I talked with my friend Rod Khleif a few months ago, but so much has changed in the last month that I knew that his ability to step back and look at a situation in its scope would really help shape our perspective. Rod is a thought leader in the real estate space who not only made $50 million dollars, but lost it all in 2008. He’s rebuilt his real estate portfolio since the last crash, and he knows a thing or two about courage when you really just want to hide in your house.
It feels a bit surreal out there, says Rod. 80 or 90 percent of what will get you through the next 18 months is your mindset. If you get your mindset right, you’ll be prepared to scoop up the opportunities that are coming our way. Focus on learning new things, embrace that growth mindset, and get ready to make some serious money.
GET YOUR MINDSET RIGHT
One of Rod’s biggest tools is the vision board. He really believes that the physical manifestation of your desires helps you remember as you’re going through all of this what you truly want out of it. Through all of this uncertainty, there’s going to be a silver lining in all of this, and you need to focus on finding that. Besides the vision board, how do you get your mind right?
Average people right now are going to be focused on entertainment and trying to distract themselves with Netflix. First of all, turn off the news. Their job is to freak you out, warns Rod. They’re entertainment just as much as Netflix. Spend thirty minutes reading the news and then stop indulging in your fear.
Now more than ever, you need a morning ritual. Rod likes to start his day off by closing his eyes and just listing the things he feels gratitude for. One by one he pictures his wife, his kids, his businesses, and his goals. Take some time to exercise daily. Your gym is closed? So what? Pivot and adapt, says Rod. As an investor, you need to be more flexible anyway. Go for walks with your family more, find an online trainer, just do whatever you need to do to move your body.
You can’t hide your head in the sand right now as an operator or as a human being. You need to get out in front of your company and your family and be a thought leader. Are you focusing on your fear, or on the tremendous opportunities coming our way? If you can get your mindset right and focus on some personal growth for yourself, you’ll be prepared and confident to make crucial changes to your business that will help you build real wealth.
FOCUS ON THE LONG TERM IMPACT OF YOUR DECISIONS
I feel like we’re being forced as a society to slow down and focus on what matters most to us right now. There are so many tremendous opportunities that can come from this forced slow down. We’ll need to assess our personal lives and our business lives, and get rid of what wasn’t serving us anymore. In 30, 60, 90 days or when all of this has let up, we can reassess our new normal and take the best parts of our experiences from right now and add them to our lives.
The longevity of my impact on people and on my company is important to me. But I’m still going to have to face some tough decisions. Who do I lay off? Should I furlough employees if things get too tough? I have to consider the long-term health of my investors, my students, and my tenants. What’s the best decision that I can make today that I absolutely have to make?
As a presenter at live events, all of this social distancing has really closed down a lot of Rod’s business. Instead of focusing on the events he has to cancel, he’s quickly shifted to planning online meetups. He bought some domains, and is working on moving a lot of his thought leadership events to the online space. Once lockdowns and quarantines end, Rod will have a new asset for his business. He’ll be able to reach more people than ever before. Without this whole slowdown, he would never have moved so quickly and absolutely into an online platform.
FROM BIG FAILURES COME BIGGER OPPORTUNITIES
Like a lot of other investors, I’ve been planning for a recession. 2008 was a sucker punch for many of us, and we haven’t forgotten the lessons we learned. Rod not only lost $50 million, but he also lost out on a lot of time to rebuild because he let fear rule himself during the last downturn. For both of us, we knew a hard reset on the economy would be a chance to find some great properties. Even if you didn’t get liquid before this happened, you’ll still have some chances to benefit from this upheaval.
To those of you who don’t have enough capital right now to finance your own deals, Rod says that multi-family deals are team affairs. If you don’t have access to capital, that’s okay. By figuring out the value you can add to a team, you can still get in on a deal. Is your superpower asset management? Are you really analytical? The beautiful thing about real estate investing is that you don’t have to do deals with your own money. The talent you bring to an investing team can be your capital.
It’s sad to watch a lot of businesses close down, but the truth is, many of them just couldn’t hold on. There were a lot of skinny deals in the last few years when there just wasn’t that much room to make a profit. Those deals are going to come back on the market because those investors don’t have enough liquidity to survive the downturn.
Stepping out in front of your company and leading with courage means focusing on the long-term goals of your organization. Yes, you’re going to have to make tough decisions in the next 18 months. Framing your decisions with a positive mindset and with an eye on opportunities that will serve your company’s mission will help you come through this crisis stronger than before.
WHAT ARE YOU THINKING?
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