Ep. 16: How to Select a Midwest Market with Todd Dexheimer

Out of state investing isn’t limited to dwellers on the East and West Coasts. After investing in his hometown of the Twin Cities, Todd Dexheimer realized he would need to expand to other markets to reach his investing goals. He developed his criteria and identified Milwaukee, Cincinnati and Lexington as new target markets. As the founder of S&D Real Estate Solutions, Todd owns and operates 140 units across three Midwest markets. He has owned everything from single-family homes, apartments, a mobile home park and even a ski resort. Listen as he shares his perspective on multiple markets and neighborhoods on this episode of Target Market Insights.

Key Market Insights

• Todd stared buying rentals, but ran out of money so he used flips to generate more capital
• Stopped flipping when single-family flips became too heated to make profits without being heavily involved
• Invested in out of state duplexes, but found they were hard to manage with a 3rd party property manager
• Cap rates and profitability has diminished in the Twin Cites
• $140k per unit for multifamily in Twin Cities seeing 2-3% rent increase
• Not strong value adds in Twin Cities, even C class are selling for 6.5-7% cap rates
• Looks for a city with good job creation, population growth and value-add opportunities
• Cincinnati had strong affordability, good growth
• Looks for average income to rent to see if rents are affordable for tenants
• Look at crime maps, talk to brokers, property managers
• Cincinnati neighborhoods: Northside, Mt Airy are areas with decent growth
• Owns in Westwood and Cheviot, not as much growth, but stable cash flow
• Walnut Hills, Norwood have higher potential for growth
• Likes the stability of Lexington, steady population growth since 1860

Bull’s Eye Tips:

Winning Your Market: Diligence and Planning Market Changes: Check national and local resources such as Marcus & Millichap, Colliers CBRE, Cincinnati Bureau, REDI Daily Habit: Every morning, try to work out and read through goals, review 10 year outlook

Resources

Cincinnati Economy Article

Best Business Books:

Am I Being Too Subtle by Sam Zell 

Think and Grow Rich by Napoleon Hill 

Digital ResourcesBiggerPockets.com LinkedIn.com

Tweet This:

“The Twin Cities does not allow you to let your property get too bad.” 

“I want a city with good job creation, population growth and affordability”

“Lexington has seen stable growth since 1860”

Places to Grab a Bite:Twin Cities- LaGrolla  Cincinnati – Ruth’s Chris

Connect with Todd:Email: todd@sterlinggroupmn.com LinkedIn: https://www.linkedin.com/in/dexproperties/ BiggerPockets: https://www.biggerpockets.com/users/ToddD23

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