236. How to Bulletproof Your Wealth Before the Next Economic Downturn

0:00Rod Khleif's story starts far from the world of massive real estate portfolios. He immigrated to the U.S. from the Netherlands as a kid and grew up in deep poverty, wearing Goodwill clothes and eating cereal with powdered milk because it was cheaper than real milk. At age 14, he even lied about his age to get a job flipping burgers just so he could buy his own clothes. Then one moment changed everything. His mother bought a small house for$30 ,000, and a few years later, it had appreciated by$20 ,000 while she slept. That sparked Rod's fascination with real estate. Over the next few decades, he built a massive portfolio of thousands of properties until the 2008 crash wiped out about$50 million of his wealth.

0:41I'm Ryan Atkinson, and you're listening to the Outfit Podcast, where we give you actual advice on how you can start a similar business. And today, Rod is hopping on the podcast to talk about mindset, building businesses, and so much more. So, Rod, so excited to have you here. Thank you so much for the opportunity.

0:55Rod Khleif:Oh, thanks for having me here, Ryan. Let's have some fun today, brother. I'm excited to have some fun. So let's dive into our first question and really going back to the early days of Rod's because you, as I said, you grew up in deep poverty, wearing Goodwill clothes, drinking powdered milk with your cereal. What specific money habits did you learn in those like early days that really helped shape your entrepreneurial mindset? Oh, money habits. Well, I'll tell you, you stole a little of my thunder with your opening there because, you know, I talk about that Dutch, you know, immigrating from the Netherlands, not having anything, you know, and I'll be candid.

1:26Rod Khleif:I'm sure you've got listeners that had it harder than we do and maybe even have it harder now with all the things that are changing via AI and everything. But, you know, luckily I knew I wanted more and I learned money habits from my mom. Like you mentioned, she, she invested in the stock market successfully. She actually babysat kids. So we'd have enough money to eat with her babysitting money. She invested and she bought that house across the street, made 20 grand. I'm like, what? This is when 20 grand was a lot of money. I'm like, you've made 20 grand. You didn't do anything. Screw college.

1:50Rod Khleif:I'm getting into real estate. So, you know, my first year in real estate, I'm at about eight grand. My second year, maybe 10 grand. But my third year, I made one hundred thousand dollars, which back in 1980 was some pretty decent change. And so, you know, what happened between year two and three that caused me to 10x my income? Well, what happened was I I went to work for a guy in real estate and he taught me about the importance of mindset and psychology. And, you know, fast forward to today, like you mentioned, I've owned over, you know, I've owned over 2000 houses that I've rented long term.

2:18Rod Khleif:I have thousands of apartment units now. I'm buying senior housing now. And in 2006, my net worth went up$17 million while I slept. And you might say, wow. And I said, wow. And I got a head so big, I could barely fit it through a door. And you know, when that happens, God of the universe will give you a nice little smack down. And that's the$50 million that I lost conservatively in 2008 and 2009. And so what I'm known for talking about on my podcast and at my events is really the mindset it took to have the$50 million to lose in the first place. and maybe more importantly, how to recover from that kind of a loss to the success that I'm blessed to have today.

2:50Rod Khleif:So we can go anywhere you want with that, brother. Yeah. Let's talk about building it up to the 50 million, uh, like, you know, the 2005, 2006, you're getting a 50 million portfolio. Obviously you grew up, you know, in poverty. I think it's fair enough to say there, how did your mindset change? Like when it comes to money, were you just like spending a ton and like, what should be the advice for someone listening today about that? No, absolutely not spending a ton. I mean, I spend now. You spend when you have it. You don't spend while you're building. I remember I mentioned this before we started recording, Ryan.

3:20Rod Khleif:I called that a$50 million seminar. It was an expensive freaking seminar. Don't get me wrong. But I've built a lot of businesses. And one of the businesses actually was a cold air balloon business. And I'm answering your question with this. So when I had 500 houses, I was living for free in an apartment that I got for free because I was putting up a balloon once a month on this apartment complex, big cold air balloon, the big 30 foot balloons. And that was one of my businesses. And, you know, could I have bought a house? Could I have, you know, bought a Lambo and all that stuff I thought was important.

