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.
Here’s some of the topics we covered:
- Maintaining a W2 Job While Working Multifamily
- Underwriting and Sales
- Due Diligence on The Partners You Work With
- The Competition Obstacle
- Finding Deals & Money
- Wife, Kids, w2 and Multifamily Real Estate
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 back to Multifamily Rock Stars. Now, as you know, this is where we interview people that are just flat out crushing it in this business. And we show you, guys, the inside scoop as to how they’re creating massive success not just in their business, but also in their lives. And as always, I’ve got my co-host, who’s also the director of our massive action team for the Warrior group, Mark Nagy on the call. Mark, what’s up, brother?
Mark
Well, it’s going to be a fun one. First time, I think, ever. I’ve had two Rods here on the podcast, so it should be fun.
Rod
Yeah. So his name is Rodrigo Valdez, and Rod, he’s in 200 plus doors that he’s done since he’s become a warrior. And he’s a great guy, lives in Southern California, he’s got four kids, and we’re just going to have some fun today. Rod, welcome to the show, brother.
Rodrigo
Thank you, Rod. It’s an honor to honestly even be here.
Rod
No, it’s a pleasure, and you deserve it, man. You took what we had and you ran with it. And I know you joined the program in February of last year, is that right?
Rodrigo
Yeah, that’s correct. It was a virtual boot camp, and right after that, I said, let’s jump in and get to it.
Rod
Love it. So why don’t you just give us a little background on where you came from, maybe what you did as a [inaudible] as a W-2, and, you know, what skill set you brought to this business, and then we’ll fire away with some questions.
Rodrigo
Yeah, definitely. So I still have a W-2. I’m a 100% commissioned sales engineer, meeting an air conditioning industry for commercial applications, and I do well in the Southern California market. So I started taking commissions and doing private money loans to house flippers, developers, and things like that. Ultimately, got into a couple of rentals and then got connected with a syndicator and did my first LP deal with him. He eventually kept sending more deals, and I was passing them on to friends, and I came to the realization, why can’t I set these deals up myself? And honestly, I don’t know how I came across your name, but I did went to a boot camp and the rest is history.
Rod
Been all downhill from there, right?
Rodrigo
Yeah.
Rod
So, now, did you align with other people in the Warrior group to take down some of these doors? Did you do it on your own? Did you align with a different team? You know, talk about your team.
Rodrigo
Well, I think first and foremost, because of the Warrior program, I did get a coach.
Rod
Okay.
Rodrigo
I didn’t know what I was doing, so I kind of followed my coach’s lead. And for a good portion of the doors, I’ve had his expertise and guidance to take some of the stores down. Some of them have been with him, and some have not been with him.
Rod
Oh, fantastic. So you actually did some with your coach, which is very common in the program. I mean, we encourage it. Just so you guys know that are listening, our coaches are not– we don’t have professional coaches. We have operators. All of our coaches are–you know, I don’t know how many we have now, 50, 60. And they can only take a couple of people at a time because they’re actually doing the business as a business. And so that’s a key piece of this. You know, so what did you bring to the table? Because you’ve got some construction-related experience. You’ve got sales-related experience, so, you know, speak to where you added value.
Rodrigo
Yeah. And whenever I get asked this question, I always try to say this in the humblest way that I can, but having an engineering background, I do a lot of the underwriting. I get the numbers. Having a sales background, I can talk to people. Not that I super enjoy it, but I can do that and build relationships. I know the sales side of things, raising capital, I guess investor relations. And then, because I do well in my job, I also bring some network to the table on certain deals. So it’s been kind of a combination of everything. I think I’ve kind of zeroed in on investor relations and underwriting because that’s the bulk of what I do for our team.
Rod
What do you enjoy the most?
Rodrigo
Honestly, it’s the teaching side of it. The more I learn it’s nicer to just share the knowledge that I’ve gained. And I feel like I have the ability to do that in a sense? Obviously, I’m still learning and growing.
Rod
So who are you teaching? Who are you helping?
Rodrigo
Just people that see what I’m doing. They have questions. They reach out and say, hey, you know, what is this thing called syndications? Right? So I kind of teach them a little bit and then just from experience how I’ve gone about it and have done deals myself.
