Planning For Success In Multifamily

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’m thrilled you’re here. And you’re going to get tremendous value from the gentleman I’m interviewing today. His name is Dave Codrea and he’s a co-founder and partner at Green Leaf Capital Partners. And boy, they have done tons of stuff. And so I’m not even going to attempt to go through all of the things that they’ve accomplished, the transactions that they’ve done. But we are going to have an incredible, wide-ranging conversation today. Dave, welcome to the show, brother.

Dave
All right, Rod, thank you very much. I’m excited to be here. I’ve listened to a bunch of your episodes. It’s always exciting to hear what’s going on in the multifamily space.

Rod
I appreciate that very much. Well, why don’t you, you know, start out by giving us your background? You know, why real estate, when you got started and maybe some highlights along the way and bring us current?

Dave
Yeah. I mean, I got started in real estate really like at the end of high school. It’s something I’ve wanted to do forever. And I started out basically as cheap as you possibly could find something to buy that was like an abandoned townhome. That’s where I started. It took me a few years before I got into three or four-unit, basic converted row homes and eventually worked my way into what I would say is pure multifamily.

Rod
Where, by the way, where did you start?

Dave
I started up in Pennsylvania.

Rod
Okay.

Dave
So I was in the north of Philly and eventually, now I’m down in Atlanta.

Rod
Okay.

Dave
It’s a lot warmer. So that was always a goal to get further south. But I started in Atlanta in 2008. So that was a prime time to start acquiring, invest assets.

Rod
Perfect time, actually.

Dave
And that worked out well. And throughout that time frame, I’ve done a mix of single-family homes. I’ve done some student housing rentals that were, you know, in multifamily space as well, kind of a subset there. And then what I call the pure multifamily apartment buildings and then mobile homes as well. So a little bit of a mix of–

Rod
You’ve been in over 4,000 doors on the multifamily front. I see here 2 million square foot of industrial space and so on and so forth. So you’ve done a lot of different things. I think you told me before we started recording that you’re now vertically integrated, so you’re managing all these assets as well. So I’m assuming they’re centrally located. Are they all down in Atlanta or where are they?

Dave
Yeah. So really, if you look at it geographically, we limited the places that we were going to invest in because of how we’re going to operate. We wanted to really be able to see everything and touch it. And even with our investors, they want to know like, hey, where is this stuff? So everything’s centralized in Atlanta. And then we go kind of Northeast and Northwest from there. So Chattanooga is Northwest. And then if you go Northeast of Atlanta, you have towns like Greenville and Charlotte, North Carolina.

Rod
Got you.

Dave
So we invested in those as well. But that’s pretty much it. There are a lot of people in that segment. We don’t have to go too far.

Rod
Right. No, there’s plenty of property there, plenty of deals there. And so when did you start acquiring multifamily in the Atlanta market? What year?

Dave
Yeah, the pure multifamily, probably 2011 is when we bought like our first big assets that were multifamily. Prior to that, you know, we have been doing just single-family where you had multiple tenants in a house but not real multifamily.

Rod
Right.

Dave
But 2011 was kind of the first big distressed purchases. And the prices for a door were slightly different back then but so was the quality. Quality was like, oh, my gosh, we’re going to actually pay money for this.

Rod
Right. No, I mean, some of the pricing is just insane. You know, 40, 50, 60 grand a door or better. You know, we all know what it is now.

Dave
Yeah.

Rod
We’ll talk about your strategy for success in the multifamily space. You know, sell yourself a little bit as to how you operated to be successful. Now, I mean, hell, you could fog a mirror, full disclosure, you could fog a mirror up till a year ago and be fairly successful in the multifamily space. But I know you’ve done some things that other people haven’t done that I’m impressed with. So elaborate on that a little bit.

Dave
Yeah. I think things have done very well over the past year just with valuations changing and debt going down. So it made values excellent.

Rod
Right.

