Shallow Bay Flex Industrial Real Estate Investing with Steve Olson
On this episode of the Lifetime Cash Flow Podcast, Rod Khleif sits down with seasoned developer and investor Steve Olson, a veteran of build-to-rent townhomes, fourplex developments, and now one of the most in-demand asset classes of 2025: shallow bay flex industrial real estate investing. With experience in 18 states, Steve has built, brokered, and syndicated thousands of units while evolving his strategy across multiple market cycles. His insights offer a timely roadmap for investors seeking opportunities in today’s shifting economic environment.
Why Shallow Bay Flex Industrial Is Surging in 2025
A central theme of the discussion is Steve’s transition into shallow bay flex industrial developments, a niche product that combines small office space with warehouse bays. These units typically run around 1,500 square feet and cater to tenants such as electricians, plumbers, small e-commerce businesses, gyms, auto glass shops, and content creators.
This asset class is exploding in demand for several reasons:
-
Small business growth continues even during economic uncertainty
Tradespeople and service companies prefer flexible, functional space without needing a large warehouse footprint. -
Severe under-supply across Texas, Florida, and other growth markets
Developers have focused heavily on large industrial spaces, leaving a gap for small shallow bay users. -
Triple-net leases
Tenants pay taxes, insurance, and common area maintenance, helping investors offset rising operating costs in states like Texas. -
Fast construction timelines
Pre-fabricated metal buildings can be delivered and built within 90–120 days after concrete is poured.
For individual investors—including high-earning professionals, business owners, and those 1031-exchanging—Steve’s company sells units fee-simple, complete with leasing assistance. It’s similar to turnkey single-family investing but applied to small industrial.
Location Strategy for Flex Industrial
Steve emphasizes that visibility matters far less than demographic demand. His rule of thumb:
“If you’re within a couple of miles of a Home Depot, you’re probably in the right spot.”
Big-box retailers invest heavily in demographic research, making their site selections powerful signals of long-term stability.
Fourplexes, Townhomes, and Creative Development Structures
While the focus of Steve’s business has shifted, he continues developing townhomes, fourplex clusters, and duplexes—sometimes inside Opportunity Zones. He explains how investors can use their capital gains to set up Opportunity Zone funds, build new construction, and potentially eliminate long-term capital gains after a 10-year hold. His team acts as the GC, making it possible for individual investors to achieve OZ benefits without needing to become developers themselves.
Market Conditions, Oversupply, and Operational Challenges
Steve and Rod dive deep into today’s multifamily environment, acknowledging that many “Covid darling” markets—Texas, Utah, Idaho—are facing temporary oversupply due to a surge of development approvals during 2020–2022. As a result:
-
Leasing concessions are widespread
-
Expense ratios have risen sharply
-
Insurance and payroll costs have jumped
-
Debt maturities and rate caps are squeezing operators
-
Refinancing is extremely challenging unless assets qualify for programs like HUD
Steve shares personal examples of high-quality buildings at 100% occupancy that still struggle to refinance due to rate hikes and DSCR pressure. Rod adds context from his own portfolio, including the impact of mismanagement, the cost of labor, and the distress hitting operators who bought aggressively with floating-rate debt.
Despite the friction, both agree: the next 24 months will offer extraordinary buying opportunities, with many assets trading below replacement cost.
Where Investors Can Still Profit in 2025
Throughout the conversation, Steve circles back to where he sees the strongest opportunities:
-
Shallow bay flex industrial with triple-net leases
-
Build-to-rent townhomes with strong garages and modern layouts
-
Duplexes and townhomes inside Opportunity Zones
-
55+ deed-restricted communities with highly stable tenants
Rod shares that he’s shifting into senior housing, and Steve echoes the appeal, noting their new 55+ quad development in Texas.
About Steve Olson
Steve Olson is a long-time real estate investor, developer, and operator who has closed, built, and brokered hundreds of millions of dollars’ worth of multifamily and industrial projects across the United States. He has deep experience with fourplex development, build-to-rent strategies, private debt funds, and now shallow bay flex industrial real estate—a fast-growing niche ideal for sophisticated investors seeking durable, income-producing assets.
FAQ: Shallow Bay Flex Industrial Real Estate Investing
What is shallow bay flex industrial real estate investing?
Shallow bay flex industrial real estate investing focuses on smaller industrial units that combine office space with warehouse bays. These properties typically range from 1,000 to 2,000 square feet and appeal to tradespeople, e-commerce operators, small manufacturers, and service businesses needing affordable, flexible workspace.
Why is shallow bay flex industrial space in high demand?
Demand is rising because small businesses continue to grow even in uncertain economies, yet very little new shallow bay industrial construction has occurred in the past decade. Most developers have focused on large distribution warehouses, creating a gap that flex industrial fills extremely well.
Who are the typical tenants for shallow bay flex industrial properties?
Tenants often include electricians, plumbers, HVAC companies, gyms, auto glass shops, online sellers, content creators, and small logistics businesses. These users prefer functional space with roll-up doors, moderate office areas, and the ability to customize layouts.
Is shallow bay flex industrial investing suitable for individual investors?
Yes, many developers now sell individual units fee-simple, making this asset class accessible to professionals, business owners, and 1031-exchange investors. Because leases are often triple net, operational responsibilities are lower compared to residential real estate.
Why are triple net leases important in shallow bay flex industrial investing?
Triple net leases shift responsibility for property taxes, insurance, and maintenance to the tenant. This structure stabilizes expenses and helps investors hedge against rising operating costs, especially in high-growth states like Texas and Florida.
How fast can shallow bay flex industrial buildings be constructed?
Most projects use pre-engineered metal building systems that can be completed within 90 to 120 days after the concrete foundation is set. This allows developers and investors to reach stabilization faster and reduces exposure to market fluctuations.
What makes a good location for shallow bay flex industrial properties?
The best locations are areas with strong small business demand, growing populations, and proximity to major retailers like Home Depot or Lowe’s. These companies conduct extensive demographic research, signaling economic strength and future growth.
How does shallow bay flex industrial compare to multifamily investing?
While multifamily depends heavily on household formation and rental demand, shallow bay flex industrial benefits from business growth cycles and the needs of essential service providers. Additionally, triple net leases often create more predictable cash flow and lower management burdens than residential investing.
Is shallow bay flex industrial real estate resilient during economic downturns?
Yes, because many tenants are essential service businesses that operate regardless of market cycles. These spaces also attract entrepreneurs and trades that thrive during both expansions and contractions, providing more stability than many retail or office investments.
Can shallow bay flex industrial properties be used in a 1031 exchange?
Absolutely. Since these units are sold fee-simple, they qualify for 1031 exchanges and allow investors to defer capital gains taxes while moving into a higher-demand, income-producing asset class.
Disclaimer: This summary was written with the help of AI and reviewed by Rod’s Team.
01:20:07:27 – 01:20:24:09
Rod Khleif
Welcome to another edition of Lifetime Cash Flow. I’m Rod Khleif, and I’m thrilled you’re here. And I know you’re going to get tremendous value from the gentleman I’m interviewing today. We didn’t even realize we have a quasi connection, but, he’s been in the real estate business a long time. His name’s Steve Olsen. Closed on tons of deals, built a ton of deals.
01:20:24:16 – 01:20:35:16
Rod Khleif
Actually had a business building for plexus and selling them to an investor investors. A very unique model. But when done business in 18 states. And so I think we’re gonna have a lot of fun. Welcome to the show. Right.
01:20:35:18 – 01:20:38:23
Steve Olson
Hey, you got a great place here. Oh, I’m happy to be here.
01:20:38:24 – 01:20:51:15
Rod Khleif
Oh, thank you, thank you. Yeah, we’re in my studio here in Sarasota. It’s in one of my buildings in my compound, and and, it’s just such a beautiful day to be. We should. I should figure out a way to do these outside are so freaking out right now.
01:20:51:15 – 01:20:52:29
Steve Olson
It is so great right now, right?
01:20:53:00 – 01:21:06:26
Rod Khleif
Yeah. Yeah. So you’re from Salt Lake? Why don’t, you know, let’s start with you doing a much better job with your bio than I just did and talk about, you know, you probably talk about it for an hour, but let’s not make it that long. But talk about, you know, your background because you’ve done a lot.
