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Real Estate Investing School Podcast
129. Commercial Chess: Smart Real Estate Moves with Dustin
00:53:29
Welcome back to the Real Estate Investing School Podcast. In this episode, we dive into Dustin Young's journey from graduating from Iowa State with an industrial engineer degree into a full time real estate investor and developer. Join us as our real...
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- [00:00]
A
If you are really good at your job and you make money, that's great. Keep doing that and let me make your money make more money for you.
- [00:13]
B
Welcome to the Real Estate Investing School podcast. I'm your host Joe Jensen. Our guest today is Dustin Young. Now, Dustin is a native of Cedar Rapids, Iowa. His journey began with an industrial engineer degree from Iowa State University. Despite a work related accident causing 15 broken bones and significant organ damage, Dustin persevered. In 2018, he embarked on a real estate investing journey acquiring his first single family rental property. This involved into reimagining a medical facility into a 25 unit apartment complex. Showcasing his strategic prowess venturing into commercial real estate development, Dustin secured a three story warehouse for a mixed use conversion alongside a dynamic three building office compound. Now at the helm of GDL Capital, Dustin's vision unlocks opportunities for investors seeking solid returns with community impact. His engineering background simplifies intricate investment processes and his blue collar ethics underscore his commitment to treating investors with honesty and integrity. Dustin, his high school sweetheart Amanda reside outside Milwaukee with their sons Sloan and Lincoln. Beyond business, Dustin is motivated by enabling. Amanda's retirement and his family's explorations as GDL Capital's remote structure paves the way for their dreams beyond Wisconsin's cold winters. Which is what we were just talking about, how cold it is there right now. How you doing man?
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A
Yeah, good. Thanks for having me today.
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B
So if you were to get out of the Wisconsin's cold winters, where would you go? Where's the plan? I see palm trees on the background for right.
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A
Well, we honeymooned in Tahiti and Bora Bora, but I don't know if I could live there forever. Obviously visiting Brody and Brandon out in Maui is great, but right now I think hard to set on Nashville of all places. My wife likes to sing man. So I'd like to see if maybe she can get a second career doing a little lounge singing.
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B
Hey, there we go. This was fun. You know what my. I have a six year old daughter and sometimes she'll be like we'll talk about what she should do when she grows up or whatever. And she's like I want to be this. I'm like no, no, be a real estate investor. And then you can do whatever you want. Right, right. You allowed singer. You can do whatever but you'll actually be able to afford life. So do the real estate first and then, and then you can do anything you want on top of it.
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A
So. Right, Makes sense. Good plan. To me. Yeah. That the bio with the industrial Engineering degree. That's my most expensive piece of artwork. So I was actually never an engineer. So. Yeah, I noticed when I did it.
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B
I got the degree reading over it. It didn't say that it started as an industrial engineer. It just said started with an industrial engineer degree. I was like, what if you ever practiced? So never ended up using it, huh?
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A
Yeah, my. My first job with my fresh engineering degree was a baggage handler at the airport. Four in the morning for like seven bucks an hour.
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B
So nice.
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A
Not quite what I expected, but that's okay. It led me down to where we are today, so I'll take it.
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B
It's fine. I saw this meme or reel or something. It was talking about how it's like if. Imagine if. If as an 18 year old college student, you had to go and ask for a small business loan to pay for your school and present the business plan. You know, it's like, yeah, I'm gonna go spend four years, you know, doing all this and then get a degree and whatever. And they're like, good luck. Most people would not get the loan. I'm like, that's a really good way.
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A
To look at it. But if you had a business plan, it would be hard to get, you know, a loan for the business. They would prefer to see you go to college.
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B
I know, right? Yeah, so we won't get into that, but that doesn't add up on the surface. But let's talk about your journey, man, because, you know, obviously it sounds like you weren't planning for me and you were six years old to be a real estate investor. You went and you got this degree. You know, what was the plan and where was like the pivotal moment where it's like, this is all shifting now, man?
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A
I don't know. That's a great question. At six years old, I was in real estate. My dad actually had a rental property, so I would have to go clean out, you know, stuff that was left behind. So I guess it's sort of always been there in the background. I originally wanted to go to school for architecture because I really kind of liked the design side of it. I had no clue what that really meant. When I got the glossy brochure that said, hey, come to engineering, there's more scholarship dollars, I was like, sweet, because I don't have any money. My dad's not giving me any money. And then I got no scholarships either, so bootstrapped it through. Yeah, so I did. I was a baggage handler. I got a drafting job doing countertops. So a little closer to Engineering with drafting, but a little bit residential, doing countertops. That in last ended up being a mover, which I actually. I really loved. So that's kind of when I figured out I liked working with my hands. And just that sort of satisfaction of. You show up and they got a full house. You've got an empty truck, fill it up. But it was seasonal for the most part. You know, I was working 70 hours a week in the summer. And seven hours a week in the winter. And I knew that wasn't sustainable. So I got a delivery job which was much more consistent, which was fine. I liked it. I was good at it. But then I ran into the FedEx guy. And found out that they were independent contractors rather than just hourly employees. So I started chasing him around and asking more questions. And he agreed to sell me his route. Talking to the wife, got more info about it, you know, finally got the approval, decided to do it. And then he sold it to somebody else.
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B
Oh, no.
