice.”
“Rod”,”00:14:39:23″,”00:14:58:17″,”Nice, nice, nice. So everybody’s playing to their strengths, right? Yes. So everybody’s doing what they’re good at. Like you said, you know, your wife and sister, I forgot who else. They’re, they’re, they’re on the admin side. They like doing that. The details that the guys are out there, boots on the ground, having fun, kicking the doors and doing that sort of thing.”
“Rod”,”00:14:58:17″,”00:15:00:17″,”And yeah, love it, love it, love it.”
“Mark”,”00:15:00:17″,”00:15:20:00″,”I have a curiosity because a lot of people’s family members most of the time have no interest in real estate investing, right? They try and talk them out of it. Did your family have interest in multifamily when you first got started, or did you kind of lead the way, show some success and then they joined afterwards?”
“Victor”,”00:15:20:01″,”00:15:35:13″,”My family leased to my brother started this. My brother, my mother started this construction back in Mexico. They used to build four, six storey building. They always want me to join them back in Mexico. I never one day I was like.”
“Mark”,”00:15:35:16″,”00:15:36:10″,”Oh, so is the.”
“Victor”,”00:15:36:10″,”00:15:49:23″,”Operator. Yeah, I was like, Oh no, no, I will nail it. And then incorporate side. So, you know, until I quit, I was the first to come here to, to the US and then all my family follow up. So.”
“Rod”,”00:15:50:03″,”00:15:52:01″,”Oh that’s nice. That’s nice.”
“Victor”,”00:15:52:03″,”00:16:11:15″,”Yeah. It was hard to, to convince them. Probably not that much that the life, the quality of life that we have here is such so much better than what you used to have in Mexico. Even though we had like, a good, really good living in Mexico. But but seriously.”
“Rod”,”00:16:11:17″,”00:16:24:14″,”The greatest country on earth. I don’t care where you come from. I don’t care what you say. I’ll I’ll fight you toe to toe on that one. We live in the greatest country on earth. I’m an immigrant, too. So are you in southeast Florida? Are you in the Miami area? Is that We went yes.”
“Victor”,”00:16:24:15″,”00:16:26:10″,”In Palm Beach County and I.”
“Rod”,”00:16:26:11″,”00:16:45:19″,”Oh, Palm Beach. Okay. Nice, nice, nice. Okay. So so let me ask you this now, you’re obviously you’re an entrepreneur, Are you? Fear is not a big word for you because, I mean, you immigrated you’re the first one here and all that. But, you know, did you have any fear as to any pieces of this, you know, like getting involved in this?”
“Rod”,”00:16:45:19″,”00:16:57:03″,”Were there any fears or if not, then maybe people in your family and how? I just want to curious how you got over the fear or how you helped other people get over their fear? Because I’m sure there was fear in there somewhere.”
“Victor”,”00:16:57:05″,”00:17:21:01″,”So failure is always, you know, the biggest fear I think we will have always I’m sure, you know, like since the beginning, like I said, I have friends that were telling me what what the heck are you thinking about? You know, what are you doing now that my friends or family see what we have done and we have grew up, everybody or people could say like, Oh, that was easy.”
“Victor”,”00:17:21:01″,”00:17:45:05″,”But, you know, of course it’s it’s not that easy to do it. You and but my biggest fear was that some day or for something I would I would with a mr. Resources not a it’s not that you’re going to be staying here in the U.S. forever, right? You can renew your visa as long as your business continues.”
“Victor”,”00:17:45:05″,”00:17:55:17″,”But there’s no right pass through getting citizenship or green card, right. So you can have 50 years the best visa just renewing and oh, wow.”
“Rod”,”00:17:55:17″,”00:18:06:00″,”But you have to have a business. So. So I know I know where you’re going with this. So if if you fail in the business, not only do you fail in the business, you’re you’re back to Mexico.”
“Victor”,”00:18:06:02″,”00:18:08:07″,”Exactly. Wow. Now that’s so you act.”
“Rod”,”00:18:08:07″,”00:18:30:18″,”So that’s some serious motivation. That is certainly serious right there. Yeah, no kidding. But that’s you know, that that that that fear is very that’s a very powerful motivator in that regard. Interesting. Wow. That’s a lot of people don’t have that you know that that extreme of a of a consequence if things don’t go right so oh I get it now Wow.”
“Victor”,”00:18:30:18″,”00:18:35:11″,”But but luckily not anymore because we already got the green card, so.”
“Rod”,”00:18:35:13″,”00:18:39:10″,”Oh, you did. Oh, fantastic, brother. Oh, thank God. Thank God.”
“Victor”,”00:18:39:11″,”00:18:39:22″,”Last year.”
“Rod”,”00:18:39:22″,”00:18:41:03″,”So you got.”
“Victor”,”00:18:41:07″,”00:18:42:13″,”Ten years without nothing, but.”
“Rod”,”00:18:42:13″,”00:19:00:00″,”Yes. Well, you you hear about you hear about the fact that we’ve got open borders right now and you’re doing it the right way. You know, don’t get me started on this current administration that’s letting anybody come in illegally and drugs and cartel and all kinds of crap fencing, all everything else. But but you did it the right way, the legal way.”
“Rod”,”00:19:00:00″,”00:19:12:18″,”And good for you, man. I salute you for that. So so let me ask you this. You know, knowing what you know now, would you have done anything differently? Is there anything you might have done differently knowing what you know now.”
“Victor”,”00:19:12:19″,”00:19:19:10″,”With spoke at the beginning, not selling every house, I mean. Right. So yeah, yeah, yeah, yeah.”
“Rod”,”00:19:19:11″,”00:19:21:12″,”I okay. I feel.”
“Victor”,”00:19:21:14″,”00:19:21:20″,”That.”
“Rod”,”00:19:21:21″,”00:19:40:17″,”If you look you look back on what you sold those for and what they’re worth now you’re just like, oh good God. You know, I had 500 houses in Denver that I sold. If I hadn’t sold those, I would be netting. They’d be free and clear, and I would be netting every single month $1,000,000 every month. So, yeah, what it could have, should have.”
“Rod”,”00:19:40:18″,”00:19:41:13″,”But anyway.”
“Victor”,”00:19:41:15″,”00:19:53:12″,”Yeah, yeah. That, and you know, I guess you, you can ask any, any billionaire in real estate and the answer will be always the same, which is to start sooner. Yeah, yeah, yeah, yeah.”
“Rod”,”00:19:53:17″,”00:20:00:16″,”That’s right. Well I’m glad you said I’m glad you said billionaire instead of millionaire because I see where your head’s at. I love it, brother.”
“Victor”,”00:20:00:17″,”00:20:25:02″,”No one thing that you want you to talk about your, you know, on and on. There would come. The first one that I was was the virtual one because of COVID to get and you talk about all these like the picture goals that you have and you show like the car that you wanted to watch it. You wanted, right.”
“Victor”,”00:20:25:04″,”00:20:50:05″,”My wife, they have this tradition in their family. They do it every every Christmas when they, you know, family get together. And I will, you know, cut from the newspaper for magazines and, you know, like our vision boards. So nice what you said that I was like, I have that one, too. And I love it. Every year we try at least to do like 70% what we what we put there.”