01:21:06:29 – 01:21:16:23
Steve Olson
Yeah, yeah, I’ll certainly keep it well under an hour for you, rod. But, you know, I got into the real estate business in college. I was working for one of the late night infomercial guru guys.
01:21:16:23 – 01:21:17:08
Rod Khleif
Oh, really?
01:21:17:12 – 01:21:35:28
Steve Olson
Yeah. But the funny thing was, is it? It wasn’t to do real estate. I thought I was going to go to law school at the time. And so I had a friend make an okay money doing this, and I was just on the fulfillment side. I was shipping boxes and whatnot, started to learn a little, put a house under contract with a buddy because I thought this would be a great way to pay for law school.
01:21:36:04 – 01:21:43:20
Steve Olson
I had not connected the dots. Right. And but, I made 17,000 bucks on a little assignment deal.
01:21:43:23 – 01:21:45:15
Rod Khleif
And like, a wholesale deal.
01:21:45:15 – 01:22:10:08
Steve Olson
Yeah, yeah, a wholesale deal. Right. And, you know, I was in college. 17,000 bucks is like 17 million bucks when you’re in college. And I thought, you know what? I’ve had enough of this. I’m going to go do this full time. And so I’ve been involved in it one way or the other since then. Done a lot of development deals, specifically in the multifamily space, but it’s kind of unique how we platinum, which you had mentioned, we do a lot of for plexus.
01:22:10:10 – 01:22:23:02
Steve Olson
I a couple of years ago became the GP on a couple of ground up deals because, you know, playing in that space, entitling dirt, developing it, you learn a few tricks. And so raise some money from some investors and did a few of those as well.
01:22:23:02 – 01:22:27:05
Rod Khleif
And you see ground up deals with sort of what sort of let’s talk about what they were specifically.
01:22:27:05 – 01:22:28:18
Steve Olson
Built for rent townhomes.
01:22:28:20 – 01:22:33:11
Rod Khleif
Same thing. Yeah. Okay. So similar to the for plexus you sold to investors. You just build the rent townhomes.
01:22:33:12 – 01:22:41:18
Steve Olson
Exactly. Did the whole project with one investor structure as opposed to chopping it up into quads? I see right. And selling it off to individuals okay.
01:22:41:18 – 01:22:49:10
Rod Khleif
Yeah okay. And so you’re a GP and as it been primarily building that it’s not by existing.
01:22:49:13 – 01:22:52:09
Steve Olson
Yeah. No new construction has been my thing okay.
01:22:52:10 – 01:22:56:21
Rod Khleif
Okay. Yeah. And and you’ve done this in 18 states.
01:22:56:24 – 01:23:09:25
Steve Olson
I have developed in let’s see 1 to 2, three, four, five, five. And then we’ve brokered in the rest I see. Right. You know it. When you get a niche that’s that specific people kind of start to find you.
01:23:09:29 – 01:23:12:02
Rod Khleif
What do you mean you brokered. What does that mean.
01:23:12:04 – 01:23:23:27
Steve Olson
Well, we’ve got our own show. We talk about what we do and people will approach us and say, I’ve got a fourplex project or I’ve got this or that, can you help me? And so we’ve put together a number of deals via that method.
01:23:23:27 – 01:23:26:13
Rod Khleif
Someone else is building it, and you go in there and you help them sell it.
01:23:26:19 – 01:23:34:29
Steve Olson
Yeah. That’s what I mean. We’re so specific that when somebody hears us and they’ve got dirt that’s kind of platted for this stuff that they call us a lot.
01:23:35:02 – 01:23:56:27
Rod Khleif
Interesting. Interesting. Yeah, that’s something I’d actually love to do. Candidly, I’m trying to get my son to get his GC license because, you know, there’s, you know, pricing is, you know, it’s well, it’s coming down. I mean, we’re seeing some fantastic deals actually on existing product right now. But, you know, development is always been something I’m very interested in.
01:23:56:29 – 01:24:02:09
Rod Khleif
So is that you you bought bulk foreclosure packages? Actually.
01:24:02:11 – 01:24:08:09
Steve Olson
I did do a couple of those back in, let’s see, this would have been oh nine. Okay. They call them tapes, right?
01:24:08:09 – 01:24:11:16
Rod Khleif
Yeah. That’s right. They call them tapes. Yeah. You had to take the whole tape, but,
01:24:11:19 – 01:24:14:28
Steve Olson
Yeah, I did a couple of those. That was crazy. Really? Oh, man.
01:24:15:01 – 01:24:33:09
Rod Khleif
Multiple states are all in one state. So what he’s talking about is, is that is that is the lenders will take back a package. The houses they’re in typically a tranche on the secondary money market. So they have to stay together and they could be in multiple states back when I saw them. Yeah. But my part my portfolio ended up in one of those okay.
01:24:33:09 – 01:24:41:03
Rod Khleif
Because I lost 800 houses in 2009. I got my ass handed to me. Sure. But, but yeah, so. So were these all in one state or were they all over?
01:24:41:03 – 01:24:54:21
Steve Olson
No, they were all over. And it was a long time ago. But best I recall because I did two of these. Okay. And you would really in the tape and it stands for something like toxic asset or troubled asset something.
01:24:54:21 – 01:24:56:04
Rod Khleif
Right.
01:24:56:07 – 01:25:05:05
Steve Olson
You’re buying that to get maybe 10% of those houses, and then you want to break even on a bunch of them, and the rest are just complete dogs.
01:25:05:05 – 01:25:05:21
Rod Khleif
Really.
01:25:05:21 – 01:25:09:01
Steve Olson
Right. Yeah. I mean, there’s a reason they ended up on a bulk list with a.
01:25:09:01 – 01:25:09:26
Rod Khleif
Bank, okay.
01:25:09:26 – 01:25:13:25
Steve Olson
And made it that far along. But that’s the kind of thing that was going on in oh eight and. Oh, no.
01:25:14:01 – 01:25:22:03
Rod Khleif
Yeah. Oh no. For sure. Yeah, sure. Okay. So, so are you doing projects now?
01:25:22:03 – 01:25:22:17
Steve Olson
Yeah.
01:25:22:17 – 01:25:24:28
Rod Khleif
Okay. Let’s sort of talk about some of the things you’re doing now.
01:25:24:29 – 01:25:34:28
Steve Olson
Yeah, we’re we’re doing some creative stuff now. Like, one of the things I really like is and this is me stepping away from the residential side, but, we’re doing some commercial flex.
01:25:35:00 – 01:25:46:14
Rod Khleif
Oh, right. Yeah, that’s true of flex space. Love that. I’ve got students doing that very successfully. Totally. So you got a little office in the front. You’ve got some warehouse space in the back. You’re going to adjust the size of the warehouse space if you need to, that sort of thing.
01:25:46:14 – 01:25:54:09
Steve Olson
Bingo. Yeah, yeah. And we like the smaller the shallow Bay flex, because I just don’t think that they’re putting up enough of that. Yeah. Like for small businesses.
01:25:54:14 – 01:25:55:05
Rod Khleif
Where are you doing this?
01:25:55:12 – 01:25:57:05
Steve Olson
This is in Weatherford, Texas.
01:25:57:05 – 01:25:57:26
Rod Khleif
Texas? Yeah.
01:25:57:26 – 01:26:01:06
Steve Olson
Okay. We got another one. We’re working on in North Richland Hills, Texas.
01:26:01:06 – 01:26:02:10
Rod Khleif
How many square feet?
01:26:02:13 – 01:26:05:14
Steve Olson
Each unit is usually around 1500 square.
01:26:05:14 – 01:26:08:07
Rod Khleif
How many I’m in total in these projects?
01:26:08:09 – 01:26:14:12
Steve Olson
Well, let’s see 1500. Each building we do has five five bays and we.
01:26:14:12 – 01:26:16:03
Rod Khleif
Just do one building at a time. Or you do multiple.
01:26:16:05 – 01:26:25:29
Steve Olson
We do multiple buildings at a time. What’s unique about it is one of these projects we’re building and developing and keeping right, right. Our capital.