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A
Yeah. But in the meantime, I had applied. I was approved, you know, as a driver and an owner. So I had. I didn't get his route, but they were creating a new one, so I didn't have to buy it, but I did have to buy a new truck instead. So probably better off rather than buying whatever death trap he had, you know, carry rigged together over the years. So I started it, my engineering degree, as a FedEx guy. With me, one route, one truck. And then over the course of 10 years. Yeah, I expanded to 30 trucks in three different states.
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B
Oh, so you actually really built out the whole business of it then. So you're running a full FedEx thing?
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A
Yeah, so we're independent contractors. So if you want to say I had a trucking firm with one client. FedEx was my client, so. Sure. That's just the way it works. Yeah, it's kind of nice. It's kind of like a franchise. You have that, like, you know, international, whatever, Fortune 500 company behind you. Right. You're wearing. Wearing their gear, but you still get to pick and choose who you hire and how they get the job done.
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B
That's awesome.
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A
That's cool. I really loved it until I got ran over by one of those trucks. And that's. That's the 15 bones and four organs that you talked about. So.
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B
Yeah, I was wondering. So you actually got ran over by a big FedEx truck?
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A
Yeah. Not a semi, just a. Yeah. Package van. Bread van.
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B
Yeah.
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A
Nevertheless. Yep. So, yeah, a little flight for life, trip out of that. A few days in the hospital and. Yeah. Brought. Brought an abrupt end to my driving career, as in the middle of my recovery. They also decided to not renew my contract, so how convenient. Yeah, right, Exactly. So. So technically I was one day short of 10 years because your anniversary falls on the renewal, so we'll call it 10 years. Yeah, but they give you enough warning that they're canceling your contract that I was able to sell it before I walked away with nothing. Okay. So, yeah, so I took. Honestly, I was in the hospital bed and I got the call and I was like, ah, I'm just gonna be a beach bum. I'm gonna buy a boat. I bought a boat. Boat and hung out. Decided to be a stay at home dad for four years. My youngest was 10 months old at the time, so I was like, never get this chance. I'll never get this time back.
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B
Sure.
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A
And the whole point of becoming an entrepreneur and having the big business was the freedom to be at home, to be a good dad. So, so you just kind of lean.
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B
Like, cool, I'll take this time and do what I want, be with my family.
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A
I figured out I wasn't because I was actually working 80 hours a week. So when I didn't have to work anymore, then I could actually be who I wanted to be. And once he went back to school full time, it was like, okay, I, I really enjoyed that time. I enjoyed going to all the games and, you know, whatever art shows and whatever field trips. You know, I like being able to do that. So what can I do that will still allow me to have that freedom that's still my own entrepreneur gig that will build the wealth for our family. And that's where I ended up with real estate. So that accent, I guess it's always been there.
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B
So that accent kind of gave you like a pause and a reset to like one. You know, it kind of ended the whole contract with that business. So then you, you actually took a few years to kind of reevaluate and be with the family and think about like the big picture game plan. And that's where you kind of settled in on, on real estate.
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A
You got it.
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B
That's interesting. You know, it's, it's funny how sometimes these big. I had a similar thing. It was just kind of these big, you know, life moments. These that, you know, might seem pretty negative, but they can kind of cause you to step back and rethink everything and guide you forward in a better, more like, I don't know, intentional way. And I know it did for me. So essentially here that, that was that's something that happened for you as well.
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A
Yeah. I mean, so. Right. I wouldn't wish it on my worst enemy.
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B
Sure.
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A
But I would never take it back. Yeah. Because I don't, I don't know where I would be if I hadn't left, you know?
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B
Yeah. So. So you decide. Okay, real estate's the game. Why? Why real estate? Why did you settle in on real estate? And then what was your initial, like strategy and approach? Because, you know, we say real estate and that's as broad as saying, oh, I want to play sports. Right. You know, well, there's a lot of sports out there, you know, and it's like. So you said you decided on real estate, but why real estate specifically? And then what niche or strategy or approach did you have if you had one? And why?
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A
Well, I mean, I looked at a few options before I settled on real estate, one of which because I was hanging out with, you know, a 5 year old and a 10 month old. We did a lot of like Chuck E. Cheese and Dave and Buster's and you know, like my family still to this day when we vacation, we do mini golf. So we were on vacation in Colorado, couldn't ski. I was a little, little knocked up. But you know, there was little ski town. There was one place to go. It had four bowling lanes, two movie theaters, like pizza oven and a bar. And I was like, this is super cool. It's everything in one. Kids like it, adults like it. I want one in my own hometown. So I looked into that. I hired a designer, I hired a consultant, the whole bit. And when it came down to it, I was like, this is like a bar, a restaurant that's open seven days a week. So closing time, I'm like, I, I know myself. I was working 80 hours a week at FedEx that we didn't even work weekends and nights. Right. Like, if I'm working nights, weekends and holidays, like, I'll be here. I just know I would and I'll end up divorced and that's not an option. So thought it was a great idea, but I turned it down. So I wanted, it's like, no, you're doing this for the time. Freedom. So yeah, I went back to when we bought our first property and sorry, Debbie, but I felt like I knew the market better than my agent did. And so I was like, well, maybe I can do something with that. And I don't know how I stumbled across bigger pockets or what got me searching there. But yeah, that's how I came across real estate. So yeah, My first purchase was a $20,000 single family bungalow in a D class neighborhood.
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B
There we go.
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A
Four bedroom, one bath. That came with a tenant paying 650.
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B
Hey, that, that's. That passes the 1% test, right?
