How to Know If a Multifamily Deal Really Works

Multifamily Investing Lessons From Holly Williams

Multifamily investing can create significant opportunities for investors, but Holly Williams explains why success requires more than simply finding a property with attractive numbers. Williams discusses her transition from a 30 year career in advertising and data into real estate, including her experience as an accredited investor and her discovery of private real estate investments. She also shares lessons from operating through a difficult real estate environment, emphasizing conservative underwriting, sufficient reserves, strong operators, and maintaining control over the factors an investor can influence.

Holly Williams’ Path Into Real Estate Investing

Holly Williams grew up in Houston and spent approximately 30 years working in advertising and data, including work connected to Nielsen and other data providers. She and her husband owned a four family property in Brooklyn, and she had experience with single family homes before discovering that investors could participate passively in private investments. Williams says she had been an accredited investor for years without fully understanding what that meant, eventually becoming involved in private real estate syndication and multifamily investing.

One of the key lessons Williams brings to multifamily investing is the importance of understanding exactly what you are investing in. She contrasts private investments with publicly traded REITs and explains that her approach to syndication is closely aligned with the interests of investors because she invests alongside them. In a challenging market, she says her team has sometimes given up its own earnings in order to preserve investor returns, reflecting the importance she places on conservative decision making and alignment of interests.

Why Multifamily Investors Need Strong Financial Reserves

A major theme of the conversation is the financial pressure facing multifamily properties. Rising interest rates, expensive rate caps, higher insurance and taxes, increased payroll and operating costs, and stricter lender requirements can all put pressure on cash flow. Williams describes situations in which capital calls were used to pay down debt, while the conversation also highlights how investors can become frustrated when additional capital is required simply to keep a property afloat.

Williams emphasizes that multifamily investors should prepare for problems before they occur rather than assuming current performance will continue indefinitely. Her recommendations include:

• Maintaining more reserves than you think you need
• Making sure a property can remain cash flow positive at lower occupancy
• Matching the loan term to the business plan with significant room for unexpected delays
• Conservatively evaluating how rising expenses and financing costs could affect the investment

Williams specifically explains that a property operating at approximately 90% occupancy should still be capable of generating positive cash flow at substantially lower occupancy levels. She also recommends having a loan that lasts at least twice as long as the business plan, providing additional time to navigate unexpected market conditions.

The Importance of Multifamily Property Management

Another major lesson from Williams and the discussion is that property management can have a direct impact on multifamily investment performance. The conversation focuses on problems with third party management companies, including weak accounting, marketing, oversight, and onsite execution. Williams explains that management has become one of her biggest challenges, while Rod discusses how onsite staff can ultimately determine whether a management structure performs well.

The discussion also explores vertical integration and self management as a potential way to gain greater control over operations. Williams confirms that her team has moved toward this approach across three properties. The underlying lesson is that multifamily investors need to pay close attention to the people operating the asset, because even a strong business plan can struggle when onsite teams lack ownership, attention to detail, or the ability to execute effectively.

Learning From Real Estate Setbacks

Williams also shares a powerful example from a 500 unit Houston property that was severely affected by Hurricane Harvey. Approximately half of the complex became uninhabitable, forcing the team to suspend distributions and help residents find alternative housing. After insurance proceeds were received, the property was restored, and the team ultimately had a new asset in a Houston market experiencing a housing shortage.

Her experience reinforces the importance of staying engaged when a multifamily investment encounters a major setback. Williams argues that investors should seek advice from people with more experience, identify individuals whose results they want to emulate, and learn from their actions. She and Rod also discuss the value of real estate investor groups, events, masterminds, and other environments where investors can accelerate their education by surrounding themselves with experienced operators.

How New Investors Can Learn Multifamily Investing

For people entering multifamily investing without significant experience, Williams offers a practical suggestion: consider working for a property management company. Her reasoning is that managing an apartment property provides direct exposure to the operational realities of the business, including the people, systems, residents, maintenance, leasing, and day to day challenges that investors may not fully understand from an outside perspective.

The conversation ultimately returns to a central principle of multifamily investing: investors have more control when they understand the operation and build systems around capable people. Williams believes investors should continue learning, question assumptions, and critically evaluate information rather than simply accepting what an expert or financial professional tells them. Her broader philosophy is to add value wherever possible and surround yourself with people who have the experience and results you want to achieve.

If you want to hear the full conversation and detailed insights from Holly Williams on multifamily investing, property management, reserves, risk, and navigating challenging markets, watch the podcast video or read the complete transcript below.

Multifamily Investing FAQ

What Is Multifamily Investing?

Multifamily investing involves acquiring, operating, or investing in properties with multiple residential units. Holly Williams discusses multifamily investing from the perspective of an investor and operator, emphasizing conservative underwriting, strong property management, adequate reserves, and the ability to navigate changing market conditions.

Why Is Multifamily Investing Attractive to Real Estate Investors?

Multifamily investing can provide investors with greater control over an asset because property performance can be influenced through operations, management, leasing, expenses, and improvements. Holly Williams explains that one of the things she values about real estate is the ability to work toward fixing problems rather than depending entirely on market conditions.

What Should Investors Consider Before Investing in Multifamily Real Estate?

Investors should consider the property’s cash flow, occupancy, debt structure, operating expenses, reserves, management, and business plan. Williams emphasizes the importance of being financially conservative on the front end because unexpected market changes can place significant pressure on multifamily properties.

How Much Cash Reserves Should a Multifamily Property Have?

Holly Williams recommends having more reserves than you think you need. Adequate reserves can provide a financial cushion when occupancy declines, expenses increase, financing becomes more expensive, or unexpected property problems occur.

Why Is Occupancy Important in Multifamily Investing?

Occupancy is important because a property needs enough rental income to cover its operating expenses and debt obligations. Williams explains that if a property is purchased at approximately 90% occupancy, it should still be capable of producing positive cash flow if occupancy falls to around 80% or 75%.

How Does Debt Affect Multifamily Investing?

Debt can significantly affect multifamily investment performance, particularly when interest rates and lender requirements change. Williams discusses situations where lenders increased debt service coverage requirements and where capital was raised to pay down debt, demonstrating why investors need to understand their financing structure before acquiring a property.

What Is Debt Service Coverage Ratio in Multifamily Investing?

Debt service coverage ratio, or DSCR, measures a property’s ability to generate enough net operating income to cover its debt payments. In the conversation, Rod Khleif explains that a 1.25 DSCR would mean a property generates $125,000 in net income against $100,000 in annual debt payments.

Why Is Property Management Important in Multifamily Investing?

Property management is critical because the onsite team directly affects leasing, resident relationships, maintenance, marketing, accounting, and day to day operations. Williams and Rod discuss how poor management can negatively affect an otherwise solid investment and why some successful operators are moving toward vertically integrated or self managed operations.

What Is Vertical Integration in Multifamily Investing?

Vertical integration in multifamily investing involves bringing important property operations under greater direct control rather than relying entirely on outside management companies. Williams explains that her team has moved toward this approach across three properties, allowing them to maintain greater involvement in how the assets are operated.

How Can New Investors Learn Multifamily Investing?

New investors can learn multifamily investing by gaining practical experience, studying successful operators, attending real estate events and investor groups, and surrounding themselves with experienced people. Williams also suggests that working for a property management company can provide valuable exposure to the day to day realities of operating apartment properties.

What Risks Should Multifamily Investors Prepare For?

Multifamily investors should prepare for changes in interest rates, insurance costs, operating expenses, occupancy, lender requirements, and unexpected property problems. Williams’s experience operating through challenging market conditions demonstrates why conservative underwriting, adequate reserves, and careful debt planning are important components of multifamily investing.

What Is the Importance of Having a Conservative Multifamily Investment Strategy?

A conservative multifamily investment strategy can help investors prepare for conditions that differ from their original projections. Williams emphasizes purchasing responsibly, maintaining sufficient reserves, ensuring the property can withstand lower occupancy, and structuring debt with enough time to execute the business plan.

00:00:40:02 – 00:00:56:06
Rod Khleif
Welcome to another edition of Lifetime Cash Flow through Real Estate Investing. I’m Rod Klheif, and I’m thrilled that you’re here. And I am just so excited to interview my guest, who’s a good friend, a hoot, and a brilliant freaking investor. Holly Williams, welcome to the show, sweetheart.

00:00:56:07 – 00:01:05:14
Holly Williams
Hey, welcome, welcome, welcome for you to. You know, I am just thrilled to be here. I recently moved down to this area, so I’m excited to.

00:01:05:16 – 00:01:14:07
Rod Khleif
That’s right. Right. You’re in Lakewood Ranch. You’re right, you’re right. You’re right down the street and you’re in the flowers and butterflies and green.

00:01:14:07 – 00:01:15:01
Holly Williams
Now life.

00:01:15:01 – 00:01:17:22
Rod Khleif
Is good. Life is beautiful. It’s so freaking beautiful.

00:01:17:24 – 00:01:20:02
Holly Williams
The alligator swim by, you know?