01:26:25:29 – 01:26:29:08
Rod Khleif
Stack. You’re going to rent it and versus selling them off one by one to.
01:26:29:08 – 01:26:45:07
Steve Olson
Yeah. And the others were selling a one by one. Because if you’re an individual investor, right, you’re a pharmacist or you’re a software engineer to invest in flex, typically you’ve got to be the developer or an LP, right? This way they can take fee simple title. They control it. It’s they’re flexible.
01:26:45:11 – 01:26:48:17
Rod Khleif
So so it’s okay. You’re doing the same thing you do for plexus. So you.
01:26:48:17 – 01:26:49:02
Steve Olson
Kind of what we.
01:26:49:02 – 01:27:12:17
Rod Khleif
Do sell it. You’re selling you’re selling the individual flex space units to a an end investor like you did with the four plexus. And now I remember, if I recall, because we have a we have an associate, of yours that that I knew. And from what I remember, you also, we’ll get them leased or you have a management company that assists in that process.
01:27:12:18 – 01:27:28:25
Rod Khleif
It’s almost like a turnkey single family, but it’s turnkey in your. It was originally for plexus or No nail it. Right, I nailed it okay. So so you just same thing with the flex. Yeah. You can help lease them. Yeah. Interesting. What an industry model. Yeah. So so, you don’t hold on to much of this stuff.
01:27:28:28 – 01:27:33:27
Steve Olson
We hold on to some of it, but a lot of it, we, you know, we’re churning so that we can hold, you know.
01:27:34:00 – 01:27:39:00
Rod Khleif
So you’re trying to build your own, I hope. Correct. You know. Yeah. As good as the last deal if you’re just spending the money. Right.
01:27:39:00 – 01:27:56:12
Steve Olson
Exactly. Yeah. You wake up unemployed every day. If you’re just doing that, you got to hold these and it’s what I love about that flex. Because, you know, when when we talk about Texas and I think this is true for Florida to where you are, two things can be true at once. The taxes and insurance are a problem, right.
01:27:56:15 – 01:28:00:01
Steve Olson
But also people just keep moving there. Right? Right. And so how do.
01:28:00:01 – 01:28:00:28
Rod Khleif
You keep them out.
01:28:00:29 – 01:28:07:17
Steve Olson
You can’t. Right. So how can you profit as an investor. And so we love that shallow Bay flex because it’s triple net.
01:28:07:17 – 01:28:19:02
Rod Khleif
Now what a shallow let’s let’s I want to drill down on this a little more if you don’t mind. But what does shallow Bay mean compared to what are the other what was what was what is.
01:28:19:02 – 01:28:39:03
Steve Olson
It? I mean, maybe I’m oversimplifying it, but we’re just talking. It’s a small space. It’s not a giant industrial warehouse where you’ve got semis coming. Gotcha. Our tenant. And I’ll give you some flavor, because we’re just about to get close on a building. And so some of the people that are applying to lease, we got an auto glass guy.
01:28:39:05 – 01:28:40:28
Steve Olson
Perfect. We got a boxing gym.
01:28:41:03 – 01:28:43:21
Rod Khleif
Oh. Interesting. So he’s going to have the gym right there in the in the flex.
01:28:43:21 – 01:28:45:20
Steve Olson
Yeah. He’s actually going to rent two space so you.
01:28:45:20 – 01:28:49:22
Rod Khleif
Can have a retail component. Yeah. Because that’s kind of retail is a word. Yeah.
01:28:49:26 – 01:29:02:16
Steve Olson
Yeah okay. Yep. Okay. We’ve got golf influencer. He wants to take a whole building and he ships tons of clubs. He has a simulator, they film staff content, plumbers, electricians, course.
01:29:02:17 – 01:29:12:09
Rod Khleif
All all the trades. You know what? Covet may not be big enough, but. Yeah, I mean, all the trades for sure. They need. They need storage space and a place for their tools and and their truck.
01:29:12:09 – 01:29:15:28
Steve Olson
And you know, we do the big roll up door because these guys can’t rent.
01:29:16:04 – 01:29:18:16
Rod Khleif
Are they made for semis or not. No, no.
01:29:18:16 – 01:29:20:01
Steve Olson
These are shallow bay.
01:29:20:01 – 01:29:32:18
Rod Khleif
There’s shallow bays. So that’s probably means they’re just you know, you drive right out versus versus a warehouse where the truck come back up and it’s. And the bed. Hi. This is the height of the floor of the, of the warehouse.
01:29:32:18 – 01:29:41:20
Steve Olson
That’s right. Yeah. You can even frame out a mezzanine space in the back if they want some extra office or storage space. Oh, interesting. Right. Kind of a half a second level, but.
01:29:41:20 – 01:29:55:20
Rod Khleif
Oh, yeah. On the up, because they’re high. Yeah. So you could put in some stairs and put some storage or exactly another office up there. Oh, interesting. Okay. Yeah. And, are these metal buildings you’re building? They are. So they’re they’re metal. So they.
01:29:55:23 – 01:29:59:12
Steve Olson
They go up quick. Yeah. Yeah, about 90 to 120 days.
01:29:59:12 – 01:30:03:22
Rod Khleif
Wow. Yeah. Soup to nuts or that’s after the concrete’s poured.
01:30:03:24 – 01:30:05:19
Steve Olson
Oh, man. Pouring concrete. Yeah.
01:30:05:19 – 01:30:08:21
Rod Khleif
You poured a lot of concrete. That’s probably the biggest part of the job, right?
01:30:08:22 – 01:30:20:23
Steve Olson
That’s the hardest part. The rain never wants to cooperate, right? You know, so you got to get, you know, a couple of weeks of good weather. But once you’ve got that concrete in the ground. Yeah, I think 90. Yeah. I give you the 122 account for the weather. Okay.
01:30:20:24 – 01:30:28:19
Rod Khleif
That’s crazy. Yeah. So, so, do you are there manufacturers that provide this stuff ready to go? Get ready to put it together.
01:30:28:19 – 01:30:33:11
Steve Olson
Yeah. They deliver the whole thing. They deliver it. Yep. And your guys come and do the Lego set, okay.
01:30:33:11 – 01:30:52:14
Rod Khleif
Yeah, yeah, that’s what I figured. Yeah. That’s a cool. That’s a, that’s a really cool model. And and that’s a great asset class. And you know it’s it’s it’s something that’s needed now. Now let me ask you this from a location standpoint. What do you look for. Do you do is that relevant does is visibility relevant or do you just strictly look at need.
01:30:52:16 – 01:30:57:05
Steve Olson
Mostly need I on this kind of an asset. Visibility is less of a concern.
01:30:57:08 – 01:31:09:07
Rod Khleif
And you see him on the highways, you drive down, you see that you see and you see, you know, warehouses and things like that, that look like they could be shallow Bay, I suppose. Right. But so that’s not, that doesn’t. No, no, I.
01:31:09:08 – 01:31:14:12
Steve Olson
Think and this could be an oversimplification, but if you’re within a couple miles of a Home Depot, you’re probably in the right.
01:31:14:12 – 01:31:15:29
Rod Khleif
Spot. Oh, no kidding, that makes sense.
01:31:15:29 – 01:31:17:27
Steve Olson
They do tons of demographic research.
01:31:18:04 – 01:31:38:03
Rod Khleif
For, well. Oh, yeah, the depot, the any. Yeah, guys any time, you know, you see a lot of big national retailers in a particular market. They do a lot of demographic research. Yeah. Even even the fast food mart, everything they especially the big grocery stores and and like you said, Home Depot, Lowe’s, things like that. They yeah, they do a lot of demographic work.
01:31:38:10 – 01:31:45:06
Rod Khleif
So, okay, I was thinking it was because you wanted to, line up with the trades, but you’re set. You’re talking about the demographics.
01:31:45:08 – 01:32:05:20
Steve Olson
But just the there’s there’s small business in that area. Yeah. Because these guys, they don’t want to rent 10,000ft², right. They’re small business. Right. But the cool thing is, is because this is. Yeah, one business for example, the boxing gym, they want two units. So we’ll they’ll finish it out the way they need to be has flex space.
01:32:05:20 – 01:32:12:18
Steve Olson
Right. Right right right. And so it gives them the ability to go small if they need to. But we can absorb a bigger tenant if we want to.
