RG 329 – Should You Brace for a Market Crash? with Todd Dexheimer

Today, we have another returning guest on the show—my good friend Todd Dexheimer! A lot has happened in the past four years since we’ve had Todd on this show, and we’ll find out what he’s been up to in this week’s episode. 

Todd Dexheimer is the owner of Endurus Capital and VitaCare Living. Over the past 14 years, his company has acquired 4,000 units of multifamily and senior housing and made 150 flips, including a mobile home park and a ski resort.

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Todd shares the principles he lives by and his experiences throughout his career, including the changes we went through to reach success. We also talk about safeguarding assets in times of economic uncertainty, the current state of the market (from his perspective), expected changes from inflation, and much more.

If you want to check out our first episode with Todd, check out RG 135 from 2018.

Key Takeaways

• You have to understand what you’re looking for when searching for deals in another part of the country.

• As you grow as an entrepreneur, your goals and parameters of success will change.

• An entrepreneur goes through multiple paradigm shifts in life, and, sometimes, they are brought about by the smallest things.

• When you look at history, market crashes are inconsistent.
• As an entrepreneur, one of the biggest mistakes you can make is doing everything yourself.

LINKS
https://www.linkedin.com/in/dexproperties/
https://www.enduruscapital.com/
https://www.vitacareliving.com/

Be Bold, Be Brave and Go Give Life a Crack!

Remember to join my Investor Database for the latest Investment Offerings!

Reed Goossens (00:00):

Good day. Good day, guys. Now, before we dive into today’s show, I want to let you know that some of you may aware that over the past eight years, I have built a substantial multifamily real estate portfolio here in the US worth over half a billion dollars. And in that time, my passive investors have received fantastic double-digit returns. And now you two can invest directly into my deals for as little as $50,000. So if you’re an interested investor, head over to reedgoossens.com to find out more. That’s reedgoossens.com. Now, back into the show,

Todd Dexheimer (00:41):

And those who are listening, you’re gonna go through the same thing. You’re in this paradigm that you’ve got right now. You’ve have limiting beliefs, you’ve got certain things that you’re expecting, but you’re gonna continue to evolve and grow. You’ve gotta be, I think, the most important part, and my guess is if you look at the entrepreneurs that are successful as they’re willing to go through those, right? They’re, they’re open to it, and they’re expecting it, and they’re wanting those challenges, they’re wanting to be uncomfortable. That’s the people that are successful, those who just kind of flounder around or get to a certain point, they just, they, they just don’t accept it. And they, they wanna be comfortable. They don’t like that unease, right?

Speaker 3 (01:35):

Welcome to investing in the US, a podcast for real estate investors, business owners, and aspiring entrepreneurs looking to break into the US market. Join Reid as he interviews, go-getters, risk-takers, and the best in the business about their journey towards financial freedom and the sheer joy of creating something from nothing.

Reed Goossens (01:55):

Good day, good day a ladies and gentlemen, and welcome to another cracking edition of investing in the US Podcast from Los Angeles. I’m your host, reed goossens. Good as always, Debbie with us on the show. Now, I’m glad that you’ve all tuned into to learn from my incredible guests, and each and every one of them are the cream of the crop here in the United States when it comes to real estate investing, business investing, and entrepreneurship. Each show I try and tease out their incredible stories of how they have successfully created their businesses here in the us, how they’ve created financial freedom, massive amounts of cash flow, and ultimately created extraordinary lives for themselves and their families. Life by design, as I like to say. Hopefully these guests will inspire all of my cracking listeners, which are you guys, to get off the couch and go and take massive amounts of action.

Reed Goossens (02:42):

If these guys can do it, so can you. Now, as you know, I’m all about sharing the knowledge with my loyal listeners, which is you guys, and there’s absolutely no BS on this show, just straight into the nuts and bolts. Now, if you do like this show, the easiest way to give back is to give us a review on iTunes, and you can follow me on Facebook and Twitter by searching at Reed Goossens. You can find the show wherever your podcast on iTunes, SoundCloud, Stitcher, and Google Play. But you can also find these episodes up on my YouTube channel. So head over to reedgoossens.com, click on the video link, and it’ll take you to the video recordings of these podcasts. But you can see my ugly mug for the beautiful faces of my guests each and every week. All right, enough outta let’s get cracking and into today’s show.

Reed Goossens (03:30):

Turn the show of the pleasure of welcoming back, a really good friend of mine to this show, Todd Dexheimer. Now Todd is the principal of Endures capital and Vitech Care Living. Now, for those people who dunno who Todd is, he started investing way back in 2008, and today his company owns over 4,000 units of multifamily and senior housing. Todd has also completed over 150 flips, including a 20 unit mobile home park and a ski resort, while using profits to build his own rental portfolio, uh, own rental portfolio. Today, he focuses on syndicating large value add senior living and multifamily, uh, properties in emerging markets across the United States. And he was actually also on this show way back in 2018, if you’re interested to take a listen to that head over to, uh, RG 135. It was, uh, all those years ago, but enough for me. Really excited to have him back on the show. Let’s get him out here. Hey, Todd, welcome back to the show. How you doing today, mate?

Todd Dexheimer (04:24):

Great, man. I’m doing fantastic and pleasure as always to to see you and talk to you. So good to be here.

Reed Goossens (04:31):

Thank you very, very much.

Todd Dexheimer (04:32):

Four years ago, man.

Reed Goossens (04:34):

I know, I know. It was, I was, I was, I didn’t think it was that long ago, but it’s

Todd Dexheimer (04:38):

Crazy how much changes in four years. You know, you look back to, I, I’m sure you were on my podcast likely about four years ago, and you look at the differences of four years ago to today, it’s just amazing, isn’t it?

