Joe is the Founder of Joekillinger.co and host of his own podcast Real Estate Jam Session. He has been an active member in the real estate industry for many years, wearing different hats, and at times multiple hats! Over the years he has been an Agent, Investor, Syndicator, Founder and Operator of companies as well as properties he invests in. His expertise has been developed over the past 30 years.
Here’s some of the topics we covered:
- Good Partnerships
- Moving Quickly & Making Stupid Mistakes
- Real Estate Auctions
- Keeping Your Emotions Out of the Business
- Lessons Learned In D-Class Assets
- Property Management Due Diligence
To find out more about partnering or investing in a multifamily deal: Text Partner to 72345 or email Partner@RodKhleif.com
Full Transcript Below
Intro
Hi. My name is Rod Khleif and I’m the host of “The Lifetime Cash Flow Through Real Estate Investing” podcast. And every week, I interview Multifamily Rock Stars and we talk about how they built incredible wealth for themselves and their families through multifamily properties. So hit the “Like” and “Subscribe” buttons to get notified every Monday when a new episode comes out. Let’s get to it.
Rod
Welcome to another edition of “How to Build Lifetime Cash Flow Through Real Estate Investing”. I’m Rod Khleif, and I’m thrilled you’re here. And it’s a real treat to have my friend Joe Killinger back on the show again. Now, Joe actually has his own YouTube channel as well. It’s called “The Real Estate Jam Session”, so you need to go check that out. And he’s just got a servant’s heart. He wants to help other people. He doesn’t sell anything. He just wants to be there as a resource. So, you know, definitely want to check out his YouTube channel. He’s been an agent, an investor, a syndicator. He owns companies. You know, he’s had hundreds of multifamily units himself. But he’s also in asset classes, single-tenant leasing, asset classes. And just a treat to have you back, brother.
Joe
Thank you, Rod. Thank you for having me on the show. Now, I’m going to apologize. I’m putting a TV. We just expanded our office. So this is going to be a TV someday.
Rod
Okay. We’ll just imagine there’s a TV there, and it’s got some good-looking girl on it or something good. Alright.
Joe
Something other than that blank space looks like–
Rod
Right. Anything. Right. Love it. Because it’s been so long, buddy. I mean, it’s been years since you’ve been on. Why don’t you go ahead and start over and just tell my listeners how you got into the business and, you know, kind of bring us current and, you know, in a few minutes.
Joe
Yeah. I really got into– moved to California in the 80s, and, you know, I had to get out of Nebraska. There were just no jobs there in the 80s. Got out here, started working in Stride Rite Shoes of all things. Putting kid’s shoes on. Telemarketing at night. But knew that I eventually want to get into real estate. So I did everything I could. Tried to mentor with a residential real estate agent. It didn’t take me long to learn that this was not something that I wanted to do. I need to be on the more investment side. Ended up getting my license, moving up to Los Angeles. I was originally in San Clemente, which beautiful place if you’ve ever, not ever been, you want to check it out. But moved up to Los Angeles, ended up just loving real estate here, trying to really figure out what to do and work some construction on movie sets. That was fun. But when I was doing it, I live super cheap. I lived in a hotel with a bathroom down the hall, had a roommate, and it was a room that was like 10×10. There was enough room for two beds. We fall in there and crash at night, shower down the hall, go to work. And so I put my time in, was there for a couple of years. And while there was just saving money, and then I got a couple of guys together, started flipping some homes, and that market turned and I ended up working at a real estate auction company in Los Angeles called Kennedy Wilson.
Rod
So I’m guessing this was around ’08 and ’09. You were flipping before then, the market turned and then you got…
Joe
In the early 90s that we were flipping.
Rod
Oh, this is way back. Okay.
Joe
Way back.
Rod
It’s the first crash. Okay. Got you.
Joe
Try to do that stuff. One good partner, one not so good. But the economy tanked and ended up in a real estate auction company in Los Angeles, Kennedy Wilson. Started working there, really learned how to do real estate auctions, and I worked in the marketing department, so I really learned a lot about marketing. And then my business partner, George Pino, he’s the CEO of our now brokerage company here in L.A. I got moved into his department and he ended up laying me off. And so we’ve been business partners ever since. And I tell you, he pays for it every day and laid me off.