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A
I was super excited. I was like, well, it's like three and a half percent. Yeah. I was like, and it's $20,000. So you're like the end of the world.
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B
I lose 20 grand exactly. Pour money into repairs and maintenance, Right? Maybe I lose 40 grand. Okay, maybe I lose 50 grand.
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A
No, that one actually it turned out pretty good. It didn't need a lot of work for what you might think. Tenant wasn't the great greatest. We did have our issues, sure. But yeah, I sold that in 2122, so kind of, kind of the peak there. And basically 4 xed it. And by the, I had a section 8 tenant in there paying 1300amonth when I sold it.
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B
Wow. So, so just. So why, why sell it? I mean, for $80,000, you know, if you're getting 1300, like that's still a great cash flow. Did you just have other things you want to do with that cash? And if so, like, because that's always an interesting question, right? Like, do I sell my. What? I, I'm very interested in when and why people sell their assets. And I have my opinions and thoughts on it.
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A
But. But yeah, six rentals in that same neighborhood, like they were literally two blocks away from each other in each direction. So you know, it was that like efficiency of scale kind of thing. But at the same time the medical facility talked about, my Bio was like 35 minutes the other direction. So being the hands on guy that I liked being, doing the work, it's just being back and forth. And unfortunately I'm a soft hearted guy. So a lot of sob stories of why people couldn't pay their rent. Instead of being smart and just hiring property management, I was like, this is too much work. That's too obnoxious. It's not worth it. Despite the good margins and all that. And I saw the benefit, the potential of commercial real estate. Right. Apartment building having multi multiple checks under one roof. So yeah, I sold them all to consolidate and move forward with commercial real estate.
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B
That's cool. So you liquidated all of your single families in that area, if not everywhere, and then you traded it up to go into that and you turn into a 25 unit, this medical complex.
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A
Yep, I was doing that one at the same time. Yeah. I bought the three building office complex, the three story warehouse. I Just bought the one next to it. And today I'm closing on another small office building.
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B
Okay, so you've gone all in on kind of that industrial commercial side more than, than just a single family individual home. So and then that aligns with my, my thoughts on. I say we never. You never sell your assets for money. You trade them for better assets. You know, and so it's always interesting when someone's going to sell. It's like, well, if it makes sense because it's a better asset, one it's going to have a higher return is one way. But if it's less headache, you know, if it's, it's better lifestyle, if it will lead to other long term goals and you know, there's lots of better. I use that generic word, you know, intentionally, you know, you don't sell your, your assets for money, you trade them for better assets. And sounds like that's exactly what you did in letting go of those, those little rentals. And it sounds like you're doing some pretty cool stuff. So which did you do first, the 25 unit conversion or the warehouse?
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A
The 25 unit. So that was the, the single families were stabilized. So that's when I was working on the apartment building. So when I bought it, it was a medical facility. They had about 15 units in there and a lot of office space, you know, a dining room, the whole bit like, you know, the common areas.
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B
Right.
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A
We took all of that out and turned it into 25 residential units.
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B
So it already had 15 residential units, like apartments people could live in. But then it also had kind of the commercial side. And you're like, well, we're going to convert all these commercial space into more individual units. Yeah. What did you, was there just a better term spaces?
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A
Yeah, I mean, so when I bought it, it was on paper, it looked like a 2% rule. And I was like, this is incredible if I don't have to do anything until I realized that because it was designed as a facility, there's one water meter and one electric meter and the whole building was electric, baseboard heat and you know, in wall AC units. So not quite a 2% rule once you pay the bills.
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B
Yeah.
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A
So in the course of four or five years of owning it, I more than doubled the rent roll. By taking it from 15 to 25.
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B
Units, were you able to switch each unit to its own individual utilities? Were you still covering utilities for everything?
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A
No, the, the expense for that, I looked at putting in boilers but the payoff just didn't work. So. Nope, it's still one. And I actually just turned that one over what two weeks ago. So moving that on to bigger and better things again.
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B
So you sold that?
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A
I did.
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B
Oh, okay. Two weeks. So that's exciting man. And then you're rolling that into a new project or you're just gonna go GDL Capital here.
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A
So now I'm going to syndicate retail strip malls.
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B
That's awesome.
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A
So you still kind of do do the value add thing. I don't have to worry about evicting anyone that they won't be able to sleep at night, you know, and they'll be fellow small business operators. So their success will be my success.
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B
That's cool. So when you say syndicate the strip malls then. So you're, you're going to own the strip mall and just rent out each of the commercial spaces to different businesses and you is it a long term play or is this more like a value add turn around, sell it once you've, you know, got a better cap rate and you know, created wealth out of thin air.
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A
Wow. I wish we could dictate cap rates. The market does that. But yeah, value add play. One we're looking at right now is like 50 vacant. So ownership just doesn't care. They actually like it as a loss. But the city is kind of like hey, this should be like the crown jewel. We would be really nice if we could do something with it. So we'll hopefully we don't have it under contract yet so I'm not gonna spill the details on it.
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B
Sure.
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A
Yeah. So the, the goal is to, to come in and buy it and the, there's the potential to like 5x the value.
