Todd Dexheimer is a multifamily investor and syndicator and has been investing in multi-family units since 2012. A former high school industrial tech teacher, he began investing in real estate as well during the recession of 2008-2009. Due to the hardship to acquire loans, he began to flip homes - acquiring a solid rental portfolio before becoming involved in real estate syndications. 

In this episode of Multifamily Real Estate Investments with Don and Eden, Todd will discuss his first deal to transitioning from a single-family to multifamily investor. He also will outline his perceptions of the state of the market due to the talk of a looming recession. Todd also discusses what exactly he looks for in markets when investing in real estate and the types of real estate he chooses to invest in depending on what the current market outlook is.  

Highlights: 

• Todd’s Beginnings in Real Estate 


• Transitioning from One Career to Real Estate -Making the Jump Full time 


• Are We Headed for a Recession?


• Where to Invest


• Current Projects and Future Outlook

How to Connect with Todd

W: VentureDProperties.com

E: Todd@venturedproperies.com

Coaching & Mastermind: coachwithdex.com

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Transcription

Hey guys. Today I'm hosting Todd Dexheimer. Todd is a multifamily investor and syndicator and he had been investing in multi-family since 2012. Today we're going to talk about Todd's first deal to transition from a single-family to multifamily investor and the state of the market due to chatter of a looming recession. 

Welcome to the Real Estate Investing Podcast with Don and Eden where we cover all aspects of real estate investing with special attention to multi-family apartment buildings and off-market strategies. 

Hey Todd, welcome to the show. How are you doing today? 

I'm doing well. Thanks for having me. 

Of course. Yes, so tell us a little bit about your day what are your plans for the near future. 

Well for the day or the future that's a big difference. 

Right. How about we start from there and then we take it to the future I know you say you're going to be traveling to Europe right. 

Yeah. So, today I've got a couple of things I've got - I'm in the third round of a property we're looking at purchasing. And so I've got the call with the seller. So we'll see how that goes. I'm very hopeful to be getting this property and then I'm also redlining a contract that I've got an office building under contract. So we're doing the redlining which redlining means you're just going back and forth with the seller and making changes and trying to get the contract. 

So it's good for both parties so very busy before I go to Europe, but then tomorrow we fly to Germany and spend two weeks with the wife and kids traveling around Europe. 

That's nice. I've been to Germany and I'm going to go to Germany in September for personal reasons. So that's nice that you can travel and work and stay busy when you travel. I guess that's the kind of lifestyle that you get when you work in real estate and you work for yourself. Is that right? 

Well yeah I mean the benefit of owning your own business and doing real estate as I do, is that I've got time flexibility right? I can do this trip and it's not extremely disruptive and I probably on this trip will have to do some work just because of these properties and hopefully, I get this other property and so hopefully I'll be having two properties that were redlining but can be done from everywhere, I’ve got a computer. So that's a benefit. And again it's time flexibility. We can go when we want to go. 

Yes. That's nice. So, tell us a little bit about your real estate business. I know that you have been doing real estate for quite a while now and you've done residential and commercial. You've gone back to commercial, you've gone back to residential, which is kind of different most people they either do this or they do that once they do to transition from residential to commercial then they stay there. I know you had a different story so tell us a little bit about your background and career. 

Yeah. So real quick I was a high school industrial tech teacher and started doing real estate while I was teaching full time. I was buying single-family homes and duplexes keeping those as rentals and then kind of ran out of money and availability because at that time at the time in 2008-2009 at the time it was really hard to get loans and especially get them in your personal name you can only get a few and so I could only qualify for about four loans including my house and so I ran out of credit availability I ran out of money and so I started flipping houses. And that allowed me to then buy more rentals and continue on that journey doing flips as well. I finally was able to quit my job and do it full time and just continue doing the flipping and buying - so I was always buying rentals. I was always wanting to build that rental portfolio. The goal from day one when I first started was to get a thousand units thousand multi-family units and of course find one to four-family units would have taken an eternity but I had a business partner at the time and we really focused on these flips and I think definitely over-focused on the flip side and I think he kind of let us towards that which is fine, but that transition just took a little bit longer. 

When you say it started with multi-family and went back to single-family and then went back to multi-family we bought a 15 unit building that was a good opportunity that purchased and renovated and capped and the deal went okay. But it wasn't great. And so I think it kind of made us go well let's just keep on doing these smaller deals that are simple and we're comfortable with them. So, we transition back to kind of doing those smaller deals and quite frankly we do the smaller deals while we're doing the multifamily still. And then finally in 2015 my business partner I split up and I took a step back and decided what I want to do and where do I want to take this business, what makes the most amount of sense. 

The multifamily made the most sense of building my rental portfolio made a lot of sense. I looked at the numbers quite frankly I looked at the returns on the flips versus the returns on the rentals and the returns on the rentals especially when you take into consideration the principal pay down and the equity that you're building those returns made as much or more. Sounds financially as the returns on the flips and there are a heck of a lot less work way less head damage and way more control. So, the rentals just made way more sense to continue down so that that's that was the transition that was a reason for it. Now again that was in 2015 when I decided all right, this is actually what I'm going to focus on and stop doing the flips. 

Yeah, I mean, I hear a lot of people say that when they're doing anything transactional or flipping properties or wholesaling properties then that's good for paying the bills. It's good for saving some capital, but it doesn't make you rich. What makes you rich is equity and that you only get when you are getting into the bigger deals and you buy and hold. 

So that's yeah that's my perception. Yeah, flipping can be a good business. I don't want a discount and say it was a bad business and I regret doing it because I don't I mean it was good business and I enjoyed doing it and made a lot of good money doing it was able to get me to where I'm at today. 

I wish I would've transitioned out of it may be a little sooner, but it's just a hard business to scale and repeat and you're always counting on needing another deal to make money and if that's what you're counting on all of that, a lot more challenging business. Not that it can't be done and you can't do well and it's just very transactional. 

Yeah definitely. So, I want to talk a little bit about everything that you've been doing so you've been focusing on multi-family ever since. So you said 2015 and I can't ignore hearing about   all the talk and chatter on recession and the coming recession and so we've been we've been living in the perfect environment so far in 2019 where unemployment is very low, historically low and people can pay rent and people can live in A-class buildings and everything's good and there are no vacancies, but now everybody keeps talking about a recession. And so how does it affect the multifamily investor especially somebody like you that you've been in the business for quite a while and so how does it affect your acquisitions you're still doing deals you still getting in. I do count on that recession to consider it when you underwrite them. 

It is pretty funny. You brought this topic up because I just wrote an article about this and the recession is coming. I don't know well I promise you the recession will have some sort of downturn within the next 20 to 30 years I promise you that, we don't know when the recession is coming. Here are the things everybody since, I got and I got into real estate in  2008 and in 2008 the economy, I mean just crashed right? In 2006, everything was beautiful. In 2008, the stock had fallen and it was still falling. And look in 2008-2009 people said it's going to keep on getting worse we're going into this deep deep recession we're never going to dig out of it. I remember being in, I got my real estate license in 2009 and I remember people saying