00:01:20:03 – 00:01:22:22
Rod Khleif
Doesn’t get any better. Doesn’t get any better than that, right?

00:01:22:23 – 00:01:24:09
Holly Williams
Absolutely.

00:01:24:11 – 00:01:41:25
Rod Khleif
So, listen, I know you’re a huge investor as an LP and a GP, and we won’t even think about how many thousands of units. But why don’t you tell us a little bit of the background, you know, where you started and why real estate and maybe bring us current.

00:01:41:25 – 00:02:03:08
Holly Williams
So I knew about real estate, and my husband and I actually have a four family house in Brooklyn. We rent and I’ve done some single family homes, but I didn’t really realize that you could invest passively and other private investments. I was an accredited investor for years and didn’t even know what that meant.

00:02:03:13 – 00:02:22:22
Rod Khleif
By the way, for those of you that don’t know what that means, an accredited investors is somebody that makes 200,000 a year with the expectation of it. To continue married, they have to make 300,000 a year expectation continue, or their net worth is $1 million without their personal residence. Now they are talking about relaxing those. But anyway, we won’t go down that rabbit hole just yet.

00:02:22:24 – 00:02:31:02
Holly Williams
You live in New York City, right? And you are married, right? And you don’t make sure you know you’re living in a third floor walkup, right?

00:02:31:05 – 00:02:31:25
Rod Khleif
Right.

00:02:31:27 – 00:02:51:15
Holly Williams
You know, with the bathtub in the living room. Right. And so I, you know, I didn’t know what I thought I was the only one who didn’t know. And I had a 30 year career in advertising and data were for Nielsen. You know, all the data providers and, you know, all of that. And.

00:02:51:17 – 00:02:54:00
Rod Khleif
Well, on the analytical side or on the sales side.

00:02:54:01 – 00:03:02:08
Holly Williams
Or sales side, mostly. Yeah, right. At sold advertising, you know. So I was really to the Eyal thing and, and oh my internet.

00:03:02:10 – 00:03:04:11
Rod Khleif
AOL with the disks and everything else.

00:03:04:12 – 00:03:33:06
Holly Williams
Telling you you’ve got mail. Yeah. Right. And so, you know, I started reaching out when Joe and I found when my partner and I found this project in Houston, where I happened to have grown up. I was amazed when I called my friends and colleagues in advertising and said, hey, and explain to them what I was doing. They’re like, Holly, I’ve lost money in a land deal.

00:03:33:08 – 00:03:58:24
Holly Williams
If you you know and ask. Not for me. They didn’t understand that when they invest in a REIT right in the through Ameritrade or whatever, they they’re investing in the secondary market and none of the most of most of the, the, the people running it don’t have skin in the game. You know, they probably are.

00:03:58:24 – 00:04:05:28
Rod Khleif
Sitting and very often they’re not they’re they’re more knowledgeable in how to sell than analyzing the actual investment.

00:04:05:29 – 00:04:11:26
Holly Williams
That’s correct. And you know, and also they’re taking their fees no matter what.

00:04:11:27 – 00:04:13:02
Rod Khleif
Right. They get paid regardless.

00:04:13:03 – 00:04:37:04
Holly Williams
No matter what. What what private syndication does or at least how I work is I don’t get paid. And if the deal doesn’t work, I can tell you that many a few times with this real estate market, we’ll get into the current real estate market, I’m sure. But but we have foregone we have we’ve made any money. We’ve given it all to investors.

00:04:37:09 – 00:04:51:18
Holly Williams
Right. Because, you know, it’s a challenging market right now. Right. But thankfully, you know, I’ve been conservative enough to where we’re not underwater or, you know, but a lot of a lot of syndicators right now.

00:04:51:24 – 00:05:10:14
Rod Khleif
There’s a lot a not a lot of trouble out there. I mean, I can’t tell you how many deals I know are being marketed for the debt right now. So that means the people that put equity in are done, you know, and, and and you know, it’s it’s I’m seeing tons of those right now and, you know, there’s a lot of there’s a lot of just, you know, a lot of pain.

00:05:10:15 – 00:05:14:25
Rod Khleif
Yes. So why don’t you speak to why that is.

00:05:14:27 – 00:05:18:07
Holly Williams
Yes. I think that a lot of.

00:05:18:09 – 00:05:20:02
Rod Khleif
They hear it from me. I want them to hear from somebody.

00:05:20:09 – 00:05:40:08
Holly Williams
Let’s start. You know, there was a lot of hype, right? A lot of people were making lots of money. And a lot of people got into this that didn’t have a lot of experience. Right. And the government or the Federal Reserve, whatever, has not helped us at all.

00:05:40:10 – 00:05:41:17
Rod Khleif
No.

00:05:41:19 – 00:05:53:03
Holly Williams
Never even I mean, I know people, I know syndicators that bought know rate caps. Are you kidding me? I know, so even when the getting was good, we were buying rate caps.

00:05:53:09 – 00:05:53:26
Rod Khleif
Sure. No.

00:05:53:27 – 00:05:58:01
Holly Williams
The caps we were buying were, like $100,000. Oh, yeah. Like 1.5 million.

00:05:58:02 – 00:06:18:22
Rod Khleif
Oh, yeah. No. Let me give you an example of a rate cap. So, guys, a rate cap is where you where you pay to make sure that your interest rate doesn’t go up more than a certain percentage over a period of time and back in 2020. You could get $100 million rate cap 3% for $20,000. Crazy. Same rate cap for one year.

00:06:18:22 – 00:06:41:26
Rod Khleif
Forget three years. That was a three year rate cap for one year. It was like I want to say 2.4 million 100 million, right? So and I remember early on when this thing collapsed, we were I was looking at an asset in San Antonio where the guys, the the gentleman selling it was a smaller deal, but his reserve payment went from 8000 a month to 80,000 a month.

00:06:41:27 – 00:06:48:00
Rod Khleif
I mean, hello. You just can’t. I mean, that’s a small deal, but but the point is. Yeah. Anyway, continuous lenders.

00:06:48:05 – 00:07:12:02
Holly Williams
Oftentimes they’ll work with the with the people that are really having trouble. Like I’m about to default on the loan. And those of us who are cashflow positive but not like we were right. And not you know, we may have to have a small capital call or something like that, but it’s a struggle right there, wanting people like us to come to the table and buy down the debt.

00:07:12:03 – 00:07:24:03
Holly Williams
Right. You know, so okay, so, you know, your cash flow positive. You’re meeting all the this you’re right, you know, criteria. But now we want a 1.4. Yes. Or 1.5 right.

00:07:24:04 – 00:07:42:08
Rod Khleif
They want to raise the debt service coverage ratio. By the way guys the debt service coverage ratio is you know, in our world in the commercial real estate world, the the lenders look at the properties, ability to service the debt. They’re not looking at your personal income. And so the average debt service coverage ratio lender likes to see is 1.25%.

00:07:42:08 – 00:08:02:21
Rod Khleif
So to give you a quick example of what that means, let’s say the debt payment is 100,000 a year to be an annual calculation, 100,000 a year. And the the net income is 125,000 a year. So 100 in debt, 125 in income. That’s a 1.25% debt service coverage ratio. So yeah. So now lenders are saying they want more than that just because they have the ability to do that.

00:08:02:22 – 00:08:11:27
Holly Williams
Yeah that’s right. Even if you’ve never been late right. Even because they want to hedge their bets against the the the ones that are having trouble.

00:08:11:28 – 00:08:12:26
Rod Khleif
Right, right, right.

00:08:12:28 – 00:08:19:03
Holly Williams
So we’ve done preferred equity where we’ve gone out and and done we’ve done a promissory note.

00:08:19:04 – 00:08:19:11
Rod Khleif
Right.

00:08:19:16 – 00:08:38:07
Holly Williams
So I saw all of there’s a difference between any kind of promissory note or preferred equity. We’ve done a couple of capital calls, but that’s almost always been to pay down that debt. No kidding. Because the lenders were wanting you know so you’re buying equity. Yeah.

00:08:38:09 – 00:08:38:21
Rod Khleif
So that’s.

00:08:38:26 – 00:08:44:23
Holly Williams
Equity I’ve seen a lot of these. That capital call is just to stay above.

00:08:44:25 – 00:08:58:17
Rod Khleif
Oh no just to just a float. No I’m in some some deals with an ex-partner that that that our we had to do capital costs just to stay afloat. And so you know and and I will tell you investors are burned out on capital costs.

00:08:58:18 – 00:08:59:21
Holly Williams
They are big time.

00:08:59:23 – 00:09:02:00
Rod Khleif
Completely burned out. So, you know.

00:09:02:01 – 00:09:14:13
Holly Williams
Although I’ve only done three of them and I’m in a right now probably 15, you know, ten or 12 or 15 deals I lost kind of track. We were able to sell, sell.

00:09:14:15 – 00:09:19:03
Rod Khleif
Sell some. Yeah. We’re selling a bunch right now to terrible time to sell though.

00:09:19:03 – 00:09:30:15
Holly Williams
Well, it was an okay time to sell. And we were in three years into it and still delivered a, you know, 1.3 equity multiple. Yeah. Yeah. Great. I mean.

