From Teacher to Investor – Interview with Todd Dexheimer | 404

Chris Miles (00:00):
Hello, my fellow Ripplers. This is Chris Miles. Your Cash Flow Expert and Anti-Financial Advisor. Welcome you out for a wonderful show. Show that’s for you and about you. Those of you work so hard for money and you’re ready for your money. Start working harder for you. Now! You want that freedom. That cash flow. That prosperity. Today! Not 30, 40 bazillion years from now, but right now, so you can live that life that you love doing what you love being with those that you love, but it’s so much more than you guys. Than just having a lot of money and being comfortable and, you know, driving flashy cars and that kind of thing. Because if you’re following us, we’re not those kind of people. We’re real people. We’re sincere. We’re authentic. And the truth is that you’re a Rippler. That you, yes, you can create lots and lots of money create the life of your dreams, but your life is much more than that. You want to create a ripple effect through the lives of those, around you, whether it be your family, whether it be your community, the country, or across the world. And that’s ultimately what this ripple effect’s about. And I appreciate you guys allowing me to create a ripple effect through you because without that, we couldn’t do it. And you guys have been bingeing on these shows. You’ve been spreading the word you’ve been sharing it. And I love seeing these numbers grow every single day. So thank you for being a part of this.

Chris Miles (01:20):
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Chris Miles (01:29):
Alright! Today, guys, I’m bringing on another great, great investor on our show here. This is actually a guy by the name of Todd Dexheimer here. Now, Todd, like Todd’s been doing real estate. He got in right during the last recession. Like he was born out of the fire, right? He was born out of those flames when everybody says real estate stinks. And that’s exactly when Todd said, alright, let’s do this. He actually started as a high school industrial tech teacher. Then went to real estate in 2008. Now, interesting thing about him is that he’s the CEO of venture properties, LLC. Yeah. He’s also been, has purchased and renovated over 800 units guys. Has focuses on syndicating value, add multifamily and emerging markets, as well as coaching other inspiring investors. He’s the host of the Pillar of Wealth Creation Podcasts that actually I’ve been on as well. He’s also been doing contributing things like Bigger Pockets. And he’s been on various shows, whether it’s like, you know, big real estate investing advice ever, or the Michael Blank show and many, many more. And so he lives in Minnesota, his wife, and two kids love skiing, hunting, camping, hockey running. Of course he’s in Minnesota. He’s got to love hockey. Right? So anyways, Todd, welcome to our show.

Todd Dexheimer (02:41):
Yeah. Appreciate you having me on, I appreciate the introduction, man. I’m like, I’m pumped up. I, that intro was awesome! I’m pumped up to hopefully add some value to the show and yeah. This is, this is an exciting community. It sounds like we got here. So…

Chris Miles (02:58):
Absolutely. No, these are good people. These are the best ones you’ll ever, ever witness. I’ll tell you that. So, you know, tell us like, how did you even go from, you know, high school teacher to real estate? Like what even sparked that because everybody’s freaking out in 2008 and you’re like, Hey, why not? Right.

Todd Dexheimer (03:14):
Yeah. I’ve been, what was I going to lose, man?

Chris Miles (03:16):
That’s right!

Todd Dexheimer (03:18):
I was making you know, not very much as a high school teacher. And I think there was, I don’t, I don’t know exactly what sparked it like it was, I don’t know if it was just a spark, but I’ve always, I think had this entrepreneurial spirit with me. I actually built shipping crates for my dad’s company that he worked at. He was a manufacturing engineer and they’re making these vises and I built shipping crates for these vises. So I had my own decks, custom crates business that my brother and dad kind of formed and along with me, and then I took over and did that. So that was fun. And that was when I was in high school, I had the lawn mowing business, you know, but then I decided to be a teacher and just, just quite frankly, it just didn’t click. Like I thought it was going to be great. And there was parts of it. That was, was great, but it just didn’t click. And it wasn’t for me. And I bet within like a month or two, I was telling my wife, I gotta figure out what I’m going to do when I grow up because this aint it. And so…

Chris Miles (04:26):
It, wasn’t a scary moment for her to say, wait, all of this to now say you want to get out. Right?