3:52Rod Khleif:But no, back then I was in growth mode. But I'll tell you, for me, it really wasn't even about the money. You know, the key was I loved it. I freaking loved it. And one day I looked up and I'm like, I've got 500 freaking houses. It's like, holy crap. And then I've had 2000 so far in my career, but it was really more of the fun. I didn't spend a lot of money back then. I wore fake watches because I wanted girls, you know, so I tried to look cool and all that stuff. But now I've got, you know, I've probably got$2 million worth of watches now, but, but the point is you don't spend the money till you have it.

4:24Rod Khleif:And ideally you spend the money you make from your investments. It may be like your real estate investments, for example, or, you know, business income or something, you know, when you're in growth mode, you know, grind, grind for a few years like most people won't. You live the rest of your life like most people can't. When you're in growth mode, for someone that's also in growth mode, they're building their wealth. Obviously, there are smart investments to be had there. You're not doing the Lambos, the Rolexes, whatever. That's not the smart investments. Yeah, those are not the smart investments.

4:54When you're in growth mode, what are the smart investments that you did and now what you know, what you advise other people?

5:00Rod Khleif:That's a layup. Of course, it's real estate. That's what I teach. I host the largest real estate podcast really in the world now for commercial real estate. And I teach people how to buy apartment complexes, but I don't do houses anymore. And I can explain why if you like, but when I lost everything, it was my houses that pulled me down. I had 800 houses and I had several apartment complexes and it was the houses that pulled me down. And so what I learned in that is if I had just been in multifamily, which is what I teach, I would have easily survived that 08, 09 crash, but it was the 800 houses that I had that pulled me down.

5:31Rod Khleif:And I only owed 30 cents on the dollar. Don't think that I was over leveraged. And I get hate all the time. No one should own 800 houses. You're why I can't buy a house. No, you can't buy a house because you're in your mom's fricking basement whining. But yeah, anyway, I digress. Yeah, no, I absolutely love that. So real estate then that's going to be the smart investment. What can you buy that someone else pays for? If that interests you, I'd encourage you not to do houses at the very least do a duplex, a triplex, a fourplex, but even better do larger than that. And I know that sounds scary, but that's what I teach.

6:03Rod Khleif:And it's not that scary. And my students own right around 300 ,000 units, I believe under my teaching. Yeah. It's the largest, as I mentioned to you before we started recording, it's more than everybody else that teaches this combined and something I'm very proud of. And, you know, and then other, of course, every other asset class as well, mobile home parks, you know, industrial flex space, self-storage, you name it. But the bottom line is it's real estate for sure. You know, and, and people think, well, how do I get into real estate? I don't have any money. Well, here's the thing. There's a lot of money looking for a home.

6:31Rod Khleif:And so, you know, what I teach my students is how to raise that money. And, you know, people that have gotten killed in the stock market or God forbid crypto, you know, it's been devastating. And so, you know, real estate, you've got security, you've got, you've got collateral, real collateral. So definitely real estate. Why should you not invest in homes, housing to get started. Well, no. Okay. Let me rephrase that. Listen, get started. And if it's a home, fine. Okay. The problem with investing in houses, and listen, you can make a lot of money investing in houses. It's fine. I made a lot of money for a while, but if you have a house and it's empty, you're a hundred percent vacant.

7:09Rod Khleif:And if you have a house, let's say it's cash flowing 500 bucks a month. You're like, oh man, this is fantastic. Well, that tenant moves out. You're going to pay probably three to 5 ,000 to make it ready again, paint it, maybe replace carpet, whatever, you're going to lose a month or two rent and you've just eaten up your cash flow for a year or two. That's the problem with houses. If you've got even a fourplex and one unit goes empty, you're probably still breaking even. Okay. And of course, the higher the number of units, the more safe it is. And that's what I discovered when I lost everything in 08 and 09, you know, and you know, there's other factors at play as well.