“Victor”,”00:20:50:07″,”00:20:52:21″,”So, yeah, it’s a bit too big.”
“Rod”,”00:20:52:21″,”00:21:14:09″,”Wow, That’s beautiful, man. That’s. That’s. Yeah. Guys, I hope you’re hearing this, man. I mean, they’re doing the vision boards, they’re doing the goals, which is why they’re super frickin successful. It’s kind of a kind of a no brainer here. And these, these those vision boards are so incredibly powerful. Doing your goals is so powerful. So why? It’s the first thing we do at my bootcamps, by the way, got a virtual bootcamp coming up.”
“Rod”,”00:21:14:09″,”00:21:20:04″,”I think it’s January 6th and seventh. I think that’s next. I’m pretty sure those are the dates, but are you checking?”
“Mark”,”00:21:20:10″,”00:21:23:04″,”Mark Yeah, Yeah. Yep. Six and seven, correct?”
“Rod”,”00:21:23:04″,”00:21:37:01″,”Yeah. So January six and seven, some virtual bootcamp two days. I don’t sell anything there. It’s two days of training I like right now. You can come for 100 bucks. It’s really kind of a no brainer. Okay, so get your butt there if you possibly can. Yeah.”
“Mark”,”00:21:37:07″,”00:21:56:01″,”Great Way to start the new year for sure. Right. Virtual bootcamp. Now. Now I want to transition to one practical thing. We’ve talked about goals, mindset, all that stuff. What are some actions that you take on a weekly basis or maybe, maybe even just some some advice, right, that listeners can do every single week to get.”
“Rod”,”00:21:56:01″,”00:21:58:03″,”Start your day or day or day or.”
“Mark”,”00:21:58:04″,”00:22:08:07″,”Every day, right? Whether it’s networking and talking to an investor, looking at deals. What’s something that a listener could take from this podcast and go actionable to do and take action on every day or every week?”
“Victor”,”00:22:08:08″,”00:22:10:09″,”Stop complaining, just do it.”
“Rod”,”00:22:10:11″,”00:22:32:04″,”I love it, man. Just do it like Nike says. Just frickin do it. Get your butt to my bootcamp. Start looking at deals, start getting around people that are doing this, read books about this, suffer through my podcast, You know, do whatever you have to do to frickin make this happen. That’s that’s what you do. Well, listen, listen, brother, I appreciate you coming on, man.”
“Rod”,”00:22:32:05″,”00:22:47:07″,”And especially because, you know, this isn’t the easiest for you to have a conversation like this. And I asked you when you first came on, I said, how many podcast interviews have you done? You said, this is the first one. And I said, Well, go big or go home. It’s the largest in the world. So no, no pressure.”
“Rod”,”00:22:47:07″,”00:22:49:17″,”No stress.”
“Mark”,”00:22:49:18″,”00:23:07:03″,”Away. Just real quick, because I actually got this. I brought on a new warrior last week, not from Mexico, but from Europe, who also had a language barrier. And he asked me that question. He said, can I actually do this with English as my second language? And for anybody listening to where English is your second language, Victor, is more like proof that it can be done.”
“Mark”,”00:23:07:05″,”00:23:09:22″,”It’s just an excuse that you’re making for yourself, that’s all.”
“Rod”,”00:23:09:22″,”00:23:25:14″,”It’s a story. It’s a story. We tell ourselves stories so that we don’t get disgusted with ourselves as to why we’re not taking action. And that’s a story. Change your stories. Change your life. I’ve got students in Turkey, Israel, Mexico, Canada, the Netherlands. Well.”
“Mark”,”00:23:25:16″,”00:23:27:07″,”Speak Spanish, but yeah.”
“Rod”,”00:23:27:09″,”00:23:44:19″,”Yeah, but still. But still. But still. But but but it’s. But it’s different. You know. The financing is different. There’s syndications different entity structure is different. But but, but you know and they’re successful in all these different countries. So Turkey, Turkey, I mean, so so tell me and I’ve plenty I’ve got several in.”
“Mark”,”00:23:44:19″,”00:23:46:11″,”Mexico, Venezuela and.”
“Rod”,”00:23:46:13″,”00:24:04:02″,”Then in Venezuela. Yep. So so you know don’t don’t just change your story, change your frickin life. Victor, it’s great to see your brother and thanks. I hope to see you soon. Maybe you’ll be at the Warrior event. We’ve got our warrior only event coming November 11th and 12th in Phenix. That’ll be a that’ll be a lot of fun.”
“Rod”,”00:24:04:03″,”00:24:10:18″,”All right, well, you take care, my friend. I appreciate you coming on. Thank you. Thanks, Mark. Thanks so much, Mark. I’ll see you later, buddy. Take care.”
**Podcast Categories:** Multifamily Rock Stars, Podcasts
---
### [How A $30K Insurance Problem Almost Killed A $40M Deal (And How He Fixed It)](https://rodkhleif.com/podcasts/guffy-wright-on-multifamily-insurance-strategy/)
**Published:** April 20, 2026
**Author:** Bryan Hoover
**Excerpt:** How A $30K Insurance Problem Almost Killed A $40M Deal (And How He Fixed It)
**Content:**
## How Multifamily Insurance Optimization Strategy Impacts NOI
In this episode of *Lifetime Cash Flow Through Real Estate Investing*, Guffy Wright breaks down how a well-executed multifamily insurance optimization strategy can dramatically impact property value and investor returns. Many operators treat insurance as a fixed cost, but Wright reveals that even small premium changes can create massive swings in valuation. A $30,000 increase in premiums, for example, can translate into a $750,000 drop in asset value at a 4 cap rate. This makes insurance not just a protection tool, but a critical lever for increasing NOI and long-term wealth.
## Negotiating with Lenders to Unlock Hidden Value
One of the most powerful insights shared is that lender requirements are often negotiable. Wright explains how his team developed a lender waiver framework that allows operators to challenge unnecessary coverage requirements. By leveraging data and presenting a structured case, investors can reduce premiums, adjust deductibles, and eliminate redundant policies.
Key opportunities to optimize include:
- Negotiating down excessive coverage requirements
- Increasing deductibles strategically
- Removing unnecessary policy add-ons
- Using data-backed arguments to support changes
This approach can lead to six-figure savings and, more importantly, seven-figure increases in asset value.
## Why Most Investors Overpay for Insurance
A major mistake investors make is benchmarking insurance performance against their own past policies instead of the broader market. Wright emphasizes the importance of benchmarking against peer portfolios to understand whether you are truly getting a competitive rate.
Without this data, investors may feel confident about a 10% savings year over year, while unknowingly paying 30–40% more than similar assets. Access to aggregated industry data allows for smarter decision-making and better positioning during renewals.
## The Power of Alignment with Your Insurance Broker
Wright highlights that choosing an insurance broker should be approached the same way you select a business partner. The best brokers are not transactional, they are strategic. They understand your growth plans, asset types, and future risks, and help you build a long-term insurance strategy around them.