01:32:12:20 – 01:32:24:27
Rod Khleif
Is a triple net. Yes. Okay. So triple net guys means the tenants pay for everything. They pay the taxes, the insurance, the common area maintenance. So really you’re just collecting a check and making your mortgage payment. Is really it right.
01:32:24:29 – 01:32:37:22
Steve Olson
That’s right. And that’s what I was telling you about Texas and Florida. They’re expensive, but people keep moving. We think a triple net flex is a great way to invest in that market, and kind of hedge that property tax and insurance risk.
01:32:37:24 – 01:32:38:27
Rod Khleif
Oh because the tenants paying it.
01:32:38:27 – 01:32:48:20
Steve Olson
Yeah it and it’s not like it eliminates it but it just evens it out over time. Because in residential you get those you get reassessed and bam right. You know your world’s upside down.
01:32:48:20 – 01:33:07:09
Rod Khleif
So your your end user is someone is an investor to buy one of these. And then you help them place a tenant in it. You can you can, you can you know, pro forma some returns for them based on what the rents going to be. I’m assuming they’re yearly nominal rent increases so things go up.
01:33:07:09 – 01:33:09:07
Rod Khleif
Yeah. Correct. Correct me if I’m wrong.
01:33:09:10 – 01:33:10:12
Steve Olson
Now you’re getting it.
01:33:10:13 – 01:33:21:25
Rod Khleif
Yeah. Okay. And now and and typically a local bank finances these things. Yeah. Okay. Yeah. Okay. So that’s you’re doing the flex right now. Are you doing any more of these for plexus or townhouses or.
01:33:21:25 – 01:33:27:07
Steve Olson
And we’ve, we’ve got you know four plex is kind of a dirty word with the city council.
01:33:27:07 – 01:33:27:26
Rod Khleif
Oh, really?
01:33:27:27 – 01:33:28:24
Steve Olson
Yeah. They just.
01:33:28:24 – 01:33:29:17
Rod Khleif
Think you call them.
01:33:29:17 – 01:33:31:26
Steve Olson
Townhouses. Yeah, but we’ll say.
01:33:31:27 – 01:33:36:14
Rod Khleif
But they’re in groups of four. Yep. They just happen to be in groups of four. Got it. Okay. Interesting. Well that’s funny.
01:33:36:19 – 01:33:54:00
Steve Olson
I know it’s all about your word choice. Either my my, son was young, and he’s. I was making some dinner for him. Hey, you want a quesadilla? He’s like, no. And I was like, do you want a Mexican grilled cheese? And he goes, oh yeah. I’m like, okay. And that’s what we do to the city.
01:33:54:02 – 01:34:06:12
Rod Khleif
That’s funny, that’s funny. You know, my daughter just bought a triplex. Oh, God, it’s a piece of shit. I got. Hope she didn’t hear this, but she’s got it looking really good. But oh my God, when she bought it, Jesus. I’ve got a full time maintenance guy for my compound, and he’s. Yeah.
01:34:06:14 – 01:34:09:01
Steve Olson
You live in a he’s living. They can turn that way.
01:34:09:01 – 01:34:12:09
Rod Khleif
Yeah, yeah, yeah, yeah. Yeah. So,
01:34:12:11 – 01:34:18:08
Steve Olson
But we are doing more of those, you know, one. That’s cool. Rod is in Fort Worth and it’s in an opportunity zone.
01:34:18:10 – 01:34:19:22
Rod Khleif
And so some tax benefits.
01:34:19:22 – 01:34:28:04
Steve Olson
Yeah, we’re building some of them to sell to investors who want something that has a certificate of occupancy, you know, get the bonus depreciation on the books.
01:34:28:04 – 01:34:28:17
Rod Khleif
Right.
01:34:28:19 – 01:34:51:18
Steve Olson
But the rest are lots where they can hire us. Is is the GC. And so they can do their own opportunity fund. Most investors are going to invest in somebody else’s opportunity fund. But this is one where when they hire us. Because when you buy the dirt in an Aussie, yeah, you have to put improvements into the property at least equal to the amount of what you paid for the property.
01:34:51:20 – 01:34:54:09
Steve Olson
Otherwise you didn’t develop anything. That’s the whole point of those.
01:34:54:12 – 01:34:58:09
Rod Khleif
Basically allowing an investor to be a developer. Correct. Interesting.
01:34:58:11 – 01:35:00:13
Steve Olson
Yeah, but we do it for them. So if they’ve got a capital.
01:35:00:14 – 01:35:08:28
Rod Khleif
To work but they get the tax, they take it, they get the tax. So how does that work out on the tax standpoint in an Aussie? I don’t really don’t know that much about them. Talk about that for me.
01:35:09:01 – 01:35:30:04
Steve Olson
Well I’m not an expert in it either. Right. You know we refer them to a consultant for the entity set up and they talk to their CPA. But with the renewal of, the Tax Cuts and Jobs Act and the bonus and those, a lot of that stuff is coming back. So the whole point is, if you have a capital gain of any kind and this is just Steve talking, I’m not a CPA.
01:35:30:06 – 01:35:47:04
Steve Olson
Right. Stock sale. You sold some crypto, you sold business off. Said that money goes into an opportunity fund. Okay, you close on dirt somewhere, and the Opportunity Fund invests into the opportunity business.
01:35:47:04 – 01:35:47:23
Rod Khleif
Oh, interest.
01:35:47:23 – 01:35:50:20
Steve Olson
An LLC that is on title oh for the property.
01:35:50:20 – 01:35:52:00
Rod Khleif
It’s more complex than I thought.
01:35:52:00 – 01:36:08:08
Steve Olson
Oh, yeah. It’s it’s going to cost some some money legal wise to set it up. But if you’ve got a big enough of a gain, the whole point is if you hold the property for I think it’s at least ten years, you dramatically reduce, but permanently, by the way, your gains and your recapture.
01:36:08:11 – 01:36:17:23
Rod Khleif
Wow. Interesting. What are these? You know, what is one of these, flex space? It. So is it the flex units or the townhouses?
01:36:17:29 – 01:36:20:13
Steve Olson
I was what I was just talking about were duplexes.
01:36:20:13 – 01:36:21:15
Rod Khleif
Or duplexes okay.
01:36:21:15 – 01:36:32:06
Steve Olson
In the Aussie. Okay. Another way to make money in Texas, because, you know, like I said, the taxes and insurance are tough. So we get creative. We got to attack tax savings or whatever. We can’t.
01:36:32:06 – 01:36:40:11
Rod Khleif
Sure sure, sure. So so, this duplex, what what is the all in? If someone were to come in and invest, what would their cost be?
01:36:40:14 – 01:36:42:28
Steve Olson
If they want to buy one complete, it’s 410 grand.
01:36:42:29 – 01:36:44:20
Rod Khleif
That’s it. Yeah. That’s not bad.
01:36:44:25 – 01:36:48:26
Steve Olson
Yeah. These are, How big are they? They’re smaller. Each unit is two beds.
01:36:48:27 – 01:36:49:21
Rod Khleif
Okay.
01:36:49:23 – 01:36:54:24
Steve Olson
Because it’s an urban location. It’s five miles from downtown. Okay. Three miles from medical center.
01:36:54:28 – 01:37:06:26
Rod Khleif
One is smaller. Yeah. Okay. Got it. Yeah. Yeah. Because I remember when we were talking about what you did previously. I recall those being larger units, if I recall.
01:37:07:03 – 01:37:25:06
Steve Olson
Yeah, we have one of those we’re working on right now as well. Those are typically, you know, a 1500 square foot townhome, three bed, two and a half baths with a garage with a two car garage. I’ve learned over the years that two car garage and even with the driveway, it it makes a big difference in your vacancy over time.
01:37:25:06 – 01:37:26:16
Rod Khleif
Oh, sure, people love that.
01:37:26:16 – 01:37:27:02
Steve Olson
They do.
01:37:27:05 – 01:37:44:22
Rod Khleif
Yeah. Okay. So, so what superpower did you bring to your business? Just curious. What what what? You know, what are you the best at? And what did you hire, align or partner for?