Reed Goossens (04:52):

And, and I, and I’m actually shocked at the 135 number. I thought you’d be like, you know, episode 30 or something like that. You know, like we, you know, cause I I feel like I’ve known you for such a long period of time. We, we’ve sort of started it around the same time and been running the same trap. So it’s good to see, you know, see all the success you’ve done and, and I think the real sort of tip of the hat is like showing people that you have to be consistent at this business, right? It’s not just gonna happen overnight. Like I just mentioned in your story, 2008, you’ve been starting. Yep. Uh, but I want, I wanted to take that away from you. Do you wanna give us a little bit of a, uh, you know, background, a 32nd elevator pitch, your background for those people who may not have heard the episode 135 and and just bring us up to speed, what you’re doing today? Yeah,

Todd Dexheimer (05:32):

Sure. Um, well, I’ll, I’ll give you the quick story and you definitely feel free to, to, you know, dive in with more questions. But, uh, start, it started, like you said, in 2008. I used to be a high school teacher. That was a long time ago now. Uh, but I, I taught chop class. I taught, uh, you know, woodworking and metals and all that kinda stuff. And, uh, started my cutting my teeth through flipping houses. Uh, actually, my, my dream, my goal, uh, very early on was to buy apartment buildings and to buy a bunch of ’em and to own, you know, I thought if I could own a thousand units, if I could only own a thousand units, that would be amazing. And, uh, one day a potentially will get there. Uh, but I didn’t know how to start. So I started buying single family homes as rentals.

Todd Dexheimer (06:17):

I bought some duplexes, quickly ran outta money, so I started flipping houses to generate cash to be able to buy more rentals. And so that’s kind of how I moved along. I did about 150 ish flips. I had a hundred, you know, one to four family, uh, rentals and a couple smaller, smaller apartments and some mixed use commercial and stuff like that. And then about 2015 or so, I started going, Where do I wanna go with this business? And that’s what really led me into the multi-family space and where I am today. And through, through many paradigm shifts, right? It just didn’t happen overnight. But through many, you know, paradigm shifts and a lot of, lot of time and effort, I, well eventually graduated from doing one to four family to 10 to 20 unit to a hundred plus unit. And, um, like I said, that’s where I am today. We syndicate value add a hundred plus unit apartment buildings, also own some senior housing, um, own about 400, uh, units of senior housing. And then, um, have a, have a couple of different commercial, uh, buildings of retail, actually, we’re just, we’re just about to close on a retail strip mall and, uh, have an industrial slash office, uh, building as well.

Reed Goossens (07:38):

Wow, that’s incredible. Are you all in the same market since when you first started?

Todd Dexheimer (07:43):

I’m not. So I’m based outta the Twin Cities. Everything I did when I first started was the Twin Cities, or maybe dipping into Wisconsin a little bit. But, uh, everything was pretty much based there. And then, you know, I started investing outta state, kind of when I was making that transition and that transition, again, that transition was like, I looked at the cash flow versus the flips and that, that, that was what made that happen. But I started, um, going into, into Iowa, or sorry, Ohio, uh, in Kentucky, and, uh, still kind of in Ohio, Kentucky, Tennessee. Um, and then Minnesota, Wisconsin is, is most of the assets.

Reed Goossens (08:28):

So, so, so Midwest, not necessarily Sunbelt, right?

Todd Dexheimer (08:32):

Yeah, right now don’t really have anything in the Sunbelt. I mean, Tennessee is closest to the Sunbelt, you know, I have, but you know, we, we definitely look like the Sunbelt look in the Sunbelt, but just don’t have anything there right now.

Reed Goossens (08:44):

Mm. That’s interest. No, it’s, it’s interesting as everyone talks about Sunbelt, Sunbelt, Sunbelt, and like, you have a bit of, uh, just knowing you and in the introduction I mentioned, you know, you’ve been involved in a ski resort, which is a weird thing to be involved with, but it, it’s that contrarian view of not going where everyone else is and, and finding there’s still good deals in, in, in other parts of the country. You just gotta understand what you’ve gotta look for. So, um, that’s, that, that’s, that’s awesome. And, and what the company, you mentioned earlier, thousand units, if only you could get to a thousand units. What, what did that mean to you back then, and, and what does it mean to you now?

Todd Dexheimer (09:19):

Well, I, I think for me it was like, whoa, a thousand units. Like, first of all, it was a big number. It sounded really cool, . So I think that was like, it doesn’t, it’s, it’s not like it was that amazing. Like there wasn’t that much thought into it otherwise, other than, wow, that was a really big number. But then, you know, I think I was here listening to somebody say, you know, you can make a hundred bucks a unit or expect to make 75 to a hundred bucks a unit, That’s kind should be your goal. I thought, Wow, I got a thousand units. I’m making 75 to a hundred bucks a unit. That’s pretty amazing, right? I don’t have to do, I don’t have to work again. And that was honestly like my original, like, just kind of knee jerk thing was I just, I just wanna do that and I don’t have to work again.

Todd Dexheimer (10:04):

Now. I couldn’t imagine not working. I just like love everything I do. So, yeah, I, I don’t know exactly why that was a magic number. It was just like, just some, you know, it was 25 or six or whatever it was. That’s all I was thinking of. Now, what’s a thousand units maybe? What’s 4,000 units? What’s 5,000 units? We’re approaching 5,000 units right now. It’s like that doesn’t really, doesn’t really mean much. It’s, it’s, um, it’s more of how we’re growing the business, how we’re showing up, what kind of impact are we making, Um, you know, how are we changing lives? How are we changing communities? That’s, that’s more important to me than, than just some number. Right?

Reed Goossens (10:44):

Right. Yep. No, I think that’s so important. As you grow as an entrepreneur, things that you held onto early on in your career, you know, that the escape in the day job or the, you know, gotta get to this number in life will be set. There’s always gonna be another mountain top to scale, and it’s hundred percent, it’s always, you gotta enjoy the journey. And I think that’s what you’re saying now, like, you’re focusing not necessarily on the number, but more the impact. Yeah. And that’s important as, as an entrepreneur, as an investor, um, just, you know, as a human , right? It gives you purpose rather than just, because in the beginning, we all do it as an inward. I wanna escape the day job. I want to have financial freedom for my family. Yeah. And then when you get there, you think, what’s next?

