Multifamily Insights, Deal Analysis and Debt Strategies

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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.

Rod
Welcome to another edition of Lifetime Cashflow Through Real Estate Investing. I’m Rod Khleif, and I am thrilled that you’re here. And I’ve got a great show for you today. Got a guy that I know is going to add tremendous value. His name is Mark Khuri, and he’s been in the business for 17 years. You know, he’s done a combined value of about a billion dollars in assets buy, sell, and hold. He’s in multiple asset classes, and we’re going to have a lot of fun today. Mark, welcome to the show, brother.

Mark
Thanks, Rod. Great to be here.

Rod
Thank you. So, listen, why don’t you do a much better job of telling a high-level background on you to get a little better framework for who you are, you know, and why real estate, and then we’ll take it from there, man.

Mark
Sure. Yeah. I mean, I started out in corporate America doing a lot of financial analysis, budgets, and planning, spreadsheets, Rod, very fun stuff. But also started investing in the side when I was 25. So how old am I? 42. So in 2005, I started investing in real estate. Very active investing back then, right? You buy, fix, renovate, rent, and sell.

Rod
Primarily single-family back then?

Mark
A lot of single families, small multifamily. Most of it, Rod, was 12 units or less.

Rod
Got it.

Mark
Almost everything we bought was distressed foreclosures, REO, short sales, you know boarded up, and needed a ton of love. We did that for about five years, my family and I were partnering, my brothers, my parents, my aunts, my cousins. And then by 2010, I was just hooked, right, for life, really, Rod, and decided to open up our company. My father and I partnered. We created SMK Capital Management. It’s the name of our firm. That’s our initials. We focused at the time, Rod, we were really looking to just expand, keep doing more. There were a lot of buys back then, as you probably remember.

Rod
Oh, yeah, it was a great time.

Mark
Yeah, we were buying some–

Rod
I was recovering back then. I lost my butt in 2008 and ’09. You may or may not know, but if I hadn’t been, you know, we’d be doing this in the back of my 300-foot yacht because that was a fantastic time to buy. Anyway, sorry, please continue.

Mark
Wow, that’s great. Yeah. So we saw a lot of opportunity at the time, of course, to you could buy properties that were 60% off what they were just being sold a couple of years before. And so we did that for a number of years. We started raising capital from friends and from colleagues you know, outside, and expanded our network of capital. And then we really wanted to diversify, Rod. You know, when I left corporate America, I had a 401(k). It was kind of sitting idle. Once you become an entrepreneur, you can’t match your own contributions, etc. So I opened a self-directed IRA. And the purpose of that was to diversify, spread my own investments, and started investing as a Limited Partner into mobile home parks, into cell storage, into a few other asset classes and areas, all through referrals, through networking on the ground, shaking hands, meeting private groups that we found to be specialists in one thing and diversify our own capital that way. So we did that in simultaneous for a couple of years with our own deals. And then we decided to syndicate some investment opportunities, Rod, to our investor group to let them diversify. And we continue to do that today. And so fast forward to today, we’re really focused on a few different asset classes. We try and be very recession resistant whenever possible. And we think we bring, you know, financial acumen and also some operational experience to the table to help us, hopefully, pick great deals.

Rod
Yeah. So what asset classes are you in? I know you said mobile home parks. Did you say self-storage as well? I don’t recall.

Mark
Yeah, exactly, Rod. So over the years, my family and I, we’ve invested in probably over a dozen different asset classes, student housing, senior living, vacant land, and short-term rentals. But we focus today really on four apartments. Number one, specific types of apartments in certain regions, not all apartments, of course. We also love mobile home parks. We love self-storage. We also invest in ATMs, the machines, cash machines.

Rod
Interesting. Okay. I know that somewhere I saw, a fly on the wall say that you like affordable housing. Can you elaborate on that?

Mark
Yeah, we do. Gosh, it’s one of our favorite sectors, I would say, Rod, for several reasons. But to summarize, we just think there’s a long-term tailwind behind the asset class from a demand standpoint, from residents, and from investor buyer groups.