Dave
I mean, still, from going back to 2011 and even before that, it’s really operationally driven. And that’s where I think the biggest focus needs to be. I mean, if you’re a good operator, you can make money in any environment.

Rod
Yeah.

Dave
If the market is excellent, almost– not that everyone is going to make money, but it’s going to be a lot easier.

Rod
Sure.

Dave
But if there are challenging markets, the strong operators, they really excel.

Rod
Like we’re getting into right now.

Dave
Yeah. You know, there’s a lot of debt that’s going to have some issues coming up here. Anything that matures in the next 12 months, 18 months, debt rates are a lot higher and you’re going to see some– needed capital infusions. And there are going to be some challenges operationally. Even with inflation as all the costs have gone up.

Rod
Right.

Dave
You’ve really got to be, you know, on it from a management standpoint. I’ve always been integrated with the property management side and the investment side. So all the deals that we buy within the residential space, we’re operating all of those assets.

Rod
So you’ve got a separate property management division? Yes?

Dave
Yes.

Rod
Okay. And do you have a separate construction division as well? You’re handling the renovations on your units when they come up?

Dave
Yes. Basically, we have two kind of segments within that one, like a capital improvement projects that they’re going out and doing you know, a $5,000 to $25,000 repair out of the property. And then if it goes beyond that, we have project managers that are out there overseeing those construction projects as well, even on top of like a larger plumbing GC or electrical GC that we may have to hire for something. We have our own internal team that’s overseeing it as well. Just to make sure that–

Rod
How big is your organization? How many people are in all your divisions if you total up your employees and contractors or whatever?

Dave
We’ve got about 70 people.

Rod
70. Wow. Fantastic. And, you know, as you were growing, did you start that way, were you self-managed your first apartment complex?

Dave
Yes. Directly self-managed, yes.

Rod
Okay. So your butt was there every day. Okay, got it. Okay.

Dave
Oh, yes.

Rod
Wow. Okay.

Dave
Even the first seven deals that we did, you know, me and the other first partners and team members that I had, we were doing the renovations ourselves. Like that was our way to–

Rod
Wow. Swing and hammer everything, huh? Wow.

Dave
Yeah. All of it.

Rod
That’s how you do it. I’ve been on roofs. I feel you. I don’t like it, but I’ve done it. And that’s how you start, man.

Dave
You know, from a team standpoint, though, even some of the guys I work with now, those are some of our best funniest moments of doing that stuff together. And I think you start a business, you’ve got to make sure you’re doing it with people you want to spend time with and figuring that kind of stuff out, there’s no quicker way to get to know someone than doing it.

Rod
Honestly, I love it, frankly. I mean, I do enjoy it. I don’t want to do it anymore because everything hurts now, but I love doing that stuff. And the laughing and the fun you have and all that. And you learn. I mean, you’re going to have– you’ll have problems, you have things pop up you didn’t expect, and so on and so forth. But what an incredible learning experience. Do you agree?

Dave
Yes, it was great. It’s one of the best times of my life doing that stuff.

Rod
Yeah, I have to agree. You know, it’s funny you said that, but you’re absolutely right. Now, you know, I think you’ve indicated, at least in your bio here, that your strategy can limit your growth somewhat, but it’s a very conservative hands-on operational approach, yes?

Dave
Yes, definitely. I mean, it certainly limits where you can go geographically because you have to scale in different stair steps with a management company and with an acquisition strategy.

Rod
Sure.

Dave
So one can’t get too far apart of the other one. If you’re going to go look at buying something an hour away, well, not only does it have to be a good deal, you’ve got to work with your management team to make sure it’s something they can execute. Can maintenance get there in time to meet the service levels that you want to have?

Rod
Right.

Dave
Can you lease it in that market? Because it’s different. You know, every market in real estate– which is great about real estate, is that an hour away is it might be on another planet, half the time.

Rod
Correct. Everything could be–

Dave
It’s totally a different market.