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B
Yeah. Well, I love the concept you mentioned. Like the city wants it to be something because if you're in aligned with the hands that control things, it's going to make life a lot easier. Like if you need a special permit, if you need, you know, permission or deadlines or certain things, you know, if the city's wanting this, then they're going to be a lot more easy to work with and be like, yeah, here's your permit, let's get this done. You know, I've seen people try to go against the grain and sometimes it works. You can find something really creative and you know, this awesome vision and you have to fight every tooth and nail against everybody to get there and there's a place for that. But the man, if you can, you know, ride the wave, the way the water's going, it can be a much better experience. And yeah, I've, yeah I've looked at.
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A
A lot of properties, and I've never seen city involvement like this one. So it's going on, like, 30 years now. They've had a tax improvement district for the property, and the city has actually paid to repair the roof in the parking lot along the way.
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B
No way.
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A
Is it historic?
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B
Like, is it like a historic protected thing or. No, they're just like, we need it.
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A
Been there for a long time and, you know, I mean, it's massive, right? Two hundred and some thousand square feet in total. So just when it's ugly, it's ugly and doesn't look well for the city. So, yeah, they would love to see it turned around.
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B
That's cool. I love that, man.
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A
I'm not gonna complain. It should be pretty easy. We've already talked to the mayor about it, so.
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B
That's rad. That's rad. So. So, I mean, man, that. That we quickly covered, you know, a lot of big stuff. What. What would you say, I don't know, for maybe someone who's thinking of going from just a couple? You know, they've got a small portfolio, like, you know, six units or whatever, maybe eight or 10, and then they want to do something like you did, maybe get into more of the commercial space or apartment complexes. You know, what's the big difference between those? What are some, like, the major, like, oh, I wish I'd known that before. Like, this is a whole different world. Pros and cons, for someone who's maybe thinking of kind of pivoting that direction.
- [22:12]
A
Yeah. Not that you don't do it along the way with single families, but I feel like in the multifamily space, you definitely play more counselor, whatever, financial advisor, marriage therapist, you know, helping people figure out what to do with their careers. So I had my office there, which is why I'm back home in the basement now. So, you know, I was on site every day. So. Also, probably one of my downfalls, like, the single family, is that kind of, you know, they became friends more than just tenants. So. Yeah, I mean, bigger. Bigger buildings, bigger systems. Right. Bigger mechanicals, different issues. Sprinkler system was new and expensive to learn. Fire alarms and, you know, just sort of like, not that, you know, if a toilet breaks down in the middle of night, it's like, okay, turn the water off. Relax. But yeah, and then a apartment building, it could flood down below and cause a lot more damage. So you just have to be a little more on call, a little more responsive to those sorts of things, especially with a Fire alarm, talking life safety. Definitely left a dinner or an event or two just to make sure everything was okay. Yeah. But switching to the commercial side, you find, you know, much like any other real estate investor, some people know what they're doing, some people don't. Business operators know what they're doing or know what they don't. You know, some people can look at a raw space you've got demoed and they can see the vision and they're willing to put in the work. And some people want a finished product, you know, so you gotta full on white box it and make it turnkey for them to be able to go, oh, okay, this is what I can do here. So yeah, it's, it's fun, right? Every, every property, every project is a new deal.
- [24:08]
B
That's cool. So, so, pros and cons of single family, individual to apartment complex commercial. What's like one of your favorite things about each of the. The genres and what's one of your least favorite. What's one of your least favorite things about each of the. The different ways to do it?
- [24:27]
A
I mean single families. Right. You're typically going to have a family there, so it's their home, they're going to stay for a while. You know, hopefully they treat it like their own home. But just the margins on most single family is pretty tough. And once you get into multifamily. Right. Commercial, five units and above, you know, you're talking more of a business. It's going to be valued differently. It's not going to be valued on what your neighbor bought their house for. I just like the power, the economics of scale. Same same reason to go into retail strip malls. You know, you can create so much wealth just by signing a new lease. Yeah. Rather than having to do a bunch of improvements to a property like you would a single family home. Yeah.
- [25:15]
B
So out of the three, it sounds like if you were to start over, like if you can only pick one, it sounds like the commercial space is where you go because that's where you're at. But I don't want to put words in your mouth, but out of the three, so it, and it sounds like one of the big reasons is the opportunity to create wealth more manually as opposed to relying on the market, even though obviously it's still affected by that. But you know, relying on the other things, you, you have a greater impact on the value that you can create. Is that kind of your main draw as far as managing though? Do you also. It sounds like you maybe prefer managing business people than than families and having that responsibility on your head for sure.
- [25:59]
A
Right. In single family, I mean depending on the properties you're buying. Right. On a $20,000 house, you're not going to save a lot of money. But you know, we just put a loi in on a property, they were asking 2.8 and we put an offer in at 2.3 and they came back at 2.6. I don't know where else you can save, you know, a quarter million dollars just by sending a piece of paper, send an email. Right, right. You know, and I think we're going to end up actually around 2, 5, if not below after we found some, some problems with the property. So just by, you know, going to walk a property and sending a piece of paper or sending an email, really, you know, we save three, $400,000, you know, that's the entirety of a residential single family purchase.
- [26:49]
B
Yeah. Or a lot of them. If you're buying $20,000.
- [26:52]
A
Yeah. Or a whole neighborhood, that'd be nice. Not anymore.