Rod
So what’s your definition of affordable housing? Let’s make sure we’re on the same page.

Mark
Perfect. So we look at it as housing that can be reasonably afforded by the local population and there’s a formula to it as well where you look at area median income. And if somebody is earning 80% of area median income, they’re considered affordable. Excuse me, low income and then very low income is 50% or below. And so it’s housing that can be afforded by different areas of area median income. That changes over the country.

Rod
So with that metric, 50% to 80% of median income, what rental amount do you allow– how do you back into what someone can afford? You know, we use the three times the rent rule for income. Do you do the same thing in the affordable space or do you do it differently?

Mark
Same concept, Rod.

Rod
Same.

Mark
Right.

Rod
Okay.

Mark
The rent-to-income ratio, 30% rule, or let’s say it’s $1,000 a month for the apartment, you’ll want the folks to be earning $40,000 a year in income.

Rod
Yeah. So do you have C-class assets then, as well?

Mark
Some. We focus a lot on, I’d say, B, that had value add, and we also have been investing in some nicer class-A properties that have tax exemptions for affordable housing.

Rod
Same here. Yeah. You know, sidebar, how do you feel about where we are economically and how it might impact that C-class demographic? Do you have any thoughts on that? Is that why you shifted? I’m just curious.

Mark
Yeah. So to answer your question, I think the C-class asset segment has, of course, some of the lowest rents, which are the most affordable when compared to other apartments. Right? So, we like that concept. We also like to be able to grow value, Rod. I know you do the same.

Rod
Yeah. [inaudible] you are.

Mark
And so if you come into a property that maybe it’s a little bit older, it’s got outdated interiors. If you buy it right, you can allocate capital and improve them. I think there’s also a little bit more– how should I say? They’re a little bit more affected during economic downturns than maybe a B-class. So that’s probably–

Rod
That’s where I was going with it.

Mark
Okay.

Rod
You know, I’m seeing inflation, which is, I mean, the price of eggs, for example, gas. I mean, it’s insane. And Walmart even had something in the news where their earnings are down and they feel like you know, their demographic is really hurting. And of course, we see personal debt increasing as well. And so, you know, I’m in the camp that you know, these C-class demographics get in their butts handed to them, and it’s sad. And it’s a little dangerous for operators that are in that C, C-minus space, even D space, in my opinion. I could be wrong. I’m wrong all the time, but I would be a little nervous about those assets through what we’re heading into. I don’t know if you disagree, agree, or whatever.

Mark
I think so. I mean, there are pros and cons to every asset class, Rod, as you know.

Rod
Right.

Mark
I think in the C-class specifically, you’re going to see through tougher times, higher vacancy, higher bad debt, people having a tougher time paying their rent.

Rod
Right.

Mark
And so you have to work with a team that’s really good and very much focused on that demographic and they know how to handle situations early on and are very proactive versus reactive to changes in the market.

Rod
Yeah, you said it. You said it right there. No, I absolutely agree. So, you know, I’ve got some topics here that were bantered about. One of them is discussing strategies to recession-resistant your portfolio to make it less volatile and really we’re heading into a recession. I think it’s a given. And so if we’re not there already, technically, I believe we’re there already. I think they changed the rules to make it so that we’re not. But I believe we are already. So, you know, how do you create a recession-resistant portfolio?

Mark
So first I’d start by defining what that even means. Right?

Rod
Okay.

Mark
It’s somewhat you loosely used. So to us, it means a portfolio that can withstand market volatility, that can continue to do well in a recession or economic tough times. And do well means to us, it stays in high demand from users and from other investor groups, which is who we sell to. So we’re looking at our exit and it also will maintain its value or potentially even keep growing. So if it’s inversely correlated, the demand for it will go up during a tough time. And so that’s how we define it. That’s kind of some of the fundamentals. We love cash flow, Rod. So if it can keep pumping out cash flow and provide distributions and we can wait through a recession and not be forced to sell. Those are some other thoughts during the recession-resistant mindset for us and how we like to invest.