Instead of constantly shopping for the lowest premium, investors should look for:
- Specialists in multifamily real estate
- Brokers who understand cap rates and NOI
- Advisors who align with long-term portfolio growth
- Partners who anticipate future risks and challenges
This level of alignment can prevent costly mistakes and create compounding value over time.
## Overcoming Investor Friction in Capital Raising
Beyond insurance, Wright dives into the psychology of decision-making, which directly applies to raising capital. He explains that even when a deal is strong, decisions often stall due to three types of friction:
- Cognitive friction: confusion or lack of clarity
- Emotional friction: fear, uncertainty, or lack of trust
- Directional friction: concern about future regret
To overcome this, investors must simplify their messaging, be transparent about risks, and reinforce the strength of the opportunity. Creating clarity and trust leads to faster, more confident investment decisions.
## How AI Is Transforming Insurance and Real Estate
Wright also discusses how AI is beginning to reshape the insurance landscape. By analyzing lender requirements, policies, and property data, AI tools can quickly generate strategies for negotiation and optimization. While still evolving, this technology is expected to significantly enhance efficiency and decision-making for top operators.
## Guest Bio: Guffy Wright
Guffy Wright is an owner, board member, and National Sales Leader at The Mahoney Group, where he built a real estate-focused insurance practice exceeding $100 million in premiums. With nearly two decades of experience, he specializes in helping multifamily investors optimize insurance strategies to protect assets while maximizing NOI and valuation. Known for his innovative approach, Wright has pioneered tools like lender waiver frameworks and benchmarking systems that give investors a competitive edge.
## If you want to hear the full conversation and detailed insights, watch the podcast video or read the complete transcript below.
**Multifamily Insurance Optimization Strategy FAQ**
**What is a multifamily insurance optimization strategy?**
A multifamily insurance optimization strategy is a data-driven approach to structuring and negotiating insurance coverage to reduce costs while maintaining proper protection. Instead of treating insurance as a fixed expense, investors actively manage policies, deductibles, and lender requirements to improve net operating income and overall asset value. This strategy focuses on aligning coverage with risk, eliminating inefficiencies, and leveraging market data to secure the best terms.
**How does multifamily insurance optimization impact NOI?**
Insurance is a direct operating expense, so any reduction in premiums immediately increases net operating income. Even small savings can significantly boost property value due to cap rate calculations. For example, lowering insurance costs by tens of thousands of dollars can translate into hundreds of thousands or even millions in increased valuation, making optimization a powerful financial lever.
**Can you negotiate insurance requirements with lenders?**
Yes, many lender insurance requirements can be negotiated with the right strategy and supporting data. Investors can work with experienced brokers to request waivers, adjust coverage limits, or increase deductibles. Presenting clear data and risk analysis helps lenders feel confident approving modifications, which can lead to substantial savings without increasing exposure.
**What are the most common mistakes in multifamily insurance?**
Many investors make the mistake of comparing their current premiums only to prior years instead of benchmarking against similar properties. Others rely on generalist brokers who lack multifamily expertise or fail to question lender requirements. Overpaying for unnecessary coverage and not aligning insurance strategy with long-term portfolio goals are also common issues that reduce profitability.
**Why is benchmarking important in insurance optimization?**
Benchmarking allows investors to compare their insurance costs and coverage against similar assets in the market. This provides clarity on whether they are overpaying or underinsured. Without benchmarking, it is difficult to identify inefficiencies or opportunities for savings, making it a critical component of any multifamily insurance optimization strategy.
**Should you use a specialist or generalist insurance broker?**
A specialist broker with experience in multifamily real estate is typically the better choice. They understand key metrics like cap rates, NOI, and portfolio risk, and can provide strategic guidance beyond just securing a policy. Specialists are also more effective at negotiating with lenders and identifying long-term optimization opportunities.
**How does deductible strategy affect insurance costs?**
Increasing deductibles can significantly lower insurance premiums, which improves cash flow and NOI. However, this must be balanced with the investor’s risk tolerance and financial reserves. A well-structured deductible strategy ensures that savings outweigh potential out-of-pocket costs during a claim.
**How is AI influencing multifamily insurance optimization?**
AI is beginning to transform how investors analyze and optimize insurance. Advanced tools can review policies, lender requirements, and property data to identify cost-saving opportunities and negotiation strategies. As adoption grows, AI will make it easier to benchmark performance, reduce inefficiencies, and improve decision-making at scale.
**How often should multifamily insurance be reviewed?**
Insurance should be reviewed at least annually, but more frequent evaluations may be necessary in volatile markets. Regular reviews ensure that coverage remains aligned with property performance, market conditions, and portfolio growth. Continuous optimization helps investors capture savings and adapt to changing risks.
**What role does insurance play in long-term portfolio growth?**
Insurance is a key component of risk management and financial performance in multifamily investing. A strong optimization strategy protects assets while enhancing profitability, allowing investors to scale more efficiently. By reducing unnecessary costs and aligning coverage with growth plans, insurance becomes a strategic advantage rather than just an expense.
*Disclaimer: This summary was written with the help of AI and reviewed by Rod’s Team.*
01:20:07:26 – 01:20:28:05
Rod Khleif
Welcome back to life time cash flow to real estate investing. I’m Rod Cleef and I’m thrilled you’re here. And I know you’re going to get tremendous value from the gentleman I’m interviewing today. His name’s Guffey, right? Yes, I said that. Right. Guffey. Right. I gave him shit about that earlier. And he’s the owner of and of the Mahoney Group, which is a real estate practice group in insurance.
01:20:28:08 – 01:20:44:17
Rod Khleif
And I know you’re thinking, oh, God, John, but we’ve already had some very interesting conversation about some of the strategies and values that can be implemented using insurance. So if you’re a multifamily owner, you know, you really, definitely need to listen up. Welcome to the show, brother.
01:20:44:20 – 01:20:45:14
Guffy Wright
It’s great to be here. Right.
01:20:45:16 – 01:20:57:15
Rod Khleif
Thank you. Of course. So why don’t you give me a little, do a little better job on that bio than I just did? And, maybe talk about why you do what you do and and where we might be able to add some value to my listeners.
01:20:57:15 – 01:21:26:01
Guffy Wright
Sure. I started selling insurance at age 22, dropped out of college. No plan B got married young and started cold calling and grinding. And the industry that most resonated with me, that connected me to, value was real estate. I think they appreciated the relentless hustle I had. And so we connected and, from there, here we are almost 20 years later, and that’s been quite the journey.
01:21:26:02 – 01:21:47:02
Rod Khleif
Yeah, yeah. So you’re, I know you do all sorts of different types of insurance. You’ve got a very large practice, talk about, let’s talk about real estate specifically, because that’s what we focus on here. And in fact, I was just telling Guffey that, you know, we’ve got a six package of assisted living facilities in Texas under contract.
01:21:47:02 – 01:22:11:04
Rod Khleif
Unbelievable deal. And, and he immediately said, well, because I said, you know, they’re in Houston, Dallas and San Antonio. And he said, well, hopefully they’re on the right side of 45 in Houston because of that’s a tier one, insurance area. And you can add $200 a unit to your or a bed to your insurance premium. So, I immediately texted my partner, I said, hey, let’s check and make sure the Houston one’s not in that area.