01:37:44:25 – 01:37:46:14
Steve Olson
What am I the best at? Geez, I.
01:37:46:19 – 01:37:53:04
Rod Khleif
When you when when you started I mean, did you were you a geek right out of the gate? No. Okay. No, I got your GC license later.
01:37:53:04 – 01:37:56:02
Steve Olson
No, I’m actually we have one of our other guys. Is the GC.
01:37:56:08 – 01:38:04:03
Rod Khleif
Within the one that just qualifies the company? Yeah. That’s correct. Thought about doing too. Yeah. Okay. So you’ve got a GC for you. But but what do you bring. Just the, just.
01:38:04:03 – 01:38:04:16
Steve Olson
The you know.
01:38:04:22 – 01:38:05:20
Rod Khleif
What what what are you.
01:38:05:20 – 01:38:10:08
Steve Olson
Bring I’m good at tying everybody together okay. Getting them to go in the same direction okay.
01:38:10:09 – 01:38:14:20
Rod Khleif
Got it. Okay. The team won’t like hearing that. Guys, I’m just kidding.
01:38:14:20 – 01:38:18:25
Steve Olson
Take that. Guys. Yeah. You don’t even know why you’re doing what you’re doing.
01:38:18:27 – 01:38:30:19
Rod Khleif
The neck turns the head. Yeah, yeah. No, I I’m just being kind of facetious, but, so. Okay, so you put it all together. Interesting. That’s kind of what I do, too. Okay. Nice.
01:38:30:19 – 01:38:31:18
Steve Olson
Somebody’s got to do it.
01:38:31:19 – 01:38:57:13
Rod Khleif
That’s it. No, it’s it, you know, and, Tony Robbins talks about three different archetypes in a business. There’s the the creator, like, like in, in, innovator. Creator that there’s the, the entrepreneur. So, so like in the, in the tech space, you know, you’ll have you’ll have the, the techies that come up with the thought process, then you’ll have the, the venture capitalists come in with the sea level team.
01:38:57:13 – 01:39:07:18
Rod Khleif
That’s the entrepreneur piece. And then you’ve got to have a manager leader component that that manages it after the fact. And those are those are the pieces. But you’ve been doing this a good bit. How big or how big your team are.
01:39:07:18 – 01:39:15:26
Steve Olson
In the in the DFW office, there’s probably 15 people in there. There’s five people over in our Birmingham operation. You know.
01:39:15:27 – 01:39:17:00
Rod Khleif
That’s something in Alabama too,
01:39:17:05 – 01:39:20:10
Steve Olson
Yeah, yeah, yeah, we we acquired a GC out.
01:39:20:10 – 01:39:21:08
Rod Khleif
There, Salt Lake.
01:39:21:10 – 01:39:24:14
Steve Olson
Yeah. We run our lending team out of Salt Lake and. Okay.
01:39:24:15 – 01:39:25:29
Rod Khleif
What what do you mean lending team?
01:39:26:04 – 01:39:32:00
Steve Olson
So we have a small debt fund, okay. Right. That we use to acquire deals and and develop deals and.
01:39:32:00 – 01:39:39:20
Rod Khleif
Oh I see. So you’ll have investors put money in a debt fund. They get a return. And you use that money to, to to for acquisitions. Yeah.
01:39:39:20 – 01:39:48:13
Steve Olson
And it’s actually just an Ria registered investment advisor that does alternative investing that we paired up with. And they they’re the ones that pumped the money into the debt fund.
01:39:48:13 – 01:39:53:27
Rod Khleif
That’s interesting. Yeah. Okay. And you said you had some experience with Rich. Can you elaborate on that a little bit.
01:39:53:29 – 01:40:03:03
Steve Olson
Yeah. Our our company, the pep Group did work with and work as a REIT for a number of years. Nightmare. Really? Yeah.
01:40:03:05 – 01:40:04:08
Rod Khleif
Why?
01:40:04:10 – 01:40:20:25
Steve Olson
Just the, the institutional controls that are required. I mean, you know, you talk when you’re raising money for a deal and you do your PPM, that’s all. They get away from the public security stuff. Correct. So you’re in that right. When you’re a REIT and it’s just.
01:40:21:02 – 01:40:27:20
Rod Khleif
You’re in that public security stuff. Yeah. Having to deal with all that reporting and all that crap and making sure you don’t say the wrong thing and all that business.
01:40:27:20 – 01:40:39:19
Steve Olson
All that stuff. And so your, your money partners are going to be wanting, you know, they’re going to want to report every time you go to the bathroom, right? I mean, it’s crazy. So we much prefer dealing with Main Street investors.
01:40:39:19 – 01:40:42:04
Rod Khleif
Sure. Yeah. So you were the REIT.
01:40:42:07 – 01:40:44:27
Steve Olson
Yes. Correct. I got you the operational side of it. Yeah.
01:40:45:00 – 01:41:02:21
Rod Khleif
Gotcha. Okay. I got the impression you worked with a REIT, but you were you were basically the REIT. Okay. Wow. So I know you’re really in tune with what’s happening in the marketplace. And you’re obviously a very intelligent, sophisticated investor. You’ve been doing this a long time. What are you seeing as you’re you’re in some interesting market, especially Texas.
01:41:02:21 – 01:41:18:17
Rod Khleif
I’ve got a lot of assets in Texas. I don’t have any in Alabama or Utah, but, quite a few other states. What, what are you seeing in the multifamily space right now? And are you and tell me if you’re speaking to the larger multifamily or the smaller.
01:41:18:19 – 01:41:31:08
Steve Olson
Let me speak to the the larger. Okay. Although I do think that the two of them, as far as I’m concerned, are linked because when we do smaller multifamily, we’re doing it in a large quantity. Got it. We’re in that same rental.
01:41:31:15 – 01:41:45:10
Rod Khleif
But you’re an anomaly in that regard. Yeah, correct. I mean, you know, most, most small multifamily operators have a, have a, have a duplex, a triplex or maybe. Yeah, 3 or 4 of them or ten of them and that’s it. Yeah. But but okay. Well so what do you see. We’re we’re.
01:41:45:10 – 01:41:49:26
Steve Olson
Good. Yeah. We’ll put up 30 of them in one subdivision. Right, right. So that’s like bringing on.
01:41:49:26 – 01:41:52:10
Rod Khleif
A person doesn’t buy all three. Correct. Right. Okay.
01:41:52:10 – 01:42:19:20
Steve Olson
Correct. But you know, in some of these markets that I call them the Covid darlings, you know, that a rush of new supply came in. You had developers showing up, for example, in the Rockies and in Texas in, 2020, 2021, when we realized that Covid wasn’t going to be an extinction level event. Right, right. And so they went into these places that they perceived to really need a lot of supply.
01:42:19:22 – 01:42:22:29
Steve Olson
And what I’m feeling right now because I’m in Lisa.
01:42:22:29 – 01:42:23:28
Rod Khleif
Oversupply.
01:42:24:00 – 01:42:30:18
Steve Olson
Yeah. Yeah, yeah. Now we are leasing our units okay. I’m having to give concessions. You know, you got to fight.
01:42:30:18 – 01:42:38:29
Rod Khleif
For it before. Yeah. We are two huge concessions in our some of our existing assets San Antonio. Yeah Dallas and Houston and yeah.
01:42:39:03 – 01:42:42:19
Steve Olson
Tenants have choices. Yeah. Right. And it’s of.
01:42:42:20 – 01:42:43:15
Rod Khleif
Mitigate.
01:42:43:17 – 01:42:44:15
Steve Olson
Eventually. Yeah.
01:42:44:15 – 01:42:45:04
Rod Khleif
Yeah, yeah.
01:42:45:07 – 01:42:45:21
Steve Olson
And that’s.
01:42:45:23 – 01:42:45:29
Rod Khleif
There.
01:42:46:00 – 01:42:58:15
Steve Olson
Yeah. It’s kind of I view it as like an intermediate problem right where we’re moving through that pipeline. But as far as people coming in behind getting new approvals, that’s a very low, low amount.
01:42:58:19 – 01:43:01:02
Rod Khleif
Correct. Which is why we’re going to see that change.
