The Fastest Way To Build A Six Or Even… Seven Figure Real Estate EMPIRE!
For anyone new to real estate investing, it’s expected that mistakes will be made. And in this economy, with inflation and interest rates rising, the cost of supplies skyrocketing, experience matters.
So, with that in mind, what sets a world-class operator apart from an amateur operator?
To help me answer that question, I’m talking to Randy Langenderfer. He’s the CEO of InvestArk Properties, owning over 4,000 units of multifamily properties across Texas, Oklahoma, Ohio, Louisiana, South Carolina, and Arizona. He is a CPA with an MBA in finance who has pivoted from the corporate world and now helps busy professionals access vetted, cash-flowing real estate investing opportunities.
In this episode, Randy and I peel back the onion on his journey into multifamily investing. You’ll learn how he defines a best-in-class operator, the critical questions you should be asking as you go into any deal, and the ones that limited partners might be asking you right now.
Key Takeaways with Randy Langenderfer
- How the changing economy and increased interest rates have impacted multifamily real estate.
- What defines a best-in-class operator–and the key factors that set a deal up for success.
- How Randy landed his first deal without paying a massive entry fee to a multinational group, learned from a number of major mistakes, and doubled his investors’ money despite the building literally catching on fire.
- How to get a clear sense of your strengths and weaknesses, become a powerful collaborator and leader, and scale your network to create great opportunities.
Randy Langenderfer Tweetables
- InvestArk Properties
- Follow Randy Langenderfer on LinkedIn | Facebook
- Contact Randy on Calendly
- Trinity Multifamily
- Asset Living
Rate & Review
If you enjoyed today’s episode of The Accelerated Real Estate Investor Podcast, hit the subscribe button on Apple Podcasts, Spotify and YouTube so future episodes are automatically downloaded directly to your device.
You can also help by providing an honest rating & review on Apple Podcasts. Reviews go a long way in helping us build awareness so that we can impact even more people. THANK YOU!
Connect with Josh Cantwell
Sign Up For The Forever Passive Income Partnering, Mastermind and Coaching Program with Josh Cantwell
Click Here to Read the Transcript with Randy Langenderfer
Josh Cantwell: So, hey, guys, welcome back. This is Josh, your host, on Accelerated Investor. I’m so excited to be with you today. And today, we’re going to talk about a couple of really important things. Number one, asset management and some of the dirty details around asset managing your property managers. Also, number two, we’re going to talk about how to be a best-in-class operator. And also, number three, we’re going to talk about why the– this makes me laugh because people fall in love with this. They fall in love with the acquisition. And many people are going to get in real trouble in the next two or three years because of the dynamic market if they don’t be one of these world-class operators that we’re talking about. We’re also going to talk about rate caps and we’re also going to talk about what the Federal Reserve is doing with interest rates and why you can expect interest rates to come down roughly 24 to 30 months from now.
My guest on today’s episode is Randy Langenderfer. He is the CEO of InvestArk. And they own over 4,000 units of multifamily properties, including Texas, Oklahoma, Ohio, Louisiana, South Carolina, and Arizona. And he is also currently a coach in a multifamily investing organization and also has an MBA in finance and is also a CPA. It’s a fantastic interview to talk about everything I just mentioned. Here we go on Accelerated Investor with Randy Langenderfer.
Josh Cantwell: So, hey, Randy, listen, thanks so much for joining me today on Accelerated Investor. I’m excited to have you on the show and peel back the onion on multifamily properties. Thanks for joining me.
Randy Langenderfer: Josh, thank you. It’s a privilege to be here, especially given some of the elite customers, I guess, you’ve had in your podcast. I feel privileged.
Josh Cantwell: Oh, thanks for jumping in. Thanks for joining. So, let’s jump in, Randy. When I get to know somebody new on the show, you guys have done 4,000 units in Ohio and then a bunch of southern states, but I always like to hear, like, what are you working on today? What are you passionate for? Whether it’s in business, whether it’s personal, family, like what gets you up in the morning? What keeps you going? What do you like to do or projects that you’re working on that you’d like to tell our audience about as they get to know you?