Todd Dexheimer (04:31):
Well, we just started our life together, you know, as like all this. So it was kind of crazy, but at the same time I knew it wasn’t for me. So it was just exploratory and just trying to figure out and real estate made a ton of sense. And like you said, it was right during that like firestorm, right. Everything was crashing. Everybody was running in the opposite direction. And I got in a little bit about, you know, I was naive. I didn’t really understand a hundred percent what happened cause I wasn’t involved. Like I didn’t lose anything. Right? So it was a little bit of maybe me being naive, but also seeing the opportunity. Understanding like that real estate will go back up in value, even though some people sat and I heard this a lot of times real estate will never go back up to where it used to be. Never. And that’s very shortsighted. And I knew that it was like, yeah, see, but these are people that got, just got burned. Right? And so it just made so much financial sense and I understood the industry being an industrial tech teacher and you know, doing construction through the summers too, work my way through high school and college. It just made sense.

Chris Miles (05:44):
Yeah. So what was your first deal? Like what’d you start out doing?

Todd Dexheimer (05:48):
You know what, I did three deals pretty much at one time, which is, which is crazy. And I didn’t have any money, by the way. My wife and I had probably like $30,000 saved up, maybe $25,000 saved up. And so we bought a single family that we ended up living in, but it was a foreclosure. We did this 203K loan. So you can get in for very little money. And then we did the renovation ourselves, big renovation. I mean, when we moved in, there was no plumbing, water wasn’t working. So like the first, like, I shouldn’t say when we moved in, like probably the day we moved in, I just got it going. I can still remember working on some, we didn’t have heat, which is fine. Cause we moved in in August, but we had to get heat because at Minnesota, by end of September, you need heat. So I, they like get around is we’re on a time deadline. Yeah. But so that, that was one of them. The other one was a flip that I partnered with a guy that had money and we did the fix and flip. And then the other one was a single family rental house. I bought that out of foreclosure. For like 60,000, somewhere around there stuck another 10, 15,000 into it. Did all the work myself with my wife and a couple of friends came and helped me in, but that was it. And then was able to then refinance that house actually in that snowball, from there. Fix and flip, actually ended up being a flop. I bet I made a thousand dollars on it. I did all the work

Chris Miles (07:27):
You got to learn pretty quickly. Like it’s probably better that happened because in some people’s case where they hit really big on that first flip, they think that’s the way it’s always going to be. Right?

Todd Dexheimer (07:35):
Oh, this is easy!

Chris Miles (07:37):
Yeah, exactly. And you’re like, okay, that wasn’t as cool as I thought that was, that was like a dollar an hour. Gosh.

Todd Dexheimer (07:43):
But it probably wasn’t even that much.

Chris Miles (07:47):
Well, that’s great. And you’ve done. I mean, you’ve done flips, you’ve even done mobile home, parks and you did a ski resort, is that right?

Todd Dexheimer (07:53):
Yeah. Yeah.

Chris Miles (07:55):
Tell us about that.

Todd Dexheimer (07:55):
Well, I bought a defunct ski resort, so it was just a ski resort that, you know, we had some really bad winters in the early, the late 90’s to early 2000’s where there just wasn’t a lot of snow. And so when that happens, these little skiers are just can’t handle it. And so they ended up shutting it down. Somebody got hurt really bad too. And so there was a big lawsuit. And so it was just shut down. The guy that owned it originally passed away, handed down to his kid and grown adult, but yeah, just didn’t want to do it anymore. So they ended up shutting it down and we stumbled upon it. Actually the business partner at the time was actually hunting nearby and he was seeing all these deer trails. And they all led into this property.

Todd Dexheimer (08:48):
So we went and talked to the owner and then was like, Hey, what’s going on here? And we ended up striking a deal. Then we ended up getting the property and we got it for such a cheap price that we had a bank that financed it a hundred percent.

Chris Miles (09:01):
Wow!

Todd Dexheimer (09:02):
It appraised for a million dollars and we were buying it for $450,000 and they fund us to a hundred percent of the deal.

Chris Miles (09:10):
That’s incredible.

Todd Dexheimer (09:12):
Yeah. It was incredible. And that was 2000, maybe 13 or 14. So things, I mean still were a little iffy, you know, probably 13. Yeah. We’re still a little iffy. There is banks. Weren’t being super friendly. Yeah. Not like that, but…

Chris Miles (09:29):
But the numbers made sense. It said, all right. Go for it.

Todd Dexheimer (09:32):
Yup. Yup. So we ended up just taking that. We did some work to it. We were thinking about doing something with it, but it ended up just being more of a distraction to try to get it up and running. So we ended up selling it. So I basically flipped the ski resort. You know, I tried to convince my wife to move down there. She said, no.

Chris Miles (09:50):
I’m saying it as a skier. You were probably really tempted weren’t you?