00:09:30:21 – 00:09:35:11
Rod Khleif
What you got out of a challenging deal, I’m assuming these were deals needed to get. Yeah. They were all there all along.

00:09:35:18 – 00:09:36:11
Holly Williams
Every one of them.

00:09:36:15 – 00:09:53:18
Rod Khleif
And you know where I wanted you to go with my question about why they’re challenged. It’s not just the bridge debt. It’s it’s it’s inflation has made all of our expenses go up crazy. I mean, forget just tax and insurance, which have insurance gone through the roof, but but just payroll, you know.

00:09:53:24 – 00:09:55:26
Holly Williams
Finding somebody to get on the payroll.

00:09:55:28 – 00:10:01:16
Rod Khleif
Exactly. Even finding somebody. Exactly. It’s like they don’t want to work and depends on where you’re at. But.

00:10:01:23 – 00:10:04:29
Holly Williams
And if even if you’re down the street, they still don’t want to work.

00:10:05:01 – 00:10:05:14
Rod Khleif
Right?

00:10:05:15 – 00:10:27:24
Holly Williams
Right. I mean, I had a my partners are in Louisville, Kentucky, two of my great partners, great market markets. The rents are going I mean we’re getting rent increases of like five, six, 7%. It’s expenses. You know, I had an investor go buy the property just to look at it. Early on. And there was a note on the door we’ve gone to lunch or whatever.

00:10:27:26 – 00:10:28:20
Rod Khleif
Oh, no. Oh, yeah.

00:10:28:21 – 00:10:29:05
Holly Williams
How are you going.

00:10:29:05 – 00:10:52:16
Rod Khleif
To rent? Well, now now we’re talking management. We’re going to talk about management companies here in a minute. But, but but it’s the expenses even on an on supplies. Supplies have gone through the roof. You know I remember seeing these these funny emojis or not emojis but but graphics on social media where, where it showed a pile of lumber and somebody said this is my retirement fund or something, you know, because lumber went through the roof, you know, and things like that.

00:10:52:16 – 00:11:07:29
Holly Williams
But we’re doing so much better in rents than we are. So on the revenue side, we’re doing right. Right. And we have moved. So what we’re finding is in some unit, like we don’t need to do as much of a renovation to get the rents.

00:11:07:29 – 00:11:14:00
Rod Khleif
Up, right. No, we’ve done deals where we’ve we had planned to do a bunch of it and then the rents were getting the rent. So why spend the money?

00:11:14:01 – 00:11:24:27
Holly Williams
But we need to fix the stairs, right. And we need to do so. We’ve got to move that money from, you know, the apart, you know, from renovations to CapEx.

00:11:25:03 – 00:11:27:16
Rod Khleif
Needed, needed CapEx. Yeah. Needed CapEx.

00:11:27:17 – 00:11:37:22
Holly Williams
And lenders are difficult about that too, because they see you varying from the plan and that sort of thing, even though you really don’t need to do. We’re still getting the rents.

00:11:37:29 – 00:11:42:24
Rod Khleif
Yeah. No, we had that happen on an asset in Houston. This. Yeah, it’s a long story.

00:11:42:25 – 00:12:03:13
Holly Williams
I don’t think investors and they shouldn’t they don’t have to understand everything right. But but I’m not sure that investors really understand how how just to get the lender to move the money from the. It’s obvious that we need to fix the stairs. Right. And it’s an it really is.

00:12:03:16 – 00:12:04:27
Rod Khleif
Oh, no. It’s it’s a pain.

00:12:04:29 – 00:12:09:03
Holly Williams
No, it’s not even a pain. It’s just hard work. It really is so.

00:12:09:05 – 00:12:24:26
Rod Khleif
Well that’s what I mean I, I so many it’s so much so so many, so difficult, so much communication and difficult. And then the right hand doesn’t know what the left hand is doing at these, at these lenders. And you know, we’ve got we’re waiting on an almost million dollar payout on a fire we had on an asset.

00:12:24:26 – 00:12:34:10
Rod Khleif
And the lender is just dragging their feet. It’s just you know I think they’re making the spread on that money right now. So they’ll hang on to it as long as they can. And you know, it’s kind of ridiculous.

00:12:34:12 – 00:12:35:12
Holly Williams
We’ve got roofs.

00:12:35:14 – 00:12:35:28
Rod Khleif
Yeah.

00:12:36:01 – 00:12:36:15
Holly Williams
Same thing.

00:12:36:16 – 00:12:37:02
Rod Khleif
Yeah. Roofs.

00:12:37:03 – 00:12:41:17
Holly Williams
Yeah. $1 million for going to get on the roof. Right. But we need. Where is it?

00:12:41:19 – 00:12:49:12
Rod Khleif
Yeah, exactly. They’re holding on to it. They’ve gotten it from the insurance company, which is the case in our deal. But it’s like, hey, where’s the money? Hello? Show me the money.

00:12:49:14 – 00:12:52:06
Holly Williams
And then he was talking about privatizing Fannie Mae.

00:12:52:09 – 00:12:53:02
Rod Khleif
Oh, yeah.

00:12:53:05 – 00:13:07:25
Holly Williams
That sort of thing. And so there’s a lot of uncertainty and volatility both on the market side and internally just managing those costs that are going up. Sure. Managing those people.

00:13:07:27 – 00:13:23:26
Rod Khleif
Yeah. The average expense ratio was 50%. It’s pretty hard to get that right now. That’s right. I mean, because, you know, everything has gone through the roof. And so, you know, and that’s impacting these deals. And we’re going to see a lot of distressed assets on the market. And I will tell you, I think we’re going to see some significant bank failures as well.

00:13:23:27 – 00:13:40:12
Rod Khleif
Small and regional banks that are holding this commercial debt. I’ve got my money. I don’t know where you’ve got your money, but I’ve got my money in a in a bank that spreads it out over 80 banks. So there’s never more than 250. Same for you. Yeah. So? So never more than 250 in any bank? Correct. You know, we want at least we have the FDIC.

00:13:40:13 – 00:13:42:26
Rod Khleif
If that goes down, then then we mail go home.

00:13:42:26 – 00:13:55:02
Holly Williams
But I just don’t. So there’s a lot of uncertainty. And whenever there’s uncertainty. There’s fear. Fear. Yeah. And you know that goes right back to mindset. Right. And understanding.

00:13:55:02 – 00:13:56:24
Rod Khleif
Which is what I love to talk about. Right.

00:13:56:25 – 00:14:16:22
Holly Williams
Yeah. And the universe is I believe on the side of of good. I really do. And I think that it there’s always a way to make it work. As long as you were responsible on the front end. I mean, we bought the last deal that I was involved with that we bought was in 2023.

00:14:16:23 – 00:14:17:29
Rod Khleif
Wow. It’s been that long.

00:14:18:00 – 00:14:19:22
Holly Williams
Well, the end of it. Like.

00:14:19:24 – 00:14:23:17
Rod Khleif
Yeah. Same here. Same here actually. Same here. Exactly the same. That was the last deal.

00:14:23:20 – 00:14:27:00
Holly Williams
Because I’m not going to buy something that’s not. No. And you know.

00:14:27:06 – 00:14:30:13
Rod Khleif
I’ll tell you though, not to not to completely derail the conversation.

00:14:30:19 – 00:14:32:12
Holly Williams
Right. I know I add.

00:14:32:13 – 00:14:40:03
Rod Khleif
I am very wealth of us. I think I’m the worst I have. I have four and a half stars on my podcast instead of five because I interrupt too much. I get too excited.

00:14:40:07 – 00:14:41:03
Holly Williams
To interrupt anytime.

00:14:41:04 – 00:15:05:05
Rod Khleif
I know, I know, but you know, but I’m very interested in senior housing and I am. I am going to start raising money for. I’ve got a deal coming up right now. You know, I was going to do this like ten years ago and just never pulled the trigger. And and I, I’m, you know, I’m looking for an alternate asset classes at this point until, you know, we see a reckoning in the, in the, in the multifamily space.

00:15:05:05 – 00:15:20:03
Rod Khleif
And I think it’s coming, like I say, these deals that are being marketed for debt that still don’t pencil out, you know, debt plus fees, they’re being marketed for the debt plus the fees to close. And they still don’t pencil. So, you know, these lenders are going to have to take a haircut. And they haven’t yet. But I think it’s coming.

00:15:20:03 – 00:15:23:02
Rod Khleif
Do you think it’s coming? I think they’re going to start taking a haircut.

00:15:23:03 – 00:15:38:12
Holly Williams
I think that if the Treasury yields don’t come down, and I think that if if you need another million dollars every six months to buy the rate cap, right, you can only do that so many times. And that’s the reality of it.

00:15:38:13 – 00:15:46:17
Rod Khleif
The catch phrases extend and pretend with these lenders, lots of deferrals, lots of loan mods, you know, and these struggling assets.

00:15:46:18 – 00:16:09:03
Holly Williams
So yeah, so it is lots of fear now. You know, I thought maybe it would happen faster. Everybody was talking about how 2024 would be an end of it would be the. And now that’s the end of 2025. Right. We have an administration that’s doing that understands real estate. Yeah. So that’s a good thing.