Randy Langenderfer: Well, I’m a long-term corporate guy, so I feel very, as they say, unconsciously competent in my corporate job, but I am enthralled and really invigorated by multifamily real estate these days. That’s where my passion is. That’s where I get my feet hit the floor with a little bit of excitement each morning. And so, I’ve got several projects we’re workin on and we have recently just, in the last several months, acquired a couple of different properties, one in Greenville, South Carolina, and one in Tucson, Arizona. And so, we’re transitioning those, bringing them up and starting all the process, the renovations, the increase in rents, the social media campaigns, the connection with the property management staff, all that stuff that syndicators do and limited partners are thankful they don’t have to do.
Josh Cantwell: Yeah, that’s great. We’re going to peel back the onion on that. As I’ve gotten to know you and kind of prep for this, I know you’re from the Greater Houston area, although originally from Solon, Ohio, my backyard, but you’re investing in Oklahoma, South Carolina, Louisiana. So, that’s one of the things I think we should peel back the onion on is how does that all come together? I’ve done deals like that, but I’d love to hear some of your input and take on onboarding a new property that’s not necessarily in your backyard. We’ll talk about that.
So, Randy, let’s talk a little bit about the market. Obviously, the 10-year Treasury has skyrocketed from 1.6% last October. We’re recording this in October, a year later in 2022. And now, the 10-year Treasury is at roughly 3.7%. SOFR rate’s gone up, cost of capital has gone up. The Fed’s doing everything they can to tame down some of the inflation. And in the process, obviously, we know the Fed has a significant control and impact on housing because the cost of debt impacts both residential and commercial.
So, I’m just curious, your take, big picture, high level, what are some things that you’re doing, changing in your analysis, your due diligence? You just acquired these new properties. How have these market shifts impacted your underwriting? How has it impacted your acquisitions? What are you looking for?
Randy Langenderfer: Yeah, it really has impacted underwriting. As you said, all the turmoil or all the uncertainty in the market today is very real. And I just got done doing two raises and I’d say LP investors are skittish today. They really want to understand how we as GPs are going to address that risk. And so, traditionally we do it with some kind of rate cap as you’re well aware of, I’m sure. We bought a rate cap on a property in February of ‘22, it was a small 60-unit here in Houston and it had a $120,000 rate cap expense. That rate cap expense if we were to buy right now, it’d be probably close to $800,000, $900,000.
Josh Cantwell: Yes.
Randy Langenderfer: So, it has just gone off the charts to add cost to the acquisition process. And now, it’s even trying to decide, well, do you really buy rate cap insurance because how much farther is it going to go up? Is it going to go up another 3%, 4%, or 5%? Is the Fed going to let it go to 10% like it did back, you and I are probably a little bit older and remember some of those days in the 70s and 80s when interest rates, I mean, I bought my first house at 10.5 FHA percent and I was ecstatic. So, we’ve seen some of those times.
I don’t think it’s going to come back. I don’t think the Fed can let it go that high because it would bankrupt the company. We just have too much debt. And whenever they do raise it, I mean, they’re raising the cost to themselves, too, and that would just be extreme hardship. The other thing, we are in an inflationary cycle. I don’t know when it’s going to end, I hope sooner rather than later. But the other side of that is that leads to inflation and rent prices too to force.
So, I think today, general partners or syndicators really have to become best-in-class operators. We have to push the upside, but we really have to manage the expense side of the equation, something not many of us think we can do very well, but we have to just question every penny that’s going out. I mean, I’m on weekly calls with my property management company, as I’m sure you are, too. And we’re just being very anal about even some of the lower-cost stuff.
Generally, don’t look at expenses unless it’s a variance of a couple of thousand dollars. What we’re pushing down below that and saying, where can we save money? And for the ones that I did get, where there’s a rate cap, they’ve kicked in. So, that’s good because our rate is, I mean, our loan is pretty much fixed for the next two, three years. So, our loan is fixed for the next three years.