Rod
So it’s basically just you know, how you go into an asset. You’ve got you know you take that very conservative approach as do we to basically create a situation that you just described. Now, have you purchased the last couple of years? Have you been buying assets for the last couple of years?

Mark
Yeah, we’ve been investing and the way we invest, Rod, is we partner with other operating partners and we [inaudible] the capital from ourselves and from our investor group and invest. And then we’re all part owners in the asset that’s being purchased.

Rod
Right.

Mark
The answer is yes. We did stop for seven months. We made no new investments during Covid. On purpose, you know, in early 2020, we just stopped everything. We were in the middle of a deal actually, Rod, and we told our investors, no, we’re not moving forward. Here’s your money back.

Rod
You thought it was the catalyst that I thought it was. It never, it didn’t end up to be, but, you know, we thought it was for sure. Okay, fair enough.

Mark
We didn’t know, you know. When we don’t know, we [inaudible].

Rod
No, it’s right.

Mark
Yes.

Rod
Be conservative. I felt the same way. In fact, I did a YouTube video, the coming real estate crash of whatever that year was, 20– and of course, I got a lot of hate, but it was the most watched video I’ve ever had. People love negative news. Let me ask you this, what sort of debt have you utilized? Any bridge debt or has it been all conforming?

Mark
Yeah, good question. So it’s transitioned on purpose for us. And so in 2020, after waiting several– seven months or so to watch to see what was going on, we saw a ton of tailwinds in the market, Rod. I mean, rent growth was going astronomically high.

Rod
It’s insane. 30% in some markets, annually. It’s crazy.

Mark
Exactly. And so there was an investment strategy that we added to our portfolio, which was to come in and essentially renovate some older properties called 80, 90 vintage apartments, specifically in growth markets and to sell them within two to five years. And so we sum up more short-term compared to what we typically invest in. Those properties all had bridged debt and interest rate caps. Then in 2022, in February, January, or February, we stopped doing those investments because the capital market has adjusted significantly.

Rod
Right.

Mark
Since then, we’ve just been focusing back on recession resistance, long-term kind of fixed rate debt, a lot of agency debt today, Rod, and that’s where our focus is.

Rod
Have you sold out of those properties that you were describing that you did the quick turns on? Do you still have some of them? Where are you at with that?

Mark
Yeah, we sold the first one. It’s just a giant home run on that one, Rod. We had our investors are really attractive return.

Rod
Got you.

Mark
But we still carry a few others. We’re still renovating some units across those portfolios, but we have some that are slated to hopefully sell this year, we’ll see, depending on the markets and into next year.

Rod
Well, I can tell you, the reason I ask is I’ve got a couple of bridge loans with a former partner, and he’s sweating it because they’re asking for a two million dollar reserve on one of them. And, you know, we’ve got an operator in San Antonio, we’re looking at an asset, and his reserve payment to his bridge lender went from 8,000 to 80,000 a month.

Mark
Wow.

Rod
That bridge debt is onerous debt. And, you know, with what’s happened with cap rates– well, cap rates not as much yet, but is happening now. But definitely with interest rates, it’s made it very, very challenging to exit some of those deals. In fact, I was at an event in Vegas last week and I met with a really competent operator, just a rock star. The operator, a very impressive guy that I’ve always looked up to, frankly, because he just runs a really tight ship. He was freaking out because he’s got 10 deals with bridge debt and he’s just very concerned about the exit strategy on those deals. And that’s why I asked the question because you know I think as we move into this recession if it’s not as big as– I think it’s going to be pretty bad. But if it’s not that bad, at the very least, I think some of these unseasoned, unskilled operators that have bridge are going to have some heartburn and going to have some issues. Do you agree?

Mark
Oh, yeah, I would agree. There’s also a lot of what we call rescue capital, Rod out there that’s ready to fill the gap.

Rod
Waiting to pounce.

Mark
That’s right. Yeah.

Rod
I’m in that bucket as well. So, you know, we’re gearing up for that as well. And, you know, we’ll see how it goes. But we’re already seeing– you know, I can tell you, in the last six months, I’ve gotten more contacts from brokers than I’ve gotten in the last four years. And I’m sure you’re seeing the same thing.