01:43:01:07 – 01:43:02:17
Steve Olson
Yeah it’s coming and it’ll.
01:43:02:17 – 01:43:09:28
Rod Khleif
Shift and then it’ll be landlord friendly again. I mean, the landlord will be the boss instead of the tenants right now, but, yeah.
01:43:09:28 – 01:43:32:07
Steve Olson
The tenants are in charge right now, and, and, you know, additionally, what’s what I’m seeing, too, is we’re just in a really volatile economic environment. I don’t care what the fed says. Ask any regular person. Right. Yeah. And, you know, every time they cut rates and Jerome gets up there, I had to shut up. Stop talking. He’s pushing that treasury up.
01:43:32:09 – 01:43:34:11
Steve Olson
The more he talks.
01:43:34:14 – 01:43:44:24
Rod Khleif
Yeah I know Trump’s regretting that move. Yeah. So yeah. So you’re seeing you’re seeing a challenge with leasing. I mean, there’s are some other big challenges as well.
01:43:44:25 – 01:44:09:12
Steve Olson
Well in those tenants two, they’re the household formation is down when when there’s negative news, when there’s this and that and tariffs and everybody’s worried you postpone big life decisions like babies. Like babies. Yeah. Like I’m going to move to a new, bigger apartment. Right, right. That stuff has slowed down a lot. So you’re dealing with that at the same time you’re dealing with the Covid supply glut.
01:44:09:14 – 01:44:12:00
Steve Olson
And here we are making these big concessions.
01:44:12:00 – 01:44:32:09
Rod Khleif
Yeah. No I mean occupancies dropped. Yeah. And and and you know what I’m seeing is a lot of distress. Candidly there’s a lot of operators that are that got adjustable rate debt in the 2120. Everybody bought in 22 overpaid and just it’s oh yeah. But it is now. Will it come back. Yes. But yeah there’s a lot of I mean I tell the story.
01:44:32:12 – 01:44:54:11
Rod Khleif
I probably talk about it too much, but I’m, I’m watching a deal right now. That’s right next to a 200 unit we have in San Antonio that sold for 43 or 40 4,000,000 in 20 1 or 22. Don’t quote me on this. Exactly, but that’s about it. Bank owns it’s down to 28 now. Yeah, the same vintage as ours, which is beautiful, but, it doesn’t even make sense until it’s 24.
01:44:54:11 – 01:45:06:07
Rod Khleif
We’ll buy it if it gets down to 24. I mean, that’s the kind of stuff we’re seeing in the, you know, as far as distress. There was a portfolio of 700 units that was being marketed for 10,000 a unit in Texas.
01:45:06:10 – 01:45:07:14
Steve Olson
10,000 units.
01:45:07:14 – 01:45:08:15
Rod Khleif
Yes.
01:45:08:17 – 01:45:11:08
Steve Olson
Yes. Wow. Can you say below replacement cost?
01:45:11:11 – 01:45:33:19
Rod Khleif
Yeah. Like the like by 500%. Yeah. So yeah. So yeah I mean we’re seeing some, some some stuff happening. You know there’s you know they’re saying there’s a, there’s a trillion and a half in debt that that’s hitting by next year. And you know, you know in our space this this debt has terms, you know, like balloon payments and, and maturity and a half a hell of a lot of money and.
01:45:33:21 – 01:45:41:16
Rod Khleif
Oh yeah. And so, you know, if that if you, if you’re one of these operators that’s got one of these loans, you there have to sell a refinance and neither one of or very easy right now.
01:45:41:19 – 01:45:48:13
Steve Olson
I’m sure I was on the phone on the way to see you dealing with that. You know, I’ve got two deals in refi right now.
01:45:48:13 – 01:45:48:29
Rod Khleif
No, kid.
01:45:49:00 – 01:45:50:20
Steve Olson
One is in Utah.
01:45:50:20 – 01:45:55:04
Rod Khleif
It’s time to meet debt service coverage requirements, which is a which is very challenging right now. Oh, it’s.
01:45:55:04 – 01:46:04:26
Steve Olson
Tough because those leases are coming the other direction. Now the rates are higher. It’s complete. And I’ll tell you this, the one in Utah that I’m refined, we’re okay. We’re going HUD.
01:46:04:28 – 01:46:05:09
Rod Khleif
Oh, good.
01:46:05:11 – 01:46:07:08
Steve Olson
I’m I’m actually getting cash out.
01:46:07:08 – 01:46:08:01
Rod Khleif
So you’re keeping it.
01:46:08:08 – 01:46:08:23
Steve Olson
Keeping it?
01:46:08:23 – 01:46:09:00
Rod Khleif
Yeah.
01:46:09:01 – 01:46:12:09
Steve Olson
Got it. I’m going to be able to return about 4 million to the LPs.
01:46:12:09 – 01:46:12:29
Rod Khleif
Nice.
01:46:13:01 – 01:46:31:20
Steve Olson
That’s great. Now let’s go to the crappy one. Right, right. The other one. This one’s in Idaho and Boise. We’re going to have to go to market. It is. But man I’ve got an expensive construction loan on it. We’ve got to bring in some cash for the refi. And we have to you know, it’s a conversation with the investors of guys.
01:46:31:20 – 01:46:39:06
Steve Olson
We have to look 24 months or more out. We’ve got to get through this. I mean, we’re 100% occupied and it’s still a pain in my ass.
01:46:39:06 – 01:46:45:01
Rod Khleif
Yeah, I, I actually right in the middle of a capital call, I’m on my other San Antonio asset that. Well, that’s.
01:46:45:01 – 01:46:45:11
Steve Olson
Fun.
01:46:45:11 – 01:47:06:25
Rod Khleif
For you. Oh, yeah, that’s no fun. I mean, we’re already up to about 700,000 and we only need eight, so we’re good. But but you know it. This this was a management company issue. This management company completely shit the bed. I mean, fraudulent fraud, misrepresentation. If I were soon and we just got an attorney today literally today about like, found out an hour ago, so.
01:47:06:28 – 01:47:21:20
Rod Khleif
But, you know, we’re having to do a capital call. We didn’t realize it was a quarter million dollars in bills. They hadn’t posted. We, Wow. You know, they were lying about maintenance and all kinds of stuff because we, you know, we run a really tight ship. We get a daily KPI report that ties into their software.
01:47:21:20 – 01:47:33:14
Rod Khleif
So we know exactly what’s going on. We know exactly what’s where we’re at with renewals, with occupancy, with delinquency, with income, and what happened. So I’m kind of stealing the conversation here.
01:47:33:14 – 01:47:33:28
Steve Olson
Now, I like.
01:47:33:28 – 01:47:49:01
Rod Khleif
It. What happened was, you know, we couldn’t hit over 80% occupancy, and we thought it was an economic issue. We were having lots of leasing, but it was a lot of churn because people were leaving as fast. They were coming in. We thought it was an economic issue. It wasn’t. They weren’t taking care of the tenants was maintenance.
01:47:49:01 – 01:48:01:08
Rod Khleif
And that’s what we missed. We missed that piece. We thought it was because they couldn’t afford to stay. And then that’s what we were told. But that wasn’t it. They remained the rats in the, in the buildings. I mean, it was.
01:48:01:08 – 01:48:02:00
Steve Olson
How do you get to the.
01:48:02:00 – 01:48:20:16
Rod Khleif
Bottom of it? We fired them and then we found. Then we found all that. We found that we we showed we showed we had no age payables whatsoever. And we fired them. And we found $250,000 in payables hadn’t been paid. I mean, I could go on and on. I’m trying not to. I don’t want to steal the whole conversation, but, I mean, it was one thing after another.
01:48:20:20 – 01:48:21:08
Steve Olson
Well, that’s real.
01:48:21:13 – 01:48:40:25
Rod Khleif
Exceeded our budget by 40%. You know, you’re not allowed to do that. So just a lot of crazy stuff, but but yeah, you know, and, and, you know, but a lot of operators are in trouble right now. I mean, I guess what I’m saying is I’m not immune either. And, you know, but a lot of these operators, I mean, they’re getting killed with.