The other side of that is I’m banking on history personally, because history shows that over the time of the Fed from the time of their first rate increase, which was March of ’22 was the first rate increase, the time until they start declining or reducing interest rates is anywhere from 22 to 36 months. So, that puts us someplace ‘25, early ‘26, where rates would start to decline again if history repeats itself, and I’m counting for that. I’m hoping that happens and continues on that historical trend because that would be really good for some of the properties we just bought in three-year cycle.
Josh Cantwell: For you to refi or sell at that time.
Randy Langenderfer: Yeah.
Josh Cantwell: You have the interest rate go down, cap rate go down, prices go up, and the price per door go up whether it’s a refi. It’s good. Look, I think you’d agree with this, Randy, is that as long as you’re taking the long-term approach, the only time you can really get bit in this industry is when you have to recap a property, sell it or refi it at the wrong time. And I think we can agree that if you’re going to sell a refi, it would have been last year, probably the top of the market, in my opinion, was July, August of 2021. And there’s still a lot of demand for multifamily, but people are not dumb. They’re going to even get a rate of return for investors, for themselves. And so, those costs have gone up, rate cap costs have gone up, interest rates have gone up, and they might go up even further.
But as long as you’re refi’ing or selling at the right time, which could be, again, 20 to 36 months from now, and if you have a deal that you maybe promised your investors you’re going to sell and it’s going to come up next year, you have to be able to explain, I think, to those LPs, look, it’s just not the right time. We’ve got it on for another maybe 12 to 24 months longer. And ultimately, because those rents are going way up and then if the cost of debt comes back down, we should be in a pretty good spot. I think that sounds like that’s what’s you’re betting on.
Randy Langenderfer: Yeah, I sure am. I think you’re absolutely right is that, again, as real estate investors, we have to be in it for the long term. This isn’t a short-term game. We’ve all had some short-term wins, but the reality is, is we need to be in it for the long term and ride out the cycle because we know that it’s cyclatory. We know that it’s going to come back as well. We just don’t know exactly when.
And I think the greatest fear I have is I was in corporate America in ’09 and ’09. And at that time, the debt markets dried up, even good properties. This was on the commercial side, more or less industrial side, specifically, I know. You just couldn’t get loans even if they were cash-flowing and stuff. Banks just didn’t want to refinance. The debt market has just effectively dried up. And it was only if you had longstanding relationships with the lenders did they recapitalize.
And so, there will be fewer syndicators or fewer general partners in the multifamily space in the years to come because as the markets tightened, it’s going to separate those best-in-class operators from the average operators or the poor operators that are on autopilot.
Josh Cantwell: I agree. Randy, let’s pull back in a couple of things that you mentioned. First of all, let’s talk about rate cap for a minute, and for our audience that may not know that term or maybe they’re newer to it, what is a rate cap? Just explain that in your own words.
Randy Langenderfer: I’m sorry, I should have done that first a bit, but a rate cap, very simply for the listening audience who’s not familiar, it’s insurance. We, syndicators, buy insurance in a rising market like this. That one we bought in February of ‘22, we bought insurance for $118,000. That said, if the interest rate goes up greater than 2%, this insurance kicks in and pays us the difference over the 2%. And it kicked in for us in July of ‘22. So, between February and July was on our own and we saw interest rates rise, but in July, it went over 2% for us in that example and those fact patterns. And the insurance company starts to pay the overage of the difference. Now, they only pay it for three years so it’s not indefinite, but we got three years window on, like I said, banking on that 22 to 36-month window. We’re confident, still bullish, put it that way.
Josh Cantwell: Yeah, that’s great. And then when you mentioned best-in-class operator, that’s such a powerful term, best in class. Talk about that for a minute. Like when you look at people who fell in love with the acquisition, and I think we’ve all seen it in a new syndicator or group of syndicators, guys that were flush with cash or that were good at recruiting money. They could find a property, underwrite it, and acquire it. Little do they know that all the work then begins and you have to be a best-in-class operator. I certainly feel like my firm falls into that category, I know, Randy, years, those two. But what does that mean in your own words? To be a best-in-class operator means you have to be good at what?
Randy Langenderfer: I think as your listening audience, especially as LPs, as limited partners, you need to understand and form your own opinion of people as people bring deals to you. And for me, very simply, it’s Josh, does that person have experience? Have they seen, are they integrated? Do they have a construction company, a property management company? Are they just doing this all by themselves? And there’s no right answer. There are a lot of great people that have their own property management companies that are certainly best in class, and there are third parties that do as well, too.