Rod
That’s funny.
Joe
I’ll beat your ass for 30 years.
Rod
Love it.
Joe
I just don’t let go. But then we started a brokerage company, Commercial Brokers International, Los Angeles. And then we do investment properties. We started and invest in multifamily. We bought our first ten-unit building in the Adams area in Los Angeles, and we thought we overpaid it at $250,000 for ten units. Cut to–
Rod
Did you pay 250 for the whole place?
Joe
Yeah. That’s been a lot of years ago. A lot of years ago. Keep in mind.
Rod
Right.
Joe
So we bought that property and really started working on that. We bought another one. Got a big lesson there. Three-story walk-up in what is now Korea Town. Beautiful. I mean, I was really not right about it because it was six units and they were big, but it was a three-story walk-up. And keeping that, those two units up top, filled. Very difficult.
Rod
Kind of hard to drag a bed and a big screen TV and everything else up three flights of you know–
Joe
Yeah. In a largely Hispanic community, the groceries, you know, it was dragging that up every day. It was very hard. So you had to discount those but learned a lot from that. I made a lot of mistakes, you know. So I do this, you know, to try and really help people that have, you know, I’ve made a lot of beauty mistakes that you could, you know, for entertainment value, I guess, but learn from it so you don’t go through that. And, you know, I just think there’s a lot of, you know the guests we have on, too. We talk to them about you know, tell us what worked, what didn’t work. So trying to help people on the shortest path to success.
Rod
No, I love it. I love it. You know, I actually should have worn my shirt. One of my students got me a shirt that says, #AskMeHowIKnow, because, in my boot camps, you know, I’ll say, you know, you don’t want to do this. Ask me how I know. And I say it so much that they actually, we now sell the shirt at my boot camps. Yeah.
Joe
That’s a good one.
Rod
Here’s what not to do. Yeah. I’m the poster child. Well, that’s awesome. So I’ve got a bunch of stuff we can dig into here. The first thing, I circled back to some of the things you said. So you’ve had some not-so-good partnerships and some good partnerships. This commercial real estate business is a team sport. Talk about what the components are of a good partnership and what causes a partnership not to be good. So if you could speak to that, I’d love to get your insight on that.
Joe
Yeah. You know, so I put in a little bit of money. Another investor put in a little bit of money. Then we had the contractor that put in his time, sweat equity. And, you know, the money guys were there every day ready to do the work, and the contractor just put in sweat equity, wasn’t really around that much. And the overruns, and you know–
Rod
What could have been done differently? What could have been done differently possible–
Joe
Everybody should have put in equally, I think. It’s probably what I should have done. And. I mean, I was 27 or 28. I looked back now and what was I thinking? I just wanted to do a deal so bad, Rod, that I just took anybody. And I got lucky with the one partner, you know, but the other one, not so much. And, you know, I just think it’s patience, finding the right property, finding the right people.
Rod
If you don’t mind, I’d like to drill down on it just a little bit more because this is so important for my listeners, because again, in this business, you’re going to have partnerships. And by the way, guys, I’ve got a free resource. Oh, God. What is the acronym for this thing? It’s a book called “Questions to Ask When Forming a Partnership”. So they ask all the hard questions upfront. Oh, gosh. Now I don’t remember how they get it. I’ll look it up while we’re talking here. But you can text something to get this book, which is really powerful because I’ve had partnerships that have failed as well. And a lot of the problem is not going through and really doing your homework upfront to see, you know, hang on. I’m just looking it up real quick here. Where is it? Partnership. Oh, it’s partnership. Just text the word “PARTNERSHIP” to “72345” and you can get that book. In fact, I just used it with my newest partner, Scott, myself. And it’s got all sorts of questions in here. But, you know, speak to– you know, obviously, this would be something you might have done differently. Does anything else come to mind as it relates to, you know when you form a partnership?