01:22:11:04 – 01:22:29:12
Rod Khleif
I don’t think it is, but, appreciate that right out of the gate. And, I also appreciate the fact that you said, you know, life is about adding value. And wherever we add value, you know, it’s it’s it’s a reciprocal thing. And, I and I mentioned that the most successful people on the planet add the most value.
01:22:29:12 – 01:22:51:17
Rod Khleif
You know, I look at I look at someone like Jeff Bezos, and I can order something in about 30s anything, anything in the world. So but, so let’s let’s get into it here. You know, when you’re getting insurance, you’ve got to deal with lenders and lenders can can be a little ridiculous. In fact, I’m dealing with that right now with my son.
01:22:51:17 – 01:23:07:10
Rod Khleif
He’s trying to buy a house and and it’s a nightmare what we’re dealing with. It’s been harder than buying a 20 unit. I’m sorry. A $20 million apartment complex. Getting this house. But, lenders will require different types of insurance coverage. Can you speak to that and speak to how you might be able to help with that?
01:23:07:17 – 01:23:34:10
Guffy Wright
Yeah. We developed a lender waiver template. Okay. Together with Fannie Mae, Freddie Mac and some other loan servicers, because we learned that our owners value what the lender dictates big time, because that impacts the NOI. Right. And I was working on, a deal in Colorado, about 700 units and two days before closing, the lender required different things than they set out.
01:23:34:12 – 01:23:50:27
Guffy Wright
And it was about a $30,000 insurance premium increase. And my client was very upset. Yeah. And called me and and I actually said, hey, this is like a $40 million deal. What’s the big deal on 30 grand?
01:23:51:01 – 01:24:00:20
Rod Khleif
Well, let me just say this. Okay. Let me let me. I just pulled up my calculator here to tell you what the big deal is. At a four cap, that’s a $750,000 swing in value.
01:24:00:27 – 01:24:02:16
Guffy Wright
And that’s what they told me, right?
01:24:02:18 – 01:24:03:16
Rod Khleif
I’m sure.
01:24:03:19 – 01:24:07:23
Guffy Wright
Right. And it really hit me that, wow. This is what they value right now.
01:24:07:24 – 01:24:08:12
Rod Khleif
01:24:08:14 – 01:24:29:09
Guffy Wright
And in that moment I said okay let’s let’s figure this out. And we got some things waived okay. And we were able to get the lender to agree to a lower value to a higher deductible and to negotiate out one specific, coverage at the time. It’s called assault and battery. And so because of that, we were able to then save $60,000.
01:24:29:10 – 01:24:47:20
Guffy Wright
Wow. And so he thought he was basically going to have to come up with half a million bucks at the time. And then it was, you know, over $1 million million, a half dollar swing in the matter of a couple seconds. And that’s when I got hooked. And obsessed with this concept of value and how value is in motion always.
01:24:47:20 – 01:25:06:24
Guffy Wright
Because nobody’s ever called me in a tough claim and said, hey, Guffey, can you shave off 10% right now? Right. They don’t value it. It’s the same thing. Like if I offered someone a briefcase full of cash or a briefcase full of bottle of water. Well, I’m going to take the cash unless I’m in the desert for seven days right now.
01:25:06:24 – 01:25:07:18
Guffy Wright
What’s more valuable?
01:25:07:25 – 01:25:20:29
Rod Khleif
So tell me, tell me, tell me. Be more specific as to what you mean by value in motion. So that I’m not. I’m. Because I’m. I’m struggling with how you’re describing it. Yeah.
01:25:21:01 – 01:25:47:03
Guffy Wright
I think people value different things at different times. Oh, for different reasons. Okay. And in decision making, there’s a couple things that prevent deals from flowing or prevent value from winning. It can still stall, deal, stall the decision stall even when value is clear. And I think by removing that you can see how value can flow quickly.
01:25:47:05 – 01:25:55:16
Guffy Wright
The you know, my dad, inherited gold coins for my dad. Well, gold right now per ounce is worth about $5,000 an ounce.
01:25:55:16 – 01:25:59:01
Rod Khleif
Right. It’s amazing because I paid 1500. So there you go. Yeah.
01:25:59:05 – 01:26:14:03
Guffy Wright
So so it’s in motion. It was at 1500. Now it’s 5000, right. However, my gold coins that I got from my dad, who he bought from his mom, you know, she got him in Austria in 1908. Wow. Those are the last things I’m parting with other than feeding my children.
01:26:14:03 – 01:26:14:14
Rod Khleif
Sure.
01:26:14:17 – 01:26:16:21
Guffy Wright
So that’s what I mean. Value is always in my mouth.
01:26:16:22 – 01:26:50:02
Rod Khleif
Gotcha. Okay. Fair enough. Well, you know, as it relates to this conversation we just had regarding, you know, a deal that’s about to close, you know, every dollar that’s saved, from the net operating income is about a 17 to $20 fluctuation or savings. Or an increase in value, rather, you know, and I knew that $30,000 example because, I remember I have a 296 unit asset in San Antonio, and we painted numbers on the parking spaces and said, hey, for 25 bucks a month, you can have your own parking space right in front of your unit.
01:26:50:05 – 01:27:07:26
Rod Khleif
100 people took it. You annualize that $25 times 100 and it’s 30 grand. So I knew the number because I use it as an example. You know, I had a four cap that’s $750,000 instant increase. And so you basically if you save the guy 60 grand, you basically saved him a million and a half dollars right out of the gate.
01:27:07:26 – 01:27:29:06
Rod Khleif
Correct? I mean, which is huge. So, so, as far as this lender waiver, you know, people a lot of people think that when a lender says something, it’s locked in stone. And this is why you always bring in an attorney, guys, okay. To review your financing documents, to review the clauses in your financing documents and to also, you know, negotiate things.
01:27:29:09 – 01:27:36:12
Rod Khleif
You know, you can you can negotiate quite a few things with a lender. A lot of people don’t realize that. So you can actually negotiate insurance, which. Yeah.
01:27:36:12 – 01:27:40:18
Guffy Wright
And if you don’t value your insurance broker the way you value your attorney.
01:27:40:20 – 01:27:41:09
Rod Khleif
Yeah.
01:27:41:12 – 01:27:42:09
Guffy Wright
You have the wrong broker.
01:27:42:10 – 01:28:00:16
Rod Khleif
Well, I agreed and we talked about this before we started recording. You know, we talked about alignment. Right. And that’s where you’re going with that. And, you know, I tell people, and candidly, shame on me. I’ve never really included the insurance broker in that conversation. Usually I’m talking about property management companies, how you align with a property management company.
01:28:00:16 – 01:28:26:13
Rod Khleif
You’re basically partnering with them. But I can see it’s the same thing with insurance, because if you can save that kind of money, I mean, good God, you know, we’re on the same team there. And and, you know, shame on me for not thinking through that, I’ll be honest. But, but I’ve I’ve changed my mindset as of this conversation that definitely your insurance broker, has got to be you’ve got to be aligned and, you know, and I’ve had some big insurance claims in my, in my career.