Rod
Yeah. Your core team, your core– I know you’re a co-finder, but your core group when you first started or maybe what you’ve evolved to, what are the different hats that people are wearing? Like, what hat do you primarily wear? I’m assuming you’ve evolved into roles that you’re not bumping heads with each other doing the same stuff. Can you elaborate on that a little bit?

Dave
Definitely like as you, you know, as you hit different milestones, the business needs people to do different things. And as a leader, you’re always stepping in to say, hey, what does the business need next that I can go fulfill and do? And a lot of that recently has been on the finance side. So that’s kind of structure, like, what is the evolution of our structure look like? What is the evolution of how do we report and provide transparency? How do we structure our reserve policies so we make sure you know, we feel like we’re well capitalized? Two years ago, 2020, almost three years ago now, I think that was a big shift in how people look at reserve. So we completely redid our finance structure, assuming we need to take a more conservative approach, we really need to start building up more and more cash in these deals to plan for things.

Rod
Right.

Dave
So we’re seeing that kind of shift, and that was where I led when we’re doing that kind of shift.

Rod
Give me an idea on an asset, what you’re comfortable with having in reserve? I’m just curious, I know what we do. I’m just curious how it lines out with what you do.

Dave
Yes. So we had a pretty formulaic approach to what we were going to do.

Rod
Okay.

Dave
Every quarter, we want to have three months of total operating cash. So whatever we spend in OpEx, on everything, debt, maintenance, CapEx, whatever happened in that past quarter, we want to have that much cash on the books.

Rod
Okay.

Dave
And then we want to also have our taxes for the year, our insurance for the year, and then we want to have $500 a unit in CapEx.

Rod
Wow. That’s a lot.

Dave
So you’ve got a chunk there that’s the buffer.

Rod
Yeah, that’s more than we do. We do six months of expenses, but that’s even more than we do, which is really impressive. That’s a very solid conservative approach. And it’s a safe approach, honestly. And guys, we’re talking about money you got in the bank in case the you know what hits the you know what. And that’s happening right now. So, you know, liquidity is everything. And I’m seeing it with operators right now that have no liquidity and they’re getting problems with their debt and have debt coming due. And we were talking about this before we started recording. And, you know, there are some guys that are really in trouble. And right now, you know, your approach is critical, frankly, for any operator that’s out there is this really heavy operational conservative approach with where we are in the market cycle. And, you know, I know you know, you’ve seen this, Dave, you’ve been in the business a good bit that there are a lot of operators that got in in the last few years you know when everything was fantastic. And again, it was hard to make a mistake because the rents were going up so fast. But a lot of these guys don’t have operational experience or don’t have people on their team that have operational experience. And I hate to say it, but it’s probably going to be some pain. Do you agree?

Dave
Definitely.

Rod
Yeah.

Dave
I think valuation has covered up a lot of expenses.

Rod
Right.

Dave
And I think going forward, the next two, three years, operators are really going to be– that’s going to be where the money is made. It’s a hard conversation to have with investors, too, of saying like, hey, all of a sudden we’re going to totally shift our reserve plan. We’re now going to have this pile of cash for just in case.

Rod
Yeah. You might even limit distributions for a little bit to make sure you got the cash. Is that what you’re saying?

Dave
Oh, yeah, definitely. We had certain deals where we’re like, look, we’re not going to distribute until we hit these reserve thresholds, so we need to hold this cash.

Rod
Yeah.

Dave
Now at least we’re getting a little bit of interest on that cash, so that’s helpful.

Rod
Oh, yeah, that’s right. Yeah, that’s helpful. Yeah, I just came across some of that myself. Forget the main banks. You know, talk about– in multifamily specific, because I know you can talk about the other asset classes as well. But talk about some hiccups along the way. I call them seminars instead of failures but talk about a couple of doozies or one or two and the lesson learned. And it can be in any part of the process and financing and the equity raise and the due diligence and the CapEx, whatever.

Dave
I think the biggest thing over the years that I’ve learned is time. That’s really where all the challenges we faced have come down to.

Rod
Give me an example.