Joe
Yeah. You know, for me, it’s like you know, there should have been a laid out plan and we just started doing it like, okay, this is what we’re going to do.
Rod
Got it.
Joe
And, you know, so there was no plan laid out. This is your responsibility. This is my responsibility. Here are the time frames, really treating it like a business.
Rod
Right.
Joe
And young guys, you know, we thought we knew everything. Turns out we knew nothing, but we sure got the experience from it. And we got lucky. We did a few homes that we were buying and flipping, and, you know, we made a little bit of money, did pretty well in the first two. But once we started making some money, the guy was sweat equity. We just couldn’t– the contractor, we couldn’t get him to show up very often. So we got out of all of them. But you’ve got to treat it like it’s a business. That’s number one. You’ve got to treat everything. You need to have a detailed plan laid out. We went partnership property financing, and we should have worked on the financing. Make sure everything was in place first. You know, obviously, partnership first. But know all details in the partnership. Who’s going to do what? This is what you’re responsible for. These are the time frames we want the market by and then getting the money raised and then the property. We did partnership property, then we were stressed to go out and find the rest of the money to help invest. And, you know, it’s just bass-ackwards, you know. There was so much anxiety all the time, and we made a mistake of allowing the contractor to live in the home as he was working on it. So he had free rent. It was just a whole group of bad decisions because we were inexperienced and we didn’t really know anybody doing it at the time.
Rod
Let me put an exclamation mark on a couple of things you said. Guys, when you buy a property, you need a business plan. Just like if you were going to build or buy a business, it is a business. And that’s what he’s describing here. You know, you literally, when we buy an apartment complex, we have a plan for that complex. What we plan to do, how many units we’re going to do it to, what our budget is going to be, how we’re going to market, you know, how we’re going to manage, who’s going to manage, who’s responsible for all of that. So keep that in mind. I’m really glad you brought that up. And the second thing is, as it relates to financing and raising money, you need to be doing that while you’re looking for properties. If you’ve got a deal that you’re interested in, you get your loan broker involved immediately to review that deal and see what sort of financing is available for it. And if you’re going to raise money, you’re talking to investors even before you have a deal. Now, one of the advantages, if you come to one of my boot camps is you’ll get a sample deal package that you can give to a potential investor. It’s an example of a deal. You can modify or use that one and just say, you know, this is the kind of stuff we’re looking for. If we, you know, find something– looks like this, are you interested? And so you start building a Rolodex. That dates me. That comment. Building a Rolodex of people, you know, the CRM of people that could potentially be investors. Awesome. I’m really glad we drilled down on that because it’s so important. Let’s talk about auctions for a minute. Because, you know, I talk about auctions and let me say how I describe them and you tell me, you know, what you think about what I say and then share your insight. So, you know, I tell people, you know when you buy a property that’s listed with a broker, you know, you’ll get a broker’s offering memorandum, and it’s primarily pro forma. You know, what they think the property will do, which in many times can be toilet paper, you know. You need to know what it’s done historically and need all as much historical data as you can get. And very often you don’t get a lot of that until you have it under contract or accepted. LOI. You know you’ll typically have a due diligence period. But even with, you know, the market as hot as it is right now, even sometimes you don’t have much of that right now. We’ll get back to normal on that before too long. But with an auction property, if you bid on it and you’re successful, it’s your deal or you lose a lot of money if you back out. Yes, number one?
Joe
Well, it depends on the type of auction.
Rod
Okay.
Joe
Yeah, in some cases, there might be a reserve on it. So you need to know what type of auction you’re going to. Is there going to be a minimum reserve?
Rod
What I mean is you’ll have to put up a deposit to have the privilege of bidding, right?
Joe
Well, it depends on the auctions. I haven’t done an auction in years.
Rod
Okay.
Joe
They’re all going online.
Rod
Okay.
Joe
The way we did it was no, you go in and bid.
Rod
Okay.
Joe
And then if you get the property and you met the reserve or beyond the reserve, then you would get the house you had to put the deposit on that day.
Rod
Okay.
Joe
Yeah.