But the property management, as you said, we like to chase the deals and be the deal, the rainmakers, but the property is successful because of operations and property management. And that’s where the rubber really hits the road. That’s success versus mediocrity or even failure because the devil is in the details, and so, to me, best in class is just saying experience, not experience, just a multifamily experience in that market, in that submarket. So, you’ll get a lot of property managers that are great in the Class C and I’m buying a Class A, probably not a good fit.
And conversely, the opposite, I mean, maybe they do a lot of Class A’s and I’m buying a Class C, maybe I’m buying in the Third Ward of Houston, which is not the greatest neighborhood versus one of the suburbs or something like that, totally different marketing area. And ask the general partner what their track record is if they have their own company or if they’re using the third party. How many times have you used this company? What’s been your success rate? What’s been the challenges you have encountered? Why are you using them again? Have you looked anyplace else?
We as syndicators generally find somebody we like and trust on a property management side. We tend to use them more than once, and that’s okay, especially if it works. But limited partners need to understand that, limited partners really need to challenge and ask questions around that.
Josh Cantwell: I agree. I think being a best-in-class operator, in my opinion, is look, if you look at most of the large property management companies in Asset Living, Trinity Multifamily, which just sold to Asset Living, look at any of the big ones, Lincoln, the key to me is usually the property management team which is on site. If you have a large enough building, they’re sitting there at the office, you have there a pretty manager, a leasing agent, an assistant property manager, a couple of maintenance tax. And then usually there’s a regional, a regional VP. Then that regional is really more of the decision maker that helps drive decisions, but that regional also has multiple properties that they’re overseeing. And that’s usually more of a corporate guy, somebody that really knows a lot of the detail but is also not there every day.
So, in my opinion, a big part of being best-in-class operator is the asset management and making sure that you as a syndicator, operator have conveyed and are executing the business plan with the regional, that regional that feeds down from the regional down to the day-to-day guys who are doing leasing and evictions and unit turns and that kind of thing. That relationship to me is absolutely critical. I just had a call this morning with one of our property management companies for about an hour, hour and a half. We have it every two weeks. They manage about 750 units for us. It’s four or five different acquisitions.
And I’m not on the phone with the property manager that’s sitting in the leasing office. I’m on the phone with the regional. That to me is key. Randy, I’m sure you guys are doing a lot of that same stuff.
Randy Langenderfer: We do. We want both, I want both. I want the onsite and the regional. And it started out with the one we’re doing, mostly the onsite was, I mean the regional started leading that, but we just changed on sites. And so, first, I want both there, but you can’t go wrong with either one of them. Just because I get the flavor for both of them, I want to hear what they have to say because the onsite is going to know more about specific challenges, tenant complaints, tenant maintenance issues, etc., etc.
And the other thing you mentioned is some of those bigger firms. How many properties does the regional cover? Sometimes they cover five. Sometimes they’ll cover 10 or 12. And so, they start to get watered down when they start having more rate, higher ratio. And so, that’s another indicator to look for, too. But I think you sum it up very well as they’re the ones on site each and every day. I’m always amazed, we have these multimillion-dollar assets that we have, a $40,000 or $50,000 employee really running.
Josh Cantwell: Yeah, right. Isn’t that wild?
Randy Langenderfer: Yeah, but these multimillion-dollar assets that we own, and there’s a $40,000 or $50,000 person running it, and I don’t know, a $30,000 or $40,000 leasing agent or something like that.
Josh Cantwell: Yeah. That can work, though.
Randy Langenderfer: Yeah, it does.
Josh Cantwell: If they have some leadership, they have some guidance, if they have some accountability, and also feel like they’re part of the team. But to just leave it up to them and say, okay, let me get on an owner call once or twice a month, tell me what’s going on, and they’re driving the bus. That ain’t going to work.