Todd Dexheimer (09:53):
Yeah, it was great. It was. And it’s amazingly beautiful piece of property and it’s just amazing.

Chris Miles (09:59):
That’s great. What kind of deals are you doing now? Like what kind of multifamily stuff are you doing? Cause I know with different people I’ve had on the show, some were kinda like, you know what, I’m getting so strict with my underwriting. Like I am almost refused things left and right, right?

Todd Dexheimer (10:13):
Yup. Yup. And kind of the same actually. Things were heating up quite a bit, obviously that was pre-COVID. Things were heating up quite a bit and it was really tough to find a deal that made sense. Now people were just buying these properties for crazy amounts and we weren’t willing to. So I’m buying, you know, value add, B class multifamily, typically a hundred plus units. So we can have some scale. We can have the onsite staff and, and we’re buying those in a few markets cross country that are kind of emerging or markets that have some, the, all the right fundamentals that we’re really looking for and we’re doing the syndication. So we’re raising the funds for down payment, all that kind of stuff. So that’s, that’s kind of our bread and butter. And I anticipate that to still be our bread and butter as we kind of emerge through this whole COVID deals will probably come out of this. You know, we don’t know exactly the future yet, but I think there’ll be some opportunity down the road.

Chris Miles (11:24):
Yeah. I mean, not that I, I glory in people’s pain right? Or do something bad, but I definitely foresee that there’s a lot of deal operators that really weren’t operators. They were just greedy people wanting to get in on the, on the ride. Right. And buy these properties even probably have investor’s money out there. And, but they’ve never done a deal before and they don’t know how to operate something. And I imagine that’s where there could be some good opportunities coming up.

Todd Dexheimer (11:47):
I think so. I think so. And like you said, we don’t like for me, it’s you, when you look at it and go, Oh, I really, so some people are excited. They’re like, Oh, it’s great. I can’t wait for people to start losing their properties. It’s like, well you do you understand like that, that actually only hurts you as well. Like I’ve got properties. So if the guys around me guys and gals around me lose their properties, those value, my property pretty value is going to go down. Right. And so it’s, it’s it’s yeah. Well, do I wish ill will upon anybody? No. But the matter of the fact is exactly what you said, likely there’s going to be people that are gonna end up maybe not losing the property, but be told to sell. Lenders have low incompetence and you are going to be told to sell if you’re not hitting your numbers. And so you’re going to be forced, basically forced to sell and yeah, you’re right. A lot of those people had no clue what they’re doing or even if they did have a clue what they’re doing, they were just going about it the wrong way, or they’re going after these properties for fees. I think that’s a lot of things. A lot of what was happening is people are going, wow, I can do this deal. I can syndicate it and I can make $300,000 right up front on this deal. That’s a great payday Al’s I need to do is one to two of those each year. And I’m doing really well. And some people are doing two, maybe three deals a year, they’re making 600 to a million dollars, man. They didn’t care how good the deal was. That’s, Unfortunately I think what was happening.

Chris Miles (13:21):
Yeah. No, there’s, there’s definitely, I’ve seen that. I have definitely seen that out there and you’re right. Like we don’t want people to have to sell off, like in a sense of just being, you know, selling off for dirt cheap or anything like that, you know, I would more see like where’s the opportunity of increasing profits and it’s something that’s already there. Right. It’s like, you know, where they just didn’t operate it well, and yeah. In your opinion, like right now, I mean, what are you seeing? Are you seeing like good deals or you see in most everything’s just junk currently?

Todd Dexheimer (13:50):
Yeah. So currently I would say we haven’t seen much adjustment. The sellers aren’t quite ready to take a discount and yeah, I don’t need the salaries to take a bath. Like I don’t need, in order for me to feel comfortable with the buy. It’s not like I need the sellers to sell for 40% discount or something like that now would that be great? Sure. You know, I need the sellers to come off of their, their price by let’s call it 10%, maybe 15% and then, okay, I’m ready to, I’m ready to start buying. For me, my company. We don’t need to buy Properties, dirt cheap. Now will we? If that happens. Absolutely. But all right. It’s still about the fundamentals of the piece of real estate and how the numbers work and can we get our business plan to be able to take any, can we execute it? And so that’s what really important part. So…

Chris Miles (14:43):
Yeah. What kind of cash flow or NOI can you get from it? Right?