- [26:56]
B
The big game you play, the, you know, the bigger the margins are in your favor, you know, like any appreciation if you simply looked at, you know, if things did go up in value and obviously they're value different. But it's like I always say this, you know, if you have a million dollar home that doubles in value, you know, that's a lot better than a $20,000 home that doubled in value. You know what I mean? Even if you're making no money along the way because you had all this debt and you leverage to get that million dollar home, you know, it's barely covering its own cost. But if it doubles in value, it's a lot better than a cash flowing $20,000 one that doubles in value, you know, but an even bigger like say when you have these bigger project, the margins just give you a lot more room for, for profit and growth. But also the downside, right. Like if you have a new roof on, you know, your commercial project or new driveway, that can eat up a lot of money too. How do you balance those, those big ticket things?
- [27:54]
A
You're not wrong. Right. I just got an email this morning with some roof quotes. So that three, three off, three building office complex, I mean the quote was $178,000 for all three roofs.
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B
Yeah. And do they finance that, those kind of roofs or is it just you out of pocket.
- [28:14]
A
New vendor? So we'll see what their terms are. But yeah, yeah, for the most part, yeah, you're going to have to either unfortunately with Capex Right. It's hard to like prove to the bank that it adds value unless you're trying to sell it, which is one thing. But yeah, if you. It's no different than single family. Right. You got to budget it in like, okay, you know, the furnace is 10 years old. Well, going to need another one in 10 years. So set aside a little bit every year and just plan for it. Now going in on a new purchase is one thing. Right. You're going to have to either in my case, raise money for improvements or get the seller to fix it before you go. Yeah, bigger, bigger system, bigger, bigger budgets, but also bigger dollars on the back end.
- [29:01]
B
So when you buy like a project like that, are you putting aside like a, a six month reserve of all operating expenses and then have like, you know, big capex amount you're putting aside every single month? Just like I would on a residential. And is that just all part of the money you raised in because you're running syndications. Right. And that's how you're funding these projects.
- [29:23]
A
Yeah. Still haven't done our first deal. So I'm starting to do syndication. So I don't have all of the answers yet, but I'm learning as we go. So the ones you've done, capital reserve.
- [29:34]
B
How did you fund these? You know, 25 unit and all that, like that's a kind of a big project.
- [29:39]
A
All me, that's just you.
- [29:41]
B
Awesome.
- [29:41]
A
Everything I've. Yeah, I do have a partner on a couple like the three story warehouse and the three building office complex, but that was a private money lender and then just a business partner for operations.
- [29:54]
B
That's awesome.
- [29:55]
A
Yeah, yeah. Everything's been me so far. So I want to go bigger and you know, my, my money is limited. Always. Right. You want more. So that's why I wanted to do syndication. To be able to bring other people along for the ride to help them get tax benefits and passive income.
- [30:14]
B
Yeah, it's awesome. I, you know, I think there's such an awesome place for syndications and syndicators in, in the space where it's like it gets, it can solve so many problems for so many people and be such a win win, you know what I mean? It's right. It's not going to be the path for everybody to be on either side, but there's a time to be on one side, there's a time to be another side, you know, and, and if you know what your goals are, it can solve a lot of people's problems.
- [30:39]
A
In a very, very good way for sure, yeah, yeah. That's if you are really good at your job and you make money, that's great, keep doing that and let me make your money, make more money for you until you decide that you've had enough. Right. Sort of buy that freedom. I like to think of it as sort of like prepaying bills, you know. So I got a teenager, so instead of buying him a car, brand new car, which I never do, but I was like, okay, invest that money. And then the returns you get back would be your car payment. Or like in a single family home, it was kind of easy. Like, okay, I make 100 bucks a month on there. Great. That's my Internet bill, you know, that house is my grocery bill, that sort of thing. Until you can sort of replace, you know, your income.
- [31:29]
B
What was the most surprising thing, switching to like commercial or retail from the residential side that there was just like, wow, this is so different. Good or bad?
- [31:42]
A
Yeah. Well, starting with a FedEx career and then going to real estate, my patience has been tested. Right. FedEx it was get it done now, if not sooner. In real estate, you're thinking in years or decades. So just slowing down, being patient and not trying to force it, not trying to just take the first opportunity or tenant that comes along. Right. Actually spending the time to go wait for something better. So, yeah, that commercial takes a while to fill up and to fill up properly. So that's definitely a learning, learning curve.
- [32:22]
B
Yeah, no, I love that concept of, like I said, just looking at that big picture, knowing that it takes time and slowing down and things do take so much time. People ask me, like, especially newer students and newer people in the game, they're like, oh, I'm doing this. I'm just going to wait till this is all done and then I'm going to start the next project. It's like it might take nine months for you to get this thing fully done, whatever that means. So like, I'm like, no, just get two or three projects going at once because one's gonna fall through completely and you're not even gonna do it, you know, the other one's gonna take two years to get everything done for some stupid reason, you know, and, and this one will be done in six months. Like it. Things can drag out, you know, And I bought, you know, some of these cheap D class C class homes in like small towns. Like, and, and time moves very.
- [33:13]
A
Like.
- [33:13]
B
The, the banks and these local, like the local banks that lend on this stuff. Like they're not in a hurry. No one's In a hurry. Like, I'm like, I've closed on some of these deals and it's taken like eight months to buy, like, something that could have been happening in one day with cash. And, you know, like, why, this is ridiculous. But they just drag their feed and then they need an abstract and, oh, then the attorney who's gone on vacation for a month, and then things can just take so much time that it's okay to be doing a lot at once, because it's not every single day. A lot of these things are you send an email and you wait two or three days to hear back, and you're like, oh, my goodness. You know, and so anyway, that. That's definitely something I don't think people quite realize when they. They get in, they're thinking, oh, I'll just be doing this. And the faster I work, the harder I work, then it'll be done sooner.