Randy Langenderfer: And you really don’t know a good one until you’ve had a bad one. I mean, because everybody will tell you their Facebook image about how they do, but until you’ve had a bad one and I’m sure you’ve had one too, along the way, they oh, my gosh, what did we get into? My first GP that we did was that way. We bought 139 units myself, a couple of other guys, and it was just a train wreck.
The onsite manager had lived there literally 25, 30 years and raised her family there. And she couldn’t tell people that we were raising the rents. And then the back house was a train wreck and anyhow, so we had to change. And it was at that point, I said, ah, now I know.
Josh Cantwell: Yeah. I was going to ask you about your start, so let’s actually get into that since you mentioned it.
Randy Langenderfer: Okay.
Josh Cantwell: You mentioned being in the corporate world a long time. You just mentioned this 139-unit. How did that first deal come up? How long did it take you from your kind of, hey, I’m interested in multifamily to I’m going to take down this larger asset? And I think, just to help our audience understand, a lot of guys that have corporate jobs that are high-income earners, but that otherwise coming from residential that are flipped a few houses, interested in multifamily, how was the transition for you to get that first deal, though?
Randy Langenderfer: When my journey started, I started out in single family. I was a hard money lender. I was living in Cleveland, Ohio at the time, as I said. I was working with a group. I’m a Buckeye.
Josh Cantwell: Yeah.
Randy Langenderfer: I was living in the Cleveland, Ohio market at the time and I was flipping houses in Dade County-Miami Beach, Florida with another group, and it had been successful. And I moved to Houston and I got really excited, but when I came to Houston, I learned about multifamily and I just never really turned back. So, I started, I was not going to pay the large entry fee to some of these multinational groups that are out there. They want $25,000, $35,000 to join, and I couldn’t do that. So, I just said, I’m going to start investing.
And so, I found general partners that I know I could trust and started to invest with them. And I was learning along with them and asked a lot of questions. And I asked if I could go and do diligence with them and I asked if I could sit in some of their calls, their property management calls, etc., etc. And so, I learned a ton. I learned a ton.
And I pulled down the first deal in ‘18. This was 139-unit in lovely Beaumont, Texas, about 150, 120 miles due east of Houston along the Gulf. And I remember vividly, I had a friend that said, it’s something that you never should buy, which was a 1965 build with flat roofs and chiller boiler system. And so, for your listening audience, if you’re ever considering investing in a property and somebody tells you it has chiller boiler as the HVAC and flat roofs, turn and run from it.
Josh Cantwell: Got it, yeah.
Randy Langenderfer: So, we took down this asset and we had a ton of property management issues. As I started to allude to it, the property manager was incompetent and just a lovely soul, but she was not a business person and couldn’t support our business plan to raise rents and start to make changes. And so, we had to release her and we found another person that had some commercial experience but not multifamily experience. And she’s an energetic woman and loved her, but she didn’t have any support at all.
I became the regional manager. I was working 15, 20 hours a week on the calls with her setting leasing arrangements. And I was young and dumb in my career development. And it was a great, great learning curve, but something I never want to repeat again.
Josh Cantwell: Probably a lot of brain damage, right? My audience, they know this, like I don’t hire people to learn the job on my payroll, on my time. I hire people that already know the job and bring them onto my team so they can contribute, so they can offer something. So, I’m willing to pay more for talent because they’ve been trained somewhere else.
My dad told me when I was younger, he said, listen, when you get out of college, I want you to go to work for a big company and get trained. And then after you have all their money and all their time and all their training that they can give you that I can’t afford, then come work for me. I ultimately did that. I never went to work for my dad. I actually got into real estate instead, but I did learn from that because I worked for a big Fortune 500 company that a lot of my training.
So, that’s one of our corporate philosophies now I learned from my dad years ago is that I don’t have the dollars that big companies have so I want somebody to learn the job and then bring them on. I tried just like you, Randy, to have my own property management company, do it in-house and teach everybody the KPIs, the leasing agreements. Oh, my God.
Randy Langenderfer: It’s exhausting.
Josh Cantwell: It’s exhausting, exactly. It’s a good way to put it. So, you did that. What did you learn from it?