Mark
Sure.

Rod
I mean, things have slowed down and there’s more and more opportunity. But let’s talk about what you’re doing on a deal analysis underwriting, you know, how that shifted in this current environment.

Mark
Sure.

Rod
I’m sure you’re much more conservative. What does that look like at a more micro level?

Mark
Yeah. So, I mean, we’ve been underwriting, for example, the technical exit cap rate growth for many years on everything we do, Rod.

Rod
Of course. Same.

Mark
Keep doing that today. I think that’s a big– just kind of a quick step. If you’re looking at a deal, check that out. Right?

Rod
Sure.

Mark
We’re underwriting what we think is realistic rent growth, and we also will stress test it now, assuming there’s no rent growth. How does the deal [inaudible]

Rod
Which is possible.

Mark
Yeah.

Rod
Sorry, I just dropped something. Which is possible. I just saw a CoStar report where a guy– CCIM did an analysis of a market that we have an asset in and the rents have declined. And this is a super high-growth market. But, you know, we’ll see what happens.

Mark
We’ll see what happens.

Rod
We’ll see what happens. Yeah. So you’re doing that. I’m sure you’re looking at break-even analysis and you’re looking at, you know, if your liquidation event is a refinance, you’re plugging that in and being conservative with the interest rate and so on and so forth at that point. Yeah. Same. Same.

Mark
Yeah. We won’t always put the refi in the underwriting. We often won’t.

Rod
No, because it boosts the returns. A lot of operators will throw a refi in there just to make the returns look better. Yeah, I’m glad you brought that up. By the way, guys, if you’re investing passively and someone presents a deal to you now with a three or four-year refi, just recognize the fact they’re likely have that in there to boost the returns. And so keep that in mind, yeah. Well, we kind of talked about the current investment environment and how we’re reducing risk. I’m doing the same thing you’re doing in that regard and stress testing and so on and so forth. Let’s shift gears a little bit. In this career of yours, which is very varied and you’ve done lots of different things, talk about some of your epiphanies, like aha moments that you had as it relates to this business.

Mark
Okay. I think you know, going back to different points in my career when I’ve pivoted and maybe gone left when I didn’t expect to initially, those come to mind a little bit, Rod. I’ll tell you, for example, we stopped investing in single-family homes as investments, for flips and for rentals about five or six years ago. Why did we do that? That was an aha moment, as you asked because we just started seeing that the potential for the same return that we were essentially working hard for in single-family could also be achieved in other asset classes.

Rod
At scale, too, right? At scale?

Mark
At scale.

Rod
Yeah.

Mark
And then the big one for us was you know, looking at operating expense ratios. And so, the single-family home, I mean, depending on where it is, Rod, the operating– there’s not a lot of margins.

Rod
No, there’s not much cash flow in single-family homes, guys. I’ve had 2,000, ask me how I know. Okay?

Mark
Yeah.

Rod
Long-term rentals, no. And people don’t believe you when you say that. Oh, well, it’s rented for 200 more a month than I’m collecting. Yeah, well, wait till you have a turnover and it costs you 3,000 or more to turn it over and you’re empty for two months, and then tell me about your cash flow for the two-year period, right?

Mark
Exactly.

Rod
Yeah. And I learned that the hard way. Most of my assets were C-class, so, you know, they’ve got a tougher demographic. They’re older, tons of maintenance. The maintenance just kills you, honestly. Yeah. So that was an epiphany. Yeah, okay.

Mark
I’m on the same page. I mean, we’ve invested in homes that are over 100 years old, Rod in the Midwest.

Rod
Same here. Same here.

Mark
Like you think the CapEx and the budget for repairs is, you know, you might be right, you might be way off. And so a lot more, I would say volatility in the cash flow stream.

Rod
Yeah.

Mark
And then when you compare it to a large apartment community and we’re investing in stuff that’s 500, 600 units.

Rod
Yeah.