00:16:09:04 – 00:16:10:10
Rod Khleif
Well that’s a very good thing.

00:16:10:16 – 00:16:11:16
Holly Williams
But I don’t.

00:16:11:22 – 00:16:19:09
Rod Khleif
He’s talking about getting rid of the head of the Federal Reserve to hopefully, you know I don’t know if when that’s going to happen I don’t know I don’t know our mind on that.

00:16:19:09 – 00:16:47:10
Holly Williams
But our, the United States are we’re really at a standstill because I think because there are so many competing things you have to get over. I remember the internet in 1990 or so when AOL started and I was getting advertisers right. And I remember sitting in Detroit, the top marketing guy at Ford, just like the top the guy.

00:16:47:12 – 00:16:57:01
Holly Williams
Whatever the guy. And he looked at me and said, Holly, you’re crazy. No one will ever buy a car on the internet. So.

00:16:57:04 – 00:17:07:29
Rod Khleif
You know, and blockbuster, it said no one will stream. They’ll always come pick up, come pick up movies. Right? And they had a chance to buy Netflix. You know, that’s Tory. And they screwed that up.

00:17:08:01 – 00:17:10:05
Holly Williams
And gamble had a chance to buy diapers. Yeah. Yeah.

00:17:10:06 – 00:17:18:09
Rod Khleif
Whatever. And Kodak I think, had a chance to get into digital cameras or get digital film. And or maybe it was Fuji, I don’t remember. But anyway. Yeah.

00:17:18:10 – 00:17:19:12
Holly Williams
And they fought it.

00:17:19:13 – 00:17:22:11
Rod Khleif
Yeah. They fought it. Thought they were doing everything they could.

00:17:22:11 – 00:17:33:29
Holly Williams
To lobby against right against it. Right. And so there’s some of that that you know, I call it bunker mentality. So when you’re when people sense a sea change in.

00:17:34:01 – 00:17:53:15
Rod Khleif
Change is scary. Change is uncomfortable. And I’ll tell you AI, you want to see some change. I’m going to tell you they’re going to be millions of jobs that are going to be gone where people had better, you know, figure out something because they’re going to be replaced by AI. Look what they say. You better put your resume out better.

00:17:53:16 – 00:17:53:26
Holly Williams
I know.

00:17:53:26 – 00:17:54:03
Rod Khleif
We’re.

00:17:54:03 – 00:18:12:24
Holly Williams
Not going to need you anymore to adjust them. Right. So so it’s like, you know, but they said that during the Industrial revolution, right? They said that the internet was going to enable, you know, cut jobs and it’s grown jobs with jobs and that we never even dreamed of.

00:18:12:26 – 00:18:18:28
Rod Khleif
I remember when they were given Jeff Bezos shit because he wanted to sell books online. I mean, look for that. Look what.

00:18:18:28 – 00:18:19:28
Holly Williams
Happened.

00:18:20:00 – 00:18:20:18
Rod Khleif
With that went.

00:18:20:19 – 00:18:31:26
Holly Williams
But, you know, I really believe that our our industry is going to change. If we could just hang in there because blockchain is going to change a lot of things.

00:18:31:27 – 00:18:32:10
Rod Khleif
Yes.

00:18:32:11 – 00:18:42:28
Holly Williams
And make it easier to do to do what we do. I think that that people are really starting to understand that this is way more complicated than it needs to be. Yeah.

00:18:42:29 – 00:18:46:05
Rod Khleif
And our business. Yeah. Yeah, I don’t disagree.

00:18:46:05 – 00:18:47:29
Holly Williams
There’s the loan buying the rate.

00:18:48:00 – 00:19:03:01
Rod Khleif
Oh that’s stuff. Yeah. That stuff’s ridiculous. That’s that’s that’s the that’s that’s crazy. You know, you know how how complex and how many how many trees they have to kill, how many trees they have to kill to get stuff signed. And I’m just ridiculous, honestly.

00:19:03:02 – 00:19:10:15
Holly Williams
We got down to the wire and Fannie said, oh, we’re not going to do any more loans for the rest of the year. No kidding. A week before we were.

00:19:10:23 – 00:19:12:15
Rod Khleif
Wow. Yeah, yeah.

00:19:12:18 – 00:19:22:15
Holly Williams
Because they were afraid that, you know, they were going to be privatized or whatever, you know, whatever, you know? So I think there’s uncertainty. People are just frozen.

00:19:22:19 – 00:19:22:26
Rod Khleif
Yeah.

00:19:22:27 – 00:19:23:19
Holly Williams
Or a lot.

00:19:23:21 – 00:19:42:02
Rod Khleif
I think you’re right. I think you’re right. And and you know, I got just kind of I’m waiting. I’m still very interested in multifamily. Obviously it’s my wheelhouse. And my students I know brag for a minute to you because you’ll appreciate this. My students now in 260,000 units that we know of free. Yeah. Thank you. I’ve been teaching seven years.

00:19:42:02 – 00:19:48:17
Rod Khleif
I’m very, very proud of that. It’s way more than that because a lot of people don’t respond. But we count with that. We know for sure. Well, listen, I.

00:19:48:18 – 00:19:50:01
Holly Williams
You know, you’re helping a lot of people.

00:19:50:02 – 00:19:50:09
Rod Khleif
Oh.

00:19:50:09 – 00:19:57:25
Holly Williams
Thank you. You know, because people just don’t. We have no financial education in our country.

00:19:57:26 – 00:19:59:01
Rod Khleif
Don’t get me started on that.

00:19:59:01 – 00:20:13:02
Holly Williams
And we have lots of embedded. I mean, when I was in grad school, the banks provide Wall Street provides the education for the NBA. Yeah. So I medical schools, medical school, the the drug companies provide the education for.

00:20:13:02 – 00:20:13:15
Rod Khleif
Their doctors.

00:20:13:21 – 00:20:32:19
Holly Williams
That’s very true. And so I think that people are starting to realize that and starting to realize that you really have to do. I mean, we don’t have a lot of attention span, but you got to just take things and look at all sides of a situation and critically think about what’s really going on when somebody tells you something.

00:20:32:20 – 00:20:33:20
Rod Khleif
Yeah, I agree.

00:20:33:21 – 00:20:35:00
Holly Williams
And, you.

00:20:35:00 – 00:20:39:27
Rod Khleif
Know, that was a very general statement, but I were you referring to something specifically in that.

00:20:39:28 – 00:20:47:11
Holly Williams
I was referring to just what the you know, by, you know, the Jim Cramer’s, you know, the, the tell our media.

00:20:47:12 – 00:20:49:00
Rod Khleif
Oh, God, oh, God, I spent.

00:20:49:02 – 00:20:52:19
Holly Williams
30 years in and. I’m also referring to, you know, I.

00:20:52:22 – 00:20:56:16
Rod Khleif
You want to go political, should we go political to I mean, let’s blow this up. Yeah.

00:20:56:18 – 00:21:06:02
Holly Williams
Well, I’ve got a couple of friends I invested with them almost every time, you know, and some have turned out right in the long haul.

00:21:06:04 – 00:21:06:13
Rod Khleif
Right.

00:21:06:14 – 00:21:12:29
Holly Williams
But the investment wasn’t that fabulous either, because I really didn’t.

00:21:13:03 – 00:21:31:23
Rod Khleif
You didn’t dig in. You didn’t really? Yeah. You didn’t. Yeah. You didn’t do all the homework you could have done. Hey, we, you know, life gets in the way and and, you know, I’ve, I’ve invested with people that I trusted and, and unfortunately, I’ve got, you know, big, big partnership going down right now and dealing with the fallout of that.

00:21:31:23 – 00:21:48:17
Rod Khleif
And it’s it’s a mess. But but you know, it happens and I and I, and I teach this stuff. So you know, I mean, you know, don’t feel bad if you’re listening and you’ve had a, you know, partnership fail or, you know, a bad business relationship because, again, I teach people how not to let that happen. And I’m in the middle of one myself.

00:21:48:17 – 00:21:49:07
Rod Khleif
So, you know.

00:21:49:14 – 00:21:50:03
Holly Williams
You recover.

00:21:50:03 – 00:22:00:08
Rod Khleif
From it. Yeah. No for sure. And I mean, you have partnered with some really top shelf guys that I have a lot of respect for and like, and they’re friendly. In fact, they’ve been on my podcast as well. Yeah.

00:22:00:10 – 00:22:02:20
Holly Williams
Who will crawl over broken glass?

00:22:02:26 – 00:22:03:13
Rod Khleif
That’s right.

00:22:03:14 – 00:22:06:02
Holly Williams
Before we will let anybody lose money.

00:22:06:03 – 00:22:06:21
Rod Khleif
Right, right.

00:22:06:22 – 00:22:07:04
Holly Williams
I mean.

00:22:07:05 – 00:22:09:20
Rod Khleif
Seriously, same same here. Same here. It’s.