Randy Langenderfer: I learned I never want to do it again. I’m going to use third-party property management is the short answer. But I did learn an awful lot about running an asset. And then so, the story continues that. So, we had onsite property management and then we changed the front office person and then we got rid of the company altogether and retained the property manager. We got rid of the company and changed companies because they were really a company that, lesson learned, is they were really competent in HOAs, they had a lot of HOAs. They only had two really multifamily properties and they just weren’t equipped for it.
So, we changed companies. And then just everybody’s got to share their story. So, this is the one I tell people that we own the property two months and I get a call. I’m in my corporate office and I get a call, Randy, the building’s on fire. What?
Josh Cantwell: What?
Randy Langenderfer: Are you kidding, right? No. Local news is out front. Nobody’s hurt, thank goodness. So, we lost. So, I got a ton of experience, and we had 24 units out of 139 that were burnt pretty much to the ground and had to be rebuilt. And so, we’re in the middle of property management changes. We’re trying to rebuild. We’re trying to work with insurance companies to get repaid. And it was really just a lot of work. But good news, we sold it 21 months later and doubled the investor’s money.
Josh Cantwell: That’s fantastic.
Randy Langenderfer: So, it had a great outcome but a lot of the work along the way.
Josh Cantwell: I love it. So, if I ask you a bigger question, Randy, like if you look back at not only your corporate journey because that’s a big part of your life journey, but also this entrepreneurial journey of investing in real estate, taking on that first asset in 2018, the last five years or so, operating through COVID 4,000 units as a GP/LP, both being a GP and a limited partner, if you had to look back and say, okay, I did maybe these three things I did right and maybe these two or three things I didn’t do right, but I learned a lot, like, what would you pass along to our audience? What do you think those couple of things would be if you had to reflect back on this journey?
Randy Langenderfer: Oh, that’s an insightful question. I wish I had a day to ponder that.
Josh Cantwell: Bring it on you.
Randy Langenderfer: I think on the positive side– it’s both the positive and negative. I wish I had got started in this space 30 years ago. It sounds like when you did it, when you were along the journey, but I had a young family and I didn’t have a lot of assets and it just wasn’t going to happen at the time because this is a capital-intensive business. So, one lesson would be, but when I did get into it in 2014, it’s really in ‘13 when I started to get into it, I studied it a lot. I didn’t just blindly throw money at people and properties because I believe really the key to a lot of this as investors, whether you’re a limited partner or a general partner, you need to continue to educate yourself.
I just hung up. I was on a phone call with another guy from, actually, looking at a property in Cleveland, Ohio and Shaker Heights. And the education along the way allowed me to ask a lot of questions about the property and why we were going to do it and what were the pluses and minuses. So, education is paramount for the limited partners.
If you want to speculate, put your money in the 401(k)’s, put it in the index fund right out the market, whatever the market does, you’ll do, that’s okay. But I really think to be in this space, you have to educate yourself. And I would say I did that. I took a long-term view as well. So, I realized that I had a runway in the corporate world that I wasn’t going to leave right away. And I’m really not going to leave. I mean, don’t want to leave right now but take a long view on real estate because my property, one that was on fire and all itself and I was drowning in my beer, I could have easily thrown in the towel, but it came very successful. And I own through 2008 and 2009 personal properties and other things that looked like gloom and doom was going to happen, but in the end, it all came out.
So, education, the long-term view, and just continue to network, you know, finding people that you want to work with and building a relationship. Don’t ask them right away, “Hey, can I invest with you or can we do a deal together?” Get to know them. Find out their pluses and their minuses. And on the negative side, I think the biggest one is just I wish I had gotten started earlier. On the negative side, I am an analytical type. I’m an MBA and a CPA and blah, blah, blah. So, you’ve probably heard of ready, aim, fire illustration. So, I’m ready, aim, aim, aim, aim, fire versus some of my friends are fire, ready, aim.
Josh Cantwell: Yeah, right. Right.
Randy Langenderfer: And so, you have to know your strengths and your weaknesses. I think I work with people very well. My corporate background brings me a lot of process, brings me a lot of collaboration and cooperation with teams, developing teams over the years, working with teams. I think that suits very well for this space. So, one of the negatives is I guess I wish I got started earlier and just gotten after it sooner but it wasn’t going to work for me just given the life where I was at.