Rod
Nice. That’s why I love it. I mean, that’s why I love what I do. But, you know, it’s interesting that you are an anomaly in that regard, in the fact that you can sell and you’re super analytical, and that happens. But you enjoy–you know, you said–you know, you’re an engineer, so you don’t enjoy the sales quite as much, maybe, as the underwriting. Well, that’s very interesting. So where are your assets located? Are they all over or are you in one particular area?
Rodrigo
My main focus has been Arizona. That’s where the bulk of the deals are, that we’re looking at.
Rod
Great market.
Rodrigo
I do have East Coast and Midwest deals also.
Rod
Okay. Yeah. Scott, my partner is in Phoenix. And it’s just incredible what’s happened in that southern State. So, yeah.
Mark
For some context there, what are the roles that the others play? I know you mentioned your coach, but the other people on your team, what role are they playing? You know, being in Southern California, I’m here as well. Are they the boots on the ground, the management, the sponsors? What roles are those people playing, and how has that helped you scale a little bit quicker?
Rodrigo
Oh yeah, definitely. So, it’s primarily a group of four of us. I will do the bulk of the underwriting. I did pull in one of our partners who’s also a warrior that does a lot of the asset management. He had a lot of experience flipping houses and dealing with contractors, so he fits that role perfectly for us. Another one of us is very into the marketing side and the business management of the team. He has an insurance sales background, and then our fourth member has years of experience as a commercial broker himself, but not necessarily in the multifamily industry, but more on the retail office space side. So he’s got a lot of the broker relationships also. And so together, we kind of lean on each other for different roles, but we are all capable of helping in different spots.
Rod
No, that’s awesome. That’s awesome. So let me ask you this. Do you have a favorite failure that helps set you up for future success?
Rodrigo
I’d have to say it started when I first started investing in real estate.
Rod
Okay.
Rodrigo
Again, I used commissions to do private money loans and lent some money to a developer. The deal sounded great. Long story short, this was 2017, and I’m still in litigation on trying to get my money back. But, you know, it was something that I knew I could risk, and I was comfortable with the risk, and even though things didn’t turn out great, it was something that put me into perspective to do a little bit more due diligence on who I’m working with.
Rod
Yeah. Which is a critical piece. I mean, and guys, those of you listening, you know, this business is a team sport and so you’re going to have partners. And like a marriage, partnerships are easy to get into and hard to get out of. And, I mean, I host a Mastermind. It’s the largest multifamily Mastermind, I think on the planet, with about 14 to 16 billion in assets. In fact, I’m flying to Houston to meet tomorrow. We’re meeting tomorrow, once again, one of our three times a year. And there were two very large partners in there that broke up, a male and a female broke up. Very large partnerships. So, the reason I bring this up is I have a free resource for you. If you text the word “partnership” to “72345”, it’s a list of questions that you should ask before you get into a partnership. It’s very valuable. I’ll show it to you. Yeah, here you go. “Questions You Should Ask When Forming a Partnership”. And it’s free, and, you know, because you’ve got to ask all the hard questions upfront so that, you know, you don’t get caught up in the emotion of it, and you have, you know, a really good understanding of who’s doing what and so on and so forth, you know, as you move forward, so, you know, there’s no bad feelings. So, the next question is who do you think is the best type of person that’s suited for this business?
Rodrigo
I would honestly say it’s just someone that’s hungry, I think, with anything. Right? If they have a desire, they’re going to go after it and figure out ways around the obstacles to overcome them. Right? And if you’re just kind of just trying it out, well, then, you know, the level of effort that you put in is what you’re going to get out of it, I would say.
Rod
Yeah, actually, you know, let me hammer something home on that. You know, that’s one of the reasons I spend so much time on mindset and help–you know, at our boot camp, the first thing we do is goal setting on steroids, because how do you get anything if you don’t know what it is? You’ve got to create that burning desire so that you push through. You got to want it, otherwise, you’re never going to do it. And so that’s why I hone in on that first, because– and that’s why our Warriors are so, you know, obviously incredibly successful because they’re taking massive action.
Rodrigo
Yeah.
Mark
Well, let’s talk about one of those obstacles, or at least, I think, a perceived obstacle right now, a competition. You know, a lot of people might think the market is saturated or there’s a lot of investors out there. What are some of the things that you’re doing right now, Rod, to stand out above the other investors in a competitive market?
Rodrigo
I think it ultimately boils down to your relationships. Just staying in contact with, you know, the different team members, whether it’s your property manager, your lenders, you know, other brokers, you know. Otherwise, you’re just a number. Right? So when it’s competitive and yes, your offer may look good, but they’re going to want to work with someone that they like. So we try to stay on top of having consistent interaction with, you know, the people that we’re pulling into the team.