7:43Rod Khleif:But listen, if you go out there and buy have some houses. That's how most people get started. But here, you know, I've had some of the most successful operators on the planet here in my studio, on my couch, own thousands and thousands of units. And I ask them a question, Ryan, because I know what they're going to say. And I want my listeners to hear it from them, not from me. I say, what would you tell 18 year old self if you told them something? And they always say, go bigger, faster. So there you go. You know, that's the bottom line. Yeah. Okay. What does go bigger, go faster mean? More units, more units.

8:11Rod Khleif:Instead of doing a house, do a fourplex. Instead of doing a fourplex, do a 10 unit, a 20 unit, a 30 unit. And I got to tell you something, I'm helping my son buy a house right now. And the crap we're dealing with with the mortgage company is more difficult than if I was buying a 50 unit. I'm not kidding. I'm not kidding at all. It's more challenging than buying a 50 unit because, you know, when you're buying a commercial real estate property, which is higher than four units, five units are up as commercial. The bank is looking at the property's ability to service the debt, not your debt to income.

8:40Rod Khleif:So it's actually easier to buy a larger property. And it all sounds crazy, but it's the truth. Are you working a nine to five, but dream of entrepreneurial freedom? Look no further than the Uflip Academy, the number one entrepreneurial platform with 20 plus step-by-step courses taught by active business owners, live workshops, hands-on skill training, a business idea database, and a thriving entrepreneur community to keep you accountable. Click the link in the description below to join the Uflip Academy today and make this the year you stopped dreaming and started building your business without guesswork.

9:15The mindset to get started, I know you're like really big on mindset. So if someone is on like the ledge of getting started in real estate or any business endeavor, advice that you would give to them that's listening right now?

9:25Rod Khleif:Absolutely, I'll do this as quick as I can. So there's several steps. Like when I, this is how I had 50 million to lose and how I got it back, okay? So it starts with goals. You gotta know what it is you want. You come to one of my boot camps, the first thing we do is goal setting on steroids. because you got to create that burning desire, that hunger. So you push through fear, you push through limiting beliefs. You know, you get back up when you get knocked down. You know, it takes goals. And you got to know why the goals are a must. Now, if you're not interested in real estate, on my link tree, I do a goal-setting workshop.

9:57Rod Khleif:It's rodslinks.com, rodspluralinkspro.com. At the bottom is that goal-setting workshop. There's a guide you can download. I don't sell you anything. Just go there. You know, here's the problem, Ryan. People spend more time planning a freaking birthday party than they do designing their lives. Doing your goals is designing your freaking life. Have your spouse do it. Have your kids, if they're over 10 years old, do it. Design their life. So it starts with goals. And then candidly, you got to make a decision. So back then when I lost everything, I'm like, I knew I had to reassociate with my goals.

10:23Rod Khleif:And then I had to make a decision. Get up off underneath the rock, out from under the rock you're hiding under, licking your wounds. And I don't mean dip your toe in the water, man, you make a decision. I don't mean one foot in, one foot out. I mean, it's freaking done. You know, the Latin root for the word decision means to cut off. So a great analogy is if you're going to attack the island, you burn your ships because you're taking their damn ships home. That's a decision. Okay. It's freaking done. Yeah. That's a phenomenal quote. But it's the truth. You know, you got, you got, you're in. When you make a decision, it's commitment.

10:50Rod Khleif:A hundred percent commitment. You're done. And once you're committed, you're like a train on a track. If you don't commit, you're going to get knocked off track. Right. And then the next piece is you got to take the first step. Right. And, you know, Dr. Martin Luther King says, you take that first step in faith. The next step will be revealed. And, you know, I get lots of analytical people and I love you if you're listening and that's you, but I know you also know how you have to check off every single box before you make a move. Well, you can't do that to get started. You're not going to see the whole path.