Josh Cantwell: Yeah. Life kind of reveals itself at the right time, right? It’s just you got to, you know. I think what you did well, you took your time, did it at the right time when it was right for your family, right for your business, right for your other obligations and passions. But you certainly didn’t wait very long to go big, 4,000 units. You’re still acquiring things. So, last and final question is over that five-year period, some people would say, “Why you’ve done 4,000 units, 5,000 units?” You’re continuing to acquire properties today. You’re operating today. So, once you got into it, made that first acquisition, 139-unit Beaumont, Texas. What do you think are some of the keys to scale? You mentioned network, right? Because I’m even thinking like I was doing some emails right before we got on this call to start recording and I was looking through them like we’re fighting with our laundry company and the attorney that I’m using to fight with the laundry company is somebody I was referred to. Property management company that I was on the phone with earlier is somebody that I met through another operator that I networked with. Most of our investors and people that are investing with us are not through referrals. It’s through network, right?
Randy Langenderfer: Yeah.
Josh Cantwell: I never just, to use an old adage, never open up the yellow pages, and just call out of there to have… I don’t do business with anybody that way. So, to scale as big as you’ve done in the last five years, as big as we’ve done, that’s obviously one of the things that you did well to scale was network. What else do you think is key to scale?
Randy Langenderfer: Yeah. Networking is paramount. I mean, it’s like anything else. I mean, I go to church on Sundays because I want to be with believers and people who are like-minded. And so, that’s the same thing as you go to real estate conferences and you go to real estate meetups and you listen to podcasts because you’re always trying to learn. So, it’s that lifelong learning journey too, networking, continuing to learn. And today I look for people that, you know, you put it out there. I want a joint venture with people. I don’t want to necessarily do stuff by myself. Some people want to do it by themselves. I want to have fewer partners rather than a GP of seven or eight people on an asset. I just found that doesn’t work too well. But joint venturing is the way for me. I’m finding a lot of success these days, which is joint venturing with other operators. And so, I mentioned Greenville, South Carolina, and Tucson, Arizona. The reason I went to those markets is because those are very strong markets. They have all the fundamental demographics of high income and high population growth. But most importantly, my partners have operating experience in those areas, in those submarkets.
Josh Cantwell: Huge.
Randy Langenderfer: In those submarkets, they’ve had not just once, twice, four or five, six times with success. Oh, that’s a lot easier for me to tell my investors about than, “Hey, I found the property in Greenville, South Carolina. I live in Houston, Texas. And trust me, we’re going to make this a winner.”
Josh Cantwell: Yeah.
Randy Langenderfer: So, joint venturing, education, networking, I’m going to summarize as continuing to be a lifelong learner.
Josh Cantwell: Leveraging other people’s experience, right? Like that, I’d say, you know, if I’m going to associate with this person or be a GP with this person, now I get to leverage or inherit, if you will, their experience because I’m now on the same team. And when I talk about the team, the GP, you’re using obviously your own experience but theirs as well in your pitch deck, in your marketing, in your conversations, in your emails, social media. You know, you’re on a presentation with investors. People are inside your investor portal. You all become part of the same conglomerate, if you will, the same team, and you get to leverage other people’s experience that maybe you don’t have in a certain area or certain type of experience. We’re heavily focused on construction, right? We do a lot of, I would say, heavy value-add where we’re putting in 1,000 to 10,000 a year. We’re buying a lot of 60s, 70s, 80s vintage in Ohio, Cleveland, Columbus, Cincinnati but we own the construction company. That’s our silver bullet. So, we don’t just outsource.
Randy Langenderfer: That’s huge.
Josh Cantwell: It’s huge, right? So, you’ve got to have that one thing. That one thing could be a partner that Randy has that has some sort of GP experience in Greenville, South Carolina. Or it could be that you own the construction company, or it could be that you’ve done other deals in Tucson, Arizona. You got to have some of that leverage to be able to sell yourself. So, to sell yourself to investors I think is key. And you’ve obviously done that while, Randy, growing 4,000, 5,000 units in four or five years. It’s been pretty amazing to watch.