Dave
I mean, that could be– you know, we were doing a renovation project, and this was around 2019, going into ’20. And we’re like, hey, we’re going to turn these units and then we’re going to do all of them in eight months, and it’s going to be great. And we’ve been doing this for years. So we’re pretty confident on our timeline that we could do it, even though that’s hard to turn a whole apartment complex in under a year.

Rod
Sure is.

Dave
Covid happened in the middle of that, and, you know, we were delayed a year on finishing up our units just because that’s what it was. And that time really hurt us on that deal because it took us twice as long to turn the units as we had planned for. And that required a whole lot of extra equity. You know, we didn’t hit our revenue targets because we couldn’t turn the units. Materials are more expensive. You were getting pushed on both sides in that situation.

Rod
But what did you do to get through it? Just had some hard conversations with your investors? Talk about how you got through it.

Dave
Yeah. I mean, you know, we were a year late on making any distributions from what we had planned.

Rod
Right.

Dave
You know this is a turnaround deal. So, you know, we didn’t meet any of those timelines. And that’s definitely not a fun conversation to have of saying like, hey, we are behind and you can’t really say, hey, none of it– it’s all the sponsor. It’s all on the sponsor. There’s no one really cares about the outside factors.

Rod
You have to own it but you don’t have to be an idiot not to know what was going on as well. So there is that. You know, you can bitch, but you know, open the paper or look in the news and you’ll see that you know, this is not poor operations. This is an environmental thing. But you’re right. I mean, that’s never fun to have those conversations. You know, in the multifamily space, what would you say is your– well, let me ask you this. If– a better question. Can I ask how old you are?

Dave
41.

Rod
41. Okay.

Dave
Yeah.

Rod
You’ve done a lot in the short amount of time. I’ve got socks that have a decade on you. But that said, if you could go back until 18-year-old Dave something about this business, real estate in general, and this will be really helpful because I have a lot of people that haven’t done anything in this business yet. They want to do it. They haven’t taken action. What might you do differently as advice to these people that are listening?

Dave
Gosh, I mean, I feel like I started pretty earlier, but I wish I started just earlier.

Rod
No kidding. Wow.

Dave
Starting– you know, having a longer-term horizon than saying, hey, I want to get into real estate so I can make some money today. I think that’s a hard way to look at it because you’re going to then see like, well, I didn’t make money today. Oh, now I should quit.

Rod
Right.

Dave
And it’s really got to be, I need to get started early. And my goal is to make money over a 10-year period or a 20-year period. So really being able to have that longer-term outlook and not be so concerned with you making money immediately.

Rod
Oh, interesting.

Dave
If you’re able to buy something and hold it and operate it, you’re going to learn so much from doing that that it’ll make the next one easier. And the third one, the fifth one, and the 10th one so much easier.

Rod
Did you tighten your belt initially? I mean, did you live below your means as you were getting started?

Dave
Yeah. My wife wouldn’t think that was super fun. But I was– I mean, one of the guys I started with, I slept on his couch a year when I was in Atlanta. I was like, we need to take all the money we have to start this business.

Rod
I hope you’re listening, guys. I remember I had 500 doors and I still lived in a one-bedroom apartment that I was getting for free because I had another business that was an advertising business that was advertising for this apartment complex. I had these cold air balloons that went on roofs and my happy ass was up there tying them off on the three-story roofs. But I had free rent and that’s what I did. And that’s what you do to be a success in anything. You grind for a few years like most people won’t. So you live the rest of your life like most people can’t. Do you agree with me, Dave?

Dave
100%. The multifamily space is not easy. It’s not just like you just show up and it’s magic.

Rod
Right.

Dave
But if you put that effort in and you get started early and you have a long-term vision, you know [inaudible]

Rod
It’s not a get-rich-quick business. It’s just not. If somebody tells you, hey, get into multifamily, you can get rich quick and run the other direction. It is a become super freaking wealthy over time business, though. Okay? If you can have that long-term horizon. So what drives you, buddy? Well, let me ask it a different way. How do you line out your goals? And when you first– were getting started, how did you come up with targets? How did you keep those targets in your mind’s eye? How did you work to those targets? Give us a little of the mindset stuff and the things that you did.