00:22:09:22 – 00:22:11:10
Holly Williams
You know, Wall Street’s not going to do that.

00:22:11:10 – 00:22:12:22
Rod Khleif
No, no, no they don’t.

00:22:12:27 – 00:22:14:22
Holly Williams
And they’re spending distributions too.

00:22:14:23 – 00:22:15:07
Rod Khleif
Oh yeah.

00:22:15:09 – 00:22:34:04
Holly Williams
That’s what I think. You know, in a lot of it’s just almost you know, think about your personal personal life. You know, they were talking about in New York City reassessing all the houses and doubling the tax. You know, if they did that, our taxes would double. Well, I spend and I started saving a little more money. Yeah.

00:22:34:06 – 00:22:35:14
Holly Williams
Because what are we going to do with.

00:22:35:14 – 00:22:39:01
Rod Khleif
The New York’s already overtaxed and overregulated? Don’t get me started.

00:22:39:02 – 00:22:57:22
Holly Williams
Yeah. Don’t get me started on that either. But that’s what you do. So when we’re in a multifamily situation and we know that the rate caps and we know all this is coming, it may be a year and a half away, but we need to we need to build up more reserves as fast as we can so that we’re prepared for that.

00:22:57:23 – 00:22:59:09
Holly Williams
Because you don’t want to lose money.

00:22:59:10 – 00:23:16:07
Rod Khleif
Right. Yeah. Same. Yeah. That’s the that’s the name of the game, you know. And when I stepped into this particular partnership to, to step into asset management to do what I could to rectify it, you know, I noticed just how bad some of these management companies are. They’re so bad.

00:23:16:10 – 00:23:18:01
Holly Williams
Terrible and so terrible.

00:23:18:02 – 00:23:39:07
Rod Khleif
And I was I was dealing with properties in seven states and, you know, and and what I noticed was it doesn’t matter if you get a very well recommended management company, huge management company. Everything depends on the on site staff, everything, everything. The whole you could have a terrible management company, the great onsite staff. They’ll do fine.

00:23:39:09 – 00:24:05:21
Rod Khleif
You could have a great management company with a bad onsite staff. And that’s what I saw a lot of because we had to bring in new management and they’re just terrible, absolutely terrible. Their accounting is terrible, their marketing is terrible. Their their oversight of the on site staff is terrible. And what I’ve come to realize is that the most successful, in my view, in my experience so far, operators are the ones that vertically integrated self-manage.

00:24:05:22 – 00:24:06:27
Holly Williams
Well, that is what we’re doing.

00:24:06:28 – 00:24:07:22
Rod Khleif
That’s what you’re doing.

00:24:07:24 – 00:24:10:18
Holly Williams
We’re done. We’ve got three properties, right.

00:24:10:21 – 00:24:14:27
Rod Khleif
Good for you. Same here. I’m moving towards that in in the markets that I’m in.

00:24:15:03 – 00:24:37:06
Holly Williams
No one is going to care about it. That’s right. When you’re renting an apartment, you know you can’t you can’t teach enthusiasm. You can’t teach a caring, right. No one is going to care more about your your stuff. Because I care about investors. Because you know what? Because I’m invested in all of them, too. Are you sitting me?

00:24:37:10 – 00:24:55:25
Holly Williams
Right. Let me tell you. I mean, I’m I’m I know I look like I’m 30, but I’m really 63 years old, you know, so I don’t have, you know, it’s a curse that I look like I’m 30, but, you know, seriously, it’s it’s it’s. I don’t have a lot of time, you know, I my investors are like that.

00:24:55:25 – 00:25:01:05
Holly Williams
And I mean, you know, I got into this because my parents ran out of money.

00:25:01:06 – 00:25:01:29
Rod Khleif
Oh, no kidding.

00:25:02:00 – 00:25:04:17
Holly Williams
Yeah. Pretty much. Yeah. I mean, they had a little.

00:25:04:18 – 00:25:06:05
Rod Khleif
But you grew up in New York, too?

00:25:06:06 – 00:25:07:29
Holly Williams
No, I grew up in Houston.

00:25:08:00 – 00:25:09:02
Rod Khleif
Oh, Houston. No kidding.

00:25:09:09 – 00:25:15:09
Holly Williams
And I came to to New York to work for a Arbitron, the radio ratings company.

00:25:15:10 – 00:25:16:02
Rod Khleif
Oh, no kidding.

00:25:16:03 – 00:25:18:25
Holly Williams
Of in New York. And I got up here, and I just loved it.

00:25:18:26 – 00:25:22:01
Rod Khleif
Yeah, well, I don’t look as good as you when I’m 65.

00:25:22:02 – 00:25:24:01
Holly Williams
No, you’re not sick. No way.

00:25:24:07 – 00:25:31:17
Rod Khleif
Yeah, but anyway. So. So management companies. Yeah, I it’s been a nightmare to deal with these companies.

00:25:31:17 – 00:25:33:01
Holly Williams
And it’s our biggest problem.

00:25:33:02 – 00:25:36:10
Rod Khleif
It really is. And so, you know, as you get into this.

00:25:36:17 – 00:25:38:16
Holly Williams
Reason for expenses. Yeah. Sorry to interrupt.

00:25:38:16 – 00:25:54:01
Rod Khleif
Oh no question. As you get into this business guys, you’re going to discover that, you know, they need a tremendous amount of oversight. Like I just visited an asset that we have in Nashville. And basically I have to I told the I told the management company, you need to fire the whole team here. They’ve got to go. And so they’re gone.

00:25:54:01 – 00:26:12:06
Rod Khleif
We got a new manager in there. And the same thing happened with an asset in San Antonio. I had to fire the team, had to fire both regionals for that matter. Both regionals had to go. You know, by the way, when you work with the management company, they’ll be onsite staff, onsite property manager. They’ll be an assistant, maybe leasing agent, maintenance supervisor, maintenance porter.

00:26:12:08 – 00:26:31:02
Rod Khleif
But there’ll be a regional manager that manages those on site managers. And the regional may have 7 or 8 properties that they manage. But by the way, on that front, if you’re going to hire a third party property management company and you’re listening to me and you’ve got an asset, I’ve got a fantastic book on the questions you should ask and the due diligence you should do.

00:26:31:03 – 00:26:40:25
Rod Khleif
Called How to Hire a Third Party Property Management Company. And it’s at my Linktree, Rod’s links. It’s one of the free books there, and it’s really good report.

00:26:40:29 – 00:26:44:08
Holly Williams
Lot of good things. Thank you for for people.

00:26:44:09 – 00:26:45:03
Rod Khleif
Well, I appreciate that.

00:26:45:04 – 00:26:59:09
Holly Williams
I mean, you really do. And, you know, you look at the people you want to work with or those people. Yeah, right. The more the more. And so I think that you find that in private investments and you don’t.

00:26:59:10 – 00:27:05:00
Rod Khleif
Oh, you don’t find that in the stock market or in these rights or things like that, because their secondary gain is, is, is fees.

00:27:05:01 – 00:27:08:05
Holly Williams
And if you didn’t grow up wealthy, right, you don’t know.

00:27:08:08 – 00:27:09:01
Rod Khleif
Right?

00:27:09:03 – 00:27:10:07
Holly Williams
You really don’t know.

00:27:10:08 – 00:27:16:03
Rod Khleif
No. And you know, financial advisors are going to push you to their book of business. You know.

00:27:16:06 – 00:27:18:10
Holly Williams
It’s not even their fault. This is.

00:27:18:13 – 00:27:41:07
Rod Khleif
Exactly the same. That’s how they were trained. No, that’s exactly right, doctor. Same thing. You know, I’m very big into natural medicine and, you know, supplementation and exercise and all that stuff. And, you know, doctors are trained by the pharmaceutical companies, just like you said. And so they’re wonderful people, but they’re going to prescribe things. They’re going to give you pills rather than tell you to eat better and get off your ass and go work out.

00:27:41:08 – 00:27:41:20
Rod Khleif
Right.

00:27:41:22 – 00:27:53:21
Holly Williams
So our industry has changed. And back to management companies. What worked for them, you know, when the getting was good? Five, six, seven, eight, nine, ten years ago. Right. Isn’t working now.

00:27:53:24 – 00:28:02:11
Rod Khleif
And that’s the you know, it’s the emperor’s clothes. You know, the water is going out and you see who’s naked in these management companies that don’t know how to manage properly.

00:28:02:19 – 00:28:22:04
Holly Williams
We had people. This was last week. I just have to tell this one story. Yeah. Five tenants wanted to come in and rent apartments, but they didn’t want to move in until June 1st. Right? And we’re like, we’ve got an occupancy problem. Right. And they sent them. No, we can’t do it. Can’t honor them. I mean, are you out of your mind?

00:28:22:08 – 00:28:23:01
Rod Khleif
Good lord.

00:28:23:02 – 00:28:26:07
Holly Williams
Are you really out of here? I mean, we’ve got an accuracy problem.

00:28:26:08 – 00:28:32:02
Rod Khleif
You can’t make these stories up. And I got tons of these with management companies. And like I said, I’ve had to clean house.