Reed Goossens (11:23):

. You know, I, I remember when I, I left my day job and it, for the longest period of time, it was like, you know, quit, quit, quit, quit, quit, quit, quit. And then I got there, I was like, Well, now what’s the new North Star? Like, what, what am I building? What’s the next 10 years gonna look like? It took me seven years to get me to where I was, and now it looks a little different. And, and I I love that. I guess the question back to you is, what does the next 10 years look like, given that, you know, you and I have been friends for over five years. I’ve had you on the podcast four years ago. You, you’ve been doing it it since 2008. What, what does that look like now?

Todd Dexheimer (11:56):

Yeah, obviously 10 years is a long time from now. Um, what does it look like? You know, when I look at what 10 years from now looks like, it’s probably gonna be a lot different than what it truly is. And, and my values, or not, I should say my values, my values are my values. But, but what I value as being important right now is probably gonna be a lot different in 10 years than some of my philosophies and stuff like that. But, you know, if I look forward, I, I look at, you know, just, I want to create a business that can continue to make impact. And so I really want a business that, that I’m, I’m impacting positively impacting my, my employees, my staff. I wanna positively impact the communities that we’re doing business with, uh, business in. And I wanna positively impact the, the tenants, you know, that are residing at our buildings or renting from us.

Todd Dexheimer (12:52):

Uh, and of course provide, you know, great returns for our investors. I really wanna create this kind of community. And, um, it’s all about impact for me right now. It’s, it’s, you know, certainly definitely there’s, there’s the selfishness too, right? I wanna create a wealth and income and for my family, for my myself, and kind of that legacy, you know, that, that’s the other thing I think of a little bit more. Um, just creating more impact with my family as well. And it’s not, again, it’s not about just the wealth. Um, but that definitely has something to do with it. And the other day I, you know, I was able to make a, a nice donation to my church. And that’s, that’s the other thing. I, I look at it just like, Man, how nice Reed would it be? I’m sure you have some passions that you really, really, really get you going.

Todd Dexheimer (13:44):

And how nice would it be just to be able to go, Oh, they need 500,000, or they need a million, or they need whatever, name the amount, I’m just gonna write the check today mm-hmm. . And I know it’s gonna make a massive impact and I don’t need anybody to, to pat me in the back. I don’t need anybody to even know I did it. I just wanna be able to do it and know that, you know, it’s, it is almost more fun. So I, I made this, you know, donation, nice donation to the church, and it, it doesn’t matter how much it was, but it was, it’s nice to hear people talking and not knowing who did it and just going, Wow, that was really cool. You know? And I went, Oh, you know, somebody said, Can we find out who did it so we can write ’em a thank you, you know, letter. And it’s just kind of, I’m like, Yeah, cool, giving

Reed Goossens (14:37):

Back.

Todd Dexheimer (14:37):

No, you’re not gonna find out who did it, but really cool to like hear that. So it’s just, you know, that’s what it’s all about now.

Reed Goossens (14:45):

No, I, I, I think that that is really important and, and having impact in one’s life and, and being able to give back. Cuz that’s the purpose of going back to what I was saying earlier, is that those goals, those north star changes as you progress through your entrepreneurial life. And I like the fact that, and I sit in the same boat as you. I, when I moved, first moved to the US I, 10 years ago, I had no idea I’d be sitting here talking to you about, Oh, yeah, you know, 4,-10 whatever the units. Right? And the last 10 years been a fricking awesome ride. The next 10 years when I, I’m 36, when I turn 46, like, it’s gonna be even better. Yeah. Right. Like, and it’s sort of, the surrender is also, it’s not that I don’t have a path or I don’t have a north star.

Reed Goossens (15:26):

It’s just like, I don’t, I’m not tying my value to 20,000 units or a billion dollars or whatever that might be. And, and when those shackles came, come off and you get to do the, the giving backs and the, you know, the, the, the realizing more, I think you grow as you just grow a little bit more, you know, I can’t quite, can’t put my finger on it, but it’s, it’s like a stress has been lifted. Like, I don’t, I don’t, I don’t need to prove it to myself that I can go out and buy a thousand units. I I’ve already done it, thus this next 10 years, I can take that pressure off. Cause I’m just gonna continue to do what I’m gonna do.

Todd Dexheimer (16:01):

Yeah. Look, I mean, goals, goals are always great to make and, and, uh, have these values and this vision, and I think it’s really important to be looking at that stuff and understanding what your goals and your values and your visions are. But also you have to be able to understand that that’s always changing. And, uh, as you’ve, as you move along your journey, that that it’s okay to, to change and disrupt your goals and your, your vision and, uh, just always be, always be evolving. You know, part of I think what makes an entrepreneur success journey exciting and an entrepreneur successful period is that they go through these paradigm shifts in life. And I mean, think back, I’m sure you’ve got 30 paradigm shifts as if you dive into it. You know, I just, I can still remember thinking about wanting to buy a hundred unit building, but just not knowing how to get there.

Todd Dexheimer (16:55):

And it was simply a few words from a mentor of mine that made me go, Whoa, you’re right. And I’m gonna go buy a hundred unit building. And it was within like two months of that conversation that I had a hundred unit building under contract. And it was just the simple like paradigm shift. It was my own mind holding me back. There was nothing else. And those who are listening, you’re gonna go through the same thing. You’re in this paradigm that you’ve got right now. You have limiting beliefs, you’ve got certain things that you’re expecting, but you’re gonna continue to evolve and grow. You’ve gotta be, I think the most important part, and my guess is if you look at the entrepreneurs that are successful as they’re willing to go through those, right? They’re, they’re open to it and they’re expecting it, and they’re wanting those challenges. They’re wanting to be uncomfortable. That’s the people that are successful, those who just kind of flounder around or get to a a certain point, they just, they, they just don’t accept it. And they, they wanna be comfortable. They don’t like that unease, right?