Mark
I mean, to think about what would have to happen for 20% to 30% of those people to leave all around the same time and for nobody else to move in, it’s so unlikely. Right?

Rod
Right.

Mark
It would have to be a devastating event that would affect the entire region, you know, storm or something like that.

Rod
Right.

Mark
So you’re just a little bit more protected there. You got operating expense ratios that are a lot more favorable from a margin standpoint. So I think that was a big aha moment for us when we’re just investing in both and we decided to focus just on larger, more institutional quality assets.

Rod
Yeah, it took a kick in my butt for me to get that memo. But I lost a lot of money in ’08 and ’09, and that was my memo on that. So let me ask you this, your team, obviously this business is a team sport. Just describe who’s on your team, how many– you know, in the inner circle. I’m not talking about onsite staff or stuff like that.

Mark
Sure.

Rod
Yeah.

Mark
I mean, we’ve evolved, like I said, Rod, right over the last 15 years. We essentially are a private equity firm today. And so we partner with other groups, other teams, other operators that handle all the day-to-day operations. Most of them have an acquisitions team.

Rod
Got you.

Mark
They have an asset management team. They have a property management team.

Rod
Okay.

Mark
And so that’s where a lot of the day-to-day gets done at the asset level.

Rod
I got you. Got you.

Mark
And then internally for us, it’s you know, more of an investment management firm. So CPA, bookkeeper, portfolio manager, myself, and some other fund managers that we partner with.

Rod
I’m really glad. I guess I didn’t pick up on the fact that you’re primarily private equity at this point, but that brings up a couple of great questions. What do you look for in an operator? When you’re looking to place you know, your hard-earned money or money you’ve raised that people are relying on you for? What do you look for in an operator to work with?

Mark
Yeah. So, that’s been a long evolution for us because I worked with a lot of operators. They’ve actually underwritten, vetted more than 120 over the years, Rod, across multiple asset classes because we invest in different things.

Rod
And multiple regions and geography, I’m sure. Yeah.

Mark
Totally. Yeah.

Rod
Right.

Mark
First and foremost, we’re looking for something special. Like what do you do that makes you so unique? Are they in a certain niche that they’re one of the best or the best at where you would rather partner with them than try and learn it yourself?

Rod
Yeah. Smart move.

Mark
That’s an initial thought process of how do we get into certain sectors that we otherwise wouldn’t even go in ourselves. And so partnering with folks that are specialists in one thing is a good start. We look at the track record, pedigree, and experience. Hopefully, they’ve been in it longer than us and they’ve seen different market cycles, different trends. We’re also looking for– a lot of times it’s not like a hard line in the sand trust, but vertically integrated, Rod where they have–

Rod
I was going to ask that question. And what he means, guys is an operator that has their own property management company, they’re managing themselves, maybe has their own construction arm that handles their repositions. That’s what he means by vertically integrated. That was going to be a question next. Okay, that makes sense.

Mark
Yeah. And just really trying to ask yourself the question, am I going to be really excited to keep working with these folks for the next ten years, right? Not just one deal. And try and build a relationship there. And so that’s a big part of it for us is the right people. And then we look at, of course, you know, from an underwriting standpoint–

Rod
The deal.

Mark
The deal and then how do they structure their deal? Heavily weighted in fees or do we find it to be more market rate and fair, that kind of thing?

Rod
Right.

Mark
So that’s probably a good start.

Rod
No, that sounds good. Now, do you have like a financial range that you’ll typically go into a deal for? Is it different by asset class or what does that look like? You know, what do you like to invest? $5 million, $10 million, $2 million. You know, what do you typically do?

Mark
Most of our investments were raising and investing between two and five million per deal.

Rod
Got you. Okay, so moderate. Okay.

Mark
Yeah.

Rod
And do you exert control in your deals when you go in– and this is for my own edification, honestly, not that I’m looking to do business with you, but I’m just curious because a lot of private equity does exert some control. Can you speak to that a little bit?

Mark
It depends. Right? And so I’ll start by saying we’re partnering with an operating partner because we want them to handle the day-to-day operations and be in control. That’s the purpose, right?