00:28:32:09 – 00:28:34:29
Holly Williams
I mean, I talk a whole podcast about that.

00:28:35:01 – 00:28:47:09
Rod Khleif
And, you know, I go and I visit these assets and I’m like, are you not seeing what I’m seeing here? You know, and and just just crazy. No attention to detail whatsoever.

00:28:47:10 – 00:28:49:19
Holly Williams
Right. And that’s what makes the difference.

00:28:49:20 – 00:29:06:21
Rod Khleif
Everything. That’s everything. If the if the asset looks good, it’s clean and it looks good. And when the, when somebody walks in, they jump out and with a big smile on their face to help them lease and build rapport. You’re great. That’s right. That’s it. And but you know, they hire these slugs. They don’t train them. They don’t know them.

00:29:06:23 – 00:29:07:01
Rod Khleif
They don’t.

00:29:07:01 – 00:29:11:19
Holly Williams
Empower shopping. And they’re not. That’s right. What the what they’re even up against.

00:29:11:23 – 00:29:31:17
Rod Khleif
Right. You got a secret shop to. That’s another thing. You send people into secret shop and see how they’re doing and that that tells you a lot. But you know, we’re we’re sounding very negative about the business right now because because she and I are commiserating, because we’ve been had our butts kicked this last year or two. But, you know, we’re obviously still very bullish on the business.

00:29:31:18 – 00:29:48:03
Holly Williams
Here’s the deal, rod. And what I love about this business. Yeah, all the things that we’re talking about, first of all, people should be on the lookout for well sure number because we had no idea that they were as bad as they were. Right, right. And then this is fixable.

00:29:48:05 – 00:30:09:26
Rod Khleif
Well, it is, yes. So I told my investors, you know, both those assets I went visited. Hey, now we know what the problem is. Now we know where there’s an occupancy problem because the place looks like crappy. The breeze ways were filthy. I had them all pressure washed immediately. You know, on the other asset. Trash everywhere. I’m like, come on, you know, and and and no one would lease here that’s any good, right?

00:30:09:28 – 00:30:12:00
Rod Khleif
So so and so you know.

00:30:12:02 – 00:30:14:10
Holly Williams
That’s half the message is.

00:30:14:12 – 00:30:15:23
Rod Khleif
You got to keep an eye on the ball.

00:30:15:24 – 00:30:17:11
Holly Williams
If you need to go pick up trash.

00:30:17:12 – 00:30:19:06
Rod Khleif
That’s it. I was picking up trash.

00:30:19:10 – 00:30:27:17
Holly Williams
That’s right. Done it too. And a lot of times yeah. And and you know, it’s it’s that’s, that’s part of this and it’s not all.

00:30:27:18 – 00:30:31:15
Rod Khleif
But you got to find these staff on site staff that take ownership. They care about it.

00:30:31:17 – 00:30:32:24
Holly Williams
You got to show them how to do it.

00:30:32:25 – 00:30:41:28
Rod Khleif
Yeah. Show them how to do it. Then you praise them and you validate them, and you make them feel good about what they’re doing, and and they’ll they’ll walk through water for you. I mean, they.

00:30:41:28 – 00:30:42:09
Holly Williams
Want some.

00:30:42:10 – 00:30:42:29
Rod Khleif
Fire for you.

00:30:42:29 – 00:31:02:06
Holly Williams
That’s right. They really will. Yeah. And that’s and a lot of, you know, it really comes down to managing people. I have a friend who’s an orthopedic surgeon and he says it’s not it’s not the knee replacement. That’s the problem. It’s it’s all the people management of everybody that’s got to be around to help me replace the knee.

00:31:02:08 – 00:31:10:18
Rod Khleif
And that’s exactly right. You know, every business is nothing but systems and and people. You get the systems right and you get the right people. Success is inevitable.

00:31:10:18 – 00:31:31:27
Holly Williams
That’s why it’s so important to have business experience. And that’s that’s been more valuable to me than anything else, is that I’ve I’ve been in business before, and that’s one of my requirements to, to invest with people that have been successful in business and why I, you know, I have a, you know, I have a daughter that’s in college and I want her to go work for a big company.

00:31:31:28 – 00:31:36:00
Holly Williams
You know, I really do, because I think it’s really important to understand how they all work.

00:31:36:01 – 00:31:58:04
Rod Khleif
Yeah. It’s great framework for being your own entrepreneur. If you if you work for a successful company that knows what they’re doing. I was listening to a fantastic interview on Tim Ferriss. You know, I listened to two, I listen to two podcasts. I listened to Tim Ferriss and Joe Rogan. So I get both sides of the aisle. Okay, I’m definitely on one side, but I hear on the Tim Ferriss side.

00:31:58:07 – 00:31:59:16
Holly Williams
I suspect we’re on the same side.

00:31:59:18 – 00:32:27:18
Rod Khleif
I’m certain we are pretty much any business person is. But but you know, on the on the on this Tim Ferriss show, he’s interviewing the guy that started Expedia and Zillow and Glassdoor, which is the employee rating service. And I mean, just a brilliant interview about, you know, business strategy and people hiring and and yeah, by the way, guys, I would absolutely recommend that interview.

00:32:27:18 – 00:32:55:13
Rod Khleif
I think it’s episode 806 because I sent it to like three people. But anyway, yeah, I mean, and and the other thing is, is in this or any business is that continue a learning process that continue growth process. Right. And, you know, not just I mean, yes, staying on top of what’s happening. Like, I’m sure you get every possible research paper that comes out like I do, you know, see our daily and, you know, all the broker specific things and but it’s it’s continuing.

00:32:55:16 – 00:32:59:13
Rod Khleif
And you were you were at one of my events I did. Yeah. In you’re continuing your.

00:32:59:16 – 00:33:17:00
Holly Williams
Went to one of your beginner right events. Right. And I love the workbook that had all of that stuff. Thank you. And you you never. And I met a couple of really great people. Sure as well. Sure. And so you never know. I’ve never gone anywhere or listened to a where something.

00:33:17:04 – 00:33:29:17
Rod Khleif
You didn’t pick something up and we met at the other. I mean, that was the event that I did my three day, but also we met at another Dan’s event, Dan’s conference, and where I was on stage doing a little dog and pony thing. And you were there.

00:33:29:17 – 00:33:35:10
Holly Williams
So you’re you’re in the ice. You said, we gotta we gotta exchange numbers.

00:33:35:15 – 00:33:52:26
Rod Khleif
That’s right, that’s right. When I was done speaking, I remember we met. Yeah. So I mean, you you subscribe to that continual education piece as well. Yeah. So let me ask you this talk about some, some seminars that you’ve had. I don’t call them failures. I call them seminars. And I’ve had big ones. You know, I lost $50 million in 2008.

00:33:52:26 – 00:34:11:20
Rod Khleif
I don’t know if you know I know. Yeah, yeah. So so talk about talk. I mean, we all I mean, you’re in the business. I’m in the business. We’ve got a menu of options with that question. But talk talk about something that might add some value for you if it comes to mind. You know, where you, you know, had a had a seminar and you know, and a learning experience.

00:34:11:27 – 00:34:16:22
Holly Williams
Well, when you say seminar, you want to hear how I learned in the real world.

00:34:16:23 – 00:34:20:04
Rod Khleif
Well, I’m talking about a setback, really. But you that you that you.

00:34:20:04 – 00:34:28:12
Holly Williams
Recover one setback. We’ve sort of already touched on it. Okay. But one setback was property we had in Houston, and Harvey flooded.

00:34:28:18 – 00:34:29:06
Rod Khleif
Oh, God.

00:34:29:08 – 00:34:40:10
Holly Williams
Places that no one had ever nothing had ever flooded. Right. And about half of this 500 unit, you know, complex was was uninhabitable.

00:34:40:11 – 00:34:40:22
Rod Khleif
Oh my.

00:34:40:22 – 00:35:04:10
Holly Williams
God, you know what we did? We worked very hard and helped the residents get in other places or whatever. And then when the insurance finally we suspended distributions. But when the insurance finally came through, we had a brand new asset and there was a housing shortage in Houston. Perfect. So a lot of this, you know, you a lot of this, you cannot give up.

00:35:04:10 – 00:35:17:15
Holly Williams
There is always a way and and talk to people. I tell people don’t take advice with anybody for any you know, that doesn’t have more experience than you find people that you want to want what they have and you do what they do.

00:35:17:18 – 00:35:29:27
Rod Khleif
Get around people that know more than you. That’s how you learn. You know, I had formed a mastermind years ago. It was called the Multifamily Boardroom. I, I got it was like herding cats after a while, but there was probably 40 or 50 billion in assets in.

00:35:29:27 – 00:35:31:04
Holly Williams
There as well.

00:35:31:05 – 00:35:46:05
Rod Khleif
Yeah. And they’re fantastic. And you pick up these little nuggets and you know, if you’re playing tennis, you want to play somebody better than you or worse than you. I mean, hello, it’s the same thing in any, any business. So guys you’re listening. Get around people that think what you think is hard as easy. Go to the meetup groups.