Rod
Great answer. Yeah, great answer. So, you know, what words of wisdom would you share with someone that’s thinking about getting into this business? And let me just say this, guys, if you’re thinking about it, good Lord, don’t wait too long, because you know what is hitting the fan right now and there is going to be an exponential freaking opportunity coming. And here’s why. And it’s interesting. I just had an interview with somebody– actually, I was being interviewed on his show, and we went back and forth a little bit. You know, back in the last crash, ’08, ’09 is because, you know, if you could fog a mirror, you could borrow money to buy a house. Well, that’s kind of happened in the multifamily space over the last three years with bridge debt, you know, at 80% loan to cost, and brand new operators that had never–you know, didn’t have someone like me looking over their shoulder that did deals that they shouldn’t have done and paid too much and so on and so forth. And I think that the correction isn’t going to be so much in the single-family space as it is going to be in the multifamily space because of that. So, it’s going to be really interesting to see because, you know, like that bridge debt is unregulated. You know, and with, you know, the fix that would happen in 2008, ’09, they made home loans much more difficult to get. And they’re– you know, you can’t just, you know, state your income, for example. They stated income back then, so it’s going to be very, very interesting. So, you know, if there was ever a time to learn this business it is right now. Do not wait. So anyway, back to my question. You know, what words of wisdom would you give someone that’s thinking about this?
Rodrigo
I mean, you preach it all the time. Take action, take massive action. Right? Every step forward is a step in the right direction. If you’re sitting there just, you know– I was guilty of it a lot of times, was having paralysis by analysis and just kind of figuring out what I needed to do. Just every step you take is a good step.
Rod
Yeah, I couldn’t agree more.
Mark
What are some of those things? You know, maybe for people listening that don’t have a coach, don’t have a mentor, that’s fine if they don’t want to do that. What are some of those, like practical items that you think people listening could get started on today to start taking action? They just don’t know where to start.
Rodrigo
Yeah, I mean, I think it’s repetition, right? I’ve heard Rod say it so many times, you have to kiss a million frogs or whatever, right. And you’ll only get good at the things that you practice. So, you know, if it’s underwriting, you know you struggle with that, just get started looking at numbers. Get started looking at OMs and figuring out what terminology is. Right? Get started just talking and having conversations with brokers or lenders. Just start to learn something and just take it a little bit at a time, whatever your time allows you to do.
Rod
How do you eat a whale? Right?
Rodrigo
Yeah.
Rod
That’s it. And that’s how you do it. Yeah. So what comes first, finding the deal or finding the money?
Rodrigo
I would say probably finding the money. And the reason why I say that is because when you find a deal and you don’t have the money, then the deal is really not a deal because you can’t close it. Right? So you’re always building those relationships, trying to find people that, again, trust you, you know, that you relate to and are willing to invest with or alongside you.
Rod
Yeah, I agree.
Mark
Both of you guys, what do you think is harder right now?
Rod
Well, finding the deal has been the hardest thing up to this point, okay, in the last few years. Finding the money has been easy. Now, I think that could very well flip right now because, you know, what’s going to happen is people are going to be fearful, which is stupid because the opportunity is coming. If they, you know, invest with the right operators and, you know, exponential opportunity. I mean, some economists say the greatest transfer of wealth in history is coming, you know, depending on who you listen to, but certainly opportunity. And we’re seeing, you know, big price reductions already. Some people aren’t reducing prices yet, and some operators are still paying too much, but it’s definitely going to start happening. And the Fed is raising the rates either today or tomorrow. They’re meeting today and tomorrow. So it’s, you know, probably another at least another half a percent interest, 50 basis points. So, you know, we’re going to start seeing pullback and opportunity. And then, of course, all these skinny deals that were done in the last few years that, you know, people–they didn’t pro forma higher interest rate. I mean, you know, our last deal we did in San Antonio at 3.2% interest, we’re pretty sure the interest rate is going to be 6% by the end of the week. Okay? So, you know, that’s double what we paid, you know, less than a year ago. So, you know, it’s got to impact things. So let me ask you this. With what you know so far in the business, Rod, you know if you were to go back and do it any differently, is there anything you do different with what you know already?