01:28:26:13 – 01:28:40:24
Rod Khleif
I had a fire on a 22 unit in Nashville, burned to the ground. Thank God nobody died. We’re getting sued by a woman. Had to jump out of a third floor balcony, but we’re not at fault. We didn’t do anything wrong. I feel bad for her. She broke her ankles, but. But, you know, there’s that one.
01:28:40:24 – 01:28:51:01
Rod Khleif
And then I had a tornado destroy 101 units in in, Dayton, suburb of Dayton called Beavercreek, Ohio, destroyed 101 families had to move. So these are big insurance claims.
01:28:51:04 – 01:28:52:15
Guffy Wright
But you’ve been through it, you know?
01:28:52:17 – 01:29:13:24
Rod Khleif
No, no, I’ve been through it. Yeah. And and tons of houses, you know, but, over the years. But so, so, so having a insurance broker that can negotiate with a lender as needed is huge. And, that lender waiver will not tell me what that waiver is, is a document that that you execute or what is that correct?
01:29:13:24 – 01:29:22:10
Guffy Wright
It’s a it’s a document. And then we also support it with data okay. We know that lenders love to check a box okay. It makes them feel so great.
01:29:22:12 – 01:29:23:09
Rod Khleif
Exactly right.
01:29:23:16 – 01:29:26:20
Guffy Wright
And and so we give them permission to do.
01:29:26:20 – 01:29:38:05
Rod Khleif
That I see and you do that through this waiver where you’re substantiating your position. Correct. And it allows them to check that box and say, okay, I can eliminate that particular clause. Yeah. Okay. Got it.
01:29:38:06 – 01:30:02:08
Guffy Wright
Okay, love, can I mention another mistake or how I would sure. You know, a lot of times you just compare yourself to yourself in insurance, meaning, oh, we save 10% high five or we’re up 6% year over year. But what if you had information on what all your peers are paying? What all your peers are buying? Now, you can really evaluate how you’re doing.
01:30:02:12 – 01:30:05:03
Guffy Wright
Right. And that’s what we provide. It’s called a benchmark report.
01:30:05:06 – 01:30:05:25
Rod Khleif
Okay.
01:30:05:27 – 01:30:10:25
Guffy Wright
And ask your broker for a benchmark report because right now.
01:30:10:27 – 01:30:11:21
Rod Khleif
It’s easy.
01:30:11:21 – 01:30:17:11
Guffy Wright
To save, money on property insurance in the next 12 to 18 months. It’s actually going down.
01:30:17:13 – 01:30:18:20
Rod Khleif
Premiums go down a lot.
01:30:18:20 – 01:30:37:12
Guffy Wright
Yeah. And so you’ve comparing yourself year over year to yourself. Right. Well, you’re happy that your premiums are going down. But then what if I showed you your neighbor is paying 40% less and each and actually has a worse asset? That would make you feel great, right? Right. I like to grade my own papers to to make myself feel good.
01:30:37:14 – 01:30:44:03
Guffy Wright
Sure. But when you have all that data, it really just provides clarity so you can put a strategy around it. Oh, sure.
01:30:44:08 – 01:31:05:05
Rod Khleif
You know, it used to be, it used to be, not the greatest idea to shop insurance. You know, insurance brokers don’t like it because it’s a lot of work for you guys to, to to get print, you know, to get, commitments and things of that nature. And so, but now, obviously that ship has sailed just because of the huge swings in insurance and all the things that have happened.
01:31:05:05 – 01:31:10:13
Rod Khleif
But, I love that. So this benchmark report is that like an industry report is that’s just your firm that does that.
01:31:10:13 – 01:31:16:08
Guffy Wright
So we we combined with about 15 other firms nationwide to share our data, the mastermind group.
01:31:16:08 – 01:31:16:23
Rod Khleif
Gotcha.
01:31:16:25 – 01:31:21:11
Guffy Wright
And we aggregate that data together. Got it. So we can add value to that’s.
01:31:21:11 – 01:31:30:15
Rod Khleif
To our classic idea. Yeah. By the way I’m a huge mastermind fan. You know, Napoleon Hill is book thinking grow rich. I, I used to have the largest multifamily mastermind pretty much on the planet.
01:31:30:15 – 01:31:30:25
Guffy Wright
I know that.
01:31:30:26 – 01:31:47:27
Rod Khleif
At one time you have 40 or 50 billion in assets, and it it just getting these guys together was like herding cats. But, but it was pretty amazing. I had the first, the first, session here at my house was 16, 16, successful multifamily investors. This grew into something. And I gave it up a couple of years ago.
01:31:47:27 – 01:31:52:26
Rod Khleif
I, I’m thinking about it. It was called the Multifamily Boardroom. I think the website’s still up, but, but, yeah.
01:31:52:26 – 01:31:53:24
Guffy Wright
This long ago was that.
01:31:53:24 – 01:32:11:23
Rod Khleif
Oh, a 2 or 3 years ago? I, I’m bad with dates, but I it was just too much work. And I’m, but I’m thinking about, at the very least, doing one meeting a year, just to compare notes on what’s happening because there’s so much, you know, the multifamily, so tumultuous right now, so incredible opportunity with the deals that are out there right now.
01:32:11:23 – 01:32:16:11
Rod Khleif
But a lot of people are scared. A lot of people are in trouble. And, yeah.
01:32:16:12 – 01:32:18:14
Guffy Wright
Can I make a comment about shopping brokers?
01:32:18:14 – 01:32:21:15
Rod Khleif
Yeah, sure. Okay, sure.
01:32:21:17 – 01:32:44:29
Guffy Wright
I would interview 2 or 3 different specialists, brokers, and I would pick the person that best aligns with your future ambitions. A lot of times, in my experience, owners and insurance agents, they care the most about the present transaction. Let’s get this deal done. Let’s say premium. Let’s say premium. Great. I get it. But if you can find a partner that will anchor to your future ambition, that’s alignment.
01:32:44:29 – 01:32:48:08
Guffy Wright
That’s the holy grail of an insurance.
01:32:48:10 – 01:32:50:15
Rod Khleif
So elaborate on that a little bit.
01:32:50:18 – 01:33:05:05
Guffy Wright
Well, if you tell me you’re going to if I ask you about your growth plans and you say, hey, we’re doing some, you know, senior housing, and we’re going in Texas and we’re going in, you know, like, I just want like you just told me, right. And you’re doing some other things. Well, then then I know how I can help.
01:33:05:05 – 01:33:33:05
Guffy Wright
I already know the problems you’re going to face in 2 or 3 years. I have all of the lawsuits in every state, that you need to worry about. And I know you probably try to stay out of those high litigious states, right. But Florida has issues on the liability side. Big time. Texas is better, but I would I would then talk to you about your future and align with how I would build a whole strategy around your future, because I know the pitfalls you’re going to face as you grow.
01:33:33:07 – 01:33:41:04
Guffy Wright
And so instead of just shopping out every three years and trying to find the best deal, it’s it’s better to actually build a strategy in alignment.
01:33:41:06 – 01:33:41:20
Rod Khleif
01:33:41:22 – 01:33:47:15
Guffy Wright
Where we can kind of benchmark you along the way and if we have to pivot, we pivot. But I think.