01:48:40:29 – 01:49:04:03
Rod Khleif
I mean, I know you’ve seen your payroll go through the roof. Yes. Yeah. I mean, you know, the trades are a lot more money than they used to be. Oh, sure. You’re seeing that. Oh yeah. You know maintenance guys, I mean you used to pay them 20, 22 an hour. You’re up to in some cases 40, you know, and for us, for a maintenance supervisor and, and so, I mean, it’s it’s it’s really impacted our expense ratios.
01:49:04:05 – 01:49:26:23
Rod Khleif
You know, typically, you know, you look at a, you know, an average deal, you know, not brand new, but a B, b to C asset, you have a typically a 50% expense ratio. Well, it’s closer to 60% now. And so, you know, with payroll, with taxes, insurance, all this stuff going up. So, you know, it’s tough times for a lot of operators.
01:49:26:23 – 01:49:33:11
Rod Khleif
And but with that is an incredible opportunity coming. I really believe there’s going to be some incredible opportunity to snap some of these assets.
01:49:33:11 – 01:49:48:10
Steve Olson
I agree with you. It’s humbling to see we all swim in a current that’s much bigger than any of us. Sure, sure. Right. And there’s just some. So what you’re talking about is a you know, an operational issue, but still doesn’t change the fact about where rates are and what what the demand for equity.
01:49:48:10 – 01:49:56:07
Rod Khleif
They’re just not coming down fast enough. You know, I know there’s a lot of talk that they will come way down again, which would be which would be interesting.
01:49:56:09 – 01:49:59:29
Steve Olson
I remember that talk started back in 2022. Yeah. Still going. There you.
01:49:59:29 – 01:50:14:12
Rod Khleif
Go. Yeah. It’s the same talk about a crash coming. Crash, which I, you know, I get hate for. I thought Covid was going to cause a crash. So I did a video and I’m like the coming crash to come Covid real estate crash. And of course, I got so much hate because the wrong kids love to tell me you’re tired of being wrong.
01:50:14:14 – 01:50:15:20
Steve Olson
You put yourself out there.
01:50:15:20 – 01:50:37:04
Rod Khleif
Yeah, well, you know, it’s okay, but but, you know, I, I, I will tell you this. I go to politics for a second, I think, and where we are right now interviewing this, if if they reverse that, if they don’t reverse that Supreme Court, the Supreme Court doesn’t reverse that tariff decision. I think we’re headed for some real pain, because that’s the only leverage that he has with these other countries.
01:50:37:07 – 01:50:53:14
Rod Khleif
And that and I don’t see any or the way to attack the this country’s debt, this national debt other than tariffs and or greatly reducing, you know, the bureaucracy of our government. So we’re an interesting times. Oh are we country. Yeah.
01:50:53:17 – 01:51:08:03
Steve Olson
I mean, have you heard that stat going around that even if you confiscated all the wealth of the top 1%, you wouldn’t even get close to putting a dent in the international in the debt or the deficit for that matter. It is a giant giant spending problem. Yeah.
01:51:08:04 – 01:51:25:10
Rod Khleif
If you know, if you’re listening and you want to see something that that’ll that’s a little sobering. Take a look at a graph that shows the difference between a million, a billion and a trillion. When you see how much a trillion really is, it’s going to blow your mind. And, and, you know, and they claim it’s 36, 37 trillion in debt.
01:51:25:16 – 01:51:46:18
Rod Khleif
Well, you know, the fact I was listening to a fantastic interview on Joe Rogan with Elon Musk, this latest one. Yeah, highly recommend it. It’s really good. But, you know, he talks about the fact that, you know, what the reason that Musk got involved it with Doge was he discovered that our, our interest on our national debts is, is more than what we’re paying for the military.
01:51:46:21 – 01:52:07:05
Rod Khleif
I mean, and so, you know, and and yeah, these interest rates and, you know, these interest rates are killing it too, because, you know, we’re paying based on on prevailing interest rates. So anyway, I, I had an economist sitting in that chair, you know, oh, gosh. You know, six, eight months ago I was talking about this. And, you know, these rates don’t come down.
01:52:07:05 – 01:52:12:18
Rod Khleif
It it just that just going to continue increase that national debt. So who knows. You know, it’s
01:52:12:20 – 01:52:15:02
Steve Olson
That’s why you see gold doing what it did.
01:52:15:02 – 01:52:23:04
Rod Khleif
Oh yeah. Thank God gold. Gold. Goldman. My saving grace I’m God because I bought quite a bit of it. Yeah, yeah. But, yeah, that’s with my savings.
01:52:23:04 – 01:52:34:04
Steve Olson
It’s an uncomfortable situation. Yeah, yeah. But it it, you know, to me, it kind of illustrates the fact that because I remember oh eight. Right, I remember September.
01:52:34:04 – 01:52:37:14
Rod Khleif
What were you doing in oh eight. Were you in real estate at that time or.
01:52:37:17 – 01:52:38:21
Steve Olson
Not so much. Yeah.
01:52:38:22 – 01:52:40:02
Rod Khleif
See, perfect timing for you. I mean.
01:52:40:02 – 01:52:41:20
Steve Olson
I had a couple rentals.
01:52:41:20 – 01:52:42:06
Rod Khleif
Yeah, but.
01:52:42:06 – 01:52:43:00
Steve Olson
Yeah, but.
01:52:43:06 – 01:52:46:08
Rod Khleif
If I hadn’t been in it. Oh, my God, to be a billionaire, right.
01:52:46:10 – 01:53:04:18
Steve Olson
Well, yeah. Yeah. And once again, we all swim in a big current, you know, it’s. But I do remember the talk of, you know, when Lehman went down and. God. Yeah. I mean, there was a segment on CNBC talking about, is this the end of capitalism? Right, right. Yeah. And and there was so much panic. But what really stood with me was, you know what?
01:53:04:21 – 01:53:08:21
Steve Olson
Even through all of that, people still needed somewhere to live. Oh, yeah. And even.
01:53:08:21 – 01:53:20:19
Rod Khleif
With Covid, you know, shopping centers didn’t get rent relief. The office didn’t get rent relief. Yeah. That’s right, you know, but we got to hundreds of thousands of dollars in tenant rent relief because people have to have a place to live.
01:53:20:19 – 01:53:24:24
Steve Olson
No one wants to rock that boat. No. And it’s it’s a polarizing topic.
01:53:24:24 – 01:53:42:17
Rod Khleif
How about this 50 year mortgage? They’re talking you know, they’ve had that in Europe forever. I mean I don’t know if you knew that or not. I, I’m from from the Netherlands and 50 year mortgages are I’ve been around there forever. Yeah. And property stay in the family typically they just they go through generations and they stay very often as well.
01:53:42:19 – 01:53:48:28
Steve Olson
I kind of like the portable one better. But yeah 50 I mean isn’t the rate just going to be higher? I mean, if you’re a.
01:53:48:28 – 01:54:01:10
Rod Khleif
I don’t have the rates going to be higher of the payment will be lower, which is the whole issue for a lot of these people. They just don’t qualify. But of course, you’re paying interest pretty much the entire time. My son just I literally just had coffee with my son this morning is he wants to buy a house.
01:54:01:10 – 01:54:04:03
Rod Khleif
He’s got a we got a baby coming. I’m going to be a granddad here in a couple of weeks.
01:54:04:03 – 01:54:04:19
Steve Olson
Congrats.
01:54:04:19 – 01:54:16:14
Rod Khleif
Yeah, yeah. Thank you. And and and we’re talking about getting a house and he’s like, what do you think about this 50 year mortgage. And I said well you know it’s great to get started. You have that low payment. Then when you can just accelerate it, pay more, you know, and pay it down because there won’t be any prepayment penalty.
01:54:16:14 – 01:54:29:11
Steve Olson
I like the idea of stretching the term out as much as you can and pay more as you’re able. Then you’re not locked into such a high. Yeah, you know what? And it there’s things I don’t like about it, but it may be the best of bad choice.
01:54:29:11 – 01:54:47:07
Rod Khleif
I, I haven’t owned a bitcoin. I can’t misspell bitcoin but I, I use it as example of, you know, safety and other things like real estate, like, gold, you know, hard assets you can touch. Bitcoin is, is er but yeah. What are your thoughts?