Rod
The ones that I’ve attended, you actually have to put some money up to have the privilege of bidding so they know you’re serious and you don’t screw up their auction. But the other piece is you’re doing due diligence on an asset that you’re not even sure you’re going to get in advance of the auction. I’m talking multifamily now. Not a single-family. Single-family, there’s less margin for error in most cases, but on a multifamily, you know, you’re likely not going to scope the sewer lines. You’re not going to know if there’s aluminum wiring. Maybe you can see if there are foundation issues or structural issues, but very often it’s difficult to do any exhaustive due diligence. The other thing is most auction packages, I tell people it’s a great place to learn the business because the package will have everything that the auctioneer has on it. You know you’ll see appraisals and third-party reports like environmental reports, you know, surveys, things like that. It’s just a great place to learn the business, you know, to enhance your knowledge. I don’t know if you agree with that statement either.
Joe
Oh, no, I think so. Now, when we did some commercial, some multifamily, you know, we’d have inspection day. We were doing it back then. Now, you got to remember, this was in the early, the mid-90s. You know, we’d have inspection time where you could do it ahead of the auction. And then so on the day that you bought it, you got it. But certain companies did it differently, you know. Depends on the company you went to. But, you know, the single-family homes, you know, there’s a very mathematical process that goes into those auctions. So let’s say we have a 60 property auction and we have open houses, two weekends, Saturdays and Sundays, prior to the actual auction weekend. So we track all that. Right. We see which homes everybody was most interested in. You know, during the auction, you would put a home– the first property on auction would be a mid-level property that people were interested in. So I had 50 people that were interested in that house. And the number one house had 200 people. So first property, the auction would be 50. The next one would be somebody with like 100. The third one would be the number one house. So it drives the prices up. So it’s all mathematically done. If you go to an auction, keep your emotions out of it.
Rod
Right. And you should have your ceiling clearly delineated before you go in and not budge on it either. And you’re right, you can’t be emotional.
Joe
It’s numbers. Back to being a business, right? Yes. It’s all about the numbers.
Rod
No, I love it. Love it. So, you know, we were talking before we started recording about this latest asset in Dallas. I’ve got several assets in Dallas, I think four or five now. But you had a 73-unit, I think you said that was quasi a D-property.
Joe
Oh, yeah.
Rod
So, you know, on the show here, I tell people to avoid D-properties. Now, I know it worked out for you but talk about some of the lessons learned on that particular asset, you know because I know you just sold it and it worked out great. But how long have you owned it? Let’s start there.
Joe
I think we have for nine years.
Rod
Wow. Okay. So you have a lot of bruises. Okay. Talk about some of the stuff that happened there. You know, I think it’d be really helpful.
Joe
Okay. Yeah, I can start from the very beginning. So we had an exchange and we went too long on the exchange, and then we ended up just kind of picking a property to buy it. And I, too, do not like D-assets. They’re typically too much work. Now, when I say it’s a D-assets, the outside of it looks horrible.
Rod
Right.
Joe
Now, the interiors were all done up nice. And I had great long-term tenants.
Rod
Okay.
Joe
But the reason we didn’t put a lot of money into the exterior during that time that we owned it was, it was over an acre of land and the property was underutilized. So our plan was when everything started turning in that area–
Rod
I’m sorry. I’m sorry. One acre for 73 units?
Joe
Yeah.
Rod
How high was the property?
Joe
It’s two-story. Just a two-story.
Rod
How the hell did you get 73 units on one acre?
Joe
Oh, it was terrible. I mean, the layout, it was a little bit over an acre, but not much.
Rod
Okay.
Joe
Yeah. Come to L.A, we’ll show you how to do it.
Rod
Wow. Okay. This is L.A. Okay. Please continue. Sorry, I interrupt.
Joe
No, so this is in Dallas.
Rod
Oh, in Dallas. Sorry.
Joe
We were going to add about another 30% more units, go up a level. But the offer that came in was, I mean, if we have gone through all that risk of getting rid of it or moving the tenants out, putting them up, demo, rebuild. Yeah. It was–
Rod
Yeah, no, that’s not feasible. So what are some of the hurdles that you had to overcome managing this asset, asset managing or I don’t know if your property managed it as well?