Dave
Yeah. I mean, I think a lot of that changes with age, too.

Rod
Of course. No, it evolves. I’m saying when you got started. Because there are a lot of people here that haven’t done anything yet, so I’d like to speak to them.

Dave
I just wanted to be able to find a path that I could replicate the amount of money I was earning for my job with real estate. That was my only goal. That’s all I wanted to do was a–

Rod
What kind of a job did you come from just out of curiosity?

Dave
I was working at Deloitte Consulting.

Rod
Okay.

Dave
I had a consulting job and I was there for a few years.

Rod
Business Consulting?

Dave
Yes.

Rod
Okay.

Dave
So I traveled a bunch. It was a great start to a career and I loved it there. But I ultimately wanted to have more flexibility, which I don’t necessarily know if I fully have but I like what I do so you’re spending time on it. And I just wanted to find a way that I could replicate my current income with real estate. So it’s like, how much do I have to save to buy to do that?

Rod
Let me just say this. I mean, that’s a great framework for running any business. Obviously, you’re doing business consulting. You know what works, what doesn’t work. You know, you’re learning and as you’re teaching, you’re learning a ton. So that’s a great framework. And guys, there are so many frameworks that you could start with to get in this business. Sales background, underwriting, you could be an analytical background, asset management, you could have project management, construction experience, or management experience period. So there are a lot of different hats you can wear in this business, and it’s absolutely a team sport. Oh, you know what? You didn’t give me the answer to your core team. How many people are in that core high-level, top-level team? And do you guys each wear different hats?

Dave
Yeah, we’ve got about eight people kind of running all that stuff.

Rod
Wow.

Dave
And that goes down to– you know, we have regional managers that are overseeing all of our residential assets.

Rod
Right.

Dave
They’ve got a wide array of teams. They’re back and forth between various properties all the time. And then within that, we have CFO that’s running all the finance stuff.

Rod
Okay.

Dave
Our chief of staff oversees all of the people activity that’s happening. And then I have other partners that are helping with the acquisition side, too.

Rod
Okay.

Dave
Cause it’s– you know, that focus on being able to find a deal no matter what the market is?

Rod
Right.

Dave
I’m a firm believer that doesn’t matter what’s going on in the market, there’s always an opportunity to find something, it just takes [inaudible]

Rod
You might have to kiss 300 frogs to find one, and that’s been the case, you know. And that’s okay. That’s what you do.

Dave
Yeah.

Rod
So what’s the driver for you? Okay, do you have any core beliefs that help you stay focused and energized, and motivated?

Dave
Yes, certainly. I think, one, you’ve got to love real estate, so that’s got to be the given and you’ve got to love working on a team. None of this is happening unless you have those two factors because, like you said, it’s a team sport. You can’t do it [inaudible]

Rod
Let me interject. I want you to continue, but let me interject. Guys, listen, you can learn to love anything. Okay? You can associate pleasure with whatever you’re doing, even exercise. But I’m going to tell you this, and I tell my students this, if you cannot learn to love it, for God’s sakes, go do something else. Life is too freaking short. But when you love what you do, work is play and you never work another day in your life. And, when you love what you do, you’re passionate about it, and you have to influence people in this business and that takes passion. And so I love it. You love real estate and you got to love working in a team. You’re right. There’s no I in team, right? You’ve got to figure out what role you’re going to play. And I would tell you to play to your super strength, play to your superpower, hire or align or partner for your weaknesses, but build your strengths because when you’re playing in your strengths, you’ll love it and you’re passionate about it. Sorry I interrupted. Please continue.

Dave
No, yeah, it’s completely true.

Rod
Right.

Dave
And, you know, what drives me, what gets me excited is as you kind of hit these different thresholds of growth in the business, certain things break.