01:54:47:10 – 01:55:12:13
Steve Olson
I think that, it’s an expression of people’s belief that the financial system is failing them, that it’s gotten away from you. And I think you’ll know Bitcoin has really hit when we stop talking about how many dollars worth of bitcoin do you own. Right. Because now it’s a lot of people just view it as oh it’s a hedge.
01:55:12:13 – 01:55:33:06
Steve Olson
It’s for my dollars. But the whole point is is how can we streamline transactions. Right. How can you do business. Cross borders safely securely. And when you stop talking about I own X amount of dollars or X amount of euros worth of bitcoin instead of I have X amount of bitcoin, then it’s truly that the store value that it’s meant to be.
01:55:33:09 – 01:55:36:00
Steve Olson
And I think we need something like that, although the feds are gonna.
01:55:36:04 – 01:55:49:04
Rod Khleif
We may if if this if if like I said if they if the Supreme Court doesn’t reverse that appellate decision on tariffs that may be the the endgame here is, is that we go to a digital currency, which is a little alarming to me, but we’ll we’ll see.
01:55:49:04 – 01:55:53:13
Steve Olson
You know, some people think that they’re going to do a US dollar stablecoin and that’s the way to solve it all.
01:55:53:13 – 01:55:54:06
Rod Khleif
Oh, interesting.
01:55:54:06 – 01:56:13:22
Steve Olson
You know, and that that’s going to reset everything and make the dollar supreme again and just kind of reset the clock because, you know, say hey, any currencies that have been around, you know that we’re top dog a couple hundred years later, they’re not anymore. Yeah. Right. And we’re we’re spending in a way that I like I think you’re 50 year back to that.
01:56:13:22 – 01:56:21:06
Steve Olson
Yeah. Something has to change. If something doesn’t change I do worry a little bit about asset prices.
01:56:21:07 – 01:56:40:29
Rod Khleif
Sure. Well and homeownership is is you know, really dropped I mean we’ve become a renter nation which serves me serves you in some cases. But but but it’s not great for the population. And you know, I get a lot of hate. Oh, I get so much hate online. Nobody should have owned 800 houses. And like, yeah, well, nobody should stay in their mom’s basement and bitch on their keyboard either.
01:56:40:29 – 01:56:42:11
Steve Olson
But go back to your Xbox.
01:56:42:12 – 01:56:55:07
Rod Khleif
Yeah, right. Exactly. But but but but but you know, it is tough to buy right now. And, you know, I help my daughter, obviously, but I have the ability to do that. Get that triplex and I’m proud of her. But you know it’s a lot of money down.
01:56:55:11 – 01:56:57:12
Steve Olson
What about the kids that don’t have a dad that can help?
01:56:57:12 – 01:57:15:02
Rod Khleif
Yeah, exactly. Exactly. So you know, they homeownership is pretty much out of the loop. Out of loop. Unless they, you know, really kick ass with a white collar job or something. It’s really a struggle. So, yeah, you know, I, I, I, I’m pleased with the 50 year mortgage candidly. You know, hopefully the rates will come down and ease things up a little bit.
01:57:15:04 – 01:57:24:20
Rod Khleif
There’s the rest of the from what I’ve heard, the rest of the world is the rates have gone down. It’s just not here in the United States that’s, you know, this political component that I think Powell is bringing to the game or that committee is it’s.
01:57:24:20 – 01:57:32:26
Steve Olson
Hard to think that that’s not what’s going on to a degree for sure. I mean, they’re subtle about it. Yeah. No, but you’ll they’ll come out and they’ll cut the rates and then they’ll say, but no more 20.
01:57:32:26 – 01:57:39:21
Rod Khleif
Five basis points, please. And that’s like a joke. That’s just like a passively, you know, they they raised it so many times.
01:57:39:21 – 01:57:47:15
Steve Olson
Who do you know. Yeah. Right now that is psyched about the economy. Right. Because I hear the fed say the labor market solid I’m like I that I do not.
01:57:47:20 – 01:58:05:16
Rod Khleif
I’m psyched about opportunity okay. That I am psyched about it. I think this incredible opportunity to buy real estate coming I really I’d say it’s already here. And I think there’s incredible opportunity to buy businesses. You know, there’s 10,000 people a day turning 65 in this country. I’m one of them. I turned 65 in January. So there’s a great opportunity to buy businesses.
01:58:05:18 – 01:58:19:09
Rod Khleif
And if there were to me, one would be buying businesses. I can tell you that right now. But, you know, I’m shifting to senior housing. I got my first assisted living facility a couple months ago, and I’m real excited about that asset class. That’s cool. Yeah, yeah, we’re excited about that.
01:58:19:09 – 01:58:25:18
Steve Olson
We’re working on one in Texas. Yeah, we’re we’re going to do our quads, but it’s, deed restricted to 55 plus.
01:58:25:19 – 01:58:27:22
Rod Khleif
Okay, okay. So so that’s that’s that’s.
01:58:27:22 – 01:58:29:09
Steve Olson
Awesome I think I think you fill it.
01:58:29:09 – 01:58:29:22
Rod Khleif
With that.
01:58:29:26 – 01:58:33:25
Steve Olson
Yeah. Yeah. The investors will love it because those, those tenants pay right.
01:58:33:27 – 01:58:34:27
Rod Khleif
Oh yeah. They they don’t miss it.
01:58:35:00 – 01:58:36:09
Steve Olson
Yeah. They’re not hard on the units.
01:58:36:09 – 01:58:50:23
Rod Khleif
Yeah I had one here in Sarasota had an 88 unit 55 plus. And it was always 101% occupied. Yeah, always a waiting list. Always. And the and death was the only reason we lost somebody. So, you know, it was that was a I hated to sell that place. And that’s a long story.
01:58:50:23 – 01:59:03:10
Steve Olson
What’s tricky about those rod is we’re looking at this and we’re trying to go, what what what is this going to rent for? And we couldn’t anywhere close find any government type. No, no. Okay. It’s just going.
01:59:03:10 – 01:59:07:27
Rod Khleif
To be this one was and our rents were tied to a percentage of the median income.
01:59:07:27 – 01:59:08:24
Steve Olson
In the Army. Yeah.
01:59:08:24 – 01:59:09:07
Rod Khleif
Yeah. Yeah.
01:59:09:07 – 01:59:26:14
Steve Olson
Right. Yeah. They’ll so they’ll tell you what they can be, but in like a private deal if you don’t have comps close, you don’t know. So we, we actually worked with a builder in the same subdivision. Say hey can our property management company just list one of these. Let’s see what happens. Let’s see what comes in the door.
01:59:26:14 – 01:59:35:05
Steve Olson
Because we legitimately had no idea. We could tell you a normal lease, but just what the construction and layout of the community I’m like, not a 55 will pay more for a lot line.
01:59:35:05 – 01:59:43:28
Rod Khleif
Is that what you did there? But you know where you’re taking care of the yards and all that. Yeah. Correct. Okay. Interesting. Yeah. There’s a couple those very close to here. Yeah.
01:59:43:28 – 01:59:45:15
Steve Olson
In Florida. No kidding. Oh yeah.
01:59:45:21 – 01:59:53:12
Rod Khleif
Oh yeah. Right, right. Hello. Yeah. Hello. Yeah. I ride my bike by one, almost daily. Yeah. But, yeah, the way you.
01:59:53:12 – 01:59:54:24
Steve Olson
See that by one, that you know of.
01:59:55:00 – 02:00:00:05
Rod Khleif
Yeah, exactly. This one right here. Well, listen, Steve, I, I really enjoyed this conversation.
02:00:00:05 – 02:00:02:12
Steve Olson
Yeah, I could shoot the shit with you all day. Yeah, I, I think.
02:00:02:12 – 02:00:17:16
Rod Khleif
We absolutely could, Yeah. And, really enjoyed this and, and, and, you’re doing some really cool stuff that I would actually love to be doing as well. And if there were 2 or 3 of me. But, I appreciate you coming down and, you know, let’s stay in touch. This, really enjoyed this.
02:00:17:16 – 02:00:17:28
Steve Olson
Thanks for.
02:00:17:28 – 02:00:19:25
Rod Khleif
Having me. Yeah, I enjoyed it. Yeah, absolutely.