Joe
Right. Yeah, we manage it.
Rod
You managed it. Okay. So it’s all in-house. So you hire a property manager and you manage it. So what are some of the hurdles you had to overcome?
Joe
Well, I can start right. You know, here’s one of the things that, you know, we bought a good enough–we just own ST&L and Chase Banks, Jack in the Box.
Rod
STL is Single-Tenant Leases, guys. So you get a Chase Bank and that’s the only tenant in an asset. We don’t talk about that here much, but that’s an asset class that I love as well because you get a big national tenant, you know, they’re going to pay the rent and the margins aren’t as big. You know, I’d compare that to a yield play in the multifamily business where you’re buying an A-class asset, banking on rents to go up, but it’s really not a value-add scenario. Would you agree?
Joe
Well, the one is for us because it was a Chase Bank with eight and a half years left. They were going dark, and we know that area very well. So what we’re going to do is go in and find the tenant that we want to put in there, and then we’ll be able to flip that. I’ll go to the Chase Bank and go, listen, you got eight years left. Let’s cut a deal. You’ll be out, this new tenant’s end, take that money that we got for the buyout. Give that to the new tenant. They’ll rebuild. We should make about 1.8 to 2.2 on it.
Rod
Very nice– no, that doesn’t. When a tenant goes dark, it just means they don’t like that market anymore or they’re shifting their gears and they’ll continue to pay the rent. But the building is empty. You see these all over, guys, you know, these old bank buildings and other sorts of retail. Okay, got it. But let’s go back to that D-class multifamily.
Joe
To that property management?
Rod
Yeah, please.
Joe
You know, Rod, here’s a lot of things like we’re seeing the shift. Everybody’s hearing the news, right? California to Texas. Great. I know that’s happening. I’m in Texas every month, but there are a lot of California people there. But the management style in Texas is not the same as it is here in California. And so two of the properties we bought in Texas were because they were out-of-state owners that were not watching their assets, treating it like a business. So the last one we bought, I’ll give you– this is how bad it was. In the 73-unit, there was an on-site manager. There was an assistant manager. There was a lead construction guy that was getting a three-bedroom unit given to him, plus a salary. And his assistant was getting a salary. The manager, when we were looking at the numbers, she goes, are you guys going to keep me on? I go, we can’t keep you on for the salary that you’re getting. This makes no sense. She goes, well, what are they saying I’m making? And we told her, she goes, I get half of that.
Rod
Wow.
Joe
The property management company is billing for, let’s just say 60 a year, which is actually getting 30.
Rod
Wow.
Joe
They were funneling their supplies. The property management owned a property, right around the corner, buying supplies through this property, using it there.
Rod
Wow.
Joe
The guy that was getting a three-bedroom was not even actually working on that property. He was working on a night neighboring. So again, we go back to treating it like a business. Right?
Rod
Right.
Joe
You need to go to that property. Boots on the ground, go check and see what you’re doing. Check your numbers.
Rod
Right.
Joe
And that’s how we bought that property. So when we were done, we took that guy as a junior, put him in on one-bedroom apartment because he was a single guy, gave him I think he was either free rent or just about free rent, plus his salary and the manager, a unit plus her salary.
Rod
That’s all you need for that size asset. Yeah.
Joe
Just that. And then we went in and just started upgrading the units to the level of the market because so many people go into these. I mean, this market was almost 100% Hispanic, long-term tenants.
Rod
Well, Hispanics, they’re a great tenant base. I mean, they’re good, hard-working people. You know, we won’t turn this into a racial conversation, but I want to tell you, you know, the hardest workers I’ve ever had, you know, work with and work in conjunction with and had worked for me and good people. Now, you may end up, you know, with a lot of– more residents than an asset and a unit than you might like in some cases. But, you know, I love to buy assets that are primarily Hispanic. They always do well. And that’s mobile home parks and apartment complexes.