Rod
Yeah.

Dave
My passion is just what can we do next to break something.

Rod
I love it.

Dave
Because as it breaks in the business, that’s when you get to– get into uncharted territory. That’s when you get to solve new problems because there’s always something new that you haven’t done before.

Rod
What a great attitude about it, man. I love that. I’m going to steal that. How can we break something? Because, of course, that’s when you have the most growth because you know, what’s the one thing that’s constant? Change. Right? And so, you know, you’re looking for opportunities to improve. I love that. I love that framework.

Dave
It gets you into some exciting projects that are just like you would have never known how you’re going to do them.

Rod
No, that’s awesome. Well, what’s your why, man? What’s driving you? You got kids, a family. What’s the why that gets you to jump out of bed every morning?

Dave
I’m married, I’ve got three kids, and I kind of think about that why. It’s like, hey, do I do all this work for my kids? It’s like, well, sometimes, but most of the time I’m doing it because I find enjoyment in trying to solve these problems. My kids ask, hey, what are you doing at work? And right now we’re working on a pretty unique video solution to monitor different parts of the property. But it’s hard with so many Internet connections and, you know, trying to use some radio frequency, interesting stuff that is certainly out of my skill set. But the guy on our team that’s leading this, it’s super fun to just see kind of doing to solve that problem.

Rod
Oh, that’s cool. What’s the age range of your kids?

Dave
Nine, seven, and five.

Rod
Oh, wow. Okay, that’s awesome.

Dave
I got some little ones and it’s fun. And I love showing them when we go to different assets, I show them, hey, look at this piece of real estate. I want to show them and take them around and walk around and see it.

Rod
Sure. Whether they follow in your footsteps or not, you know, you want to show them. And let me ask you this. So you’ve got this core team. Do you use a business operating system like EOS or anything like that to keep you on track with an action plan?

Dave
You know, I’ve done some stuff with Verne Harnish and the Scaling Up stuff, so similar to EOS. And we do the morning meetings every day on what is our task today, what is the goal for the week. We go through that with the whole team every morning. And then we have a weekly meeting called TPS. So when I first started Green Leaf, I didn’t want to have big corporate-sounding stuff because I just left that environment.

Rod
Oh, yeah.

Dave
So the movie “Office Space”, they always talk about TPS reports. And some of my team members now are– they’re like, Dave, we’ve never even heard of that movie because it’s so old. But it’s hilarious. So we named our main weekly meeting our TPS reports, which doesn’t stand for anything other than to be entertaining. But it’s once a week that they get together and go through all the metrics of how their asset is performing.

Rod
So you’re looking at a scorecard, you’re looking at KPIs, you’re measuring everything.

Dave
Every Wednesday.

Rod
You know, one of the things I like– now, Verne Harnish, is that the “Rockefeller Habits”?

Dave
Yes.

Rod
Okay. I used to train from that in a big company that I had as well. We’d have somebody do a lunch, learn, and do a chapter on that book. And we use EOS now from the book “Traction”, which has been really helpful for us. You pick 90-day goals. And I love the fact that they– you know, you have one person accountable for each thing. If you have more than one, nobody’s accountable. And the one other thing I love from them is instead of an organizational chart, you have an accountability chart, which is kind of cool. So if you haven’t ever looked at that, you may want to take a look at it because it’s–

Dave
Yeah. No, I think– I’ve read EOS. I think it’s a great platform and we just kind of tweaked it a little bit to work for us. And one of the things that we kind of do or added into that was this concept of goals where our team members, they’re compensated for either a work goal or a personal goal.