Rod
Right.

Mark
We believe they do it very well. With that, sometimes we will get consent rights where we have to have a vote for certain exit strategies, a sale, a refi, etc. And a lot of it for us, Rod, is more just how transparent are they? How well do they communicate? Are we on monthly calls looking at the asset and going through the financials and the business plan and talking to the asset manager, the property manager, or are they only going to reach out to us, you know, four times a year with a PDF update that’s two pages long?

Rod
Got you.

Mark
And that’s a big part, too, is how much attention can they provide us to feel really comfortable about them, their team. And it takes time, right, Rod? So a lot of times we’ll start with a personal investment. Start small, work with them, see how it goes, get a little more comfortable, learn more, and then maybe go from there and offer something to our investors some [inaudible]

Rod
Smart. Smart. Smart. So as we get into this recession, are there any asset classes you won’t consider?

Mark
Yeah, there’s a bunch actually.

Rod
Talk to me.

Mark
I think the first few that come to mind right now are office.

Rod
Office for sure. Good Lord. They get [inaudible]

Mark
Malls.

Rod
Yeah. Malls, right?

Mark
Short-term rentals, you know.

Rod
Oh, yeah.

Mark
Some retail we may do, but most retail we won’t do.

Rod
Same. Same.

Mark
Student housing, senior housing.

Rod
You wouldn’t do senior. Senior, I feel pretty good about. Student– you know, if you listen to Harry Dent, who’s a doom and gloomer, but he’s an economist, he talks about population demographics. And I tell you, it’s a little sobering for the student housing sector as it relates to student age you know, demographics. But senior living now, that’s a different story. What’s your hesitation there?

Mark
Gosh, it goes back to the same kind of thought process on why we don’t really do single-family homes, Rod. They’re really expensive to operate. And so you have a staff that–

Rod
And litigious. Nobody wants to see grandma be left outside or hurt or whatever and– yeah, very litigious as well. Okay. Anyway.

Mark
Just a tight-margin business and a lot of overhead. And we find that returns aren’t any necessarily better than other stuff.

Rod
No kidding. I did not know that.

Mark
So why do I [inaudible]

Rod
Yeah. I didn’t know that. I thought that they had pretty decent margins, but I know that they’re dying finding help you know, and paying help to get competent help. They underpay. Yeah. Okay, no, that’s very interesting.

Mark
And this is all general, Rod, right? Don’t get–

Rod
No, no, no, I know it changes in different markets and everything else.

Mark
Exactly.

Rod
Yeah. So let me ask you a question. I just asked somebody else on the show here. We started doing interviews live in person. It’s a shame we couldn’t do that. It’s a lot of fun. They’re our first ones here at my studio. But I asked him you know if you went back and told 18-year-old Mark, you know, told him what you know now, is there anything you might do differently in this business? Would you have even screwed with single-family?

Mark
I think I would have and I’m probably going to have my kids do the same, Rod. I think it’s really great to learn from.

Rod
Okay.

Mark
And so I would have started at 18 and not [inaudible]. That’s number one. I probably would have also partnered with more people that were much more experienced earlier on. And so those are, I think, two of the biggest ones.

Rod
Those are big ones to prevent the seminars. I don’t call them failures, I call them seminars, you know. Prevent the seminars or make them smaller seminars as it were.

Mark
Here you go.

Rod
So what’s some of the best advice you’ve ever received? And it can be in any– and it can be a personal, business, relationship, whatever. What’s some of the best advice you’ve ever received?

Mark
Yeah. So it’s something we try and do all the time. Number one is be patient and say no a lot. It’s hard to do when you’re– especially if you’re young and you’re new. You want to invest, you want to grow. It’s like inside of you and you just feel it and it’s burning in you. But you can also make mistakes that can take years off of your career. And so be patient, go slow, and say no a lot.

Rod
I like it. I like it. Especially in the time that we’re in right now, for sure. Is there a book that you gift more than another to people? I’m sure you have people asking you, hey, can I pick your brain for an hour? They think they’re going to learn a business in an hour or whatever. But, you know, is there a book that you gift more than others? It can be any genre.