Joe
Yeah, but you’re right. And again, your manager has to be proactive and walk through the units. We had them go through at least three times a year. How many people are actually living in this place?
Rod
Right. It comes up. You know, I don’t want, you know, to say anything disparaging. Again, I have nothing but good things to say about, you know, having an asset that has a lot of Hispanic people in it, because like we just described now. So you didn’t have much of a crime issue then. That was what I was going to ask you that next. And my guess is you really didn’t because–
Joe
We were kind of on an island. So there was a creek on one side, on the east side, a retail strip center, on the right side that was just getting upgraded. A school that a lot of the kids were going to was on the other side, and then the main road.
Rod
Got you.
Joe
We did have some in the beginning.
Rod
Right. Okay.
Joe
But probably our biggest problem, Rod, was at one point we had some kid that was in the building across the creek and he got a new BB gun for Christmas and it slips on our windows.
Rod
Yeah, that happens. Or if a previous owner made the mistake of putting throwable rocks in the landscaping and you have kids in the complex, I mean, kids will be kids.
Joe
We were all kids. We probably wouldn’t have done that because we were aging.
Rod
I know, I wouldn’t.
Joe
But, you know, everybody will like you or not.
Rod
And I know I was a bad kid. I’m kidding. I wasn’t that bad. But anyway. All right, so D-class, but, you know, that’s one of the things when you have an asset that’s a C-minus or D-class. I had my friend Maureen Miles on the show, and she’s bought some of these. And one of the biggest things she said is you need to make sure you secure it with fencing so that there’s like one way in, one way out. And you already had that literally, by the way, this thing was designed and built with these three corners handled. So that’s a real positive.
Joe
Well, we work with the police department pretty regularly, too. We had them come by, we got to know them. And there was crime down the street maybe about half-mile away. We would come in, we would serve them coffee, you know, whatever they wanted just come in and get to know our tenants. And a lot of them were illegal, they were little tenants were a little nervous at first, but when they got to know, the police officers are like, listen, we don’t have time for that. You know, we’ll come in, sit down and talk to your tenants. We want to make sure the kids feel safe around us. And that helped a lot.
Rod
Oh, yeah. No, we do that as well. Yeah, no, that’s fantastic. In fact, in this asset that we had in Louisiana, we had one time, two officers that lived there as long as they drove their patrol cars home. You know, there’s nothing better than seeing a patrol car in the parking lot, you know. I’ve had an asset where we gave them the use of an office, you know with a refrigerator and a desk so they can go in there and do the reports and park their car there and, you know, we’d put some drinks and stuff in there for them. You know, that’s a win-win all the way down the line. In fact, Maureen talked about this asset she did in Atlanta, and she paid $2,000 to pay for the police officers’ Christmas dinner. That’s all it was. And they freaking love her there. Guys, one of the things you always do is you call the non-emergency number on the police department and you tell them you know, you’re the new owner and you want to find out what’s going on there and what things to look out for and so on and so forth. And they love to see that. They love to see active involvement like that. So one thing–
Joe
Time watch meetings, too.
Rod
Oh, yeah. I love it.
Joe
Time watch meetings. Get on– what’s that website Nextdoor? Is that the thing, I think Nextdoor?
Rod
Yeah. Nextdoor. Yeah. I get it. I’m on that one on here.
Joe
Yeah. Get on there. Talk about your community, how great it is. And that’s what brings in tenants, too.
Rod
Yeah. A lot of the social channels are really good for that. Facebook is really good for that now, too. We’ve been shocked at how effective it is. So let me ask you this. You know, a lot of times when you’ve got an asset like that, that you know, with a minority demographic, you’ll find residents that really don’t have much of a credit history. And you are self-managing. What did you do to mitigate your risk when you encountered that? I’m just curious if it’s what I think it is?
Joe
Larger deposits.
Rod
Larger deposits. Yeah.
Joe
Got to work out. I mean, if they had a job and, you know, they’ve been at the job for a while, we’ve always checked references.
Rod
Right.