Rod
Oh, that’s awesome. That is so freaking awesome. I love that. I was about to do that. I’m about to do that with my team, which I used to do at another company that I had, a big one with 60 employees. And I haven’t done it with these two companies I have now. You know, I’ve got the thought leadership business you know, with the coaching and all that. And then I’ve got in the events and then I’ve got my acquisition business now. And, you know, I used to get involved in the personal goals of my team, and that’s so important. And that’s something that– I love the fact that you’re bonusing personal goals. That’s freaking awesome, man. That’s just so good. And you know what else is great about that? Is that even something you can do in a virtual environment which– I don’t know if you guys have an office or if you’re virtual or what, but that accountability and that connection and that culture is difficult in a virtual environment. Do you have a virtual component or are you all in one location?

Dave
Yes. Well, virtual, not really, but everyone is spread out because our assets are– you know, we have different states. I’m not going to see our manager that’s up in Charlotte on a daily basis because we’re in a different city.

Rod
Right.

Dave
But we have a dedicated goal meeting once a quarter where everyone gets together and they share you know, what goals they’re setting and what goals they’ve achieved. So I kind of took it as I’d rather just be around an environment with other people that set and achieve goals, not just setting them. I want to be around people that achieve goals. Whatever those goals are, it varies every quarter.

Rod
I love that. Guys, I hope you’re taking notes. I freaking love that. I’m stealing that one. My team, I’m actually meeting with my acquisitions team Thursday here before my big event this weekend, and I’m going to have them give us– outline their goals. And we’re going to do that because we have quarterly meetings with the whole EOS system and we can certainly implement goals into that process. I love it. So you know that I’ve got a lot of listeners that for whatever reason haven’t done anything yet. And, you know, fear, limiting beliefs, comfort, they just haven’t taken action. They know they want to, but things are holding them back. What would you say to those people? What advice would you give them?

Dave
Well, one, it’s hard to do it on your own.

Rod
Yeah.

Dave
Right? However motivated you are, it’s really hard to just sit there and just say, hey, any mistake you have, I’m just going to internalize that and eat it all myself. So really finding anyone that, you know, not just anyone, but someone that’s also successful that you can really bounce some ideas off and do something with so you have a sounding board. If they’ll get in the trenches with you, even better. You know, split something 50-50, it’s like splitting a pie 50-50 is better than having no pie at all.

Rod
Thank you. 20, 30, or 40% of something is better than 100% of nothing. Right?

Dave
Yeah. And there are all the stories out there of how partnerships work and don’t work. But if you find the right one and you put the right structure in place, you can have some of the best times ever working with people that are like-minded and want to achieve the same things that you want to achieve.

Rod
If you take the time to ask the hard questions upfront, and guys, if you haven’t downloaded my list of partnership questions, “The List of Questions You Should Ask Before You Get Into Partnership”, go to “RodsLinks.com”, “RodsLinks.com”. And it’s in the free book section. Because, you know, partnerships are easy to get into like a marriage, and hard to get out of.

Dave
Yeah.

Rod
But they’re fantastic. And if you take the time not to get caught up in the emotion, ask the right questions, do your due diligence, make sure you trust your gut as well. Your intuition is incredibly powerful, but you do all of those things and, you know, partnerships are fantastic. And then the other thing you said about team, about getting around people that are doing this. You know, go to your local real estate investor club meetings, your meetup groups, or start your own about multifamily and just start talking shop and get around people that want more out of life because who you hang out with is who you become. And so make sure you’re around– and there’s a reason. Like my Warriors, my coaching students, they own upwards of 150,000 units that we know of. I think it’s more than that. We’re trying to count them right now, but it’s at least that. And those are all done between Warriors. They’re done in teams. And so, you know, there’s a perfect example of what you just described. So get around people. What about pushing through the fear? Do you have anything to add to that piece, Dave?

Dave
When I was thinking about it, I was always like, I can always just go back and get another job.

Rod
Okay. So you just looked– you had an exit strategy in case you didn’t make it, basically.