Mark
Yeah. Well, I mean, the first one that everyone knows about, maybe they don’t.

Rod
Rich Dad, right?

Mark
Exactly. “Rich Dad Poor Dad”.

Rod
Right.

Mark
That was a big one for me when I was young and early starting out. And then there’s a– I mean, it depends on how technical you want to get, but I’ll just think of one I just read, which was Stephen Schwarzman’s book, “What It Takes”. I think he’s the founder of Blackstone.

Rod
Oh, wow.

Mark
It’s his personal journey, going back to his high school, college years, upbringing, and some of the achievements–

Rod
Was it good?

Mark
It was good, yeah. I thought maybe it would just be a giant pat on the back the whole time, but it was actually very compelling. You know, you could just see that this individual has achieved so much, but he also has this character and this personality to get him where he is. Right?

Rod
Interesting.

Mark
He doesn’t quit. He’s very smart. He’s liked by most, and he’s done some amazing things throughout his career.

Rod
I mean, they’re worth more than most countries, so, you know, it’s insane how profitable and successful they are. So where do you get your drive, Mark? What’s the why? What gets you to jump out of bed every morning?

Mark
Yeah, I’m not exactly sure, Rod.

Rod
Really?

Mark
You know, here’s what it is for me. I’ve just had this inherent– it’s part of my character, I guess, to always be improving.

Rod
Good.

Mark
[inaudible] anything I’m doing. And I start out usually in most any new feet as an observer, and I take a ton of notes, and I’m a sponge, Rod for something that I’m interested in. And so I think that’s possibly part of my analyst background and growing up enjoying math and also listening and being really an observer. And then you keep doing that over a long period of time, you wake up in the morning and it’s almost like, gosh, what am I going to learn today? And it’s exciting to have that thought process.

Rod
Nice.

Mark
And so I don’t know if there’s necessarily one thing that’s my drive. It’s all of that and kind of just over decades of wanting to always be improving.

Rod
Nice. No, that’s awesome. You know, I’m a Tony Robbins mentee and he has this term called CANI. It’s Constant And Never-ending Improvement. You know, even these little improvements you make, you take them out two years, three years, five years, ten years. They’re massive shifts. So, you know, I have a lot of aspiring investors that listen to the show, people that know they need to do something. They hear about success stories. And, you know, I do episodes now called Multifamily Rock Stars where I just interview my students and, I mean, I’ve got a backlog. I’ve got so many that are successful now. But for the ones that haven’t taken action yet, what words of wisdom might you share with an aspiring multifamily investor or real estate in general, it doesn’t have to be multifamily specific.

Mark
Sure. I would say you know, you got to rip the bandaid off, right? And you got to go for it. And I had trouble doing that early on, too, right with the W-2. It’s hard to leave.

Rod
Yeah.

Mark
Safety–

Rod
Comfortable. It’s comfortable. Comfort zone is a nice, warm place and nothing freaking grows there, right?

Mark
That’s good. I like that. Yeah. So yeah, take the bandaid off and if you’re, again, if it’s a student of Rod’s, I mean, you’re in great company.

Rod
Oh, thank you. Thank you for that.

Mark
If you have time to do it, you got a lot of support.

Rod
No, I was not looking for that, but thank you for that.

Mark
Well, it’s true.

Rod
But you’re right. You just got to do it. You just got to do it like Nike says. Well, listen, brother, it’s a pleasure to meet you. We didn’t make it to NMHC this year, but probably will next year. We’ve got a lot of stuff going on. But hopefully, we’ll get to meet one of these you know, midmarket things or whatever and shake hands.

Mark
I look forward to it, Rod.

Rod
If you see me and my eyes are crossed, please come up and smack me and remind me who you are. But I really appreciate you coming on and sharing your wisdom, my friend.

Mark
My pleasure, Rod. Thanks for having me.

Rod
All right. Take care now.

Mark
You, too.

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. 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 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. 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.