01:33:47:15 – 01:34:01:14
Rod Khleif
That that makes that makes sense. But I mean, I’ll tell you, you know, I, I’m the most loyal person you’ll ever meet. My, my, my loan broker is a guy that’s been with me forever. My attorney has been with me forever. I mean, I’m I’m incredibly loyal that come.
01:34:01:14 – 01:34:01:27
Guffy Wright
From.
01:34:01:27 – 01:34:31:28
Rod Khleif
Work ethic. I have no idea where it comes from, but I am very loyal, and, it’s good. And I believe in that, you know, and of course, it’s it’s we add value to each other. But, you know, a lot of people aren’t, you know, but but I am for sure, and I respect that. So, you know, another thing that you mentioned before we started recording is, you know, a lot of people will go to an insurance broker that they maybe, you know, borrowed money they did with their house or something like that.
01:34:32:03 – 01:34:40:22
Rod Khleif
And, and, you know, and we’re talking about a generalist in insurance versus a specialist. Do you want to elaborate on that conversation?
01:34:40:22 – 01:34:52:03
Guffy Wright
Sure. So our industry is moving more towards like how an attorney, how a law firm is set up. Certain attorneys specialize in real estate and certain do you know medical malpractice insurance is the same now?
01:34:52:09 – 01:34:53:15
Rod Khleif
Okay.
01:34:53:18 – 01:35:12:04
Guffy Wright
It’s still old school in some ways. However, I would align or partner with a specialist or an expert. Now everybody’s going to say I’m an expert, right? And I have the largest relationships and all these other things. Right. Truly, you just ask them a couple questions. You’ll know real quick if they know what they’re talking about.
01:35:12:07 – 01:35:12:15
Guffy Wright
If they.
01:35:12:15 – 01:35:13:03
Rod Khleif
Don’t know.
01:35:13:06 – 01:35:18:28
Guffy Wright
What, they don’t know what a cap rate is. Oh, how are they? How are they a specialist in multifamily?
01:35:19:00 – 01:35:19:10
Rod Khleif
Okay.
01:35:19:12 – 01:35:28:23
Guffy Wright
Insurance. Right. If they don’t, if they just roll over and say, hey, the lender’s the lender, right? Right. Oh, wow. Okay. That costs you millions of dollars a value.
01:35:28:23 – 01:35:30:10
Rod Khleif
Sure, sure.
01:35:30:13 – 01:35:50:25
Guffy Wright
You know, another thing with, a lender, if you have a large portfolio in multiple states, you know, you should really look at lowering your value and having a blanket policy, right? Because your risk is much lower. And we can show the data on how to do that with lending. And so that is a big deal when it comes to picking a specialist versus a generalist.
01:35:51:01 – 01:35:56:08
Guffy Wright
They will add so much value over time. Just like an attorney would.
01:35:56:13 – 01:36:15:25
Rod Khleif
Got it, got it. So before we started recording, you mentioned identifying your ideal client and also a process that you go through with a prospective client, and helping them in the same in the same vein. Can you elaborate on that?
01:36:16:02 – 01:36:21:08
Guffy Wright
Yeah. So an ideal client is crucial to know who that person is.
01:36:21:08 – 01:36:21:29
Rod Khleif
Your avatar.
01:36:22:02 – 01:36:47:18
Guffy Wright
Your avatar. Yeah. And it’s not just demographically. It’s also psychographic who they are between the ears. Okay. My favorite people to work with are the ones that are high growth mode. Love deals, love looking at deals. They send me deals and we discuss and we, you know, we strategize together. But how I help my clients is they’ll sometimes call me and say, hey, we’re raising money or we need to x, y, z.
01:36:47:20 – 01:37:16:17
Guffy Wright
I said, well, who’s your ideal investor? And sometimes they don’t know even who their ideal investor is. Is he a doctor? Is your minimum spend 100,000 or a minimum investment. Right. What part of the country are they from? Right? I would get so specific on who your ideal investor is, that I would be able to share a slide that describes exactly who that human is, because when they see that slide come up in real time, they’re going to think, wow, this person understands me.
01:37:16:19 – 01:37:17:26
Guffy Wright
They’re experienced.
01:37:17:28 – 01:37:29:04
Rod Khleif
So you know what? They wait a minute just to clarify what you’re saying. When that investor sees that slide come up in a presentation, correct. They’re going to it’ll resonate with them because it’s describing them.
01:37:29:10 – 01:37:47:12
Guffy Wright
Correct. Got it. And I have I’ve been in these presentations. And if you think just adding more information and adding more data is going to help somebody not be confused, it won’t. Right. But if you share a slide that says I’m experienced, I understand you and I’m attached to your future ambition,
01:37:47:14 – 01:37:51:11
Rod Khleif
Which which that particular slide would if it describes them. Correct.
01:37:51:11 – 01:37:59:25
Guffy Wright
Right. And they’re not asking the question, how much does it cost? And will I regret buying this asset. Right, right. They’re not asking that question. Yeah. Right.
01:37:59:25 – 01:38:19:04
Rod Khleif
Right, right. No I like it. I like it a lot. And and you know we’ve tried to identify my, you know, our avatar in both the investments. You know the investors that we’re looking for and as well as the coaching clients that I, that I bring in. And it’s very helpful, you know, because when you I mean it sorry about the analogy, but when you’re marketing you’re you’re also using it for marketing.
01:38:19:04 – 01:38:31:18
Rod Khleif
And you’re not shooting with a shotgun, you’re shooting with a rifle. Right. And so, you know, you want to you want to fish where the, where the fish you’re looking for are, are eating. And so yeah, you know, sorry about these ridiculous analogies because that’s like that’s it.
01:38:31:21 – 01:38:39:07
Guffy Wright
I think to my dad would always say I’d rather be in a bad deal with a good partner. Yeah. Than a good deal with a bad part.
01:38:39:07 – 01:38:51:21
Rod Khleif
Always. Yeah. And and don’t get me started on that. Oh, good. Good. Yeah. No. And so, so, I want to shift gears for a minute. Let’s do how is AI impacting your industry?
01:38:51:24 – 01:39:13:22
Guffy Wright
So insurance is traditionally slow at reacting to technology. Is it they it’s a lot of hey we’re in the relationship business which hey I agree right. In the end relationships make all the difference here. But they are not a differentiator too. If I if I came to you or somebody listening, it said, hey, do business with me because of my relationships, it’s not going to move the needle.
01:39:13:24 – 01:39:42:26
Guffy Wright
Right. But I do believe in the end it makes all the difference. AI is going to have a massive impact in insurance and already is. Yeah, we’re already using it. Right now we can upload your statement of values, your lender requirements and your insurance policy into our bot. Right. And it’ll spit out a brief on what should what should we do to negotiate with the lender based on our experience, what the percentage chances we have to get this out, what the NOI is at a five cap.
01:39:42:28 – 01:39:48:03
Guffy Wright
And so we have that already built. That’s cool. I wouldn’t say it’s scaling yet.
01:39:48:03 – 01:39:48:14
Rod Khleif
Right.
01:39:48:16 – 01:39:56:17
Guffy Wright
But when I scales in insurance I think it’s going to be amazing for the top performers. Yeah, I think it’s going to really.