00:35:46:05 – 00:35:54:26
Rod Khleif
Go to the real estate investor clubs. Go to these events like my event and other events that people have. And and it just accelerates your learning process.

00:35:54:27 – 00:36:13:05
Holly Williams
You know, people ask me how was the best way to get into this business, multifamily. And they’re young. Maybe they don’t have a lot of experience. And I tell them to go get a job at a management company, sure. To go manage one of these things, and you’ll learn more doing that on what’s involved, because a lot of it is hard.

00:36:13:06 – 00:36:17:24
Holly Williams
Sure. You know, a lot of it is just hard. It’s you think it’s going to be.

00:36:17:25 – 00:36:20:06
Rod Khleif
Like, it’s not rocket science, but it’s work. You’ve got.

00:36:20:06 – 00:36:20:16
Holly Williams
To do.

00:36:20:16 – 00:36:21:12
Rod Khleif
It work. Yeah.

00:36:21:13 – 00:36:26:08
Holly Williams
It’s a lot of work. And that’s what makes the difference between something that’s successful in something that is.

00:36:26:10 – 00:36:42:11
Rod Khleif
Sure, I can tell you, my students, you know, like I said, they own 260,000 units. And and, the ones that that are successful aren’t the smartest. They’re not the ones with the most money. They’re not the ones that live in the big cities. They’re the ones that just go out there and kick butt and make it happen.

00:36:42:14 – 00:37:05:04
Holly Williams
I’m invested in a couple of deals that have not gone well, and I will tell you that the operator, well, not immediately, but on the next deal or the deal, you know, they have made it, right? Yeah. And paid back investors. I mean, I have 11I know of operators that have said, okay, I’m going to give you your preferred return.

00:37:05:04 – 00:37:09:11
Holly Williams
It might take two years, but I’m going to pay you every month. Nice. You know, and.

00:37:09:13 – 00:37:10:18
Rod Khleif
Well, that’s that’s integrity.

00:37:10:19 – 00:37:27:05
Holly Williams
Yeah. And you can’t say that to investors when they, you know, and all that. But I will say that that you know it’s not always it’s not sometimes it’s just not possible. You know, if you invest in something that’s it’s I mean, it could go bad. Nothing’s ever guaranteed.

00:37:27:06 – 00:37:27:27
Rod Khleif
Sure, sure.

00:37:27:28 – 00:37:33:27
Holly Williams
But you really have to work with people that have that. I believe that’s this mindset.

00:37:34:03 – 00:37:35:21
Rod Khleif
Yeah. No question.

00:37:35:23 – 00:37:37:21
Holly Williams
And if you’re in it for the money, forget it.

00:37:37:22 – 00:37:46:20
Rod Khleif
Yeah. No, you’ve got to love it. Yeah. If you don’t love what you do, life’s life, life’s miserable. I mean, when you do love what you do, work is play and you never work another day in your life.

00:37:46:20 – 00:37:48:07
Holly Williams
I’ve worked a little bit, but. Yeah.

00:37:48:08 – 00:37:59:12
Rod Khleif
Yeah, but. But yes. Okay. Fair enough. Fair enough. But that’s how when you love it, you push through the obstacles. You know you have passion for it. People feel your passion and they want to work with you.

00:37:59:13 – 00:38:22:12
Holly Williams
You know, I moved down here to Sarasota, right? Right. And and I have some investors that live here, and we we have suspended distributions and some of them aren’t going as well as they go. Right. And I’m like never like. Right, right. And and you know, are you kidding me? I, you know, I feel good about what I’m doing.

00:38:22:18 – 00:38:25:22
Holly Williams
Right? Because I’m telling you it’s going to be okay.

00:38:25:23 – 00:38:30:17
Rod Khleif
It’s going to be okay. You’ve got your preferred return. You’re going to get that at a minimum. Relax.

00:38:30:18 – 00:38:34:15
Holly Williams
Are you going to get rich and be able to sail off to the. No.

00:38:34:16 – 00:38:35:19
Rod Khleif
Maybe not. Right.

00:38:35:20 – 00:38:39:02
Holly Williams
But you’re not going to lose money, right? You know.

00:38:39:04 – 00:38:39:15
Rod Khleif
So.

00:38:39:16 – 00:38:42:23
Holly Williams
If you do we’re going to figure out how to sell pencils on the street.

00:38:42:25 – 00:38:51:10
Rod Khleif
And we’ll figure it out. Yeah, we’ll figure it out. You know? So, you wrote a book. I did talk about that.

00:38:51:16 – 00:38:55:21
Holly Williams
It’s basically about the Ten Myths of Money, one of the.

00:38:55:21 – 00:38:57:17
Rod Khleif
Chapters on Amazon or anything, or just.

00:38:57:18 – 00:39:17:27
Holly Williams
Hidden investing. Hidden investing. Hidden investing. What? The wealthiest? No, that we don’t. It’s about growing up wealthy. And things that I learned when I was so shocked. I mean, I was so shocked that people that were so much smarter than me and so many had their net worth. You know, my net worth was a square root of their net worth, right?

00:39:17:27 – 00:39:20:02
Holly Williams
Right. And they didn’t know what I was talking about.

00:39:20:03 – 00:39:21:05
Rod Khleif
Yeah. In that fascinating.

00:39:21:05 – 00:39:36:25
Holly Williams
It is just amazing. And I thought it was a scam. And and you know, one of my chapters is trust the extroverts. You know, that’s one of the things, you know, the air is safe at ground zero, right? It’s just like the experts don’t know often anymore than you know.

00:39:36:27 – 00:39:51:19
Rod Khleif
Oh, no, that’s absolutely correct. That’s absolutely correct. And you should question everything. Everything. Yeah, yeah. So, now what do you think is the most challenging? Well, I think we’ve talked about Brian. Brian, cut that out. Hang on one second.

00:39:51:21 – 00:39:52:14
Holly Williams
Without a doubt.

00:39:52:14 – 00:40:06:04
Rod Khleif
That’s. Yeah. So, Holly, what are some words? You know, I have a lot of listeners that want to do what we do, okay, I teach them, I love that. And and obviously get your butt to my boot camp. Hello. But. But what?

00:40:06:11 – 00:40:08:00
Holly Williams
Miss that. Seriously.

00:40:08:00 – 00:40:17:13
Rod Khleif
Thank you. So what words of wisdom would you share with an aspiring real estate investor? What what what might you share with them?

00:40:17:16 – 00:40:48:02
Holly Williams
What I love about real estate investing is that we talked about something is fixable, right? Well, it’s fixable and we can fix this and not depend 100% on the whims of the market and what the banks are doing, or what the president is doing, or who’s in office here and there. And and so the more control you have over the situation.

00:40:48:02 – 00:40:56:09
Holly Williams
And so it’s very important to be able to raise to, to to have enough reserves more than you need. Right, right.

00:40:56:10 – 00:41:04:28
Rod Khleif
Oh yeah. We’re over reserved on the one we bought in 23. I mean, we just talked about it today. We’ve got 2 million in the bank on a 200 unit asset. So I mean that’s some reserves, right?

00:41:04:29 – 00:41:26:07
Holly Williams
It’s very. Important to if you buy something that the occupancy is 90%, it needs to it needs to still cash flow. It doesn’t need to make a lot of but it needs to be cash flow positive at like 80% 75%. That’s right. Right. And it needs to also you need to have a loan that’s at least twice as long as as the business plan basically.

00:41:26:08 – 00:41:40:10
Holly Williams
Yeah. Right. Now that’s not to say that we can’t run out of, you know, in a market. People that have been in this for 50 years have told me, I mean, really old people who have said, there’s never been a market like this, right?

00:41:40:11 – 00:41:41:12
Rod Khleif
Oh, it’s crazy right now.

00:41:41:13 – 00:41:45:28
Holly Williams
So if you can navigate through this and deals are to be had.

00:41:45:29 – 00:41:52:06
Rod Khleif
Oh, they’re coming, they’re coming. I tell people, if there’s ever a time to get in here, it’s right now because they’re coming. Yeah.

00:41:52:07 – 00:41:53:14
Holly Williams
For sure. Tell my daughter that.

00:41:53:15 – 00:42:16:11
Rod Khleif
Yeah. Good, good. So, Holly, I love to ask this question because I usually I get the same answer, but I’m curious if I get it from you. So if you went back and told 21 year old self, like your daughter, for example, something with knowing what you know now, what might you do differently?

00:42:16:13 – 00:42:25:29
Holly Williams
Add value wherever you can. That’s the most important thing when you are working for, not about your career. It’s about your boss.

00:42:26:05 – 00:42:29:25
Rod Khleif
How about real estate in general though? But but yes, I agree completely with that.

00:42:29:25 – 00:42:31:19
Holly Williams
First of your partners.

00:42:31:20 – 00:42:45:04
Rod Khleif
I agree with that answer absolutely 100%. In fact, that’s how I built this podcast. My focus was just adding value. If you listen to the first few episodes, I say, you know, my focus is to add value. I’m never going to sell you anything now I’m a liar because I sell everything.