Todd Dexheimer (14:46):
Yup. So I’ve been talking to a lot of brokers that deal in my space and they’re kind of the same, most sellers are looking for right now between a 10% and a 20% discount or sorry, most buyers are looking for a 10% to 20% discount. Most sellers are well expecting to sell either at the previous high or within at least 10%. So they, I have heard from brokers, but a lot of sellers are understanding. They’ve got to come down 5% to 10% and but most buyers are actually even more than that. So we’ve got a gap there eventually that’ll close.

Chris Miles (15:22):
Yeah. It’s got to take some time before they start adjusting and believing the numbers and say, okay.

Todd Dexheimer (15:27):
Real estate. It’s not the stock market. I mean, you’re right, Chris. I mean the stock market goes like this and actually overreacts quickly. Where real estate actually Under reacts and takes a while for those, those drops to happen.

Chris Miles (15:41):
Isn’t that the beautiful thing about real estate? Is that it doesn’t happen overnight. Right. Where people are used to, if they’d been watching the stock market, it’s, it’s painful to watch. You can’t watch it, you know, without freaking out, you know. Where at least the real estate there’s slow adjustments typically. I mean, whether the price go down or up, usually there’s there’s time involved.

Todd Dexheimer (16:00):
Yup. Yeah. I mean, right now I’ve got a property on the market and I have priced at about the 15% below where I would have expected to sell it just a few months ago and I’m kicking myself because I should have sold it in January, but I didn’t know this was happening for some reason.

Chris Miles (16:16):
Of course.

Todd Dexheimer (16:17):
But I still want to sell the property and I’m happy to take a 15% discount because quite frankly, it’s still gonna, I’m still gonna do really well on it. And I see there’s opportunity potentially coming. So I’d rather take that capital, be able to have it, be able to do it. Okay. Put it out there when better deals do come. So right now, if you’re wanting to be a seller, it’s Still sell because real estate slowly, as you said, it’s going to take awhile.

Chris Miles (16:43):
That’s a good point, too. Like you said, you don’t always have to find bad deals. It could be someone just like you, who already bought a great deal. It’s appreciated, you know, you’ve add value to it. And of course now price is great. Even if you have to take a discount, you’re still gonna make good, good money on it. So there’s plenty of those deals too.

Todd Dexheimer (16:59):
Yup.

Chris Miles (16:59):
Well, great. Well how like, like tell us more about your show, the Pillars of Wealth Creation Show. Tell us about that.

Todd Dexheimer (17:05):
Yeah. So Pillars of Wealth Creations, mainly a real estate show, but we’re, we also talk to a lot of people that not aren’t necessarily real estate investors first and foremost. So we’re, the show is kind of more catered towards the business side of the real estate. Like not necessarily talking the nuts and bolts of real estate. I can learn that in a book for the most part. And there’s a lot of other podcasts that talk about nuts and bolts. But one of the big things that we like to focus on is how do you really build a business the right way? So how do we take cause so many real estate investors are transactional, right? They think they think about real estate as just buying a piece of property and that’s it. And then we’re going to, we’re going to be passive, right? We’re going to buy this piece of property. We’re gonna buy this a hundred unit apartment. And then we’re going to be able to sit back on the beach and relax. Cause now we got all this cash flow. Well, that’s not how it works. If you want to do that, then you need to passively truly passively invest in real estate.

Chris Miles (18:05):
That’s right.

Todd Dexheimer (18:07):
But, if you’re going to buy the piece of property and that you’re going to be a part of that deal, you’ve got to be an active business owner. You’ve got to learn how to make a business plan. You’ve got to learn, you know, how to set up systems and processes. And you’ve got to learn how to build teams. You’ve got to do all the things that a regular business owner does. And so many real estate investors have no clue that that’s even part of what they should be learning.

Chris Miles (18:28):
It’s so true. Like I’m in a kind of a high level mastermind group where you usually have to have at least a hundred doors to be in that group. And it’s so common even with those guys, those guys who legitimately do have a business, right. Even for them to say, Oh, like I am getting up at 4:00AM, 5:00 AM to basically get to work and just hammer this out. And I’m trying to manage everybody. And I don’t know if I should have a CEO or not, or a COO or, you know, they’re like going nuts. They went from just trying to make money on a few flips and deals like that. And now they’re like, man, like just to make these millions of dollars, I have no life like no real passive income. And, and that’s a big difference. There’s a big difference in lifestyle between that active investor, right? The person that is a business owner versus those that are just passively investing in. Like some sort of what you offer.

Todd Dexheimer (19:14):
Yup. Yup. Absolutely.