- [34:03]
A
It's like, well, we can all blame HGTV for that, right? You can flip a house in 30 minutes.
- [34:10]
B
Yeah. Exact minutes. That's all it takes, right? Yeah.
- [34:15]
A
Hold that long just to talk to somebody. The city. So. Right.
- [34:19]
B
So.
- [34:19]
A
So what? Patience is the game.
- [34:21]
B
Yeah. What's been kind of some of your guiding principles or habits along the way as you've kind of approached this and made these different steps forward?
- [34:35]
A
I don't know. That's always evolving. You know, having been in an accident, I really resonated with Hal Elrod and the miracle morning. So I tried that for a while. Right now I'm in the middle of 75 hard.
- [34:48]
B
So just. What day?
- [34:50]
A
Yeah, just working. Started 1. 1. So what, today's the 23rd day?
- [34:56]
B
Okay, 23 is pretty far into it, you know.
- [34:59]
A
Yeah, I think that's where I failed the last time. So if I make through today, it's a new record. Um, yeah, it's just always learning, you know, I don't know how, you know, one of your questions later is going to be books. And I don't know how to answer that question because, you know, I've read 30, 40, 50 books over the last five years throughout this journey, you know, especially right now. 75 hard. 10 pages a day. I'm on book number two, and I'm listening to an audio book when I'm doing my outside walks. So I think, yeah, just always learning. Whether it's books, podcast, you know, mastermind groups, you know, that's where I met Brody. So just, yeah, always be learning. Always be willing to. To be the dumb guy, I guess. Right. Ask questions, don't be afraid to ask questions.
- [35:51]
B
I love that. I think that's, that's awesome. I like always learning, not just studying but like say you're doing different challenges. You know, you're doing these morning routine challenges. 75 hard challenges. Just always pushing yourself to, to continually improve, I think is such a vital part of life. And it's funny because, and they might seem counterproductive. Someone might go, wait, 75 hard. You know, for those that haven't heard you, you do like two out, do two workouts. One inside 45 minutes, one outside 45 minutes. Every single day. You're drinking a gallon of water, you're following a diet plan, you're reading 10 pages a day, you've got different check marks of things. And it, it takes up a lot of time. Like it takes up a lot of bandwidth of your mind and your focus and your time. And someone might say, well, wouldn't that be counterproductive to running your successful business? Because it's going to be eating up time. And Dustin, you're shaking your head when I say that. Explain to the listeners how it wouldn't be counterproductive to eat up extra time.
- [36:58]
A
I'm not saying it was pleasant to do my 45 minute ruck at 10:30 last night. I would have rather been in bed. But the grit and the perseverance that you learn from not giving up, like, no, I committed to this and I'm gonna follow through. Just it, it carries over into business. So you start to prioritize things better. Oh, I'm not going to sit down and, you know, do thumb hurdles on Instagram for an hour because I've got other things to do that are higher priority. So yeah, it just, when you work on integrity and keeping your word to yourself, most importantly, you know that you can accomplish just about anything. Yeah. Yes, it does require some time to get those things done, but the benefits are well worth it.
- [37:51]
B
100. I love the, the quote where it says, if you want to get something done, assign it to a busy person. And it's true because it's like even the, even today, like I had, I was dropping my kids off and then I'll normally go to the gym for a couple hours. But I had this podcast so I was like, I only had like a half hour and it's just funny, I was like, dude, I got more done in that half hour at the gym that I normally would in an hour or so because I knew I'm like, I gotta get done, you know, and so I was moving faster. You know, sometimes when you have more on your plate, you're just more effective, you know, because that's where your mind's going. That's what you're used to. But when you have all day to do anything, it's, it's easily, you know, you become less effective. And it takes three hours to do something that maybe you could have done in 20 minutes if you had to do it in 20 minutes.
- [38:42]
A
I recently saw, I forget who. Somewhere on my thumb hurdles through Instagram, somebody was doing like a 24 hour marathon. But so it was like every hour they would go run. I forget one or two or three miles or something like that. And then whatever time they had left in that hour, they would knock off like a home project to do list.
- [39:04]
B
I think I saw this guy.
- [39:06]
A
Right? Yeah. So then, you know, top of the next hour you go run. When you're done, you come back and knock out another project. So I was like, oh my goodness, that would be pretty intense. But man, can you imagine what you would accomplish just in 24 hours? Yeah, like, you know, you have that release to like go run, like shake it off and start the next one. So yeah, Instead of using 30 minutes as an excuse, I only have 30 minutes instead of two hours. I'm not going to do it. You're like, no, I have 30 minutes. I'm gonna go, what can I get done?
- [39:41]
B
Yeah, you get a lot more specifically different time. And it just changes the internal mindset of like, oh, I'm an effective person, I can do hard things, I can get this done. I'm thinking of signing up for this Ironman. What's a half ironman in St. George where I live? And I was like, man, it's gonna take the training schedule. There's a lot of training. And I'm like. And I wanted the excuse of, well, this is going to distract from all my other things I'm doing. And I'm like, I don't know if it will then. That's why I've been toying with this. I'm like, I think if I do this, I might actually get more effective at everything, even though I'll have half as much time somehow that seems to be when I've had the most growth in my business and my personal life and with everything is when I also am pushing it on multiple other levels doing different challenges or trainings or programs like we've been saying. So anyway, kind of an interesting concept. So for those that want to grow their business, go do something else hard on the side and, you know, it'll get your brain in the right space.