Reed Goossens (17:58):

Yeah. No, and I could only imagine that how uncomfortable you would’ve got to go and put that a hundred units under contract back in the day. You know, it would’ve been a real big paradigm shift and, and a push outside of your comfort zone to say, just even putting the pen to paper to write the offer . Yeah. You know, am I, am I doing the right thing?

Todd Dexheimer (18:16):

Yeah. Especially after I was buying, you know, duplexes and fourplexes and stuff like that. I mean, that, that’s what I was buying. And all of a sudden to go to this 100, who am I? Like, you know, and, and I know you did similar and it’s just like, it’s kind of a, a, an odd kind of transition, but it’s just, you know, you have to allow yourself to, to take those risks. And again, to get outside your comfort zone, that’s the only way you’re gonna grow.

Reed Goossens (18:43):

Right? I completely agree. Um, let’s shift to, to today, right? What, you know, what are you seeing in the markets and, and how are you reacting to inflation and the rising interest rates, which is just, we’ve gone from 0% to, you know, you read some papers and they’re thinking it’s gonna be 4% by the end of the year. Yeah. You know, like, how are you handling that and, and are you seeing opportunities? Are you seeing falling knives? What’s, what’s going on in your world when you’re looking at new deals?

Todd Dexheimer (19:13):

Well, certainly, uh, we’re, we’re looking at what the potential risks and the downside could be that I think any smart entrepreneur always looking at that, And let me just go back real quick. Okay. When I first started US 2008, the world was literally crashing. Everybody was losing everything ducking under their house, you know, Well, they lost their house. So ducking under a bridge to, to make sure they’re not gonna get hit by the falling rocks that were still coming down. And, but when you actually look back and open your eyes and you say, Well, 2008 was a fantastic time to buy real estate, right? 2009, 2010, fantastic time. 2000. I can remember back in 2014, maybe 15, there was rumblings of a double dip recession. We were gonna go through a recession. I know several people that sold a lot of properties or all their properties in, and one guy who had many, many units and sold all his, his whole portfolio, um, because the market was going to crash 2018, the market was poised to crash.

Todd Dexheimer (20:23):

It was going to crash 2019, 2020 covid hit, the world was going to end 2021. Now, 2022, what are we having interest rates, inflation war in Ukraine, all this crazy stuff, The world’s gonna end again. Right? My point of eventually we’re gonna have a recession, eventually things aren’t gonna go perfect, but the world’s gonna continue. And people, there’s opportunities that are gonna continue to be out there. So what you have to understand is how are you buying your assets? How are you running and operating your business? And, and, and make sure you’re doing it in a sound way that’s gonna protect yourselves from those potential downsides that mostly don’t happen. But every once in a while do happen. Right? If you just look at the pure economics, I mean, upswings go for a pretty extended period of time, and then a downswing happens for a very short period of time.

Todd Dexheimer (21:23):

Okay, let’s make sure we can hold through those down periods because then the up period happens again. That’s just how, how the economy works. So that’s how we’re looking at things, you know, how long can we hold this, these assets during a downtime, uh, what’s our stress test? And okay, with, with that being said, does the, does it make sense to continue buying? The answer for us is yes, it makes sense to continue to buy. Now, would we be okay holding and and not doing anything? Absolutely. But re tell me, give me the date that a recession is gonna happen and tell me how deep it’s gonna go.

Reed Goossens (22:04):

No one knows.

Todd Dexheimer (22:05):

Perfect. You gave me the answer. So why am I gonna sit around and do nothing for two, for three, for five years waiting for this recession that’s gonna decrease properties by 1%, 10% or 50%? Cause we don’t know. So we’re continuing to buy, we’re trying to be smart about it, and we’re trying to understand how much downside we have, which again, we can never predict exactly, but we wanna be wise about what we do. And for long as we do that, we feel like we have a really good chance of making it through whatever recession, whatever gets thrown our way.

Reed Goossens (22:44):

Mm-hmm. , No, I can, I, I agree with all of those statements in, in terms of how to look at opportunity, right? It’s, as you say, no one knows exactly when it’s gonna hit and how deep it’s gonna be and for how long, but you have to be consistent, consistently being consistent around looking at deals, hanging around the hoop, you know, I think is a great time to be buying assets. Uh, in terms of that downside protection, one of the big things people are skittish about a lending, right? The lending environment. Yeah. What are you doing these days? You know, rate caps, are you getting floating rate? Are you getting fixed rate? Are you buying the caps? And, and if so, have you got assets that are coming out of cap rate, uh, rate cap, um, holds and, you know, you, you got a bit of exposure there. Like how are you navigating that right now?

Todd Dexheimer (23:28):

Yeah, I mean, I, look, I prefer if we can get a, a fixed rate. I think that’s kind of always been the safest way, but the reality is we’re doing value add. So a lot of times we’re getting floating rate debt. Mm-hmm. , uh, however I’m read, quite frankly, I’m kind of okay with it. Uh, it’s not perfect, but look, it, it’s, I I think we’re gonna see interest rates continue to rise, but they’re not, my guess, my gut says they’re not rising. They might go up to 4%. Like you said, the, the fed rate might go up to 4%, but is it gonna go up to six, eight, 10%? I doubt it. Like I just have a hard time believing that it will. So if we can lock in something right now, and it’s a, it’s a term for two to three years, I feel like in two to three years, there’s a really good chance rates will be at or below the level they are now, uh, or what we actually need them to be. So I’m kind of okay with it. Where I think it, it’s gonna hurt people are the people that locked in, you know, three years ago or close to that and theirs coming due right now and they underwrote at either refinance or, you know, they underwrote for their interest rate to be 3% and now they’re sitting there at five or potentially higher percent. That’s where it’s gonna hurt people.

