All Forum Posts by: Todd Dexheimer

@Jared K. Thank you for the response. I also want to get into multi-family investing and I have been told the best way to see if it is for a person is to find someone you can build trust with and start at the syndication route.

Shawn, if you invest in a syndication, I would suggest you go with a smaller/mid sized outfit that you can have personal contact with the main person/people. Your goal is learning, so be sure they allow you to be apart of the deal and "shadow" them and coach you along the way. I would try to get a portion of the General partnership as well, so that you can use that or your experience with the banks. Good luck!

3 Votes

Originally posted by @Aaron Mazzrillo:

Originally posted by @Jonathan R.:

I'm just going to leave one final post on this as my strategy is under attack @Aaron Mazzrillo. Granted Aaron is a pro, I've listened to his podcast even before he chimed in here and I give respect where respect is due, the guy deserves respect. I think he has an amazing strategy. Robert asked what I would do with 40k. I think a buy and hold strategy with his all cash investment is an excellent way to invest his 40k. Personally, I think he should park his money there-permanently. Let's just do some fun math. On my deal I get $675 a month in rent. If I never raise the rent $675 X 50 years is $405,000- minus expenses. Let's say I picked a real loser and only rented it six months a year, that is $202,500. Personally, I don't see the point in selling it, I'll have my investment back in a handful of years and a free and clear property to will to my kids. If you create a nice product, it will rent. Tons of people rent apartments, go find one to upgrade. I wouldn't recommend buying a property surrounded by vacant houses, I didn't do that. There are lots of great real estate strategies, this one is mine. If you can find a deal in your area, that is of course the best thing.

It isn't under attack. I'm merely pointing out that if you have a small amount of money to invest, the best strategy to grow that money is to get maximum velocity on it. Parking it in the Midwest is like putting it into a retirement home. Just starting out investors cannot afford to put their working capital in a retirement home and collect pension wages on it. You might get wealthy, but we call that the crawl slow to wealth program. I'd prefer to run to wealth... Or take a bullet train. I'd put it into something that turns over several times a year and has upside. When I really started to get into real estate full time, I partnered with another guy and we targeted foreclosures with good equity spreads. One of our early deals was a house we paid $20K cash for subject to the $700K loan. We had to make a few payments and spent $5,000 fixing the place up, but it sold for $1.2M.

I also did the good old Lonnie Deals - buying and flipping mobile homes in family parks. I would double my money on 2-3 deals. They were all small deals, but I could turn $15K into $30-40K by the end of 1 year.

I see no upside in owning a stick built house with a retail value of less than $100K. In this day and age I wouldn't ever consider putting my money into an asset of such impoverished value. If I do a rehab loan to a fix & flip investor and it goes south, the upside is I get to foreclose and now I own a house with a loan in place and a 30%+ equity spread. A deal like that can be converted into cash quite quickly.

Aaron, investing in the mid-west is not parking your money. Investing in a D class asset that doesn't increase in value is. I have invested in the mid-west and have turned $20k into over many times over 7 figures. It's about strategy, location and buying right. Somehow in California when times are good everyone forgets that their real estate could soon be worth half of today's value. Investing in the Ghetto in California cities is also a sure way to park your money.

1 Vote

Originally posted by @Robert DeForge:

Hey Todd

Thanks for the reply.

I feel I can find $40k properties too, just not in a condition to move people in. The ones I'm seeing in that range will certainly need some work, and I'm not in a position to run a job in Missouri from CA.

If you know where I can get my hands on $40k rentable Duplexes, let me know! :)

I wouldn't buy a $40k house or duplex - it likely will be in a war zone. You can buy a $200k+ SF or duplex and use $40k as the down payment. You should be able to find some markets that you can get into B class areas for $200k and have cash flow.

3 Votes

@David Song I think you are a little short sighted. You look at things quite backwards, best of luck to you. No sense for me to respond more to you, as you just don't get it

0 Votes

Originally posted by @David Song:

Todd Dexheimer

Unrealized gains are equity, which you can refinanced out and expand. Why you only think cash as profit?

If you have nice cash flow, appreciated, that is what these BRRR strategy is all about. Cash out and buy more.

Ok, let's use an example. I have a house I bought in 2009 for $28,000 and put $26,000 into it. I financed it for $65,000. I have been consistently cash flowing at $7000-$7500/year. That gives me $56,000 in cash flow and $19,000 in principal reduction for a total of $75,000. If I sold it today I could sell it for $130,000. My profit on the sale after commission, taxes, closing expenses, etc would be approx. $48,000.

By the way, if you had read my post before you would have realized that I did pull all of my money out of the properties - something you can do when you buy properties under value.

0 Votes

@David Song I think you missed the point on the flips. The point was that the land value didn't increase. The house value increased. The only time land value appreciates over inflation is when it's use changes or it's location becomes more or less desirable.

I own properties that essentially have $0 in land value, because the cost to build new is greater than the area values. Right now the house is worth $130,000, but you take a bulldozer to the house and I would be lucky to sell the land for $5000.

1 Vote

I think It is low inventory, mixed with worried investors. This happens during most cycles. My crystal ball (which may be broken) says this is a small hiccup in a market that will continue for a few more years

0 Votes

ABC's in Real Estate Investing by Ken McElroy

Advanced ABC's in Real Estate Investing by Ken McElroy

Also, both of David Lindahls books - Multi family Millions and Emerging Real Estate Markets

0 Votes

Call your local banks. Also US Bank is hungry in Cincinnati. I would call all of you local area banks, Also try Steve Barbash with Hogan Financial

1 Vote

I've owned properties from the 1800's and will not do it again, unless I can budget in all new plumbing, electrical, HVAC and structural support (old properties typically did not get built properly). The main issues with old buildings are the mechanicals. Galvanized and cast iron plumbing will be an issue.

0 Votes

All Forum Posts by: Todd Dexheimer

Todd Dexheimer has started 32 posts and replied 2971 times.

Post: Have $40,000. Where would you put it for the best return??

Post: Have $40,000. Where would you put it for the best return??

Post: Have $40,000. Where would you put it for the best return??

Post: Why to avoid < 50 k properties

Post: Why to avoid < 50 k properties

Post: Why to avoid < 50 k properties

Post: Is the Multifamily Market Correcting?

Post: Apartment Investing Book Recommendation

Post: Small Balance, $250,000 - $750,000 Lenders, who do you use?

Post: First multifamily deal: How old is too old?