- [40:45]
A
Yeah. Especially out on those long training, you know, like, you're focused on pace and stride and breath and whatnot. Your mind kind of clears. And as somebody who's got so much going on, you need that time. Sometimes that's when your mind finally quiets down and the answers start coming in. So I definitely, you know, on the solo walks at night, try not to always listen to a book. Just kind of like, okay, I'm just gonna listen to the traffic and, you know, the coyotes howling, try to turn it off and see what problems my brain solves in the background.
- [41:22]
B
I love it, man. Well, this has been fun. Obviously, we could chat about this stuff and everything else. And it's so funny how it's all so intertwined, you know, real estate and just personal growth and, you know, you know, family and money and it can all. It all intermingles, you know, how you do anything is how you do everything. And so anyway, we could talk about this forever. I do want to get into some of our final four questions. We can dig in kind of deep on some of those if we want. But if people want to follow you or leverage what you're doing with the syndications that you're starting and stuff like that, what's the best way for people to get in touch with you?
- [42:00]
A
Sure. So to follow me specifically, Instagram is best. My account is D N A M K E, which is Dustin and Amanda in Milwaukee. And then for the syndication is GDL Capital. That's our website. That's instagram.capital.com.
- [42:22]
B
Just gdl.capital capital replacement.
- [42:24]
A
Correct.
- [42:26]
B
Because that's the cool way to do websites now, guys. Yeah. Come on.
- [42:29]
A
I guess there's still some places that want a dot com. So you can't even, like, sign up your email. They're like, that's invalid. Like, no, it's not.
- [42:36]
B
No, it's. It's not. You know, and it was a lot cheaper and it looks cooler, so.
- [42:40]
A
Yeah, it's a lot shorter. Makes it dot com's old school.
- [42:44]
B
Come on, Boomers. All right, well, sweet, man. We'll dive into these. So question number one. And these don't have to be a fire round. Like I said, we can kind of dive into these. What's a dream deal that you would hope to be able to tackle someday?
- [43:04]
A
There's so many. I'm pretty excited about this one that we're working on. That could be a 5x opportunity. I mean, who wouldn't love a 5x so besides buying a jet, I don't know, I think this is pretty cool. So when you say something on the.
- [43:20]
B
Exit or is that on a refinance or how would that plan be executed?
- [43:27]
A
Well, so rough numbers. Purchase price will be a little under 5 million. And then the ARV fully leased up and occupied would be like 25 million.
- [43:38]
B
Would you plan on selling or doing like a, a cash out refinancing or would you think it would just. Better just sell at that point or what would be the path?
- [43:48]
A
Depends, right? If I wanna, there's something to scale up into, maybe sell it. Otherwise. Yeah, that one would be a great performing asset for everybody invested into it. So I think I could see, I could see holding that one for a while.
- [44:05]
B
Yeah. Do you hear that everybody? Because you don't sell your assets for money, you trade them for better assets. So like Dustin just said, he's like, well, if the opportunity comes along, that makes sense, then do it. But you don't just cash out for no reason. I love that. Cool. All right, so what has been. I know that you read a lot of books, there's been a ton of them. But what's been one of the most pivotable books you've read or just one that comes to mind randomly? Doesn't even have to be the top in the world. Be like, man, this one just. I like this one.
- [44:35]
A
I went up, went up and grabbed it. I don't know if you've read this one. The Honeybee.
- [44:39]
B
The Honeybee.
- [44:40]
A
I don't think Jake and Gino. Yeah, I sort of. A lot of people say, you know, Robert Kiyosaki, right? Rich dad, poor dad, Sure. I think this is kind of a modern parable adaptation of it. You kind of follow along. Guy stuck in his job wants something more out of life, finds a mentor, you know, follows the steps and then reaches, you know, freedom. It's just, it's a quick read. It's a great read. I could relate to the character a lot. So rich dad, poor dad felt a little contrived, a little pushed. I know, I read it. It was great book. Definitely opens your mind to thinking about things differently. This just made it a little more current. Real world applicable.
- [45:28]
B
Who's the author on that?
- [45:31]
A
Jake Stenziano and Gino Barbaro. Bar Barbaro, Jake and Gino. Wheelbarrow profits. They're multi family syndicators.
- [45:42]
B
Awesome. It's called the Honeybee.
- [45:45]
A
Yes, I like it.
- [45:46]
B
I'll have to check that one out.
- [45:47]
A
Subtitle a business parable about getting unstuck and taking control of your financial future.
- [45:55]
B
There we go. All right, question number three, Dustin. What is one of the most expensive or interesting mistakes? And I say mistakes in air quotes when I do this because it's like, what's a real mistake? Right. But some, I guess, are. But what's some of the most expensive or interesting mistakes you've made in real estate investing?
- [46:20]
A
I don't know if I want to say it, but my most expensive one, honestly, has been renting to family. But we're, we're working through it, so we're making progress.
- [46:31]
B
But yeah, talks about being a soft heart to the sob stories in your, you know, lower class neighborhoods. And everybody's living on a margin, everything's tight. You add family to that mix and that, that makes it even harder to evict that, you know.
- [46:48]
A
No, I've definitely had some of my D class tenants accumulate quite a debt. But, yeah, family racked up the biggest one so far.