Speaker 4 (25:03):

For those of you who are interested in staying up to date with all the latest happenings in my business, or to learn more about passively investing directly into my multifamily value add deals, then head over to reedgoossens.com and sign up for my monthly newsletter. By signing up, you’ll automatically be notified about my new up and coming investment opportunities. You’ll be able to stay up to date with all the latest real estate news here in the United States and much, much more. So head over to reedgoossens.com and sign up today. Now, back into the show.

Reed Goossens (25:40):

I think you’re right. And in same breath, are you seeing in the deals you are looking at, uh, uh, a cap rate expansion now? You know, a little bit. Take, take it back a year ago mm-hmm. , I think everywhere across the country, you know, would be around a four to four and a half percent. Right? Like, I don’t think there was a market, You couldn’t, you know, a market that’s poised for growth that you couldn’t find. And you probably even subbed that, you know, Phoenix is the Austin, the Dallases, the Denver’s, you know, they were starting to match cap rates on the coastal cities, you know, the Los Angeles, San Francisco’s, um, the New Yorks of the world. Yeah. What do

Todd Dexheimer (26:14):

Midwest,

Reed Goossens (26:14):

Even the Midwest, Yeah.

Todd Dexheimer (26:16):

You know, you maybe got 25 to 50 basis points, you know, higher cap rate, but you’re still seeing four and a half to five caps versus four and a half, you know?

Reed Goossens (26:29):

Right. Right. So are you seeing that shift now to be above five in your, in your markets?

Todd Dexheimer (26:33):

I, I, I would say we’re seeing a shift a little bit. I, I, I’m not seeing a big shift. I’m not seeing this, uh, at least not yet. Well, I’m not seeing this big massive shift. So I think that, so there was, there was a small time period and when everything started to really getting shaken up, you know, let’s call it May, April, May mm-hmm. June, um, that we are seeing properties that, boy, I mean, you’d expect 30, 40 offers on. Right? And all of a sudden this is insane

Reed Goossens (27:13):

What which is, which is insane in, in itself. Crazy. It’s insane.

Todd Dexheimer (27:17):

Yeah. But now you’re seeing one or two, you know, you don’t even see that many people looking at the deal. Uh, that’s what we were hearing for brokers. And so we thought, Wow, this is gonna be amazing. But we didn’t see that big of price reductions. I think sellers are kind of just holding tight, um, buyers are are not quite ready to come to sellers terms, or I shouldn’t say they’re not, not as many buyers are. See, I, I feel, still feel like there’s enough though to where sellers don’t need to adjust that much.

Reed Goossens (27:51):

Right.

Todd Dexheimer (27:52):

What are you seeing? Are you seeing this similar or

Reed Goossens (27:54):

I’m seeing, I’m seeing something similar. You know, we, we did a deal in, in April, which was right as sort of the, the shift, the sort of, you could definitely, you could definitely argue as the peak, you know, and we definitely seen markets come off, um, which has got, you know, to be brutal honest, it’s got me a little bit, you know, Oh geez, do we get, do we buy at the wrong time? Are we buying a falling knife? You know, all those sort of things. But to your point, I’ve got a two, I’ve got a three year cap on it, you know, I’ve already hit that rate cap already to be, to be brutally honest, which was a 6%, um, which is the spread plus, you know, the, the sofa. Um, but the floor is zero. So if it comes back down, you, you get the upside.

Reed Goossens (28:28):

We, we modeled that in, we looked, we showed investors, you know, all the downside that could happen. If this was at 6% for the entire five years, what does a return look like? Well, it’s definitely different to what, you know, what if you average at mid four interest rates Yeah. But you’re not losing people’s money, Right? So I think that’s still the fundamentals. Uh, there, I’m definitely seeing in, in general, there is a bit of, like, I hunt in Phoenix and I hunt in Texas and I hunt in the Carolinas. The Carolinas are more seeing a priced adjustment quicker. Phoenix is not so much. Um, but I’m also looking at, at slightly different deals. Like I’m looking at tax abatement deals, I’m looking at litech deals that are burning off in the next three years. So I’m looking at stuff that I, that I’m not gonna get as much competition on.

Reed Goossens (29:13):

Yeah. And I still believe in the value add. So there’s little, you know, and maybe so for high tax rates in certain states, like taxes where the tax rate is insane. Um, so yes, I am seeing, but I, I do think there’s still a, a shift to come with sellers having to readjust even further mm-hmm. Now, depending on who you listen to, and I love your opinion on this, is there more pain to be felt? I don’t know the answer to that yet. And I, I don’t know if, if, if you read what the Fed is saying up in, what was it? Jackson Hole, they’re keeping ’em high for a little bit for, for, for, for a foreseeable future. So I think the market was trying to, to, to, to price in what q1, Q2 next year, starting to see reversal. But I think you’re seeing J Powell really trying to break the back of this inflation. And I, I, I think you’ll be in, you know, higher interest rate environment for at least the next six to 12 months that has to have an impact on sellers expectations. I think we’re still too fresh in it only being sort of less than six months into it. We sellers like, no, no, it’ll come back and, and it just won’t.

Todd Dexheimer (30:21):

That that’s, that’s gonna be the interesting part cuz I agree. I think it’s gonna be 12, I think it’s gonna be 12 plus months, 12, 18, maybe even 24 months. Because I don’t think we have necessarily inflation problem based on what interest rates are at. I don’t think interest rates are gonna make as much of an impact as what Powell thinks they are. I think we’ve got inflation based on supply and labor issues that are going on. And that’s a long term outlook. I mean, that’s, that’s not changing tomorrow. So I think, I think we’re in an inflationary extended inflationary period of time, which means interest rates will be out for a long time. That’s, if that’s the case, which I, I I believe it is, then I agree you’re gonna see some sellers that that need to sell. Um, fir there, there’s a couple reasons why you’re gonna have sellers that need to sell.