Joe
We always call and we made sure it wasn’t their cousin or, you know, this has to be a real, you know, employer and tell us about them. And then we’d even work a deal where if they couldn’t do the whole deposit, let’s spread it out over a few months. But try and work with them. Yeah.
Rod
It’s funny. I tell a story sometimes when I tell my landlord horror stories. I had this house in Denver on 30th in Columbine. I remember it’s a two-story big Victorian and five bedrooms. And a guy rented it from me and didn’t have any credit. Told me it was in the maid service. And one day I’m reading the paper and there’s a picture of my house and the headline was making money the old fashioned way. He had turned it into a whore house. It’s a true story. True story. And I called my partner. I had a partner in Chicago. And I said, Al, you know, you own a whore house in Denver. Anyway, to me that was funny.
Joe
You never know. We looked at a couple of properties–
Rod
No, I’m sorry, hold on. But the reason I brought that up is I had charged the guy a triple deposit as well. Okay. So, I mean, I didn’t lose any money. That was the reason I said that story. Please say what you were going to say.
Joe
Yeah. We’re doing a walkthrough on some of the properties in the area where we own this one. You go in and it would be a two-bedroom, and they had a plywood up. They’ve turned in like a four-bedroom and they were leasing it out.
Rod
Wow.
Joe
Leasing all these rooms out.
Rod
Yeah.
Joe
You know, again, check your properties. Right.
Rod
Right. No, that’s good. Well, knowing what you know about real estate, which is extensive, you’ve been at it for a very long time. If you went back to your 18-year-old self and whispered in your ear with what you know now, is there anything you might do differently?
Joe
Yeah, there’s a lot I do differently.
Rod
Talk about that. And I want my listeners to hear it.
Joe
Starting off with patience, you know. Find the deal that, you know, know what you want. You know, where are you going with this? My end game. So work it backward and I try to tell our agent this is you know, where do you want to be, and then work it backward. So you want to make half a million dollars a year, then figure that out on an hourly wage. You know, this is what it’s costing you every hour. This is what you got to do to get there. You know, build your path. And so I really just kind of jumped into it with no real plan in place. And, you know, then I had to slowly build. But if you really– this is where I want to go and then build the plan to get yourself there. I think that’s the best–
Rod
What do you do every month, every week, every day, every hour to get to where you need to get? How many phone calls do you have to make? How many appointments do you need to make? Yeah, guys, that’s really sounded advice.
Joe
Who do I need to be? And there’s a guy that I did an interview with, it was brilliant. He has a big photo, bigger than this hole from my TV. He had it up there and it was just people that he needs to meet. This is who I need to meet. And I thought, man, that’s brilliant. I mean, there was probably a couple of hundred people through there, but he was halfway through them.
Rod
Wow. Good for him.
Joe
I try to connect with them. I find out who I have in common, and I asked him to introduce me. And these are some pretty big people. And so he’s, you know, finding, built that path.
Rod
What a great tip. It’s not what you know, it’s who you know, honestly. That’s really an awesome, awesome tip. So, you know, again, back to that question. If you go back and tell yourself anything, would you do anything differently as far as asset classes, size of assets, and would you have maybe done a little more in a particular area, done it any differently? Has anything come to mind with that question?
Joe
I wish I owned more multifamily. We’re sold out of our multifamily right now.
Rod
I got you.
Joe
But I wish I’d have bought more multifamily. I may have been a little too conservative in the beginning, and I didn’t feel that I was educated enough. And it turns out I wasn’t. I might have been in the poor house, but yeah.
Rod
Listen. At least you took action, dude. Seriously. It’s okay if you learn from your mistakes. We fail our way to success. Seriously.
Joe
I agree.
Rod
Yeah. Okay. I’d rather see somebody do that and stub their toe and bloody their nose. Then they never get started, which I see more.
Joe
Yeah. Talk about it instead of doing it and then bag on the people that have done it and have created success for themselves, you know.
Rod
Yeah.
Joe
Go out and do it, and try it. It’s not easy. But, you know, now we’ve got guys like you that are out there putting this great content out that you can learn from it. And so, you know, when I started, the Internet wasn’t around and I didn’t know anybody.