11:16Rod Khleif:And I'll give you a great analogy. You can drive all the, and this is for you analytical peeps that are listening. You can drive all the way across the United States at night with your headlight only seeing 50 feet in front of you. You know, you can make it. You know, other people have made it before. You may have obstacles. It's the same way in my business, buying real estate or candidly any business. but you got to get started. You got to take that first step. You know, I see it with my students all the time. It's kind of the law of the first deal. You know, my students are called my warriors.

11:42Rod Khleif:One of my warriors, you know, it takes, it's four months, it's six months, it might even be eight months and they haven't got a deal yet. And they're whining and I'm kicking them in the ass. Come on, you got this, go make it happen. And they get one. And the next day, you know, they have three. I'm like, what just happened? You know, they realize that the delay is all between their ears. And so, and a lot of people fear failure, Ryan. And I'm going to tell you, don't fear failure, fear regret, fear being in the same place you are a year or two from now, unless you love where you are right now.

12:07Rod Khleif:But, you know, there was this nurse in Australia named Bronnie Ware. She was a hospice nurse, and she asked her patients a question. These people were dying, Ryan, and she asked them a question. It was, do you have any regrets? And she wrote a book about it, something like The Five Regrets of Dying. It's a bestseller. The number one regret was not living my life, not living what I know I'm capable of. I can't think of anything worse than that. Fear that. Don't fear failure. You know, I call my failure seminars. I've built 29 businesses so far in my career, several worth tens of millions of dollars.

12:36Rod Khleif:Most are spectacular flaming seminars. Okay. So, you know, as I mentioned, do before we started recording, we fail our way to success and it's the truth. You know, don't fear that. One other quick thing. I know I'm rambling a lot here, but don't let your business be your identity. Let it be your vehicle. If any one of those failures had been my identity, that would mean I have failed and I'm a failure. No, it's your vehicle. Vehicle fails. So what? Move on to the next vehicle. Okay. So very, very important. You know, there's a lot of people about to lose their jobs, Ryan. I hope you know that.

13:07Rod Khleif:I mean, with AI, it's kind of sobering. And, you know, any, in fact, I just told my daughter, she needs to start looking for something. She works for me and she's high paid for me and she's got to start looking for something because she does SEO and marketing. It's basically, I can, I can do it, you know, with a computer now. And so if that's you and you're listening, by God, get going on a freaking side hustle. Okay. Start thinking about what you might like. You know, there's opportunities to buy businesses because 10 ,000 people a day are turning 65. If it's real estate, get your ass to my bootcamp, whatever it is, go, go learn it now.

13:36Rod Khleif:Start now so that when the shoe drops, you're not going, oh my God, what am I going to do? You've already got something else started. You know, you agree with me on that? Yeah, no, I a hundred percent agree with you on that. Like having a side hustle, especially in today's day and age is so key. There's so many ways to make money in this world. You just have to find like what you're passionate about. One question I want to go deeper with you on is knowing your goals. When I take people through their goals, I don't care what, you know, about what you can just do in a year. Okay. I'm interested in your lifetime goals.

14:04Rod Khleif:I, we start with the stuff, the houses, the boats, the cars, the jet skis, the planes, whatever it is. Start with the stuff, everything you'd ever possibly want. Start with your income goals in three years. You've got to be measurable and specific. I want to make, you know, 300 grand a year by June 1st of so-and-so. So income goals and money in the bank in case that you know what hits the fan fund in so many years. Then I talk about things you want to do in your lifetime. You know, what all do you want to do? You know, where do you want to go? Where do you want to travel? OK, everything, everywhere you'd ever want to go.

14:33Rod Khleif:And I tell people, take the lid off your brain. Don't limit yourself. There's nothing you can't do, be or have. You just have to decide and then you have to take massive freaking action. That's it. You can do anything. So everything you want to do, everything you want to learn in this lifetime. You know, do you want to learn to fly a plane? Do you want to learn another skill set? I want to learn how to play the drums, you know, whatever it is, whatever you want to learn. And then lastly, who do you want to help? Because we'll do more for others than we'll ever do for ourselves. So this is all high level.