Randy Langenderfer: Well, and I can tell you the encouragement to your listening audience is, look, I’m not the brightest crayon in the box. If I can do it, anybody can do it. It just takes persistence and time. You know, this isn’t brain surgery, as you know, and really the persistence, staying in the game for the long-term persistence and doing what others the success that follow, the success that others have had and replicate it. Whether you’re a listening audience as a 20-year-old or a 50 or 60-year-old, it can be done.
Josh Cantwell: Yeah. Randy, your website is Invest-Ark.com. When our audience goes there, what are they going to find? And are there any other places where they should engage with you online?
Randy Langenderfer: I’m on LinkedIn, Facebook as well. Happy to talk to any you’re listening audience. On that website, you’ll find some free educational materials. You’ll find our portfolio that we have. There’s a Contact Me tab on there where you can schedule a meeting. I love to chat with you about anything real estate. And, Josh, I just really want to thank you for letting me be on your show today.
Josh Cantwell: Yeah, love it. I got to ask you one final thing because you’re from the Greater Cleveland area. What is maybe one memory, one thing that sticks out about your time in Cleveland? You’re from Solon. We were talking about this before the show. My daughter just had a volleyball tournament in Solon last weekend. So, we’re from one of the same types, as you’re coming from the east side, I’m coming from the west side. What’s one of your favorite memories from the Cleveland area?
Randy Langenderfer: I can tell you the good and the bad again. So, I’m a lifelong Ohioan. I grew up in Findlay, Ohio, on the west side of the state and lived in Toledo for about seven or eight years, and then came to Solon for many years. But the beautiful part about Ohio is I tell people there’s the whole Midwest of Ohio, especially. There’s nothing more beautiful than Ohio on the spring, summer, and fall. And the Great Lakes to stand out in my mind, Lake Erie, is just such a treasure. Down here in the southwest today, we have lakes but I’m not near any of them. They’re not as accessible and they’re not as big and they’re not as beautiful as Lake Erie, so I would say. And also, you got to talk about, in the Cleveland market, you got to talk about the Metroparks. You just don’t see anything like that in the south. I mean, it’s something people in your neck of the woods take for granted, my friend, the Metroparks.
Josh Cantwell: Me included. One of some of the best in the country.
Randy Langenderfer: Yeah. They truly are. And you know, you got the whole downtown area that’s being revitalized. I was formerly employed at University Hospitals Health System and that whole health care mecca, I’ll call it, in Cleveland between the clinic in UHS is really second to none in the country and you got Case Western Reserve and you’ve got Fortune 500 companies. Cleveland may have gotten a bad rap many years ago but it is definitely home for me and I get back there as often as I can.
Josh Cantwell: Yeah, I love it. Put a smile on my face today, Randy. I appreciate that very much. Listen, thanks so much for joining us. Again, for my audience, go to Invest-Ark.com to spend some more time with Randy or Facebook or LinkedIn. Randy, thanks so much for joining me today on Accelerated Investor.
Randy Langenderfer: It’s my pleasure, Josh. Have a great day.
Josh Cantwell: Well, there you have it, guys. Listen, I hope you enjoyed that episode of Accelerated Investor with me and Randy. As always, number one, don’t forget to subscribe to Accelerated Investor. Hit the subscribe button right now wherever you get your podcasts so you’d never miss another episode. Number two, make sure you leave us a rating and a review. Like, it’s the most important thing to me to know how we’re doing, whether you enjoy the episodes, what you’re getting out of it, what you think some of the best-in-class episodes are, what you enjoy the most, please let us know. And also, don’t forget to share this all over social media. I would be so grateful if you would share these episodes on your Facebook, on your LinkedIn, Instagram, Snapchat. Let everybody know that you’re engaging in Accelerated Investor with me and this is where you’re getting your education from. This is just so, so important to me. And finally, listen, if you’re looking to take your business to the next level, you’re looking to joint venture with GPs, LPs, property managers, you’re looking for coaching, mentorship, and mastermind, go apply for the Forever Passive Income Mastermind at JoshCantwellCoaching.com. We’ll see you next time.