Rod
Same here.
Joe
I didn’t know anybody in California. So, you know, I think it’s a good time to really be– I think there’s going to be a lot of opportunities.
Rod
Yeah, for sure. No question. No question. As we’re speaking, Russia just attacked Ukraine. And so I don’t know when this episode is going to air, but, you know, who knows? That could be a catalyst for a contraction. Who knows? You know, I know there’s a huge pent-up demand for housing in this country, so maybe it won’t. I thought Covid was going to be the catalyst, and, you know, I was sure of it, actually. My kids love to tell me, are you tired of being wrong? Because I was sure that was going to cause it, but who knows? But, you know, it’s crazy times we live in with all of that. It’s so important you know to stay focused on what you want and push forward and don’t let the noise get into your head.
Joe
Stick your plan today.
Rod
That’s right. Stick to your plan. Love it. So let me ask you this. Is there a book that you’ve gifted to your agents or to people, you know, in your sphere that may be more than another? Is there something that you really enjoy or something you’d share?
Joe
Yeah. I don’t know the name of it, though. I just ordered a day before yesterday. I was watching and I’ll tell you the story is I was watching Rob Dyrdek. I don’t even know who he is. He does ridiculousness on TV. It’s a show, it’s on TV. I used to have Rob & Big. He’s had a bunch of shows in skate parks. He’s out of Ohio, smart guy, young guy. And I’d say he’s in his 30s, but, you know, he was building this business. And he goes, I was making millions. And he goes, I was just printing money. And he goes, I built this media company as part of what I was doing. I was going to sell that off and bring an investor and sell a portion of it off. And he goes, and here I was, I was walking big, talking big. And he goes, I sent them my plan. And they sent it back a few days later going, you’re uninvestable. And he goes, what. And he goes, it really probably was the biggest setback in my life. It’s made me the most money is those people telling me that because it made me learn that I was just doing the business every day and I didn’t have a real plan in place. He goes, they were exactly right. And he goes, I was making millions a week, but I was spending millions a week with production and all that stuff. It wasn’t just throwing money away. There was just no plan. And to get investors, you better have a plan. And so he talked about this book. I ordered it. And, you know, it’ll be by the time this air, I’ll send it to you if you want to put it down below. But it’s really about building your business from the back forward, and that’s really it.
Rod
Got It.
Joe
Now, my business partner here in L.A. likes to give our agency “Art of War”.
Rod
“Art of War”. Yeah. That’s an awesome, classic.
Joe
But if you read It, there are a lot of lessons in there.
Rod
You bet. Some great messaging in there. And that’s thousands of years old, and it’s still applicable today. Love it. Well, listen, my friend, it’s good to see you again. I appreciate you coming in and adding value. And, guys, like I said, check out his YouTube “Real Estate Jam Session”. And thanks for coming on, brother. I appreciate it. Good to see you on, man.
Joe
Thanks for having me on, Rod. I appreciate it.
Rod
All right. Take care.
Outro
Rod, I know a lot of our listeners are wanting to take their multifamily investing business to the next level. Now, I know you’ve been hard at work helping our warrior students do just that using our “ACT” methodology, which is Awareness, Close, and Transform. Can you explain to the listeners how they can get our help?
Rod
You bet. Guys, we’ve been going nonstop for three years, building an amazing community of like-minded people. And our coaching students, which we call our Warriors, have had extraordinary results. They’ve purchased thousands and thousands of units, and last year, we did over 1000 units with our students. And we’re looking to grow this group and take it to the next level. We’re looking for people who want to follow a proven framework that’s really step by step and then leverage our systems and network to raise equity, to find and close deals, and to build partnerships nationwide. Now, our Warrior Community is finding success in any market cycle. So if you’re interested in finding out more about how you can become more of our incredible network and take advantage of the incredible opportunities that are coming very soon, apply to work with us at “MentorWithRod.com” or text “CRUSH” to “72345” and we’ll set up a call so you can check us out and we can check you out. That’s “MentorWithRod.com” or text “CRUSH” to “72345”.