Todd Dexheimer (31:12):

One is you’ve got institutional type funds, you’ve got syndications that just, that’s their clock and they have to sell. And quite frankly, they’re probably still gonna do really well. They bought in, let’s call it 2018 now it’s 2023, it’s their five year cycle and they gotta sell. And 2018 man prices were way cheaper than they are right now. Prices could drop by 20% Reed, and they still do well. Right? Right. Um, so they’re, they’re gonna sell, and instead of selling for, you know, 20 million, they’re gonna sell for 19 million. Oh well mm-hmm. , they’re still gonna, they’re still gonna return their investors 22% IRR or whatever it ends up being. So that’s one seller. The other seller is the, the, the person, the company, like I was saying, they locked in, in, you know, 20, 2019

Reed Goossens (32:04):

Yep.

Todd Dexheimer (32:04):

Whatever it was. And their interest rate was super cheap. And now their loan is at that point where they have to figure out what to do next. And they might not have, if it was an interest only, they didn’t build much equity, maybe they don’t have enough equity to refinance. Maybe the the infrastructure is just too high, They can’t, or they go, man, it’s not worth it, whatever it might be. And they’re willing, they’re willing to sell and take a bargain. The question is, how many people are we gonna be in that position to where they’re willing to sell and take a bargain? And so how much is that bargain gonna gonna really take place? And then there’s a ton of money sitting on the sidelines. There’s a ton of money out there. So what does the money supply look like at that point in time? Uh, how hungry are they for deals?

Reed Goossens (32:58):

Right? Yep. I I completely agree. There’s also gonna be the people who buy in this time and, you know, can, can continue to hold for a bit longer than what, what’s normal. I do think you’re seeing some price adjusting across, you know, 10 to 15% already in some markets. Uh, so you, but I don’t know if you’re gonna have a deep seated recession like, you know, 50% or we, we, you know, the hundred and 20k a door is now the new 80k a door. I don’t think we’re going back that way.

Todd Dexheimer (33:25):

So fact, check me on this, Reed, but over the last 200 years, real estate in the US has crashed more than 10%, only four times. Wow. And I’m gonna be probably butcher the first two dates, but it’s something like 18 36, 18 87, 19 29, and 2008.

Reed Goossens (33:53):

Yep.

Todd Dexheimer (33:53):

Okay. That’s it. And so people who are holding their breath waiting for a massive crash in real estate might be waiting a lot longer. Now doesn’t mean they will, it could happen again. Certainly. But they, they, the history tells us that these are not consistent events. They don’t happen every five years. They don’t happen every 10 years. They happen every 50 years.

Reed Goossens (34:21):

Mm. No, you, you, that’s a good start. I didn’t, I didn’t realize the stuff back in the eighties. And you said less than more than 10%. Is that

Todd Dexheimer (34:27):

What you said? More than 10%. So, you know, 1980s definitely had some, some issues. 1990s definitely had some issues, but it wasn’t big price. Price drops on, on average, the markets went down a couple percent.

Reed Goossens (34:42):

Yep, yep. But I definitely, for all those listeners out there, I definitely go fact check that. But I, I do, I do believe in the sentiment what you’re trying to, trying to establish is that it is long time between drinks on these huge corrections. Yep. Um, and, and you know, people are comparing what we’re in to today versus the 1970s, but, you know, and the people are thinking, Oh, it’s be repeated the 1970s, but you can only look at history so much to see how to, to, to try and identify trends and history is a very good indicator of what’s gonna happen in the future. Because us as humans, we tend to do the same things over and over again. We’re stupid. Right. , we, we get, we get too far away from the last recession, we forget about what happened and we’d make the same mistakes again. Yeah. Um, so it would be

Todd Dexheimer (35:26):

Interesting. But things are always different too. Right? They are, you know, what was different in the seventies and eighties? I mean, look at, we didn’t have institutional buyers back then. You didn’t have, you didn’t have, 401ks were not a thing. Mm-hmm. , you know, we didn’t have a what a reed. What is that? You know, back in, who knew what a REIT was back in 1970, It wasn’t, it wasn’t a thing. There’s so many differences now. A hinese investor invested in the US in 1970. That didn’t happen. It was the guy down the road that had a handshake deal that had the capital to do it. It wasn’t what you see today. It was, it’s totally different. So we’ve got a totally different market, especially in, in the commercial real estate than we’ve ever seen before. And again, I’m not trying to say I’m, I’m not the super bullish person, Probably less bullish than most. But, um, it’s just, it’s just a lot different. It’s, it’s, it’s fascinating, but it’s also ch very challenging to figure out where, where we’re going. Which is why I go back to my first point of, look, be smart about what you buy and have your set criteria and stick to it. Yeah.

Reed Goossens (36:42):

And, and be consistent around doing underwriting those deals. Yeah. Day in, day out. Because you’re gonna see, it’s not sexy, but you, the more deals you underwrite, the more, um, sort of key, key performance indicators you can see. Yeah. And how things are shifting from, okay, what were sales prices two years ago? What are they today? Where, where’s, where’s interest rates today? Where’s insurance pricing? Where’s, where’s the debt? All these things, you know, you mix in a pot and you’ll be able to produce the soup that you can then make and educate a decision and say, I wanna go ahead with that deal or not, it makes sense for me or not. I’m gonna protect my investor’s downside or not. Love it. Um, Todd, one thing I wanna ask you before we wrap up the end of the show is, you know, we’ve known each other for many, many years now. What’s been, looking back on the, the career that you’ve created? What’s been like one of the biggest mistakes or failures? Now we talk about successes and, and, and this growth and thousand 4,000 units and mobile home parks. But what has been the one thing that stands out that’s like how I hit my thumb?