15:00Rod Khleif:Those are some of the pieces of my goal setting workshop. And because you write down who you want to help. And then I have people identify their number one goal and their top three one year goals. I haven't put a number by each goal. So how many years it's going to take to achieve it. And I haven't identified their number one goal and their top three one year goals. And then I have them write down why those goals are an absolute freaking must to achieve using emotionally charged words so I can show my kids what success looks like so I can retire my beautiful wife, whatever it is, use emotion, put the, cause the whys are what drive you.

15:30Rod Khleif:It's not the goals as much as the whys. But then I also haven't put some pain in there, Ryan, if they don't achieve the goal and make it freaking hurt. Why? Because as human beings, we'll do more to avoid pain than gain pleasure. So I haven't put down, you know, so I don't feel like a failure. So I don't fail my kids. so I don't live a life of regret. Make it freaking hurt because that's the fuel, right? That's what's going to get your ass up in the morning. Stay up late to, like I say, to grind for a few years like most people will never do and live the rest of your life like most people will never live, right?

15:59Rod Khleif:That's what it takes. That is so good there. I want to ask, so you can set your goals and stuff, but one thing that happens to me a lot, I'm sure it happens to our listeners, okay, I have the intentions, I'll write down my goals, but then I don't revisit them or I kind of just put them in the drawer and I don't. Let's talk about that. Let's talk about that. Okay. If I'd have known we were going to dig deep on goals, I would have showed you my planner. I've got my goals in the front. I've got my goals on the wall. I've got my goals everywhere. Okay. And candidly, you know, you should look at them ideally morning and night, really.

16:31Rod Khleif:I mean, if you really want to do this the right way. Now, most mornings, I'll tell you what I do because I use gratitude. Gratitude is the most powerful emotion we have available to us. It lowers our blood pressure, strengthens our immune system, brings us closer to our spirituality, and it's how we bring everything we want into our lives. So I'll sit on my recliner in my other building here, my compound, and I'll just be grateful for the things that I have in my life, the people I love, and so on. And then I'll do gratitude for the things that I want as if I already have them. And I've gotten emotional being grateful for things I haven't gotten yet.

17:00Rod Khleif:And I know I lost a few of you on that, oh God, we're in foo-foo land. Well, this is how I had 50 million to lose and how I got it back. So ignore it at your peril, Okay. Cause it freaking works. You call it prayer. I call it manifesting, but whatever it, it absolutely works. Okay. So one thing that I have a hard time with, and I'm going to ask you a personal questions here. And again, maybe the audience will relate to this. So there's sometimes like for my own business, like I'll set goals, like January, like daily, I was like revisiting goals where I was like, okay, here's what I did today. Like here are my goals for like the month.

17:29Here's what I did. But I found myself like really, like we had a really slow start to the year, like January and February, where it was like, well, maybe I'm putting like too much pressure on myself to like hit these goals where like I'm not hitting these goals and like I'm burning myself out. Like what's advice for the 15, 20 seconds I just gave you there for someone that like feels like, yeah.

17:48Rod Khleif:Well, I will tell you, listen, if your goals are compelling, they juice you, they motivate you. They shouldn't burn you out. Okay. You should be, they need to be goals you're excited about. So I want to, I would tell you if that's the case, revisit if they're exciting because they should propel you. They shouldn't burn you out. You should want to achieve them. Okay. That's the key piece there is that desire. I think that's the only answer I could give you on that regard, but you know, Hey, are you going to hit every goal? No, but I got to tell you, I wish I had my planner. I could show you, I've got pictures in the back of it that have been in there 25 years and I've hit damn near every one of them.

18:22Rod Khleif:I had one picture of a guy with a six pack and I put my face on it. I don't have the six pack. It's well insulated. It's in there, but you can't see it. But damn near everything else. The Lamborghini before I ever got it. I built a beautiful$10 million mansion on the beach that pictures look just like it before I ever built it. Even this compound I have now, the pictures in there look just like some of the stuff in my car. It's crazy how this stuff works. So when you do your goals, at the end of that process, if you do it with me, I'll tell you, go get pictures. I've got vision boards in my exercise room.