- [46:57]
B
Isn't it crazy? Yeah. It's funny how sometimes people, people who are not business minded can't really comprehend it because people are like, oh, do you have a place for, you know, could you rent cheaper to me? And it's like you're literally asking me, like, would you, would you give me $200 a month? Because that's what I would get if I rented it to someone else. So it's like, you know, like you would never think of just going to a random person in your family, like, hey, could you just give me like two or three hundred dollars a month, like indefinitely?
- [47:25]
A
What?
- [47:26]
B
But that's literally what you're doing when you ask for, you know, a discounted rent or this or that. And I'm not saying there's not a time or place to help people. And, you know, sometimes you give cash. But it's just funny how it's like people don't always see the business side of if the business loss on, on doing things like that. And so that's what I have to ask myself. I'm like, if I would just Give this person $100 or $200 a month for no reason because they're my brother and he needs it or whatever. And that's something I could do if I'm willing to do it. Saying it like that, then I'm willing to do it. But if I'm not, I probably need to pivot and be like, I, I can't do it because of xyz. But anyway, yeah, I think that's actually a really good Insightful one to point out because it can be an easy thing when you start getting friends and family involved with stuff.
- [48:16]
A
So I mean, that one maybe hurt the most. I guess tactically, numerically, we did sign at least with a daycare operator. And unfortunately, through some email formatting with the lease, the personal guarantee somehow was not enforceable because it wasn't signed below the guarantee, it was signed above it. Yeah, and it turns out she was actually forging a third party signature to. So and then it was. The lease was with an LLC and she shut the LLC down, so there was nothing to go after when she abandoned her lease.
- [49:00]
B
Interesting, interesting. So was this DocuSign or hard copies? Like I actually want to hear about that a little bit. That nuance.
- [49:08]
A
Well, I'm a Mac guy and she was a PC girl.
- [49:11]
B
Okay.
- [49:12]
A
Just be on the. The word formatting and the way she printed it off. Yeah, it's unfortunate. Okay, so you emailed overly enforceable and then. Yeah, she probably manipulated us, not docs.
- [49:29]
B
Yeah. Okay, so you format and she probably actually moved it knowing who knows.
- [49:36]
A
But no, the whole, whole thing was a little wonky with, you know, the, the bullet points and whatnot. So yeah, it was just formatting, unfortunately.
- [49:47]
B
And where the signature lands on it could affect, you know, if the thing's enforceable, it sounds like if the signatures before or after certain statements.
- [49:55]
A
So lease, lease, lease, lease terms, you know, sign. Great. Next page was personal guarantee and then signature, but the signature got cut off. And so the personal guarantee was just sort of like a footnote. Right. But not really like endorsed.
- [50:14]
B
Got it, got it. Yeah.
- [50:16]
A
Yeah, that.
- [50:17]
B
That's interesting. And then what was the other new. Oh, the llc because it was all signed through the LLC and not her personally. So then the LLC was the only.
- [50:27]
A
Enforceable and the LLC had no assets because she lost her daycare license and shut everything down.
- [50:33]
B
Interesting. Yeah. See, that's one thing I love about this question is you don't. Such a tiny little nuance that could just happen easily formatting where it drops off the last signature line. And so they signed everything where it said to sign, but a signature was missed. And those little details can be so easily overlooked by a new person or a very experienced person. So easily overlooked. So rule of thumb though, it's better to have an extra signature that's not in a perfect spot or an extra initial. I'll have people just like. And then also just initial every page real quick just in case. Like. Like if you're ever unsure with contracts, the more signatures, the more Initials. You know, you can have the better, especially if there's a part that's taking.
- [51:27]
A
The extra time to go and do it in person.
- [51:31]
B
Sure.
- [51:31]
A
Rather than by email.
- [51:32]
B
Yeah. Yep. 100%. If. If you can. Yeah.
- [51:37]
A
Anyway, I mistake.
- [51:40]
B
Yeah, that's a. That's a big one.
- [51:42]
A
That'll.
- [51:43]
B
That'll sting.
- [51:46]
A
And she had hired a demo contractor for the building and stiffed him as well. So not only did she not complete our lease, but I was then left with a building that was demoed down to nothing and unusable.
- [52:00]
B
Oh, my gosh. Wow. The joys of real estate. Commercial real estate. Right? That's crazy. All right, well, thanks for sharing that. I actually appreciate that. I think that'll probably help some people dodge some bullets down the road. They don't even think about it. They won't even know. But this is where it's going to get ingrained in their head, and then they'll just be careful for the rest of their lives, and they won't even know it's because of your sacrifice, Dustin. So we appreciate it.
- [52:31]
A
Take royalties. Yeah.
- [52:33]
B
There you go. All right. Well, sweet, man.
- [52:36]
A
Well, what.
- [52:36]
B
What's. What's the purpose of life, Dustin?
- [52:40]
A
Well, the big purpose of life is to. To honor and serve God, But I think while we're here, be the best human being you can be. You know, be a good dad, be a good spouse, be kind, be giving, be the best version of you that you can be for everybody.
- [52:59]
B
I love it. I love it. Well, this is awesome, man. I appreciate it. Appreciate your time. Any last thoughts or anything you want to share with the listeners?
- [53:12]
A
We don't have enough time for that, so thanks for having me.
- [53:16]
B
Awesome, man. Well, sweet. Well, this is Joe Jensen signing off for the Real Estate Investing School podcast cast, reminding you to keep growing and keep going.