Todd Dexheimer (37:37):

So, I mean, I could, I could list a, a number of ’em. You know, I, I used to not use attorneys and think I could do it myself. And, but I, that’s, that’s exactly what it is. So it’s, the bigger picture is I thought I could do everything myself. If, if it needed to get done, it was my job to do it because I’m the owner of the company. The buck stops with me. So I’m gonna make all the decisions. I’m gonna do all the work. Um, everything’s on me. And, and if I can’t do it, nobody can do it better than me. And so that philosophy was probably the biggest kind of hurdle to my growth, the biggest mistake. And I still to this day struggle with some of that. Um, and always have to find different ways to make sure I’m taking myself out of really messing up my business.

Todd Dexheimer (38:34):

, you know? Yeah. You’re in y . So, I mean, I do I have time for a quick story. Sure. I mean, I got 50 of ’em I could tell you. But, uh, you know, one, one of my favorite ones that it, you know, I flipping houses and I load my car up and I’m driving down the road and I got my Nissan Altima. I’m loaded, I got two by fours. I got, I got concrete bags, I got all kinds of stuff in there. It’s riding, you know, sitting there at like a 20 degree angle, but the butt down to the ground. And uh, I’m sitting there looking at the sky driving down the road cuz it’s so loaded up and it hit this railroad track and my whole back end just goes out. Shock struck the whole, the whole works. I gotta limp into the service station.

Todd Dexheimer (39:19):

Luckily that was like two blocks away. They probably strategically placed it there cuz they knew those railroad tracks were pretty, pretty rickety. And I’m sure this happened before. So I go limp in there three, $5,000 later, probably, probably 5,000 or more. Uh, I have a fixed car. I had to lease rent a car for couple days until it got done and I got a fixed up car. But I, but in the meantime, I’m sitting here going, What am I doing? Like, what am I doing? I’m grabbing materials for these guys that are working on my property. I’m a delivery driver. Like what the heck am I doing? And so I find out that, you know, Home Depot will, will deliver for free. And then I find out that Home Depot will actually send a guy to my property and do the whole material list takeaway.

Todd Dexheimer (40:10):

And I’m like, What? Why am I not delegating this stuff? And so that was a paradigm shift to go, I gotta figure out how to give stuff away. And it, and it continues again, It continues to this day. Here’s an exercise I would challenge like all your listeners to do yourself. To do. I, I need to always do this. And I would say do this once a quarter potentially to potentially even more. But take an inventory for at least two weeks in a row of everything you do. Write it down everything you did during that day and do this for two weeks and grade it one through 10. One is something you don’t like doing and it has zero value to your business. Okay. Or it maybe it, maybe it needs to get done, but it can be done by somebody that you could pay 10, 15 bucks an hour.

Todd Dexheimer (41:06):

Okay? A 10 is something you love doing and absolutely moves your business forward and gets you closer to your vision. Okay. And, and then everything in between, right? And so the goal then is to take all the ones, all the twos, all the threes and so on up to maybe seven and get rid of those and hand those over to people that can take them for you and be left with only the, the eights, the nines and the tens. Now how sweet read would it be to be left with only the tens, only the stuff that you wake up every morning and you go, this is what drives me, this is what moves my businesses along. And I know I’ve got an amazing team behind me that’s doing the one through nines. And that’s what drives them. By the way, my bookkeeper and and assistant, it drives her. She loves doing the work she’s doing. It drives me nuts doing the work. She’s doing . So why am I selfish and doing that work myself? I’m giving her a good paycheck and she’s doing what she loves. How awesome is that like with impact? Right?

Reed Goossens (42:12):

Right. No, no, it’s, it’s true. And there’s so many ways to, there’s another way I do it as well. I, I I break it up in a black, blue, red and green time. Yeah. On a, on a gain chart, you know, where it’s a, the y I think X access is moves a needle in the business and the Y axis. So X is I enjoyment. Y is moves the needle, and then you put in those quadrants, you, you list the things that you like doing, you don’t like doing. And then that what each quadrant then does is creates the blue and the red creates a job description for that person. Right. And then you take that and you put it up on Upwork and you find someone to Yeah. Or split it into some roles and, and you do it. The green time is actually doesn’t move the business a lot, but it’s like stuff I love doing, like surfing, right? I just love surfing. It doesn’t move the business, but it helps me mentally. And I think you gotta have that balance of all and really try and spend a lot of time in the black and the green time and leave the, the blue and the red for someone else to, to to, to move the business. I

Todd Dexheimer (43:08):

I love that. And yeah, there, whether you, you have the color or letters or numbers, it doesn’t matter. But yeah, there’s, there’s definitely gonna be that stuff that you do that you just love doing. Maybe it’s not quite gonna move the business forward and it could be something in the business, right? Maybe you just, maybe you’re a house flipper and you love to tile. It just just gives you the best and most and biggest enjoyment. Well, you’re gonna just continue to tile the bathrooms. That’s okay. Give everything else a but just, that’s fine. If you really love it, go ahead and do it.

Reed Goossens (43:39):

But, but guess what? To tie back to what we were saying earlier, if you look back at those Gantt shuts, those, those, those quarterly, you will see things shifting out of, uh, out of that black time or that number 10. And it, it’ll shift down to the blue or the red time. Yes. And you’ll, you’ll now your, your tens become bigger and your black time becomes even bigger. And, and you look at, and this is the whole point of this story, because we’ve been not known you for five years. You’ve come a long way. You know, I bet you your tens and black times look completely different today than what they did back in 2008, what they did in 2018 when we had you first on the show. Yeah. So it’s great to see that evolution. And it goes back to where I asked that question, What are you gonna in 10 years? I don’t know, I’ll see like, cause you’ll see, you know, , but I’m gonna do the things that I know that are gonna help me. Let go of that, that and, and, and, but, but, but making sure you are, you’re consistently checking in with yourself and understanding what those tens, what that black time looks like for you in the day to day business to help you keep growing as an entrepreneur.

Todd Dexheimer (44:42):

Yeah. You’re gonna be doing the things that are adding value to your life and others, right? I mean that’s, that’s right. That’s the goal. That’s the, you know, the quote unquote American dream to be able to do those things that are adding value to your life and other people’s life and be able to create that freedom. Uh, for me that’s the freedom. It’s not the freedom to go buy a Lamborghini or a Chevrolet. Like I don’t care about that stuff. It’s the freedom to be able to do what I want and when I want and really enjoy, uh, life and be able to create an impact.