Dave
Yeah. And I know no one’s like, hey, I get super excited. They’re going to go back and get a different job. But look, the backstop is that if you’ve got some skills and hard work, you’ll still be able to get a job. You know, it’s not going to be as great as what your vision is but–

Rod
Right. But you can recover. And that’s a great strategy is to look at what’s the absolute worst case. The absolute worst case is I go back to that W-2, you know, life goes on. Or honestly, I’ve had tons of students that have done it on the side with a W-2, with kids, with a family, and, you know, have hundreds of doors already. And so you can absolutely do it on the side, too. And by the way, guys, if you’re thinking– if you call me and ask me, should I quit my job to do this? I’m always going to tell you no, okay? Because especially in this environment we’re in right now, you know, if you don’t have income coming in– unless you’ve got a big nest egg, if you got a big nest egg, different answer. But if you don’t, you know, fear will pop up and fear paralyzes. So, you know, keep that job, do it on the side. You can absolutely do it. Well, listen, is there any question I didn’t ask you that I should have, Dave? Because you’ve really given some great insights, brother.

Dave
I think the other thing, too, is just investment strategy is– if you’re just going to get started, buy something close to your home.

Rod
Yeah.

Dave
As soon as you have to start driving 20 minutes, 40 minutes, an hour, or it’s in another city, you’re going to be like, why did I do this?

Rod
Right.

Dave
But if it’s right down the street, you’re like, oh, hey, you know, I’m going to swing by. It’s not that big of a deal. I’m going to get some groceries, I’m going to swing by, check it out. It makes life a whole lot easier to do that. Just try and keep it local. Wherever you do live, it’s like you know that area the best.

Rod
Well, if you can find it, I absolutely agree with you. Did you have any mentors in all of this or did you just learn as you went?

Dave
I mean, a little bit of learning as I went, but I also– the investors that I had from the very beginning, I have some investors from 2009 that are still with me today and have been instrumental in how we’ve done analysis on deals, what markets we’ve gone into, how we look at opportunities.

Rod
You’ve leaned on them. You’ve leaned on your actual investors. Love it.

Dave
Yeah. And they’ve provided a ton of value over the years and they have been key to my success. And they’ve done this stuff before, too. They were exceedingly helpful to me. So a lot of meeting the right people and some of the very first people I met were the investors I have today.

Rod
Are there any books that you gift more than others about this business or personal development or anything really that you really– if somebody asked you, what’s a great book what’s the answer you’d give them?

Dave
I’m passionate about adventure, so I like the idea of getting into something where you don’t have all the answers. But on top of that, there’s a book called “Boyd” that’s about a fighter pilot and it’s–

Rod
“Boyd”?

Dave
“Boyd”. And it’s about how to make decisions. So created a theory called the OODA loop. So you’re trying to Observe, Orient, Decide, and Act. And the faster that you can do that, the faster you can make effective decisions and move not only your life forwards or anything you’re working on, whether that applies to a military situation or just, hey, what color shirt am I going to put on today, you know. Doing that, and the better you can do that, I think the easier life becomes.

Rod
That’s a great framework. What was that acronym again? And what were those words again one more time?

Dave
It’s the OODA loop and it’s Observe, Orient, Decide, and Act.

Rod
OODA. Love it. Listen, brother– what did you say? I’m sorry.

Dave
I’m pretty sure that’s the exact order.

Rod
That sounds like the right order. Well, listen, I really appreciate you coming on the show, Dave. You added tremendous value. I hope we get to meet someday at an industry event and maybe have a circle back at some point and bring you on again. But I appreciate you coming on, my friend.

Dave
Yeah, thank you very much, Rod. Appreciate it.

Rod
Take care. All right.

Outro
So one other quick thing. We encounter so many people that are frankly frustrated. They’re looking in the mirror and they’re frustrated that they haven’t been able to escape the rat race. They haven’t been able to build cash flow to the point where they’re able to have financial and time freedom with their families. And maybe they see other people buying real estate and creating incredible cash flow, and they think, well, it’s just scary. You know, buying apartments is intimidating. And I get it. See, that’s why we created our Warrior Mentorship Program. They’re our coaching students, and they’ve had extraordinary results. My students, I’ve been teaching about five years, and they own upwards of 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.