Rodrigo
The learning curve was so great for me, and again, I just dug in and tried to learn what I could. I think I would have leaned a little bit heavier or potentially found a little bit more experience. And that’s why I got into the Warrior group is because I didn’t know what I didn’t know. And I got into the coaching program because I wanted to do that. And I think I would have probably leaned even more so in the coaching and finding more experience.
Rod
Done it sooner and heavier. Yeah.
Rodrigo
Yeah.
Rod
By the way, guys, if you’re interested in the Warrior program, text the word “crush” to “72345” to apply. And we’ll set up a call. Again, that’s “crush” to “72345”. So we can help you freaking crush it in what’s coming.
Mark
And my team, by the way, on that, even if it’s not the right thing, we can help you get prepared for what is coming.
Rod
Yeah.
Mark
So that way you know what to take to action on. Regardless of whether you work with us or not, when deals do start hitting the market and better deals, I want to say.
Rod
You’ll leave the calls with my team better than when you went on them. I can promise you that. For sure. So what motivates you, Rod? What makes you jump out of your freaking bed in the morning? Because I know you’re motivated. You’re a very soft-spoken and very deliberate speaker, but I know inside you’re super motivated. So tell me what– where that drive comes from.
Rodrigo
You know, for me, honestly, it’s a calling. The progression that I’ve taken to be able to be where I am now and to learn how to make money and also teach other people, I think it’s just a position that God has put me in to where I can not only bring Him glory but also teach others just what I’ve experienced. So, you know, if I fail, that’s fine, because I know I’m failing forward. But ultimately what it is, is that I’ve been put in this position. Doors have been open for me to step through, and I’m learning as I go, and just using that to do what has been put in front of me, I guess.
Rod
Yeah, you know, I know that we had you host our–you know, we do a Q&A session every other week, and we regularly have our warriors host them. We had you host one recently, and that’s the first time you’ve done it, and you were a little nervous. I remember the conversation. And you killed it. You absolutely killed it. And I do this in the Warrior program. I even have warriors do some of the training calls because people get a different perspective. You know, as people do this business, they do it a little bit differently, so they get different perspectives, and it’s very, very powerful. And the students love, you know, having so many different mentors that are doing it right now, involved, and it’s just kind of this thing that builds on itself. It’s just freaking incredible. Would you agree with me, Rod?
Rodrigo
Oh, yeah, 100%.
Rod
Yeah.
Mark
Well, the interesting thing about what you said about teaching is that when other people ask you these questions that maybe you haven’t thought about, it opens up your mind to a different conversation. Oh, I could think this way, I could think that way, which is one of the coolest parts about those. But I know you were talking about your goals. What drives you now? Was that your initial definition of success in multifamily when you got started, or has that changed over time?
Rod
Good question. Has it evolved? Because goals evolved.
Rodrigo
Yeah, I mean, it’s definitely evolved. I remember when I was talking when I first got on, I was like, you know, I want to hit 300 doors, you know, in the first year. And it was really encouraging to hear, oh, yeah, you can do that. And the more that I’ve learned and done it, I mean, I’m at 291 as of today, and we’re putting another 95 under contract any day now. So that’s going to push me over the 300. You know, so, yes, I mean, I still had that calling. And that– for me, anyway, that word from God to do real estate, and I didn’t know what it was. So that was always kind of a motivation, but to see the goals and how quickly they can be obtained, yeah, it’s evolved for sure.
Rod
So shifting gears just for a second, just because you enjoy the training, and I saw that when you did the Q&A the other day. You know, if you could teach school children, one thing for an hour a week, what might you teach?
Rodrigo
Oh, man. I mean, you hear a lot, and I think that’s also part of why I’m where I’m at now is I didn’t get taught financial education growing up, you know. So, school kids, you know, I mean, I’ve got kids from six to 21, and my six-year-old is not going to get it, right?
Rod
Right.
Rodrigo
When I talk about financial education, but school-age kids, if they’re able to understand it a little bit better, I know it’s not necessarily taught in the education system, but I would say that that’s probably [inaudible]
Rod
Yeah, I couldn’t agree more. I mean, it’s crazy that they don’t teach that. Yeah, I actually think it could be by design. We won’t go down that rabbit hole. But anyway, yeah, don’t get me started on our school.
Mark
Well, you know, they say that school and college and everything, it’s taught to make somebody a, “employee”. Obviously, you have to have employees to run the world, so that’s understandable. But we obviously don’t want to be that. We want to be entrepreneurs.