Reed Goossens (45:17):

Right. Completely. Love it, mate. At the end of every show, we’d love to dive into the top five investing tips. You ready? Get into it. I’m

Todd Dexheimer (45:23):

Ready. Let’s do it

Reed Goossens (45:23):

Mate. Question number one. What’s the daily habit you practice to keep on track towards your goals?

Todd Dexheimer (45:28):

Boy, um, I, I, and I’ve actually fallen off of this, so I need to get back on it, so I’m glad you asked. But, uh, I like to get up every morning and I read and journal. Uh, I also do some not big exercises, uh, but I do some, some minor exercises, some pushups, some pullups, um, some I’ve got a, a messed up back. So I do a lot of core. And so that’s, that’s kind of my morning, uh, routine that I really love to do. And, uh, like I said, I gotta get back on it. Kind of, kind of been hit or miss a little bit lately, but I think that really helps me set my day up.

Reed Goossens (46:04):

Awesome. Question number two is being is who’s the most influential person in your career to date?

Todd Dexheimer (46:12):

. Um, there’s a lot of very influential people. Um, I, I’m just gonna go ahead and, and, and say the person that really changed the way, I think fairly recently, I guess it’s been a while now, but it’s Trevor McGregor. Um, a lot of people know, uh, coach Trevor McGregor. I hired him to really beat my brain up and he did, and he did it in a good way. So I would say he’s been very influential lately. Uh, lot of, lot of authors and just a lot of people I meet. Uh, I, I try to be very open to hearing what other people have to say.

Reed Goossens (46:51):

I’ve had, um, Trevor on the show a few times. Um, he’s a very influential man and for the people who definitely dunno who he is, Trevor McGregor or Coach Trevor, definitely check him out. Um, question number three is, what’s the most influential tool in your business? So tool meaning a physical tool, it could be a phone, a journal, or it could be a piece of software that you just can’t run the business without. What is it?

Todd Dexheimer (47:14):

I would say it’s actually Zoom, uh, what we’re on right now. Uh, Zoom has been very influential. I’ve used it a lot, a lot, a lot more lately too. Uh, you know, one of my main, one of my main jobs is investor relations and it’s sometimes it’s you’re, you’re meeting, meeting somebody from California or from um, you know, Texas or wherever. And I’m based in Minnesota, so I love zoom face to face. I feel like face to face is the best meeting you could possibly have. I would love to meet them and that physically shake their hand, but if we can’t, Zoom has been very influential. And so I do a ton of business on Zoom.

Reed Goossens (47:48):

That’s awesome. Yeah, I think Zoom has been since the pandemic, just going from leaps to strengths and bounds, bounds forward in terms of what it’s achieving and how it’s getting people to connect across the globe. So Love it. Um, question number four has been, what is the number one piece of advice you could give to your younger self?

Todd Dexheimer (48:09):

I always stay uncomfortable.

Reed Goossens (48:13):

Always stay

Todd Dexheimer (48:15):

Uncomfortable, so, so easy to get fat and happy , um, and think that you’ve achieved something. Uh, but in, in my opinion, for me at least, I create the most amount of joy and happiness in my life when I’m achieving more and more things or doing more and more things or disrupting more. Right? And so I need to be uncomfortable at all times to be able to do that. Otherwise, you know, I’m not stretching myself and not growing.

Reed Goossens (48:55):

Mm. I love that. Always be uncomfortable. Question number five is, mate, where can people reach you to continue the conversation that’ll be in your sphere? Where do they go?

Todd Dexheimer (49:03):

Yeah, thanks for that. Um, Enduruscapital.com. E n d u r u s capital.com. It’s todd@endurescapital.com. They can reach me on Facebook and LinkedIn as well. Uh, send me, send me a, a direct message dme, because I’m really bad at accepting friend requests. So, uh, tell me that. Hey, I, I heard you you and reed chicha and, uh, wanna want to connect. Otherwise I probably won’t connect with you, ,

Reed Goossens (49:37):

Maybe. I’m sure you’re getting plenty of dms these days. Well, mate, look, I wanna thank you so much for jumping on the show again after all these years. It’s great to have you back. It’s great to see what you’re doing. Some of the things I took away from today’s show, I think is, is your consistency around being, um, sticking around the hoop and, and, and knowing your journey, your story and becoming from a high school teacher through 2008 through fix and flipping, uh, into what you’re doing today. And then having that impact with the realization that, you know, I definitely connected with you on the letting go of the big 10 year goals and just knowing that you living more on the present because you don’t know what 10 years is gonna gonna gonna bring you. Um, I also think that your thoughts in and around the economy and where we’re going and how to stay nimble with a, you know, recession, we’re already in a recession or how long this high inflation, uh, this high interest rate environment will be, I think is also extremely important to, to being diligent in your acquisition process.

Reed Goossens (50:30):

Yeah. Um, but, but, but with that being said, mate, thanks again. Did I leave anything out? No, uh, you know, if you’re dead, just rewind and reester guys . Exactly. Exactly. All right, mate, mate, well look, enjoy the rest of your week. We’ll catch up very, very soon. That was good. Thanks. Reed well they have another cracking episode jam pack with some incredible advice from Todd. Remember, if you do want check him out, go to endurescapital.com. That’s E N D U R U S capital.com. That’s todd endurescapital.com. He’s also all over LinkedIn and Facebook. Remember to DM him to get involved in his sphere and check out what he’s doing in the Midwest. I wanna thank you all for taking some time outta your day to tune in, to continue to grow your financial iq. Cause that’s what we’re all about here on this show. To give to like this show, just give it a five star review. It’s easiest way to give back. And we’re gonna this all again next week. Remember, be bold, be brave, and go give life. Okay?