00:42:45:04 – 00:42:55:24
Holly Williams
I got into this because I didn’t understand, because so many people didn’t know about it. Right. And I watched my parents, right, have to withdraw from the stock market when it was down and they got hosed.

00:42:55:25 – 00:42:57:05
Rod Khleif
Right? Yeah, yeah.

00:42:57:06 – 00:42:58:29
Holly Williams
And that’s the whole reason I got into this.

00:42:59:01 – 00:43:09:27
Rod Khleif
So that’s a lot that’s happening to a lot of people right now actually. But you know, if someone asks you how to get into this business besides your book, is there another book that you give to more than another?

00:43:09:29 – 00:43:13:25
Holly Williams
I would say go to as many of conferences like yours.

00:43:13:26 – 00:43:14:13
Rod Khleif
Right, right.

00:43:14:14 – 00:43:30:29
Holly Williams
That you can write, talk, read as many books as you can. Right? But really, you need to find a group of like minded people that are smarter than you and have done this. Yeah. And then try to add value to them.

00:43:31:00 – 00:43:44:10
Rod Khleif
Yeah. Great answer. That’s that’s where my warriors, my coaching students, are so successful because they do these deals together. And I tell the new ones, I say, figure out how you can add value. You’re going to bring deals. You’re going to bring money. You know, you’re going to underwrite. What are you going to do to help them be boots on the ground?

00:43:44:10 – 00:43:45:05
Rod Khleif
What are you going to do?

00:43:45:06 – 00:43:48:01
Holly Williams
This is a team sport. You can’t you can’t do one of these fires.

00:43:48:02 – 00:44:03:28
Rod Khleif
They’ve heard they’ve heard me say that a thousand times. This is a team sport, guys. And there’s so many different hats you can wear. So you just got to. And you play to your strengths. And when you play to your strengths again you’re going to enjoy it. You’re going to be able to get over the hurdles and the speed bumps and, and and you’ll be passionate.

00:44:03:28 – 00:44:09:16
Rod Khleif
Like I said, passion is so important. Let me ask you this. Did you have any fear when you first got started?

00:44:09:18 – 00:44:10:08
Holly Williams
Fear all the time.

00:44:10:09 – 00:44:12:06
Rod Khleif
Okay, so how do you get over the fear?

00:44:12:09 – 00:44:14:28
Holly Williams
Last night I had fear.

00:44:15:00 – 00:44:16:01
Rod Khleif
What do you do to get.

00:44:16:01 – 00:44:17:27
Holly Williams
Over this? You have to have faith.

00:44:17:29 – 00:44:19:07
Rod Khleif
I love that that’s a better f.

00:44:19:07 – 00:44:40:28
Holly Williams
Word that it’s fear with faith, right? I mean, so yeah, I’m I’m I’m concerned, let’s call it that. But I also look around at people that have been through whatever it is, what I’m going through. Right. And they’ve gotten through it.

00:44:41:01 – 00:44:50:20
Holly Williams
Little thing. I mean, little things. You just have to remember, you know, there’s a lot of things you didn’t know how to do. And and don’t be afraid to ask.

00:44:50:22 – 00:44:58:27
Rod Khleif
That’s right. And how do you do? Well, one bite at a time. You know, you’re going to get into this or any business. You just got to get started and and. Yeah.

00:44:59:03 – 00:45:07:23
Holly Williams
And getting started, you know, really can be, you know, finding what the where the pain point is and going and helping somebody.

00:45:07:24 – 00:45:23:02
Rod Khleif
Yeah. Yeah. You know so yeah that’s the thing. And, and that’s what makes this business so beautiful is that there’s so many different places you can put a hat on and and get started. That’s right. You know. And so yeah.

00:45:23:04 – 00:45:23:21

Do you.

00:45:23:26 – 00:45:27:22
Rod Khleif
So faith is how you got past fear. That’s your answer. That’s a good answer okay.

00:45:27:23 – 00:45:29:18
Holly Williams
Yeah. Definitely. Faith.

00:45:29:20 – 00:45:32:02
Rod Khleif
What’s your definition of success?

00:45:32:04 – 00:45:34:24
Holly Williams
I think being able to sleep at night most of the time.

00:45:34:25 – 00:45:35:24
Rod Khleif
Yeah. Okay.

00:45:35:25 – 00:45:44:04
Holly Williams
You know, and it’s never been I’ve never had probably not ambitious enough maybe. But ambitious is a different you know.

00:45:44:10 – 00:45:50:08
Rod Khleif
That’s really funny. That’s really comical. That’s comical coming from you. Not ambitious enough. That’s really funny.

00:45:50:09 – 00:46:04:15
Holly Williams
But. Yeah. And and I’ve always I don’t think I am I think that that, that I want to be able to go to a as far as money financially, I want to be able to go order whatever I want to order. And if I really want to do something, I really.

00:46:04:17 – 00:46:05:28
Rod Khleif
Just do it at that place.

00:46:06:01 – 00:46:14:05
Holly Williams
That’s right. So that’s why I’m okay, you know? You got to be okay. And you know what? You’re right where you’re supposed to be most of the time.

00:46:14:06 – 00:46:22:05
Rod Khleif
You know, 99% of what we worry about never comes to food. That’s exactly right. Yeah. There’s a book called Don’t Sweat the Small Stuff, and it’s all small stuff.

00:46:22:06 – 00:46:35:00
Holly Williams
Look at the Federal Reserve. They need to drop interest rates. I’m sorry. I don’t know when this is going to air, but they need to drop interest rates. Hello? And they didn’t drop interest rates because they are afraid.

00:46:35:02 – 00:46:35:24
Rod Khleif
Of inflation.

00:46:35:25 – 00:46:38:08
Holly Williams
The tariffs are going to cause inflation. Are you kidding.

00:46:38:08 – 00:46:39:19
Rod Khleif
Me please. The tariffs.

00:46:39:21 – 00:46:40:09
Holly Williams
They haven’t.

00:46:40:10 – 00:46:43:14
Rod Khleif
How do you hold on here okay okay. Yeah. You said the word.

00:46:43:16 – 00:46:43:28
Holly Williams
You said.

00:46:43:28 – 00:46:48:25
Rod Khleif
The word. You said the word. So now we got to dig into for just a minute. So what are your thoughts on the tariffs.

00:46:48:26 – 00:46:51:21
Holly Williams
I don’t know listen I’m not an economist okay.

00:46:51:21 – 00:46:53:04
Rod Khleif
But you have it. You have.

00:46:53:04 – 00:46:58:16
Holly Williams
An opinion that American man America. We need to start supporting our own halo.

00:46:58:18 – 00:47:09:24
Rod Khleif
And and we’ve been screwed forever by countries like China. Okay. And even Canada. Hate to say it, but we have. We’ve been screwed forever. And, you know, it’s time to. It’s time to.

00:47:09:28 – 00:47:14:18
Holly Williams
What are we? Why are we helping countries that are doing better than we are? Almost.

00:47:14:19 – 00:47:19:28
Rod Khleif
And don’t get me started on all the money that went to Ukraine, that came back to our military industrial complex. But.

00:47:20:00 – 00:47:28:21
Holly Williams
You know, I just came from New York, right? Yeah. I’m sorry, but nobody wants to live in the subway or under a bridge. Thank you. We’re not helping these people.

00:47:28:22 – 00:47:42:29
Rod Khleif
No, no, but, you know, I heard about, you know, I was listening to Joe Rogan on this because he interviews people that that are very ingrained in that whole thing and the people that that get all these billions of federal dollars to help homelessness. They don’t want to fix it because they lose their jobs.

00:47:43:00 – 00:47:43:20
Holly Williams
That’s exactly.

00:47:43:22 – 00:47:45:28
Rod Khleif
That’s what’s happening. It’s ridiculous.

00:47:45:29 – 00:47:48:14
Holly Williams
It goes back to to the bunker mentality.

00:47:48:15 – 00:47:48:23
Rod Khleif
Yeah.

00:47:48:24 – 00:48:01:08
Holly Williams
It’s back to having faith that if you’re successful at eradicating homelessness. Hello. Right. You can go. And I was successful. Look what I did. Are you kidding me? You’re going to be famous.

00:48:01:09 – 00:48:01:23
Rod Khleif
That’s right.

00:48:01:25 – 00:48:04:03
Holly Williams
No. Everybody is going to want to hire you to do anything.

00:48:04:04 – 00:48:20:10
Rod Khleif
But that’s the issue, though, because, you know, they’re entrenched and they don’t want to give up their big paychecks. Right. Well, listen, this has been a hoot. It’s so grateful that you’re here in this town now. And I got you close by. And we’ll have to we’ll have to grab a.

00:48:20:12 – 00:48:28:23
Holly Williams
Grateful to. And I’m grateful to all of the people in this business, you know, that have that have helped me. And I learned from all the time.

00:48:28:24 – 00:48:31:26
Rod Khleif
Yeah. Same here. Same here. Well, it’s great to see you. Thanks for coming.

00:48:31:27 – 00:48:33:00
Holly Williams
Great to see you, too.