Rod
Right.
Mark
I heard a cool idea the other day on a podcast. I don’t have kids myself, but I forget who it was. Someone was saying what they do for their kids is they give them an allowance every week, and their kids can either go spend that money as allowance or they can reinvest that allowance back into their parents and create a cash flow that then builds up over time, and it teaches that person, hey, you could take your money and go spend it, or you can reinvest it and get a higher cash flow, and then that continues to build up. I just thought that was a cool idea.
Rod
That is awesome. That is absolutely awesome. I love that. Love it.
Mark
Yeah. So, Rod, the last thing I want to talk about, I know you were a little nervous about this topic, but for those, you know, thinking about the recession, the fear, et cetera, we talked about taking action. What advice do you think you’d give to the listeners listening right now that are living in fear and are afraid of what might be coming?
Rodrigo
I think–first of all, don’t let fear drive you. That’s me personally. I don’t live by fear and that’s why I think I’m not afraid to fail. So number one, don’t be afraid of fear. Push through it. There’s something greater on the other side. But as far as like what I’m actually doing, I think doing a lot of the underwriting for our team. I think we look at things just a little bit more conservatively than we did in the past.
Rod
Yeah.
Rodrigo
But it is–you know, you also have to understand your market as well.
Rod
Well, you have to be more conservative right now. I mean, I’ve been pounding it into all the warriors because there were a lot of mistakes made over the last few years for people that weren’t at all conservative. I mean, I looked at people doing presentations. They had no operating reserves. That you know, we pull in six months’ operating reserves. I know you do as well. You know, they didn’t stress test the deal to see what the break-even point was. I mean, it’s just really silly, you know, important stuff you have to do when you do a deal. But, you know, let’s shift gears again. I don’t want to–I want to ask you a question because you still have a full-time W-2, you have a family, you have kids, right?
Rodrigo
Yeah, four of them.
Rod
Four. Wow. Yeah, I knew it. I just–and what’s the age range?
Rodrigo
The youngest is six and the oldest is 21.
Rod
Holy cow. So that’s a heck of a range. And you are still able to do all this on the side. Talk about that a little bit. You know, how have you been able to manage your time and still be there because you know how much I push that, to be there for your family, to be, you know, present when you’re with the people that matter and so on and so forth. How do you manage that?
Rodrigo
Yeah, so I mean, even with my W-2 being 100% commissioned, I have to get after it when I do, and if I don’t, then it’s 100% on me. So I have to time block. So there are parts of the day that are strictly for work, parts of the day that are strictly for real estate, and then parts of the day that are just family. So I will put cut-offs on when I can do different things, and then I’ll also set windows of time that okay, because I do have the flexibility with my job, I can allocate this hour to do underwriting or reach out to brokers or network. Right? So a lot of it is, you know, managing time by setting aside the time that’s important for you.
Rod
Yes, that’s right. And that’s what I teach as well in my weekly planning process. Now, last question, how did you overcome fear to get started like to do that first deal? How did you get past it? What, if any, mechanisms did you use to push yourself over the finish line with that?
Rodrigo
Again, I would say, a lot of it has been my faith.
Rod
Yeah.
Rodrigo
I know that– for me anyways and my beliefs, I know that God’s got my back. And like I said, just with that developer, you know, if I lost the money, I’m okay.
Rod
Yeah.
Rodrigo
I think of personally, what comes to me is the parable of the talents. You can either use what God has given you and apply that to something, or you can bury it in the sand and do nothing. And so for me, if I fail, I still know that I’m going to be okay, regardless. There are a lot worse things that could happen and if it’s, you know, a deal goes sour, you know, a deal goes sour, but I can still move forward.
Rod
Love it. Well, thanks for coming on the show, brother. You absolutely added value, and I know it resonated with a lot of people that are similar to who you are, you know. And, so really appreciate– and I mean that in the best possible way and really appreciate you coming on, brother. It’s good to see you again.
Rodrigo
Appreciate it. Thank you guys for having me.
Mark
Yeah, thanks, Rod and Rod
Rod
All right. What did you say? I didn’t hear that.
Mark
I said, thanks, Rod and Rod.
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 non-stop 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 the word “CRUSH” to “72345” and we’ll set up a call so you can check us out and we can check you out. Again, to apply, text “CRUSH” to “72345”.