01:39:56:19 – 01:39:57:26
Rod Khleif
Probably eliminate the B.
01:39:57:26 – 01:39:59:13
Guffy Wright
And C players are going to just get crushed.
01:39:59:13 – 01:40:20:10
Rod Khleif
Yeah. Well it’s the same thing I think in just about any industry at this point. You know, we’re implementing AI in my coaching business for sure. And then we’re formatting a, laptop with open claw and my, my main guy is telling me it’ll do 95% of his work. It’s just extraordinary. You know, really, it’s also going to eliminate a lot of jobs.
01:40:20:10 – 01:40:33:21
Rod Khleif
Yeah. Well, and and and if you’re listening and your job could be on the line and there are a lot of them on the line, by God, you better be thinking about a side hustle. You better be figuring out what you’re going to do. Don’t wait for that shoe to drop because it’s gonna drop. I mean, who was it?
01:40:33:21 – 01:40:58:27
Rod Khleif
They just announced a bunch of layoffs. So, Oracle, upwards of 30,000 people getting laid off. Meta’s done it. Facebook’s done it. You know, oh, God. That payment processors done it. I mean, yeah, and those are the people on the forefront of this stuff. It’s going to be the rank and file pretty soon. I’ve been shouting it from the rooftops because I know it’s going to cause a lot of pain, you know, until they come up with this universal income thing, which I don’t think anybody is going to freaking going to want, right know who wants.
01:40:58:27 – 01:41:19:01
Rod Khleif
I mean, it’s like like welfare, you know, who wants that? So yeah, pick a side hustle, guys. Okay. You can buy businesses 10,000 people a day turning 65. You know, they’re selling businesses, actually, like seven, 8000 people turning 80 in this country. Which is why I’m so excited about senior housing, man. I’m like, it’s it’s guts.
01:41:19:02 – 01:41:39:22
Rod Khleif
It’s got legs. So you encounter a lot of people in your practice. You encounter a lot of different personalities. And you’re dealing with a lot of zeros, you know, with a lot of these deals. Because I know your your avatar is somebody ideally that’s got, you know, hundreds if not thousands of doors. They want portfolio insurance rather than individual insurance.
01:41:39:22 – 01:41:50:20
Rod Khleif
I mean, I’m sure you’ll do individual properties, but that’s your ideal client, right? Correct. You know, talk about the different personalities and psychologies that you encounter. Well, we.
01:41:50:23 – 01:41:59:26
Guffy Wright
We see it all because we’re dealing with underwriters, right? Lenders and real estate, people, as well as our 300 employees at the Mahoney Group.
01:41:59:26 – 01:42:00:06
Rod Khleif
Wow.
01:42:00:11 – 01:42:21:27
Guffy Wright
And so one of the most frustrating things that I’ve seen in selling insurance is when value is clear, when we’re clearly the best choice. But decisions still stall. Interesting. And I think in real estate that that does happen as well, where maybe you’re trying to raise money or you’re trying to figure out why not everyone cares about your deal as much as you do.
01:42:22:00 – 01:42:26:08
Guffy Wright
And the reason what’s what’s in the way is emotional friction.
01:42:26:10 – 01:42:46:05
Rod Khleif
Okay. So what you just described is you you have presented a premium for a policy. It’s the best deal they’re going to get. Are you able to are you able to substantiate the fact that it’s the best deal. They’re going to get it. That’s my first question then. And then secondly, why would it stall at that point?
01:42:46:07 – 01:42:47:27
Guffy Wright
You’re a very loyal guy.
01:42:48:03 – 01:42:50:16
Rod Khleif
No one loyal. Loyal, yes.
01:42:50:19 – 01:42:59:25
Guffy Wright
So to break a 20 year relationship or a 12 year relationship is not easy. And so you have some fear.
01:43:00:01 – 01:43:00:22
Rod Khleif
01:43:00:24 – 01:43:21:23
Guffy Wright
Of relational fear. Maybe even identity threat. Reputational harm. Right. And then you also have buyer’s remorse you got to deal with. Yeah. And so even when value is clear let’s say I’ve saved somebody $2 million and they didn’t go with me. Oh shot. And here’s why I didn’t know what they valued. They were a publicly traded REIT.
01:43:22:00 – 01:43:30:18
Guffy Wright
And at the time they were just looking for access to capital. So they went with a large brokerage that has family, home, office money and access to VCs.
01:43:30:18 – 01:43:31:02
Rod Khleif
I see.
01:43:31:04 – 01:43:40:14
Guffy Wright
Well, if I had known what they valued, I could have attached my future, or I could have attached my value to their future position.
01:43:40:14 – 01:43:41:28
Rod Khleif
And repositioned yourself.
01:43:42:00 – 01:43:46:05
Guffy Wright
And so even when value is clear, decisions stall.
01:43:46:05 – 01:43:53:10
Rod Khleif
So talk about how that could translate into an operator that’s raising money and things like that.
01:43:53:12 – 01:44:09:26
Guffy Wright
When you’re talking about dealing with somebody’s money, it’s directly tied to their identity in some way, shape or form. Yeah. And because of that, people are going to protect that almost at any cost. And so you have to understand what’s in the way of them making a decision.
01:44:09:29 – 01:44:10:12
Rod Khleif
01:44:10:15 – 01:44:31:27
Guffy Wright
Because something else I’ve learned too is all decisions make sense with enough information. So what is preventing them from doing it. It’s typically three types of friction okay. Cognitive. They’re just confused okay. So make things simple okay. It’s hard to be aggressive when you’re confused. When you’re confused.
01:44:31:27 – 01:44:32:24
Rod Khleif
Right.
01:44:32:26 – 01:44:35:02
Guffy Wright
The second is emotional friction.
01:44:35:09 – 01:44:36:16
Rod Khleif
01:44:36:19 – 01:44:44:26
Guffy Wright
Fear not. Feeling safe. Yeah. There’s a lot going on there on the emotional side. Could be generational stuff going on.
01:44:44:26 – 01:44:47:19
Rod Khleif
Yeah sure sure. Trauma past trauma whatever. Correct.
01:44:47:20 – 01:44:49:22
Guffy Wright
Right. And the third is directional okay.
01:44:49:22 – 01:44:51:18
Rod Khleif
What do you mean.
01:44:51:20 – 01:45:03:12
Guffy Wright
Buyer’s regret in real estate and insurance and vendors is massive. What if this value goes down? What if something goes about my partners? What if Hurricane Ian comes every two months? What if.
01:45:03:15 – 01:45:09:09
Rod Khleif
It ties? It ties into fear in a way. But you’re thinking. You’re thinking about the future and future pitfalls. Basically.
01:45:09:09 – 01:45:11:28
Guffy Wright
Correct. And so that makes decisions stall.
01:45:12:00 – 01:45:13:11
Rod Khleif
01:45:13:14 – 01:45:33:03
Guffy Wright
That value sometimes is distorted and blocked because of emotional friction. And so if I was raising money because this is what I’ve done in, in, in insurance and I don’t try to close people or push right. I try to create the conditions that where the decision becomes obvious and clean.