Chris Miles (19:17):
Yeah. Well, great. So obviously like if people follow your show, you, when you talk about syndications, you’re probably talking about your syndications and deals you’re doing right then too. Right. If you’re, if people are looking for passive investments, you’ve got to, you’ve got your own funds as well, right?

Todd Dexheimer (19:30):
Yeah. You know, on the show, I try not to, I don’t probably talk too much about the deals as are going, but if we, when we close on a deal, I usually will give kind of a, Hey, here’s what we did. Here are the lessons we learned along the way, you know, here’s maybe some things we, you know, found in due diligence and why we made adjustments. And so we’ll talk about, yeah, there’s a lot of mistakes and lessons learned even along active deals, I’ve been doing this for a while, but I still make mistakes. I still learn a lot of things on every single deal that I feel like it can bring to my audience and allow them to hopefully learn as well. From what I’ve learned from my mistakes. So…

Chris Miles (20:13):
Well, the thing I love is what you do is you’re not the kind of guy to say, Hey, this deal looks awesome. Like you’re not just, you know, running around like a monkey with a machine gun. Right. You’re actually like, Hey, this deal doesn’t fit my parameters, next. Okay. Like takes me 30 seconds. See this, this one’s a no, like you just keep passing and passing. And those are like the best investors in my mind are the ones that say no to almost everything just like Warren Buffett did. He would always say, I say no to almost everything. And yes, the very, very few things, you know, and then you have to, you have to right. Like, there’s, you can’t be successful if you’re just chasing after every little deal, you’re going to have big, you’re gonna have losses and maybe some gains, but you’re gonna have a lot of losses. You won’t be in business very long.

Todd Dexheimer (20:52):
Yeah. A hundred percent. Yeah. I mean, Warren Buffett’s obviously a pretty smart man. And you know, there, he says that for a reason, there’s so many deals out there and those are deals for everybody else. Not for me.

Chris Miles (21:06):
Yeah. I actually remember him. He said a quote. And he said that to one of my friends in an interview, he said the difference between the successful and the ultra successful is that the ultra successful say no, almost every time.

Todd Dexheimer (21:16):
Yeah.

Chris Miles (21:17):
You know, I know it’s true. And I know you’re that kind of guy too. So same way as you know, listeners, you guys, those who are following this, like check out his website, for sure. What’s, do you have a website that people could follow?

Todd Dexheimer (21:30):
Yeah. A couple of websites, Pillars of Wealth Creation. They can get to my podcast and then just my general website, which should, they can actually still get to my podcasts or that is at VentureDProperties.com. So it’s venture and then D as in dog or Dexheimer properties.com.

Chris Miles (21:49):
Awesome. Yeah. I’ll definitely make sure we get to get those links in the show notes. So if you can follow you, follow your show or even check out your site and get to know you more, obviously, especially if people are looking for investing in opportunities and things of that nature, because obviously you’re looking right now, you’re actively looking for the right deals. Not just any deal.

Todd Dexheimer (22:06):
Yeah. Looking for the right deals and there’s opportunities that are going to come down the pipeline. And I think the important part for people that right now to be just thinking about is, what are the paradigms that are going to be shifting through this whole event, right? People’s paradigm shift. Consumers, thoughts are going to shift, workers habits are going to shift. So there’s going to be different things that are going to come out of this. And how can we make sure we’re positioning ourselves to be able to take advantage of the opportunities that are in front of us. And it’s not necessarily take advantage of other people. It’s take advantage of the people’s wants and needs that, you know, the consumers wants and needs out there. If you can best serve them. I think you’re going to have a lot of success. And that’s what I’m working with. Multifamily with real estate in general, I consider myself a value add real estate investor multifamily. I love a lot, but I also look at other asset classes. So we look at, you know, what are the strengths and weaknesses? What are the trends? Where do we, I think that things are going to be going, and we’re trying to make the best decisions obviously for ourselves and our investors on that.

Chris Miles (23:06):
Yeah. Working to improve upon something and make it better, you know, for everybody. Right. And that’s…

Todd Dexheimer (23:10):
Absolutely!

Chris Miles (23:12):
What cooler way to make money than actually bettering people’s lives and making money from that? I mean, that’s the way life and that’s where the world should be in my opinion. Yeah. Well, great. Hey, I appreciate your time so much Todd. Like this is awesome. Again, everybody check out the links in the show notes, you know, follow his podcast or check out his site. So everybody, you remember, it’s all about patience. It’s all about looking for the right thing. Not just anything but the very right thing. So follow Todd and everybody, I hope you make it a wonderful and prosperous week. We’ll see you later!