01:45:33:05 – 01:45:44:23
Rod Khleif
So you do that by simplifying the presentation absent by dealing with potential fear and things that can pop up there and mitigating a future calamity, I guess, you know.
01:45:44:23 – 01:45:46:11
Guffy Wright
And and here’s how you do that.
01:45:46:12 – 01:45:47:09
Rod Khleif
Okay.
01:45:47:11 – 01:46:10:06
Guffy Wright
First is value. Make sure the value is clear. Starts with clarity okay. That really brings cognitive ease down. And people understand clarity clarity clarity right. The second when we talk about emotional friction, it’s actually vulnerability is what expands psychological safety and tests it.
01:46:10:08 – 01:46:12:25
Rod Khleif
So so what you’re saying is being vulnerable.
01:46:13:02 – 01:46:13:24
Guffy Wright
Yes. And these are the.
01:46:13:24 – 01:46:15:11
Rod Khleif
Risks you’re in presentation. Correct.
01:46:15:11 – 01:46:15:24
Guffy Wright
These are the.
01:46:15:24 – 01:46:19:24
Rod Khleif
Risks being being completely transparent is what you’re saying. Because the the.
01:46:19:24 – 01:46:24:02
Guffy Wright
Best deals I’ve ever worked on is when the truth was most present on both sides.
01:46:24:02 – 01:46:25:14
Rod Khleif
Yeah. Yeah. Right.
01:46:25:16 – 01:46:32:17
Guffy Wright
So that expands that psychological safety where people can really feel safe, but also ask questions and be honest about the risk.
01:46:32:24 – 01:46:33:09
Rod Khleif
01:46:33:12 – 01:46:47:06
Guffy Wright
And then the third is directional. And how do you do that as a real estate owner with an investor is through validation. Validation, I believe, is the missed most misunderstood term in human psychology.
01:46:47:08 – 01:46:52:28
Rod Khleif
It’s like it’s like you’ve got a hell of a deal here and you’re you’re going to kill it with this deal. This this is what we’re talking about.
01:46:52:28 – 01:46:53:06
Guffy Wright
Yeah.
01:46:53:06 – 01:46:53:24
Rod Khleif
So okay.
01:46:53:28 – 01:47:02:11
Guffy Wright
What I mean is validating, like in human psychology and in business, a lot of times we think it’s affirmation or agreement or accommodation.
01:47:02:11 – 01:47:02:23
Rod Khleif
Right?
01:47:02:23 – 01:47:15:03
Guffy Wright
It is not that is not validation at all. It’s confirming truth, reinforcing value. It actually comes from the Latin word valorous which means reinforce strength.
01:47:15:06 – 01:47:22:20
Rod Khleif
Got it. You know, I’m so impressed with the fact you guys found this deal. You’re able to put it together. This is an absolute home run, blah blah blah. That’s validation.
01:47:22:21 – 01:47:38:12
Guffy Wright
Correct. And and it sounds like this I know how it sounds on the insurance and real estate side, but on on the investor side, an investor could say, hey, this deal sounds great, right? I’m I’m sure it’ll work out right. I just need some time to talk about this with my partners. Right. Okay. Validation sounds like this.
01:47:38:17 – 01:47:59:19
Guffy Wright
You know what? It’s really wise that you’re taking the time necessary, that you’re going to be with your partners and get aligned. Very wise. However, I really not just believe in my heart, but the data is showing us this is going to be an amazing deal in Texas. Right. And here’s why we think that we have the deadline is here in ten days.
01:47:59:19 – 01:48:08:14
Guffy Wright
I’m not putting any pressure on you because I but I’m just telling you facts. Right. And we would really love for you to be a part of it. And we think it would absolutely connect to your future ambitions.
01:48:08:14 – 01:48:09:21
Rod Khleif
Got it. Yeah. And so that’s.
01:48:09:21 – 01:48:10:20
Guffy Wright
That’s validation.
01:48:10:20 – 01:48:11:17
Rod Khleif
Right. That’s beautiful.
01:48:11:17 – 01:48:17:08
Guffy Wright
That ultimately equals decision velocity. Sure. You’re not speeding up a decision. You’re just removing what’s in the way.
01:48:17:08 – 01:48:27:20
Rod Khleif
Yeah. Oh love it love it love it. Good stuff. All right. Well how do people get Ahold? Get Ahold of you, Guffey. Where where where, would they go?
01:48:27:24 – 01:48:31:16
Guffy Wright
Yeah, I’m on LinkedIn. Quite active on LinkedIn. I have a.
01:48:31:17 – 01:48:37:07
Rod Khleif
And it’s goofy. And if you forget that, then forget it. Guffey. Right. Yeah. For iGTV.
01:48:37:09 – 01:48:50:23
Guffy Wright
That’s right. I’m on LinkedIn and I have, I have a website that you can upload your statement of values, right there on LinkedIn, upload your lender requirements, and I will, you know, give you a brief, no strings attached. You can even hand it over to your broker.
01:48:50:23 – 01:48:51:16
Rod Khleif
What’s that website?
01:48:51:21 – 01:49:09:19
Guffy Wright
It’s tour dot Guffey right.com. And it’s on the LinkedIn. It’s on your LinkedIn. It is on the LinkedIn. You find me, I respond to my LinkedIn within 24 hours. If anybody messages me. Okay. Be happy to guide you through any acquisition, any next deal, any lender headaches? Just love being involved in the in the deals.
01:49:09:19 – 01:49:10:19
Guffy Wright
Yeah.
01:49:10:22 – 01:49:12:15
Rod Khleif
You love the business. Like I love the business.
01:49:12:15 – 01:49:13:03
Guffy Wright
Absolutely.
01:49:13:03 – 01:49:16:08
Rod Khleif
Yeah. It’s obvious. Well, thanks for coming down, brother. Appreciate you.
01:49:16:09 – 01:49:26:12
Guffy Wright
You’re welcome. Rod, congratulations on all your success. And thank you. 300,000 warriors strong. Yeah. Giving an impact to people and making creating legacy. There’s no greater pursuit.
01:49:26:12 – 01:49:29:14
Rod Khleif
No. Thanks, buddy. I agree. Adding value.
**Podcast Categories:** Podcasts
---
### [How This Couple Went From Zero To 24 Units While Working Full Time](https://rodkhleif.com/podcasts/how-this-couple-went-from-zero-to-24-units-while-working-full-time/)
**Published:** April 17, 2026
**Author:** Bryan Hoover
**Excerpt:** How This Couple Went From Zero To 24 Units While Working Full Time
**Content:**
### Mastering the Multifamily Real Estate Capital Raising Mindset
In today’s competitive investing landscape, developing the right **multifamily real estate capital raising mindset** can be the difference between staying stuck and scaling fast. In this episode of the Lifetime Cash Flow Through Real Estate Investing Podcast, Javier Gonzalez and Yessenia Gonzalez share how they transitioned from small real estate deals into larger multifamily syndications by shifting how they think about money, partnerships, and opportunity.
Javier’s journey is especially compelling. As a Navy Marine Corps combat veteran turned emergency room physician, he had the income but not the scalability he wanted. Like many high-income professionals, he initially invested his own capital into deals. However, tru